EC 980q – 10/2/08

Bundled vs. Targeted Interventions

- Bundled

o Target something

o More likely to work

o Harder to generalize to another context (much harder to pull off- b/c

hard to be clear about all the different forces)

 A lot of levers being pulled at once to target a hypothesis

- Targeted

o Allows you to generalize to another context

o Easier to write about due to the specificity of the hypothetical

problem

Better to move from hypothesis to intervention rather than intervention to

hypothesis

Tying Odysseus Paper

-Hyperbolic Discounting

- normally 100 today or 110 in a week vs 100 in 4 weeks vs 110 in 5 weeks

- no one goes back a month later and gives the option to change their
mind

- how do we decide between short run vs long run decisions

- how do we know which (long run or short run ) ‘should’ be the one making
the decisions

- luxuries now to give up necessities later – that’s the problem

-argument about magnitude is very important

- examples where we think utility gained is so large (retirement) , one way to

gauge them is when the two (short run vs long run) advantages have very
different costs
 - large wedge makes the problem a big problem

- so there is a lot of grey area when the wedge isn’t that big

Look at a table that looks at what long run prefers vs . what the short run prefers