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Anti-evasion auditing policy in the presence of common income shocks
Sanchez-Villalba, Miguel - London School of Economics (LSE) - 2006
When fairly homogeneous taxpayers are affected by common income shocks, a tax agency’s optimal auditing strategy consists of auditing a low-income declarer with a probability that (weakly) increases with the other taxpayers’ declarations. Such policy generates a coordination game among...
Persistent link: https://www.econbiz.de/10010928739
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Peering into the mist: social learning over an opaque observation network
Barrdear, John - London School of Economics (LSE) - 2014
the link distribution. I derive a specific law of motion for the hierarchy of aggregate expectations, which includes a … increased persistence, so that average expectations overshoot the truth following an aggregate shock. When the network is …
Persistent link: https://www.econbiz.de/10011126293
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Preference reversals and the analysis of income distributions
Amiel, Yoram; Cowell, Frank; Davidovitz, Leima; … - London School of Economics (LSE) - 2003
It is known from the literature on uncertainty that in cases where individuals express a preference for a high win-probability bet over a bet with high winnings they nevertheless will bid more to obtain the bet with high winnings. We investigate whether a similar phenomenon applies in the...
Persistent link: https://www.econbiz.de/10010928778
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Do bad risks know it? Experimental evidence on optimism and adverse selection
Coelho, Marta; de Meza, David - London School of Economics (LSE) - 2012
Subjects who overestimate their performance in experimental tasks unrelated to travel are less willing to insure against failing in the task and also less inclined to buy travel insurance. This suggests intrinsic optimism influences insurance demand and diminishes adverse selection
Persistent link: https://www.econbiz.de/10011128051
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Unmet aspirations as an explanation for the age u-shape in human wellbeing
Schwandt, Hannes - London School of Economics (LSE) - 2013
theories have assumed that the U-shape is caused by unmet expectations that are felt painfully in midlife but beneficially … abandoned and experienced with less regret during old age. In a unique panel of 132,609 life satisfaction expectations matched … support theories that unmet expectations drive the age U-shape in wellbeing. …
Persistent link: https://www.econbiz.de/10010746117
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Measuring income risk
Burgess, Simon; Gardiner, Karen; Jenkins, Stephen P.; … - London School of Economics (LSE) - 2000
We provide a critique of the methods that have been used to derive measures of income risk and draw attention to the importance of demographic factors as a source of income risk. We also propose new measures of the contribution to total income risk of demographic and labour market factors....
Persistent link: https://www.econbiz.de/10011126475
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The more we know, the less we agree: public announcements and higher-order expectations
Kondor, Peter - London School of Economics (LSE) - 2004
The stylized fact that public announcements in financial markets are followed by intense trading, high trading volume and volatile prices, is widely perceived as the sign of increasing disagreement due to the announcement. However, it is common to argue that this would be inconsistent with...
Persistent link: https://www.econbiz.de/10011071459
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The effect of health on consumption decisions in later life: evidence from the UK
Karagiannaki, Eleni - London School of Economics (LSE) - 2009
expectations inducing higher consumption. Conversely ill health may induce lower consumption and an increase in precautionary …
Persistent link: https://www.econbiz.de/10010884492
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Efficiency and equilibrium when preferences are time-inconsistent
Luttmer, Erzo G. J.; Mariotti, Thomas - London School of Economics (LSE) - 2003
We consider an exchange economy with time-inconsistent consumers whose preferences are additively separable. When these consumers trade in a sequence of markets, their time-inconsistency may introduce a non-convexity that gives them an incentive to trade lotteries. If there are many consumers,...
Persistent link: https://www.econbiz.de/10010884660
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A reconciliation of two alternative approaches towards buffer stock saving
Michaelides, Alexander - London School of Economics (LSE) - 2003
This paper shows that the two main models in the buffer stock saving literature can be nested in a model that varies the level of available social insurance. Equivalently, the assumption about the time series process for labor income (and social insurance during unemployment) is crucial in...
Persistent link: https://www.econbiz.de/10010745934