Pension economics has traditionally guided pension policy with the help of formal models based on individuals who think in a life cycle context with perfect foresight, full information, and in a time-consistent manner. This paper sheds light on selected aspects of pension economics when these...

In this paper we propose a new strategy for comparing the behavior of a hyperbolic discounter who possesses self-control problems to an exponential discounter who does not. Our strategy controls for inherent differences in overall levels of impatience across discount functions, which thereby...

This paper describes a structural dynamic microsimulation model of the household that has been developed to explore behavioural responses to pensions policy counterfactuals in Ireland. The model is based upon the life-cycle theory of behaviour, which assumes that individuals make their decisions...

Using the Heterogeneous Agent Model framework, we incorporate an extension based on Prospect Theory into a popular agent-based asset pricing model. The extension covers the phenomenon of loss aversion manifested in risk aversion and asymmetric treatment of gains and losses. Using Monte Carlo...

Most important economic decision problems are sequential, and thus naturally represented as Markov Decision Problems (MDP). After reviewing the theory of MDPs, the applicability of MDPs to real-life sequential decisions appears impractical. The central question addressed in this essay is how...

Neural networks are tackled through probabilities for neurons to be activated by other neurons. They are represented by doubly stochastic matrices, named brain matrices, the polytope of which is the convex hull of the permutation matrices which are vertices of this Birkhoff polytope. Each...

We model a spectrum auction where firms purchase units to participate in a constrained, multi-product, downstream market. We use dynamic programming techniques to numerically solve for the optimal bidding strategy in a clock auction. Firms value constraining competitor market power, so...

We analyze the effect of social norms and enforcement on the dynamics of taxpayer compliance. Specifically, we develop two models to evaluate the movement between classes of compliant and noncompliant taxpayers. Our analysis suggests that the effect on compliance of changing enforcement levels...

According to the Becker-Murphy model, the consumption of a habitual good follows from forward-looking, maximizing, and time consistent choices on the basis of specific preferences. The ongoing use of such a good builds up a stock of consumption capital which, in turn, affects both its present...

Current time allocation and household production models face three major weaknesses: First, they only describe the average time allocation. Thus, information about the order of activities is lost. Therefore, it is impossible to describe the influence of activities on later ones. Such...