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Pope, Robin; Selten, Reinhard - 2009

The paper re-expresses and complements arguments against the normative validity of expected utility theory in Robin …. It will be shown that there are serious objections against the modification of expected utility theory axiomatised by … Kreps and Porteus (1978, 1979). By contrast the umbrella theory proffered by Pope that she has now termed SKAT, the Stages …

Persistent link: https://www.econbiz.de/10010270013

Optimal Stopping with Dynamic Variational Preferences

Engelage, Daniel - 2009

theory. To illustrate results, we consider prominent examples: dynamic entropic risk measures and a dynamic version of …

Persistent link: https://www.econbiz.de/10010270015

Competitive Careers as a Way to Mediocracy

Kräkel, Matthias - 2009

We show that in competitive careers based on individual performance the least productive individuals may have the highest probabilities to be promoted to top positions. These individuals have the lowest fall-back positions and, hence, the highest incentives to succeed in career contests. This...

Persistent link: https://www.econbiz.de/10010270016

Standard Breach Remedies, Quality Thresholds, and Cooperative Investments

Stremitzer, Alexander - 2008

When investments are non-verifiable, inducing cooperative investments with simple contracts may not be as difficult as previously thought. Indeed, modeling “expectation damages” close to legal practice, we show that the default remedy of contract law induces the ?rst best. Yet, in order to...

Persistent link: https://www.econbiz.de/10010270017

Minimum Wages and Excessive Effort Supply

Kräkel, Matthias; Schöttner, Anja - 2009

It is well-known that, in static models, minimum wages generate positive worker rents and, consequently, ine?ciently low effort. We show that this result does not necessarily extend to a dynamic context. The reason is that, in repeated employment relationships, ?rms may exploit workers’ future...

Persistent link: https://www.econbiz.de/10010270019

Improved Modeling of Double Default Effects in Basel II - An Endogenous Asset Drop Model without Additional Correlation

Ebert, Sebastian; Lütkebohmert, Eva - 2009

In 2005 the Internal Ratings Based (IRB) approach of `Basel II' was enhanced by a `treatment of double default effects' to account for credit risk mitigation techniques such as ordinary guarantees or credit derivatives. This paper reveals several severe problems of this approach and presents a...

Persistent link: https://www.econbiz.de/10010270021

Engel’s Law Reconsidered

Chakrabarty, Manisha; Hildenbrand, Werner - 2009

Engel's verbal formulation of his Law expresses a "negativ stochastic association" of the bivariate distribution of income and food share across the population. Among the many different definitions of association four are chosen: Kendall's tau, negative quadrant dependence, stochastically...

Persistent link: https://www.econbiz.de/10010270022

Nominalist Heuristics and Economic Theory

Pope, Robin; Selten, Reinhard; Kube, Sebastian - 2009

incompatible with expected utility theory which excludes the evaluation stage, and are also incompatible with prospect theory which … faced under risk and uncertainty, namely models under the umbrella of SKAT, the Stages of Knowledge Ahead Theory. A sequel …

Persistent link: https://www.econbiz.de/10010270023

Financial globalization, financial frictions and optimal monetary policy

Faia, Ester; Iliopulos, Esti - 2010

answer this question we lay down an open economy model where net lending toward the rest of the world is constrained by a …

Persistent link: https://www.econbiz.de/10010270033

The formation of urban centers under R&D and spillover externalities

Kranich, Jan - 2009

This paper proposes a model of urban agglomeration in conjunction with imperfect competition and endogenous product R&D of firms. The quality of differentiated manufacturing goods is a result of R&D services provided by research firms. Sectoral interactions are subject to spatially dependent...

Persistent link: https://www.econbiz.de/10010270037