Supplement to "Poverty and Self-Control"

This appendix provides supplementary material to accompany the main text.  Section A discusses the psychological foundations for our approach.  Section B provides full arguments for all the results in the main text concerning history-dependent equilibria;  essentially, up to and including Proposition 4.  Section C proves our assertions for the simplified model of Section 5.4 in the paper, and provides associated computational results.  Section D provides detailed arguments for results involving Markov perfect equilibria.  Section E describes the algorithm for computing subgame-perfect equilibrium values, and the parameter choices for the examples in the main text.  Section F provides computed examples with and without poverty traps.  Section G shows that a poverty trap is present even when MPE is used as punishment.  Finally, Section H presents the details of the model with taste shocks and lockbox saving regimes.  Referenced equations that appear in this Appendix are labeled as (a.1), (a.2), etc.  Other equation references are to equations in the main text.

Supplemental Authors: 
Bernheim, Douglas - Stanford University
Ray, Debraj - New York University
Yeltekin, Şevin - Carnegie Mellon University
Online Appendix