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General Equilibrium and Dynamic Inconsistency

Borissov, Kirill; Pakhnin, Mikhail; Wendner, Ronald - 2022

We study the role of expectations of naive agents in a general equilibrium version of the Ramsey model with quasi-hyperbolic discounting. When agents recognize others’ naivete, as strongly suggested by empirical evidence, they revise consumption paths, correctly anticipating prices in a...

Persistent link: https://www.econbiz.de/10014080053

Short Horizons, Time Inconsistency, and Optimal Social Security

Findley, T. Scott; Caliendo, Frank - 2013

We study the optimal provision of social security in a dynamically efficient economy using a continuous-time overlapping-generations model in which consumers have short planning horizons. The short-horizon mechanism leads to dynamic optimization that is time-inconsistent over the life cycle. Our...

Persistent link: https://www.econbiz.de/10014039059

Durable Products, Time Inconsistency, and Lock-In : Supplemental Materials

Gilbert, Stephen; Jonnalagedda, Sreelata - 2012

Many durable products cannot be used without a contingent consumable product, e.g. printers require ink, iPods require songs, razors require blades, etc. For such products, manufacturers may be able to lock-in consumers by making their products incompatible with consumables that are produced by...

Persistent link: https://www.econbiz.de/10014043159

Durable Products, Time Inconsistency, and Lock-In

Gilbert, Stephen; Jonnalagedda, Sreelata - 2014

Persistent link: https://www.econbiz.de/10014044616

Time is Money : Arithmetic Discounting Outperforms Hyperbolic and Exponential Discounting

Doyle, John R.; Chen, Catherine Huirong - 2010

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

Present-biased envy, inequality, and growth

Borissov, Kirill; Pakhnin, Mikhail; Wendner, Ronald - 2024

We take into account that envy (relative consumption concerns) is more pronounced in the present than in the future. We consider a Ramsey-type model in which agents differ only in their initial capital endowments but are identical in their exogenous parameters. Agents' preferences exhibit...

Persistent link: https://www.econbiz.de/10014528209

Public Investment as Commitment

Gerlagh, Reyer - 2013

Should public assets such as infrastructure, education, and the environment earn the same return as private investments? We consider if time-inconsistent decision-makers can gain from institutions that enforce cost-benefit rules on large projects that influence the economy as a whole. Long-term...

Persistent link: https://www.econbiz.de/10013093884

A General Equilibrium Analysis of Inflation and Microfinance in Developing Countries

Müller, Daniel - 2013

This paper analyses the welfare effects of microfinance and inflation in developing countries. Therefore, we introduce … microfinance institution induces peer monitoring, which in turn enables entrepreneurship. Our main result is that there exists an … inflation threshold beyond which entrepreneurship collapses. We show that inflation affects the impact of microfinance on social …

Persistent link: https://www.econbiz.de/10011390685

Effect of Microfinance on Vulnerability, Poverty and Risk in Low Income Households

Bali Swain, Ranjula; Floro, Maria - 2007

is currently the largest and fastest growing microfinance program in the developing world, has been aggressively promoted …

Persistent link: https://www.econbiz.de/10010321600

Does Microfinance Empower Women? Evidence from Self Help Groups in India

Bali Swain, Ranjula; Wallentin, Fan Yang - 2007

Microfinance programs like the Self Help Bank Linkage Program in India have been increasingly promoted for their … between microfinance and women's empowerment. This paper contributes by arguing that women empowerment takes place when women …

Persistent link: https://www.econbiz.de/10010321634