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Balduzzi, Paolo; Graziano, Clara; Luporini, Annalisa - 2012

A small committee has to approve/reject a project with uncertain return. Members have different preferences: some are value-maximizers, others are biased towards approval. We focus on the efficient use of scarce information when communication is not guaranteed, and we provide insights on the...

Persistent link: https://www.econbiz.de/10010280845

Expert politicians, electoral control, and fiscal restraints

Dulleck, Uwe; Wigger, Berthold U. - 2012

Fiscal restraints have been argued to force today's governments to internalize the externalities that result from extensive borrowing on future electorates and governments as well as on other countries by causing fiscal instability. In this article we provide an alternative argument for fiscal...

Persistent link: https://www.econbiz.de/10010280846

Minimum participation rules for the provision of public goods

Gerber, Anke; Neitzel, Jakob; Wichardt, Philipp Christoph - 2012

This paper considers the endogenous formation of an institution to provide a public good. If the institution governs only its members, players have an incentive to free ride on the institution formation of others and the social dilemma is simply shifted to a higher level. Addressing this...

Persistent link: https://www.econbiz.de/10010280850

Borrowing costs and the demand for equity over the life cycle

Davis, Steven J.; Kubler, Felix; Willen, Paul - 2005

We construct a life-cycle model that delivers realistic behavior for both equity holdings and borrowings. The key model ingredient is a wedge between the cost of borrowing and the risk-free investment return. Borrowing can either raise or lower equity demand, depending on the cost of borrowing....

Persistent link: https://www.econbiz.de/10010280861

Multiple selves in intertemporal choice

Jamison, Julian; Wegener, Jon - 2009

systems involved with Theory of Mind (that is, mentalizing other agents) are similar to those involved with prospection …

Persistent link: https://www.econbiz.de/10010280868

Insuring consumption using income-linked assets

Fuster, Andreas; Willen, Paul S. - 2010

Shiller (2003) and others have argued for the creation of financial instruments that allow households to insure risks associated with their lifetime labor income. In this paper, we argue that while the purpose of such assets is to smooth consumption across states of nature, one must also...

Persistent link: https://www.econbiz.de/10010280869

Minimally altruistic wages and unemployment in a matching model

Rotemberg, Julio J. - 2007

This paper presents a model in which firms recruit both unemployed and employed workers by posting vacancies. Firms act monopsonistically and set wages to retain their existing workers as well as to attract new ones. The model differs from Burdett and Mortensen (1998) in that its assumptions...

Persistent link: https://www.econbiz.de/10010280873

Affective decision making: A theory of optimism bias

Bracha, Anat; Brown, Donald J. - 2010

risk, such as expected utility theory and prospect theory. Hence, to explain the evidence suggesting that agents are …

Persistent link: https://www.econbiz.de/10010280875

Seeds to succeed: Sequential giving to public projects

Bracha, Anat; Menietti, Michael; Vesterlund, Lise - 2009

a desirable public project. Interestingly, Andreoni (1998) demonstrates that announcing seed money can help eliminate … such inferior outcomes. We investigate this model experimentally to determine whether announcements of seed money eliminate … the inefficiencies that may result under fixed costs and simultaneous provision. To assess the strength of the theory we …

Persistent link: https://www.econbiz.de/10010280877

Contingent reserves management: An applied framework

Caballero, Ricardo; Panageas, Stavros - 2005

One of the most serious problems that a central bank in an emerging market economy can face is the sudden reversal of capital inflows. Hoarding international reserves can be used to smooth the impact of such reversals, but these reserves are seldom sufficient and always expensive to hold. In...

Persistent link: https://www.econbiz.de/10010280879