The Strotz model

The Strotz model analyzes how individuals plan their future with changing preferences over time, especially regarding savings and consumption. It considers that people may value present benefits more than future ones (present bias), making them less willing to save or delay gratification. The model helps explain behaviors like procrastination or under-saving, showing that future choices are influenced by how people weigh immediate versus future rewards. It offers a framework for understanding why intentions might differ from actions when it comes to long-term financial or personal planning.