Diminishing marginal impatience: its promises for asset pricing
This study argues that diminishing marginal impatience ( DMI ) as an intuitively plausible behavioural assumption of endogenous time preference has the potential for resolving important issues like the equity premium puzzle . It shows that, while applied to a model in the traditional overlapping generations ( OG ) framework, DMI is capable of generating assets prices with magnitude and volatility higher than those suggested by standard models with constant marginal impatience ( CMI ).
Year of publication: |
2006
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Authors: | Nath, Hiranya K. ; Sarkar, Jayanta |
Published in: |
Applied Financial Economics Letters. - Taylor and Francis Journals, ISSN 1744-6546. - Vol. 2.2006, 1, p. 61-64
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Publisher: |
Taylor and Francis Journals |
Saved in:
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