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Kraft, Holger; Munk, Claus; Seifried, Frank Thomas; … - 2013

We show that the optimal consumption of an individual over the life cycle can have the hump shape (inverted U …, an impatient individual would prefer a decreasing consumption path over life. However, because of habit formation, a high … initial consumption would lead to high required consumption in the future. To cover the future required consumption, wealth is …

Persistent link: https://www.econbiz.de/10010225961

Testing methods to enhance longevity awareness

Mitchell, Olivia S.; Sade, Orly; Hurwitz, Abigail - 2022

Many people do not understand the concepts of life expectancy and longevity risk, potentially leading them to under-save for retirement or to not purchase longevity insurance, which in turn could reduce wellbeing at older ages. We investigate alternative ways to increase the salience of both...

Persistent link: https://www.econbiz.de/10013470685

Who saves more, the naive or the sophisticated agent?

Groneck, Max; Ludwig, Alexander; Zimper, Alexander - 2022

We consider a class of additively time-separable life-cycle consumption-savings models with iso-elastic per period … power utility featuring resistance to inter-temporal substitution of θ with linear consumption policy functions. The utility …

Persistent link: https://www.econbiz.de/10013549646

Shallow meritocracy

Andre, Peter - 2023

Meritocracies aspire to reward hard work and promise not to judge individuals by the circumstances into which they were born. However, circumstances often shape the choice to work hard. I show that people's merit judgments are "shallow" and insensitive to this effect. They hold others...

Persistent link: https://www.econbiz.de/10014420638

Understanding markets with socially responsible consumers

Kaufmann, Marc; Andre, Peter; Kőszegi, Botond - 2023

Many consumers care about climate change and other externalities associated with their purchases. We analyze the behavior and market effects of such "socially responsible consumers" in three parts. First, we develop a flexible theoretical framework to study competitive equilibria with rational...

Persistent link: https://www.econbiz.de/10014446285

Misperceived social norms and willingness to act against climate change

Andre, Peter; Boneva, Teodora; Chopra, Felix; Falk, Armin - 2024

We document the individual willingness to act against climate change and study the role of social norms in a large sample of US adults. Individual beliefs about social norms positively predict pro-climate donations, comparable in strength to universal moral values and economic preferences such...

Persistent link: https://www.econbiz.de/10014483930

Thoughts about the dictator and trust game

Detemple, Julian - 2024

Experiments are an important tool in economic research. However, it is unclear to which extent the control of experiments extends to the perceptions subjects form of such experimental decision situations. This paper is the first to explicitly elicit perceptions of the dictator and trust game and...

Persistent link: https://www.econbiz.de/10014547858

Stochastic differential utility as the continuous-time limit of recursive utility

Kraft, Holger; Seifried, Frank Thomas - 2013

We establish a convergence theorem that shows that discrete-time recursive utility, as developed by Kreps and Porteus (1978), converges to stochastic differential utility, as introduced by Duffie and Epstein (1992), in the continuous-time limit of vanishing grid size.

Persistent link: https://www.econbiz.de/10010327831

Consumption habits and humps

Kraft, Holger; Munk, Claus; Seifried, Frank Thomas; … - 2013

Persistent link: https://www.econbiz.de/10010327862

Life insurance demand under health shock risk

Kraft, Holger; Schendel, Lorenz S.; Steffensen, Mogens - 2014

This paper studies the life cycle consumption-investment-insurance problem of a family. The wage earner faces the risk …

Persistent link: https://www.econbiz.de/10010332889