Psychological evidence suggests that people’s learning behavior is often prone to a “myside bias†or “irrational belief persistence†in contrast to learning behavior exclusively based on objective data. In the context of Bayesian learning such a bias may result in...

We provide a computational economics seminar at the University of Mannheim since two years. An introduction to numerics is given in around six sessions where we present the first six technical chapters of Miranda/Fackler: Applied Computational Economics and Finance (linear and nonlinear systems,...

Population ageing and pension reform will have profound effects on international capital markets. In order to quantify these effects, we develop a computational general equilibrium model. We feed this multi-country overlapping-generations model with detailed long-term demographic projections for...

We model the optimal reaction of a public PAYG pension system to demographic shocks. We compare the ex-ante first best and second best solution of a Ramsey planner with full commitment to the outcome under simple third best rules that mimic the pension systems observed in the real world. The...

This paper employs a large scale overlapping generations (OLG) model with endogenous education to evaluate the quantitative role of human capital adjustments for the economic consequences of demographic change. We find that endogenous human capital formation is an important adjustment mechanism...

Public pensions – the primary pillar of old-age income provision – will, in the future, be less generous than they have been in the past, in particular owing to the impact of demographic change. The pension gap is supposed to be plugged by the second and third pillars of pension...

We define pessimistic, respectively optimistic, investors as CEU (Choquet expected utility) decision makers who update their pessimistic, respectively optimistic, beliefs according to a pessimistic (Dempster-Shafer), respectively optimistic, update rule. This paper then demonstrates that, in...