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Borgers, Tilman - 2017

We consider the aggregation of individual agents' von Neumann-Morgenstern preferences over lotteries into a social planner's von Neumann-Morgenstern preference. We start from Harsanyi's axiomatization of utilitarianism, and ask under which conditions a social preference order that satisfies...

Persistent link: https://www.econbiz.de/10012947990

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

Changes in Risk and the Demand for Saving

Eeckhoudt, Louis - 2008

How does risk affect saving? Empirical work typically examines the effects of detectible differences in risk within the … data. How these differences affect saving in theoretical models depends on the metric one uses for risk. For labor …-income risk, second-degree increases in risk require prudence to induce increased saving demand. However, prudence is not …

Persistent link: https://www.econbiz.de/10012770441

Habit Formation and Labor Supply

Cremer, Helmuth - 2008

This paper shows that the combination of habit formation - present consumption creating additional consumption needs in the future - and myopia may explain why some retirees are forced to 'unretire', i.e., unexpectedly return to work. It also shows that when myopia about habit formation leads to...

Persistent link: https://www.econbiz.de/10012771200

Insuring Educational Risk : Opportunities versus Income

Schindler, Dirk - 2008

We develop a model of education where individuals face educational risk. Successfully entering the skilled labor sector … depends on individual effort in education and public resources, but educational risk still causes (income) inequality. We show … in a Second-best setting. Contrary to standard models of income risk, it is not optimal to use a proportional wage tax …

Persistent link: https://www.econbiz.de/10012771202

A Theory of Tolerance

Corneo, Giacomo - 2007

We develop an economic theory of tolerance where lifestyles and traits are invested with symbolic value by people …

Persistent link: https://www.econbiz.de/10012777299

Intergenerational Risk Sharing by Means of Pay-as-You-Go Programs - an Investigation of Alternative Mechanisms

Thogersen, Oystein - 2007

the magnitude of the optimal paygo program and the nature of the underlying risk sharing effects are very sensitive to the … chosen combination of risk concepts and stochastic specification of long run aggregate wage income growth. In an additive way … we distinguish between the pooling of wage and capital risks within periods and two different intertemporal risk sharing …

Persistent link: https://www.econbiz.de/10012778396

Uncertainty and Fiscal Policy in an Asymmetric Monetary Union

Hefeker, Carsten - 2013

The paper examines the monetary-fiscal interactions in a monetary union model with uncertainty due to imperfect central bank transparency. We first show that monetary uncertainty disciplines fiscal policymakers and thereby reduces taxes, average inflation and output distortions. However, as more...

Persistent link: https://www.econbiz.de/10012753473

Risk Management-Driven Policy Rate Gap

Caggiano, Giovanni - 2018

-Bernanke period only. Focusing on this period, the “risk-management” approach is found to be responsible for monetary policy easings …

Persistent link: https://www.econbiz.de/10012910624

Offshoring under Uncertainty

Kohler, Wilhelm - 2018

We develop a theoretical framework to explain firms' offshoring decisions in the presence of uncertainty. This model highlights the role of labor market institutions in shaping a firm's ability to effectively react upon future shocks, yielding a sharp prediction of the prevalence of offshoring...

Persistent link: https://www.econbiz.de/10012910629