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The Prospect Theory proposes to assess outcomes relative to a reference point (or benchmark). Although the literature … recognises the relevance of dynamic benchmarks, most of the applications of Prospect Theory employ static reference points (or a … status quo). This paper aims to develop a Prospect Theory framework for investment under uncertainty subject to a dynamic …
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We construct a dynamic, general equilibrium model of tax evasion where agents choose to report some of their income. Unreported income requires using a payment method that avoids recordkeeping - cash. Trade using cash to avoid taxes is the theoretical measure of the "shadow economy" from our...
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The ‘curse of dimensionality’ is a common problem in the estimation of dynamic models: as models get more complex, the computational cost of solving these models rises exponentially. Keane and Wolpin (1994) proposed a method for addressing this problem in finite-horizon dynamic discrete...
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The government of common agricultural and forestry land is a topic that is currently enjoying a revival of interest. Many local communities have shown the ability to pursue sustainable use of natural resources thanks to their self-governed authorities. In this context the relationship between...
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