This study analyses the relationship between the willingness to take risk (WTR) of a sentimental couple and its individual components. Using survey-based individual and joint measures of generic risk tolerance for 128 couples, we estimate a joint model for explaining female, male and couple WTR....

Funded social security programs are particularly vulnerable to economic and financial market shocks. As a consequence of the recent crisis, a large fraction of the Dutch pension funds had to submit restoration plans for the recovery of their buffers. Such plans will have to rely primarily on a...

I simulate a life-cycle model with preferences described by a utility function a' la Gul and Pesendorfer (2001). I show that temptation to consume contributes to explain the saving, retirement consumption, and asset allocation puzzles. I perform two analyses, with and without Social Security...

We develop a model of optimal asset allocation based on a utility framework. This applies to a more general context than the classical mean-variance paradigm since it can also account for the presence of constraints in the portfolio composition. Using this approach, we study the distribution of...

The effect of intra-firm pay dispersion on work performance is controversial and the empirical evidence is mixed. High pay dispersion may act as an extra incentive for employees' effort or it may reduce motivation and team cohesiveness. These effects can also coexist and the prevalence of one...

This paper focuses on the difficulty of standard life-cycle models to predict the behavior observed in the reality, most noticeably the excess sensitivity of consumption to income, the under-provision for old-age consumption, the limited participation in the financial market, and the lack of...

This paper proposes a new test for verifying the mean-variance efficiency of household portfolios. Unlike the standard statistics, the test takes account of two additional aspects: 1) wealth consists of real estate, held in fixed proportions in the short term, as well as financial assets, and 2)...

We study numerically the inter- and intra-generational welfare consequences of alternative pension fund policies in response to unexpected demographic, financial and macro-economic shocks. Our analysis is based on an applied many-generation OLG model describing a small-open economy with...

Temptations are a largely unavoidable part of life. Resisting them is usually seen as a virtuous behavior. Recent research in social psychology, however, suggests that using willpower to delay gratification can detrimentally impact performance on immediately subsequent tasks. Using standard...

We develop a model of optimal asset allocation based on a utility framework. This applies to a more general context than the classical mean-variance paradigm since it can also account for the presence of constraints in the portfolio composition. Using this approach, we study the distribution of...