Search Results - subject:"Dynamic inconsistency"

Optimal Retirement Policies with Present-Biased Agents

Yu, Pei Cheng - 2019

This paper incorporates quasi-hyperbolic discounting into a Mirrlees taxation model to study the design of retirement policies for present-biased agents. I show that the government can improve the screening of productivity by exploiting time inconsistency. This is done by providing commitment to...

Persistent link: https://www.econbiz.de/10012899635

The relation between behavior under risk and over time

Chakraborty, Anujit; Halevy, Yoram; Saito, Kota - 2019

Persistent link: https://www.econbiz.de/10011992574

Does a change of government influence compliance with international agreements? : empirical evidence for the NATO two percent target

Blum, Johannes; Potrafke, Niklas - 2019

We examine whether changes of government influence compliance with international agreements. We investigate compliance with the NATO two percent target to which all NATO countries committed themselves during the NATO summit in Wales in 2014. The dataset includes the military expenditure by NATO...

Persistent link: https://www.econbiz.de/10011966866

Time-Consistency of Optimal Investment under Smooth Ambiguity

Balter, Anne - 2019

We study portfolio choice in a Black-Scholes world under drift uncertainty. Preferences towards risk and ambiguity are modeled using the smooth ambiguity approach under a double power utility assumption and a normal distribution assumption on the unknown drift. Optimal investment in this setting...

Persistent link: https://www.econbiz.de/10012901026

Time Consistency Requirement Implies Generalized Minimal State Variable Criterion

Heartspring, William - 2019

Persistent link: https://www.econbiz.de/10012862500

Conditional Optimal Stopping : A Time-Inconsistent Optimization

Nutz, Marcel - 2019

Inspired by recent work of P.-L. Lions on conditional optimal control, we introduce a problem of optimal stopping under bounded rationality: the objective is the expected payoff at the time of stopping, conditioned on another event. For instance, an agent may care only about states where she is...

Persistent link: https://www.econbiz.de/10012867831

Evolution Equations of Discount Functions and Metrics of Dynamic Inconsistency

Chorvat, Terrence R. - 2019

dynamic inconsistency of behavioral models that gives them their most salient features. The article then develops evolution … equations for some of the most prominent continuous discounting models to more clearly consider their dynamic inconsistency. It … then proposes metrics for the degree of dynamic inconsistency exhibited by discounting models allowing comparison of …

Persistent link: https://www.econbiz.de/10012860111

Uncertainty Under Hyperbolic Discounting : The Cost of Untying Your Hands

Alcocer, Christian - 2019

Persistent link: https://www.econbiz.de/10012858166

Optimal Risk Sharing with Time Inconsistency and Long-Run Risk

Tancheva, Zhaneta - 2019

I examine the role of time inconsistency, modeled by hyperbolic discounting, for the dynamics of asset prices and the wealth distribution between agents. Naive time-inconsistent investors with recursive preferences overconsume and have a lower effective elasticity of intertemporal substitution...

Persistent link: https://www.econbiz.de/10012859110

Optimistic Dynamic Inconsistency

Tang, Rui - 2019

We model a decision maker who anticipates her preference to change in the future, and optimistically evaluates each menu according to the best choice that could possibly be made by her future self. We characterize this menu preference by axioms weak order, independence, semi-continuity,...

Persistent link: https://www.econbiz.de/10012859228