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Consumption habits and humps
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
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Consumption and wage humps in a life-cycle model with education
Kraft, Holger; Munk, Claus; Seifried, Frank Thomas; … - 2014
The observed hump-shaped life-cycle pattern in individuals' consumption cannot be explained by the classical … consumption-savings model. We explicitly solve a model with utility of both consumption and leisure and with educational decisions … affecting future wages. We show optimal consumption is hump shaped and determine the peak age. The hump results from consumption …
Persistent link: https://www.econbiz.de/10010368654
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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
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Consumption habits and humps
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/10010327862
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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
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The long-lasting effects of experiencing communism on attitudes towards financial markets
Laudenbach, Christine; Malmendier, Ulrike; … - 2024
We show that exposure to anti-capitalist ideology can exert a lasting influence on attitudes towards capital markets and stock-market participation. Utilizing novel survey, bank, and broker data, we document that, decades after Germany's reunification, East Germans invest significantly less in...
Persistent link: https://www.econbiz.de/10015066208
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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
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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
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Understanding electric vehicle adoption: The role of information frictions and heterogeneous beliefs
Fitzpatrick, Aoife Claire - 2025
In 2023, the transportation sector in Europe contributed 25% of CO2 emissions, with almost no reduction since 2010. Despite government policies promoting decarbonization, public adoption of electric vehicles (EVs) remains limited. This study, involving 5,500 German participants from a...
Persistent link: https://www.econbiz.de/10015446046
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Putting the pension back in 401(k) plans: Optimal versus default longevity income annuities
Horneff, Vanya; Maurer, Raimond; Mitchell, Olivia S. - 2016
Most defined contribution pension plans pay benefits as lump sums, yet the US Treasury has recently encouraged firms to protect retirees from outliving their assets by converting a portion of their plan balances into longevity income annuities (LIA). These are deferred annuities which initiate...
Persistent link: https://www.econbiz.de/10011553781