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We study the impact of market incompleteness and bounded rationality on the effectiveness of make-up strategies. To do so, we simulate a heterogeneous-agent New Keynesian (HANK) model with reflective expectations and an occasionally-binding effective lower bound (ELB) on the policy rate. Our...
Persistent link: https://www.econbiz.de/10013493615
We study the welfare performance of various simple monetary policy rules under bounded rationality (BR) along the lines of Gabaix (2020) in a New Keynesian model with sticky wages and an effective lower bound (ELB) on interest rates. Policy strategies with a strong history dependence lose their...
Persistent link: https://www.econbiz.de/10014320809
described by the economic theory. We determine a significant influence of the labeling and the earmarking of taxes. We can show …
Persistent link: https://www.econbiz.de/10003962952
There are many important decision problems where learning through experimentation is costly or impossible. In these situations, individuals may try to learn from observing the outcomes of others who have made similar decisions. Often, however, information about others comprises a selected...
Persistent link: https://www.econbiz.de/10011982107
Mainstream economists are reluctant to integrate features of bounded rationality into their behavioural assumptions. However, particularly in the field of economic policy the scope for irrational behaviour is given, since voters lack incentives for rational reasoning concerning their voting...
Persistent link: https://www.econbiz.de/10013428315
Platforms often display their products ahead of third-party products in search. Is this due to consumers preferring platform-owned products or platforms engaging in self-preferencing by biasing search towards their own products? What are the welfare implications? I develop a structural model of...
Persistent link: https://www.econbiz.de/10014495178
Persistent link: https://www.econbiz.de/10000930158
With the completion of the Uruguay Round of international trade negotiations, attention turns to plausible next steps. One question on the agenda of possibilities is the adoption of competition policies that complement or substitute for the remedies traditionally used to deal with international...
Persistent link: https://www.econbiz.de/10011620650
of competition by cartels and monopolies. Since World War II there has been considerable convergence as an increasing … policy and competition policy intersect. A proposed augmentation of the World Trade Organization's functions to deal with …
Persistent link: https://www.econbiz.de/10011621317
During the past half century many nations have adopted policies whose function is to discourage cartels and other restrictive practices. Industrialized nations led the movement toward pro-competition policies, but more recently, developing nations have begun to join the parade. Initial steps...
Persistent link: https://www.econbiz.de/10011622490