Diversification is a fundamental concept in economics, decision theory and finance. It also lies at the core of the Darwinian evolution argument, and diversifying behavior known as bet-hedging has been widely documented in other species. The central premise of this paper is that attitudes...

This theoretical paper presents an incentive salience model of intertemporal choice. The model is a variation of the quasi-hyperbolic discounting model. Based on the distinction between wanting and liking, the paper presents one possible explanation of impulsive choices of smaller sooner rewards...

This theoretical paper presents an incentive salience model of intertemporal choice. The model is a variation of the quasi-hyperbolic discounting model. Based on the distinction between "wanting" and "liking", the paper presents one possible explanation of impulsive choices of smaller sooner...

This paper provides an introduction to the field of evolutionary economics with emphasis on the evolutionary theory of household behavior. It shows that the goal of evolutionary economics is to improve upon neoclassical economics by incorporating more realistic and empirically grounded...

This paper provides an introduction to the field of evolutionary economics with emphasis on the evolutionary theory of household behavior. It shows that the goal of evolutionary economics is to improve upon neoclassical economics by incorporating more realistic and empirically grounded...

This paper provides an introduction to the field of evolutionary economics with emphasis on the evolutionary theory of household behavior. It shows that the goal of evolutionary economics is to improve upon neoclassical economics by incorporating more realistic and empirically grounded...

The cornerstone of mainstream economic theory is the premise of rationality. Humans are assumed to be rational economic agents who, subject to the available information and limited resources, are able to select, among a set of alternatives, the best means to maximize their ends and their...

Two well-known violations of Expected Utility Theory (EUT) are the Allais Paradox and the preference reversal between gamble choices and gamble bids. The Allais Paradox undermines the independence axiom, according to which the preferences for two gambles should be unaffected by an independent...

Using longitudinal data from PSID, we show the positive relation between labor income and the equity share of financial wealth is stronger for those who have a higher persistence in shocks to permanent labor income. The results support the hypothesis that the cross sectional variation in...

This paper explores one of normative economic theory’s most nagging omissions: its failure to model the welfare effects of advertising and other forms of marketing – central features of all modern market economies. Technically, the paper relaxes the standard welfarist assumption that...