Showing 1 - 10 of 6,409
entropy cost functions that better match this feature of the data and that retain key simplifying features of the Shannon …
Persistent link: https://www.econbiz.de/10013077941
preferences, habits, and jumps. The metrics describe the pricing kernel's dispersion (the entropy of the title) and dynamics (time … dependence, a measure of how entropy varies over different time horizons). We show how each model generates entropy and time … approximations -- clarifies the mechanisms underlying these models. It also reveals, in some cases, tension between entropy, which …
Persistent link: https://www.econbiz.de/10013122464
We provide a full behavioral characterization of the standard Shannon model of rational inattention. The key axiom is "Invariance under Compression", which identifies this model as capturing an ideal form of attention-constrained choice. We introduce tractable generalizations that allow for many...
Persistent link: https://www.econbiz.de/10012950055
A vibrant literature has emerged that suggests willingness to pay and willingness to accept measures of value are quite different for inexperienced consumers but that value differences erode with market experience. One potential shortcoming of this literature is that market experience is...
Persistent link: https://www.econbiz.de/10013127977
it is detected. We propose a theory of "equilibrium price cutting and business stealing" in cartels to bridge this gap … between theory and observation …
Persistent link: https://www.econbiz.de/10013056583
We introduce the possibility of direct punishment by specialized enforcers into a model of community enforcement. Specialized enforcers need to be given incentives to carry out costly punishments. Our main result shows that, when the specialized enforcement technology is sufficiently effective,...
Persistent link: https://www.econbiz.de/10013017498
This paper develops a theoretical foundation for the social cost of carbon (SCC). The model highlights the source of debate over whether countries should use the global or domestic SCC for regulatory impact analysis. I identify conditions under which a country's decision to internalize the...
Persistent link: https://www.econbiz.de/10012992145
We study the optimal provision of insurance against unobservable idiosyncratic shocks in a setting in which a benevolent government cannot commit. A continuum of agents and the government play an infinitely repeated game. Actions of the government are constrained only by the threat of reverting...
Persistent link: https://www.econbiz.de/10013044626
We provide a new model that generates persistent performance differences amongst seemingly similar enterprises. Our model provides a mechanism whereby efficient incumbent rivals can give permission for an inefficient firm to exist in the presence of efficient entrants. We demonstrate that, in a...
Persistent link: https://www.econbiz.de/10013047026
Existing learning models attribute failures to learn to a lack of data. We model a different barrier. Given the large number of dimensions one could focus on when using a technology, people may fail to learn because they failed to notice important features of the data they possess. We conduct a...
Persistent link: https://www.econbiz.de/10013036458