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Efficient Intertemporal Allocations with Recursive Utility
Dumas, Bernard - 2010
In this article, our objective is to determine efficient allocations in economies with multiple agents having recursive utility functions. Our main result is to show that in a multiagent economy, the problem of determining efficient allocations can be characterized in terms of a single value...
Persistent link: https://www.econbiz.de/10012763539
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The Welfare Cost of Retirement Uncertainty
Caliendo, Frank - 2016
Uncertainty about the timing of retirement is a major financial risk with implications for decision making and welfare … retirement dates ranges from 4.28 to 6.92 years. We develop a quantitative model to assess the impact of this risk. Individuals … would give up 2.6%-5.7% of total lifetime consumption to fully insure this risk and 1.9%-4.0% of lifetime consumption simply …
Persistent link: https://www.econbiz.de/10012983656
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Estimating Dynamic Discrete Choice Models with Hyperbolic Discounting, with an Application to Mammography Decisions
Fang, Hanming - 2010
We extend the semi-parametric estimation method for dynamic discrete choice models using Hotz and Miller's (1993) conditional choice probability (CCP) approach to the setting where individuals may have hyperbolic discounting time preferences and may be naive about their time inconsistency. We...
Persistent link: https://www.econbiz.de/10013137310
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Investment Under Uncertainty and Time-Inconsistent Preferences
Grenadier, Steven R.; Wang, Neng - 2021
The real options framework has been used extensively to analyze the timing of investment under uncertainty. While standard real options models assume that agents possess a constant rate of time preference, there is substantial evidence that agents are very impatient about choices in the...
Persistent link: https://www.econbiz.de/10013226097
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Time Preference, Time Discounting, and Smoking Decisions
Khwaja, Ahmed - 2007
This study examines the relationship between time discounting, other sources of time preference, and intertemporal choices about smoking. Using a survey fielded for our analysis, we elicit rates of time discount from choices in financial and health domains. We also examine the relationship...
Persistent link: https://www.econbiz.de/10012778234
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Intertemporal Choice
Ericson, Keith M. Marzilli - 2018
Intertemporal tradeoffs play a key role in many personal decisions and policy questions. We describe models of intertemporal choice, identify empirical regularities in choice, and pose new questions for research. The focus for intertemporal choice research is no longer whether the exponential...
Persistent link: https://www.econbiz.de/10012906455
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A Tax-Based Estimate of the Elasticity of Intertemporal Substitution
Gruber, Jonathan - 2021
One of the most important behavioral parameters in macroeconomics is the elasticity of intertemporal substitution (EIS). Starting with the seminal work of Hall (1978), researchers haveused an Euler equation framework to estimate the EIS, relating the growth rate of consumption to the after-tax...
Persistent link: https://www.econbiz.de/10013246305
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Cognitive Uncertainty
Enke, Benjamin - 2019
explain a set of behavioral anomalies identified across four distinct domains of decision-making: choice under risk, choice … risk and ambiguity, belief updating, and survey expectations. Our framework makes predictions that we test using exogenous …
Persistent link: https://www.econbiz.de/10012858403
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Heterogeneous Households Under Uncertainty
Veronesi, Pietro - 2019
I characterize a dynamic economy under general distributions of households' risk tolerance, endowments, and beliefs … consumption-share increases; (b) the wealth-share of high risk-tolerant households increases; (c) richer households' wealth … risk sharing. Higher uncertainty increases stock prices, risk premiums, volatility, wealth inequality and the dispersion of …
Persistent link: https://www.econbiz.de/10012894994
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Investment Under Uncertainty with Financial Constraints
Bolton, Patrick - 2014
We develop an integrated theory of investment, seasoned equity offerings (SEOs), liquidation, and corporate savings …
Persistent link: https://www.econbiz.de/10013044990