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Optimal Policy and the Risk Properties of Human Capital Reconsidered
Anderberg, Dan - 2008
This paper considers how optimal education and tax policy depends on the risk properties of human capital. It is demonstrated that a key feature of human capital investments is whether they increase or decrease wage risk. In a benchmark model it is shown that this feature alone determines...
Persistent link: https://www.econbiz.de/10012768814
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How Changing Prudence and Risk Aversion Affect Optimal Saving
Bauer, Christian; Buchholz, Wolfgang - 2021
We show how optimal saving in a two-period model is affected when prudence and risk aversion of the underlying utility function change. Increasing prudence alone will induce higher savings only if, for certain combinations of the interest rate and the pure time discount rate, there is...
Persistent link: https://www.econbiz.de/10013316461
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Rank Dependent Utility, Tax Evasion and Labor Supply
Eide, Erling - 2010
payers act according to some non-expected utility theory, and (2) Individual ethical norms and social stigma induce people … subjective probabilities of being penalised according to the rank dependent utility theory, and (2) Tax payers' beliefs about … utility theory. The model explains data 53% better than pure random choices and predicts hours worked in the regular economy …
Persistent link: https://www.econbiz.de/10013136684
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Risk Aversion and Prudence in Contests
Sahm, Marco - 2017
I examine the impact of risk preferences on efforts and winning probabilities in generalised Tullock contests between two players. The theoretical analysis yields two main results. First, I specify a sufficient condition on the agents' comparative prudence under which a higher common level of...
Persistent link: https://www.econbiz.de/10012956876
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International Environmental Agreements with Uncertainty, Learning and Risk Aversion
Finus, Michael - 2014
This paper analyses the formation of international environmental agreements (IEAs) under uncertainty, focusing on the role of learning and risk aversion. It bridges two strands of literature: one focused on the role learning for the success of IEA formation when countries are risk neutral and...
Persistent link: https://www.econbiz.de/10013059058
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When is Ambiguity-Attitude Constant?
Eichberger, Jürgen; Grant, Simon; Kelsey, David - 2021
This paper studies how updating affects ambiguity-attitude. In particular we focus on the generalized Bayesian update of the Jaffray-Phillipe sub-class of Choquet Expected Utility preferences. We find conditions for ambiguity-attitude to be the same before and after updating. A necessary and...
Persistent link: https://www.econbiz.de/10013315928
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Happy Voters
Liberini, Federica; Redoano, Michela; Proto, Eugenio - 2021
Motivated by recent interest and initiatives taken by several governments and international organizations to come up with indicators of well-being to inform policy makers, we test if subjective well-being measures (SWB) can be employed to study voting behaviour. Controlling for financial and...
Persistent link: https://www.econbiz.de/10013315574
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Well-Being Inequality and Reference Groups - An Agenda for New Research
van Praag, B.M.S - 2021
It is argued that the concept of well–being inequality cannot be properly defined without taking the referencing process into account. The reference effect depends on how frequently individuals compare with others and on the degree of social transparency in society. In this paper we employ the...
Persistent link: https://www.econbiz.de/10013316230
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The Life Satisfaction Approach to Environmental Valuation
Frey, Bruno S.; Luechinger, Simon; Stutzer, Alois - 2021
individuals’ well-being. However, how do individuals value the environment? In this paper, we review the Life Satisfaction …-being research in economics and takes measures of reported life satisfaction as an empirical approximation to individual welfare …. Micro-econometric life satisfaction functions are estimated taking into account environmental conditions along with income …
Persistent link: https://www.econbiz.de/10013316297
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Investment, Resolution of Risk, and the Role of Affect
Van Winden, F. A. A. M. - 2010
-based questionnaire before the experiment and participants' preferences for resolution timing, risk, and time were incentive compatibly … measured during the experiment. Main findings are that delayed resolution can affect investment, that the effect depends on the …
Persistent link: https://www.econbiz.de/10013146983