Showing 1 - 10 of 8,937
We present a theory of choice among lotteries in which the decision maker's attention is drawn to (precisely defined … distinguish it from Prospect Theory, which we test. We also use the model to modify the standard asset pricing framework, and use …
Persistent link: https://www.econbiz.de/10012462269
This paper focuses on Social Security benefit claiming behavior, a take-up decision that has been ignored in the previous literature. Using financial calculations and simulations based on an expected utility maximization model, we show that delaying benefit claim for a period of time after...
Persistent link: https://www.econbiz.de/10012471466
Nearly all life-cycle models adopt Yaari's (1965) assumption that individuals know the survival probabilities that they face. Given that an individual's exact survival probabilities are likely unknown, we explore the implications of relaxing this assumption. If there is no annuity market, then...
Persistent link: https://www.econbiz.de/10012455034
We consider the optimal policy problem of a benevolent planner, who is uncertain about an individual's true preferences because of inconsistencies in revealed preferences across behavioral frames. We adapt theories of expected utility maximization and ambiguity aversion to characterize the...
Persistent link: https://www.econbiz.de/10015056138
This article reviews macroeconomic models with heterogeneous households. A key question for the relevance of these models concerns the degree to which markets are complete. This is because the existence of complete markets imposes restrictions on (i) how much heterogeneity matters for aggregate...
Persistent link: https://www.econbiz.de/10012461035
This paper characterizes an optimal redistribution program when taxation authorities: (1)" are uninformed about individuals' value of time in both market and non-market activities observe both market-income and time allocated to market employment, and (3) are utilitarian. " Formally, the problem...
Persistent link: https://www.econbiz.de/10012472461
Just like any trade activity in well-functioning markets, migration tends to enhance the efficiency of the allocation of resources. With non-distortionary income distribution policy instruments which can compensate losers, migration generates income gains. But the gains tend to be typically...
Persistent link: https://www.econbiz.de/10012474004
Vaccination against infectious disease may be beneficial to reduce illness in vaccinated persons and disease transmission across the population. The welfare-economic practice of specifying a social welfare function and considering a planner who seeks to optimize welfare provides a constructive...
Persistent link: https://www.econbiz.de/10012482662
We provide a user's guide to exotic' preferences: nonlinear time aggregators, departures from expected utility, preferences over time with known and unknown probabilities, risk-sensitive and robust control, hyperbolic' discounting, and preferences over sets ( temptations'). We apply each to a...
Persistent link: https://www.econbiz.de/10012468096
robust violations of discounted expected utility, inconsistent with both prospect theory probability weighting and models …
Persistent link: https://www.econbiz.de/10012462308