Showing 1 - 10 of 491
This article examines how dynamic changes in information cost structure and time preferences affect consumers' search and switching behavior over time and lead to lock-in. The information cost structure is conceptualized as a tradeoff of initial setup costs and ongoing usage costs. Lock-in is...
Persistent link: https://www.econbiz.de/10014030999
Hyperbolic discounting (H) is currently the dominant behavioral model of intertemporal choice, since it better explains how people behave than the normatively correct exponential discounting model (E). This paper promotes an arithmetic discounting model (A) which challenges H. First, A is more...
Persistent link: https://www.econbiz.de/10014045248
Results from four experiments suggest that currencies such as loyalty-program points are overvalued. Different allocations of the same quantity of points across the same number of purchases (e.g., 100 points for each first, 200 for each second, 300 for each third purchase vs. 200 for each first,...
Persistent link: https://www.econbiz.de/10014029731
The paper presents an unusually comprehensive empirical comparison of delay discounting/intertemporal choice models. A three-component model is developed, with power laws modeling subjective time, subjective money, and magnitude sensitivity. It nests several other models in the literature, among...
Persistent link: https://www.econbiz.de/10013109469
When it comes to trading time for money (or vice versa), people tend to be impatient and myopic. Often dramatically so. For illustration, half of people would rather collect $15 now than $30 in three months. This willingness to forego 50% of the reward to skip a 3-month wait corresponds to an...
Persistent link: https://www.econbiz.de/10012893915
This paper has four objectives. First, we describe and evaluate three models of delay discounting (time preference), showing how they relate to each other and to already established concepts in accounting/finance and elsewhere. The models are: exponential (E), hyperbolic (H), and arithmetic (A),...
Persistent link: https://www.econbiz.de/10013110430
We evaluate the effectiveness of non optimal and temporally inconsistent incentive policies for regulating the exploitation of a renewable common-pool resource. The corresponding game is an N-person discrete-time deterministic dynamic game of T periods fixed duration. Three policy instruments...
Persistent link: https://www.econbiz.de/10010312387
This paper analyzes the impact of pollution and abatement policy within a stochastic endogenous growth model. The agents have environmental preferences, but they neglect their individual contribution to aggregate abatement. Therefore, environmental care is done by the government and financed via...
Persistent link: https://www.econbiz.de/10010317622
The focus is upon equilibrium real exchange rates, optimal external debt and their interaction, in a world where both the return on investment and the real rate of interest are stochastic variables. These theoretically based measures are applied empirically to answer the following questions:...
Persistent link: https://www.econbiz.de/10010261108
In this paper we study the link between elections, fiscal policy and aggregate fluctuations. The set-up is a stylized dynamic stochastic general equilibrium model incorporating both technology and political re-election shocks. The later are incorporated via a two-party model with elections. The...
Persistent link: https://www.econbiz.de/10010261369