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Once Upon a Time Preference - How Rationality and Risk Aversion Change the Rationale for Discounting
Traeger, Christian - CESifo - 2012
The paper develops an axiomatic framework for rational decision making. The von Neumann-Morgenstern axioms give rise to a richer risk attitude than that captured in the standard discounted expected utility model. I derive three models that permit a more comprehensive risk evaluation. These...
Persistent link: https://www.econbiz.de/10010544183
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A Critique of the Literature on the US Financial Debt Crisis
Stein, Jerome L. - CESifo - 2010
A healthy financial system encourages the efficient allocation of capital and risk. The collapse of the house price bubble led to the financial crisis that started in 2007. There is a large empirical literature concerning the relation between asset price bubbles and financial crises. I evaluate...
Persistent link: https://www.econbiz.de/10008534053
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Application of Stochastic Optimal Control to Financial Market Debt Crises
Stein, Jerome L. - CESifo - 2009
This interdisciplinary paper explains how mathematical techniques of stochastic optimal control can be applied to the recent subprime mortgage crisis. Why did the financial markets fail to anticipate the recent debt crisis, despite the large literature in mathematical finance concerning optimal...
Persistent link: https://www.econbiz.de/10005094473
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A Tale of Two Debt Crises: A Stochastic Optimal Control Analysis
Stein, Jerome L. - CESifo - 2008
Banks should evaluate whether a borrower is likely to default. I apply several techniques in the extensive mathematical literature of stochastic optimal control/dynamic programming to derive an optimal debt in an environment where there are risks on both the asset and liabilities sides. The...
Persistent link: https://www.econbiz.de/10005406070
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How Much Do Means-Tested Benefits Reduce the Demand for Annuities?
Bütler, Monika; Peijnenburg, Kim; Staubli, Stefan - CESifo - 2011
We analyze the effect of means-tested benefits on annuitization decisions. Most industrialized countries provide a subsistence level consumption floor in old age, usually in the form of means-tested benefits. The availability of such means-tested payments creates an incentive to cash out...
Persistent link: https://www.econbiz.de/10009150867
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Health Club Attendance, Expectations and Self-control
Garin, Jean-Denis; Masse, Alix; Michaud, Pierre-Carl - CESifo - 2014
Using a unique dataset on health club attendance from Quebec, we look at the relationship between actual and expected attendance and how these relate to a reported measure of self-control problems at the time of contract signing. We find that a large majority of contract choices appear...
Persistent link: https://www.econbiz.de/10010877917
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Temptation in Vote-Selling: Evidence from a Field Experiment in the Philippines
Hicken, Allen; Leider, Stephen G.; Ravanilla, Nico; … - CESifo - 2014
-vote-selling intervention in the Philippines. We model selling one’s vote as a temptation good: it creates positive utility for the future self … regarding vote-selling to affect utility. Voters who are at least partially sophisticated about their vote-selling temptation … about their vote-selling temptation. …
Persistent link: https://www.econbiz.de/10010781543
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Adaptation, Anticipation-Bias and Optimal Income Taxation
Aronsson, Thomas; Schöb, Ronnie - CESifo - 2012
Adaptation is omnipresent but people systematically fail to correctly anticipate the degree to which they adapt. This leads individuals to make inefficient intertemporal decisions. This paper concerns optimal income taxation to correct for such anticipation-biases in a framework where consumers...
Persistent link: https://www.econbiz.de/10010877881
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Human Capital Accumulation and the Macroeconomy in an Ageing Society
Heijdra, Ben J.; Reijnders, Laurie S. M. - CESifo - 2012
How do population ageing shocks affect the long-run macroeconomic performance of an economy? To answer this question we build a general equilibrium overlapping generations model of a closed economy featuring endogenous factor prices. Finitely-lived individuals are endowed with perfect foresight...
Persistent link: https://www.econbiz.de/10010877922
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Life in Shackles? The Quantitative Implications of Reforming the Educational Loan System
Heijdra, Ben J.; Kindermann, Fabian; Reijnders, Laurie S. M. - CESifo - 2014
In this paper we conduct a quantitative analysis of a number of stylized educational loan systems. We develop a stochastic general equilibrium model of a closed economy with a competitive firm sector and a government that levies taxes and administers educational loans. Individuals are...
Persistent link: https://www.econbiz.de/10010948864