Impatient in experiments, but patient in simulations: a challenge to a neoclassical model

Despite ample empirical evidence on the prevalence of high discount rates among people, applied, quantitative-theoretical macro studies with exponential discounting often assume low positive, or even negative discount rate values. Relying on recent advances from the numerical optimal control branch of mathematics, we solve a neoclassical, continuous time model of endogenous consumption/saving and labor supply, and show that even if an agent has a moderately high discount rate, his labour supply and consumption behavior will be highly counterfactual. We provide a remedy to such counterfactual findings by augmenting a standard utility function based on recent evidences from the leisure sciences, while maintaining a rational choice approach of neoclassical economics.