The purpose of this paper is to reveal the relation between the reversibility of annuities and retirees' reluctance to annuitize. To this end, we assume the existence of reversible annuities, whose surrender charge is a proportion of their purchase value. We model a retiree as a...

Why did evolution not give us a utility function that is offspring alone? Why do we care intrinsically about other outcomes, such as food, and what determines the intensity of such preferences? A common view is that such other outcomes enhance fitness and the intensity of our preference for a...

We generalize the stochastic revealed preference methodology of McFadden and Richter (1990) for finite choice sets to settings with limited consideration. Our approach is nonparametric and requires partial choice set variation. We only impose a monotonicity condition on attention first proposed...

In this paper, we examine some characterizing implications of the expected utility model with a particular focus on independence and continuity. Many well documented choice anomalies under risk (e.g., the common consequence and ratio effects) show that even weaker forms of independence can be...

Preferences over acts have an α-Maxmin Expected Utility (α-MEU) representation if they can be represented by an α-mix between the worst and the best expected utility over a set or priors. The case α=1 is characterized in Gilboa and Schmeidler (1989). Inspired by their representation result,...

This paper addresses the economic value of estimated portfolio rules under general utility. Incorporating estimation risk magnifies errors associated with mean-variance approximations to the economic value of portfolio rules. In fact, for some preference specifications, including CRRA utility,...

We show that the main results of the expected utility and dual utility theories can be derived in a unified way from two fundamental mathematical ideas: the separation principle of convex analysis, and integral representations of continuous linear functionals from functional analysis. Our...

Search Models of the labor market are widespread and influential but they usually ignore that labor market decisions are frequently taken at the household level. We fill this gap by developing and estimating an household search model with on-the-job search and labor supply. We build on previous...

This paper investigates how a risk averse and loss averse agent having reference-dependent reservation utility, affects the cost to the principal when the agent also has reference-dependent preferences. The main finding is that, under these circumstances, if the agent compares his outside...