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The Weak Rationality Principle in Economics
Kirchgässner, Gebhard - CESifo - 2005
The weak rationality principle is not an empirical statement but a heuristic rule of how to proceed in social sciences …-foundation and, therefore, employ the rationality assumption in economic models. Then, with reference to the ‘bounded rationality … a part of the rationality assumption. We conclude with some remarks on handling the problems of ‘free will’ as well as …
Persistent link: https://www.econbiz.de/10005406455
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Behavioral Economics as Applied to Firms: A Primer
Armstrong, Mark; Huck, Steffen - CESifo - 2010
We discuss the literatures on behavioral economics, bounded rationality and experimental economics as they apply to …
Persistent link: https://www.econbiz.de/10008572583
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Social Security Incentives and Human Capital Investment
Lau, Morten I.; Poutvaara, Panu - CESifo - 2001
While the effect of social security systems on retirement decisions has received much attention, the impact of these systems on individuals’ incentives to invest in their human capital has not been analyzed. We integrate human capital investment and retirement decisions in a simple analytical...
Persistent link: https://www.econbiz.de/10005181353
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Is Prescott Right? Welfare State Policies and the Incentives to Work, Learn and Retire
Jacobs, Bas - CESifo - 2008
This paper bolsters Prescott’s (2004) claim that high taxes are responsible for lacklustre labor market performance in continental European countries. We develop a lifecycle model with endogenous skill formation, endogenous labor supply, and endogenous retirement. Labor taxation distorts not...
Persistent link: https://www.econbiz.de/10005181523
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Substitution Between Individual and Source Country Characteristics: Social Capital, Culture, and US Labor Market Outcomes Among Immigrant Women
Blau, Francine D.; Kahn, Lawrence - CESifo - 2015
Using the New Immigrant Survey, we investigate the impact of immigrant women’s own labor supply prior to migrating and female labor supply in their source country on their labor supply and wages in the US. Women migrating from higher female labor supply countries work more in the US. Most of...
Persistent link: https://www.econbiz.de/10011257675
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Learning Abatement Costs: On the Dynamics of Optimal Regulation of Experience Goods
Hintermann, Beat; Lange, Andreas - CESifo - 2012
We study the introduction of new technologies when their costs are subject to idiosyncratic uncertainty and can only be fully learned through individual experience. We set up a dynamic model of clean experience goods that replace old polluting consumption options and show how optimal regulation...
Persistent link: https://www.econbiz.de/10010603856
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Reserve Price Formation in Online Auctions
Englmaier, Florian; Schmöller, Arno - CESifo - 2008
We use a unique hand collected data set of 6 258 auctions from the online football manager game Hattrick to study micro-patterns of reserve price formation. We find that chosen reserve prices exhibit both, very sophisticated and “irrational” behavior by the sellers. Reserve prices pick up...
Persistent link: https://www.econbiz.de/10005766032
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Framing Effects in Political Decision Making: Evidence from a Natural Voting Experiment
Buetler, Monika; Maréchal, Michel André - CESifo - 2007
This paper analyzes a recent ballot in which two virtually identical popular initiatives, both demanding a decrease in the legal age of retirement in Switzerland, led to differences in approval rates of nearly seven percentage points. Based on this unique natural experiment, the existence of...
Persistent link: https://www.econbiz.de/10005094330
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Fundamental and Non-Fundamental Equilibria in the Foreign Exchange Market. A Behavioural Finance Framework
Grauwe, Paul de; Dieci, Roberto; Grimaldi, Marianna - CESifo - 2005
We develop a simple model of the exchange rate in which agents optimize their portfolio and use different forecasting rules. They check the profitability of these rules ex post and select the more profitable one. This model produces two kinds of equilibria, a fundamental and a bubble one. In a...
Persistent link: https://www.econbiz.de/10005406025
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Bubbles and Crashes in a Behavioural Finance Model
Grauwe, Paul De; Grimaldi, Marianna - CESifo - 2004
We develop a simple model of the exchange rate in which agents optimize their portfolio and use different forecasting rules. They check the profitability of these rules ex post and select the more profitable one. This model produces two kinds of equilibria, a fundamental and a bubble one. In a...
Persistent link: https://www.econbiz.de/10005406325