Demographic changes, tight public budgets, and reduced generosity of occupational pension plans shift the responsibility for an adequate retirement provision towards the individual. Applying the theoretical perspectives of Behavioural Finance and New Institutionalism to the domain of retirement...

People have the natural tendency to be optimistic and believe that good outcomes in the future are more likely, but also want to avoid overestimation that could result in bad decision-making. Brunnermeier, Gollier and Parker (2005, 2007) established an optimal beliefs framework that balances...

Human beliefs, while always remaining in equilibrium, serve as a an equilibrium selector and determine the degree of aggregate volatility. Fully rational and risk averse economic agents expect macro-level dynamics to be characterized by a specific degree of volatility. Given this expectation the...

Learning models extend the traditional discrete choice framework by postulating that consumers have incomplete information about product attributes, and that they learn about these attributes over time. In this survey we describe the literature on learning models that has developed over the past...

On average, "young" people underestimate whereas "old" people overestimate their chances to survive into the future. We adopt a Bayesian learning model of ambiguous survival beliefs which replicates these patterns. The model is embedded within a non-expected utility model of life-cycle...

This article questions the rather pessimistic conclusions of Allen and Carroll (2001) about the ability of consumer to learn the optimal buffer-stock based consumption rule. To this aim, we develop an agent based model where alternative learning schemes can be compared in terms of the...

Observed individual behavior in the presence of ambiguity is characterized by insufficient responsiveness to changes in subjective likelihoods. Such likelihood insensitivity under ambiguity is integral to theoretical models and predictive of behavior in many important domains such as financial...

This paper develops a theoretical model for the formation of subjective beliefs on individual survival expectations. Data from the Health and Retirement Study (HRS) indicate that, on average, young respondents underestimate their true survival probability whereas old respondents overestimate...

The structure of uncertainty underlying certain decision problems may be so complex as to elude decision-makers' full understanding, curtailing their willingness to pay for payoff-relevant information — a puzzle manifesting itself in, for instance, low stock-market participation rates. I...

Experimental evidence shows that the rational expectations hypothesis fails to characterize the path to equilibrium after an exogenous shock when actions are strategic complements. Under identical shocks, however, repetition allows adaptive learning, so that inertia in adjustment should fade...