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Shocks to Bank Lending, Risk-Taking, Securitization, and their Role for U.S. Business Cycle Fluctuations

Peersman, Gert; Wagner, Wolf - CESifo - 2014

Shocks to bank lending, risk-taking and securitization activities that are orthogonal to real economy and monetary policy innovations account for more than 30 percent of U.S. output variation. The dynamic effects, however, depend on the type of shock. Expansionary securitization shocks lead to a...

Persistent link: https://www.econbiz.de/10010752434

Adaptation, Mitigation and Risk-Taking in Climate Policy

Auerswald, Heike; Konrad, Kai A.; Thum, Marcel - CESifo - 2011

The future consequences of climate change are highly uncertain. Today, the exact size of possible future damages are widely unknown. Governments try to cope with these risks by investing in mitigation and adaptation measures. Mitigation aims at a reduction of greenhouse gas emissions whereas...

Persistent link: https://www.econbiz.de/10008833877

Competition and Stability in Banking

Vives, Xavier - CESifo - 2010

I review the state of the art of the academic theoretical and empirical literature on the potential trade-off between competition and stability in banking. There are two basic channels through which competition may increase instability: by exacerbating the coordination problem of...

Persistent link: https://www.econbiz.de/10008572523

Trading Off Tax Distortion and Tax Evasion

Richter, Wolfram F.; Boadway, Robin - CESifo - 2001

Tax evasion is modeled as a risky activity and integrated into a standard problem of optimal tax design. It is shown that there is a trade off between reducing tax evasion and reducing tax distortion. Thus it is efficient to supplement a broad-based wage tax by a tax on specific consumption if...

Persistent link: https://www.econbiz.de/10005181415

Controlling Product Risks when Consumers are Heterogeneously Overconfident: Producer Liability vs. Minimum Quality Standard Regulation

Baniak, Andrzej; Grajzl, Peter - CESifo - 2014

Contributing to the literature on the consequences of behavioral biases for market outcomes and institutional design, we contrast producer liability and minimum quality standard regulation as alternative means of social control of product-related torts when consumers are heterogeneously...

Persistent link: https://www.econbiz.de/10010948857

How Do Judgmental Overconfidence and Overoptimism Shape Innovative Activity?

Herz, Holger; Schunk, Daniel; Zehnder, Christian - CESifo - 2013

Recent field evidence suggests a positive link between overconfidence and innovative activities. In this paper we argue … that the connection between overconfidence and innovation is more complex than the previous literature suggests. In … particular, we show theoretically and experimentally that different forms of overconfidence may have opposing effects on …

Persistent link: https://www.econbiz.de/10010877694

Self-Confidence and Strategic Behavior

Charness, Gary; Rustichini, Aldo; Ven, Jeroen van de - CESifo - 2013

We test experimentally an explanation of over and under confidence as motivated by (perhaps unconscious) strategic … others’ statements of confidence about how well they have scored on an IQ test. In two-player tournaments where the highest … score wins, one is likely to enter at equilibrium when he knows that his stated confidence is higher than the other player …

Persistent link: https://www.econbiz.de/10010877986

Illusion of Expertise in Portfolio Decisions - An Experimental Approach

Fellner, Gerlinde; Güth, Werner; Maciejovsky, Boris - CESifo - 2001

Overall, 72 subjects invest their endowment in four risky assets. Each com-bination of assets yields the same expected return and variance of returns. Illusion of expertise prevails when one prefers nevertheless the self-selected portfolio. After being randomly assigned to groups of four...

Persistent link: https://www.econbiz.de/10005013059

Optimal Illusions and Decisions under Risk

Gollier, Christian - CESifo - 2005

We examine a static one-risk-free-one-risky asset portfolio choice when the investor’s well-being is affected by the anticipatory feelings associated to potential capital gains and losses. These feelings can be manipulated by the choice of subjective beliefs on the distribution of returns....

Persistent link: https://www.econbiz.de/10005406370

Overconfidence in a Career-Concerns Setting

Rosa, Leonidas Enrique De La - CESifo - 2008

We study the effects of overconfidence in a two-period investment-decision agency setting. Under common priors, agent … from first-period investment. This implies that agent overconfidence mitigates the agency problems arising from the agent …

Persistent link: https://www.econbiz.de/10005406373