Inter-Temporal Choice and Its Relevance in Consumer's Credit Behavior
Inter-temporal choices have been an important aspect of Behavioral Economics, as they deal with time-dependent decision-making of people in various situations. This chapter discusses hyperbolic time-discounting, which has gained significant recognition and has become an important part of public-policy and economic studies in last few years. It also highlights the importance of this concept from a real-life perspective, by showing its relevance in credit-behavior of individuals. This is shown by highlighting the unstable preferences of individuals using credit-cards, which exploit time-inconsistent behavior. Despite the paucity of current research, understanding impulsive-behavior has gained popularity recently because of the relevance of wellbeing and happiness in the global scenario. As is evident, credit debt does hamper people's quality of life, and so it becomes important for researchers and policymakers to reduce impulsivity and self-control issues, by making consumers use costly commitment-devices and other behavioral options to help them make rational and justified choices.