While research on subjective well-being abounds, comparatively little thought has been given to its practical policy implications. Two approaches to derive policy advice have emerged in the literature: One is organized in terms of the idea to maximize a hedonic social welfare function, the other...

I demonstrate a straightforward but apparently widely unrecognized implication of the standard requirements for perfect competition: an economy in which consumers can choose to learn is generally not perfectly competitive. In particular, if endogenous welfare relevant learning is feasible, the...

We describe a dynamic model of costly information sharing, where private information affecting collective-value actions is transmitted by social proximity. Individuals make voluntary contributions towards the provision of a pure public good, and information transmission about quality of...

We propose a micro-econometric investigation into the relation between subjective life satisfaction and income distribution, using a balanced panel survey of the Russian population (RLMS), running from 1994 to 2000, including 4096 individuals. We show that in the context of the Russian very...

When candidates in primary elections are ideologically differentiated (e.g., conservatives and moderates in the Republican party), then candidates with similar positions affect each others' vote shares more strongly than candidates with different ideological positions. We measure this effect in...

This paper analyzes decisions on emissions of a stock pollutant under uncertainty in a two period model. Decisions are based on a weighted average of expected utility (EU) and the MaxiMin criterion. I first show that more weight on the worst case (less weight on EU) may lead to increased first...

In case of multiple source lending even solvent firms may be forced into bankruptcy due to uncoordinated credit withdrawals of their lenders. This paper analyzes whether a debtor firm can thwart such inefficient liquidations by offering creditors the option to delay their foreclosure decision...

Models with heterogeneous interacting agents explain macro phenomena through interactions at the micro level. We propose genetic algorithms as a model for individual expectations to explain aggregate market phenomena. The model explains all stylized facts observed in aggregate price fluctuations...

Central bank communication plays an important role in shaping market participants’ expectations. This paper studies a simple nonlinear model of monetary policy in which agents have incomplete information about the economic environment. It shows that agents’ learning and the dynamics of the...