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I put forward a concise and intuitive formula for the calculation of the valuation for a good in the presence of the expectation that further, related, goods will soon become available. This valuation is tractable in the sense that it does not require the explicit resolution of the consumer’s...
Persistent link: https://www.econbiz.de/10011189506
A multiplicative form of the habit term in the utility function has some undesirable properties if the habit function is itself still additive (Wendner, 2003). A geometric form for the way the stock of habit accumulates can resolve these shortcomings.
Persistent link: https://www.econbiz.de/10010572157
We show that a steeply increasing workload before a deadline is compatible with time-consistent preferences. The key departure from the literature is that we consider a stochastic environment where success of effort is not guaranteed.
Persistent link: https://www.econbiz.de/10010572161
Studies of micro-level price datasets find more frequent small price increases than decreases, which can be explained by consumer inattention because time-constrained shoppers might ignore small price changes. Recent empirical studies of the link between shopping behavior and price attention...
Persistent link: https://www.econbiz.de/10015416773
Hyperbolic discounting with naiveté is widely believed to provide a better explanation than exponential discounting of …
Persistent link: https://www.econbiz.de/10011263429
We quantify the welfare gains from better retirement planning using a model in which retirement planning is time inconsistent. A modest increase in a household’s planning horizon by just a few years generates large aggregate and individual welfare gains.
Persistent link: https://www.econbiz.de/10010702786
We present a multi-trial experiment that extends the classic experiment of Thaler et al. (1997) by adding short-term information to long-term investment. The allocation to the risky asset is reduced in the long-term, when we add short-term information.
Persistent link: https://www.econbiz.de/10011041812
This paper provides an analysis of solutions for allocation problems from an axiomatic point of view, proposing a decomposition for the space of such problems into direct sum of irreducible subspaces that are relevant to the study of linear symmetric solutions. In particular, we obtain...
Persistent link: https://www.econbiz.de/10011263418
We analyze the formation of bilateral R&D collaborations in an oligopoly when each firm benefits from the research done by other firms it is connected to. In contrast to myopic stability, farsighted stability leads to R&D networks consisting of two minimally connected components, with the...
Persistent link: https://www.econbiz.de/10011116200
In social choice settings with linear preferences, random dictatorship is known to be the only social decision scheme satisfying strategyproofness and ex post efficiency. When also allowing indifferences, random serial dictatorship (RSD) is a well-known generalization of random dictatorship that...
Persistent link: https://www.econbiz.de/10010729460