This paper offers an explanation for the puzzle of low wealth holdings among a significant fraction of the elderly. Instead of invoking irrational, non-rational, or non-optimal behavior to resolve the puzzle, it is shown that widespread low wealth holdings are consistent with a rational...

This paper investigates the origins of the collinearity problems encountered in the two-step estimation method for sample selection models. The analysis reveals several critical misconceptions and deficiencies in the literature. Remedies to the collinearity problems are proposed and evaluated....

This paper investigates the problem concerning the existence of a solution to a diverse class of optimal allocation problems which include models of cake eating, exhaustible resource extraction, life-cycle saving, and non-atomic games. A new formulation that encompasses all these diverse models...

Economic theories of deterrence have primarily been built on static models. A common and serious shortcoming of the existing dynamic deterrence models is the assumption of a two-period structure that ignores recidivism. The aims of this paper are to formulate and solve a general dynamic...