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Howitt, Peter - 2009

This paper proposes and studies a theory of adaptive consumption behavior under income uncertainty and liquidity …

Persistent link: https://www.econbiz.de/10012463222

Investment Tournaments : When Should a Rational Agent Put All Eggs in One Basket?

Schwarz, Michael - 2009

In this paper we study "investment tournaments," a class of decision problems that involve gradual allocation of investment among several alternatives whose values are subject to exogenous shocks. The decision-maker's payoff is determined by the final values of the alternatives. An important...

Persistent link: https://www.econbiz.de/10012463514

Competitive Lending with Partial Knowledge of Loan Repayment

Brock, William A. - 2008

We study a competitive credit market in which lenders with partial knowledge of loan repayment use one of three decision criteria - maximization of expected utility, maximin, or minimax regret - to make lending decisions. Lenders allocate endowments between loans and a safe asset, while...

Persistent link: https://www.econbiz.de/10012464269

Simple Humans, Complex Insurance, Subtle Subsidies

Liebman, Jeffrey - 2008

The behavioral revolution in economics has demonstrated that human beings often have difficulty making wise choices. The most widely chronicled difficulties arise for decisions made under conditions of uncertainty, those whose consequences unfold over significant amounts of time, and decisions...

Persistent link: https://www.econbiz.de/10012464318

Schedule Selection by Agents : from Price Plans to Tax Tables

Luttmer, Erzo F.P. - 2008

structure is relevant in many applications. We develop the theory underlying optimal menus of non-linear schedules and prove …

Persistent link: https://www.econbiz.de/10012464839

The Economics of Inefficient Technology Use

Beaudry, Paul - 2007

The adoption and diffusion of technological knowledge is generally regarded as a key element in a country's economic success. However, as is the case with most types of information, the transfer of technological knowledge is likely to be subject to adverse selection problems. In this paper we...

Persistent link: https://www.econbiz.de/10012465146

Bayesian and Adaptive Optimal Policy under Model Uncertainty

Svensson, Lars E.O. - 2007

We study the problem of a policymaker who seeks to set policy optimally in an economy where the true economic structure is unobserved, and he optimally learns from observations of the economy. This is a classic problem of learning and control, variants of which have been studied in the past, but...

Persistent link: https://www.econbiz.de/10012465237

Robust Optimal Policy in a Forward-Looking Model with Parameter and Shock Uncertainty

Giannoni, Marc - 2006

This paper characterizes a robust optimal policy rule in a simple forward-looking model, when the policymaker faces uncertainty about model parameters and shock processes. We show that the robust optimal policy rule is likely to involve a stronger response of the interest rate to fluctuations in...

Persistent link: https://www.econbiz.de/10012466729

The Value of a Statistical Life and the Coefficient of Relative Risk Aversion

Kaplow, Louis - 2003

Individuals' risk preferences are estimated and employed in a variety of settings, notably including choices in …' coefficients of relative risk aversion (CRRA's) in excess of one, and often significantly higher. However, it can be shown that …) anomaly involving individuals' risk-taking behavior in different market settings …

Persistent link: https://www.econbiz.de/10012468845

Ambiguity and climate policy

Millner, Antony - 2010

"Economic evaluation of climate policy traditionally treats uncertainty by appealing to expected utility theory. Yet … such circumstances, it has been argued that the axioms of expected utility theory may not be the correct standard of … of abatement is more sensitive to risk aversion than to ambiguity aversion because, according to our data, the inter …

Persistent link: https://www.econbiz.de/10012454966