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Many households in developing countries spend substantial amounts on lottery tickets but have only poor knowledge about the properties of the game and hold upwardly biased beliefs on the prospects of winning. To test whether more accurate knowledge reduces lottery participation, households in...
Persistent link: https://www.econbiz.de/10012701962
We analyze the comparative statics of optimal decisions under uncertainty when preferences are represented by two-moment, mean-variance utility functions. We relate our findings to concepts for risk attitudes that have recently been proposed for the expected utility approach. In the...
Persistent link: https://www.econbiz.de/10012712200
In a mean variance framework, we analyse risk taking in the presence of a (possibly) dependent background risk, exemplified in a linear portfolio selection problem. We first characterise the comparative statics of changes in the distribution and dependence structure of the background risk. For...
Persistent link: https://www.econbiz.de/10010875260
When based on perceived rather than on objective income distributions, the Meltzer-Richards hypothesis and the POUM hypothesis work quite well empirically: there exists a positive link between perceived inequality or perceived upward mobility and the extent of redistribution in democratic...
Persistent link: https://www.econbiz.de/10010877656
Since Adam Smith, most economists have held that a professional army is superior to a conscript army, thanks to benefitting from comparative advantage and specialization. We summarize recent literature on the benefits and costs of the military draft, with special emphasis on its dynamic effects...
Persistent link: https://www.econbiz.de/10010941306
Government-run entities are often more labor-intensive than private companies, even with identical production technologies. This need not imply slack in the public sector, but may reflect a wage tax advantage, stemming from the fact that government entities (partly) pay their taxes to...
Persistent link: https://www.econbiz.de/10011019580
We analyze the interplay of group identity and inter-group conflict in a contest where each of two conflicting groups can develop either a group or an individualistic identity. Contest structures impact on the adoption of identities which themselves influence behavior in the contest. We show the...
Persistent link: https://www.econbiz.de/10010957285
In an occupational choice framework individuals can either become entrepreneurs (risky income) or employed workers (safe income). Their choice is affected by the design of the pension system which discriminates between entrepreneurs and workers. We explore the comparative statics of several...
Persistent link: https://www.econbiz.de/10005241836
Persistent link: https://www.econbiz.de/10005297092
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