and constant support. At several stages of this research, I greatly benefitted from conversations with

This paper analyzes the general equilibrium impact of satisfying time-inconsistent ("hyperbolic-discounting") individuals ’ demand for commitment devices. The first finding is that the availability of such devices decreases welfare from the perspective of initial tastes (which are the ones that commitment purportedly favors), even though commitment is individually desirable, ceteris paribus. The second main result of this paper is a characterization of equilibrium (prices and portfolio holdings) when some assets are illiquid and individuals face two opposing concerns: changing preferences and uncertainty about future tastes. I show how the interaction between these two forces affect the prices of liquid and illiquid assets in an economy with a fixed supply of those assets. If taste shocks are sufficiently important, equilibrium prices display a liquidity premium and ex-ante identical agents hold the same portfolio. Illiquid assets decrease welfare as they hinder the agents ’ ability to accommodate the shocks. Conversely, if time-inconsistency is sufficiently important relative to the taste shocks, prices display an illiquidity premium. The equilibrium is asymmetric, with ex-ante identical agents sorting themselves between fully committing to a future consumption profile or not committing at all. Even though illiquid assets trade at a premium, consumers are made worse off by their availability. I establish conditions under which the equilibrium must take either of those two forms