Search Results - subject:"Time Inconsistency"

Delegation versus communication in the organization of government

Ludema, Rodney D. (contributor); … - 2006

paper examines both questions within a model of policymaking under time inconsistency, a setting in which the government has … delegating authority, as long as the time inconsistency problem is not too severe. The second main finding is that the government … optimal policy. [Keywords: Political Economy, Delegation, Communication, Organizational Design, Time Inconsistency. JEL …

Persistent link: https://www.econbiz.de/10003748156

Information, evolution and utility

Samuelson, Larry; Swinkels, Jeroen M. - In: Theoretical economics : TE ; an open access journal in … 1 (2006) 1, pp. 119-142

Human utility embodies a number of seemingly irrational aspects. The leading example in this paper is that utilities often depend on the presence of salient unchosen alternatives. Our focus is to understand <i>why</i> an evolutionary process might optimally lead to such seemingly dysfunctional features...

Persistent link: https://www.econbiz.de/10011704445

Inter-Temporal Price Discrimination with Time-Inconsistent Consumers

Sarafidis, Yianis - 2006

This paper analyzes the inter-temporal price discrimination problem of a durable good monopolist facing time-inconsistent consumers. We look at both cases of sophisticated and naive time-inconsistent consumers, but the emphasis is on the naive case. When consumers are naive, we first need to...

Persistent link: https://www.econbiz.de/10014059745

Inflation Band Targeting and Optimal Inflation Contracts

Mishkin, Frederic S. - 2006

In this paper we examine how target ranges work in the context of a Barro-Gordon (1983) type model, in which the time-inconsistency … with the time-inconsistency problem, and achieve many of the benefits that arise under practically less attractive …

Persistent link: https://www.econbiz.de/10012466281

Markets Versus Governments : Political Economy of Mechanisms

Acemoglu, Daron - 2006

We study the optimal Mirrlees taxation problem in a dynamic economy with idiosyncratic (productivity or preference) shocks. In contrast to the standard approach, which implicitly assumes that the mechanism is operated by a benevolent planner with full commitment power, we assume that any...

Persistent link: https://www.econbiz.de/10012466444

Time-Consistency of Indifference Prices and Monetary Utility Functions

Cheridito, Patrick - 2006

We consider an economic agent with dynamic preference over a set of uncertain monetary payoffs. We assume that the agent's preferences are given by utility functions, which are updated in a time-consistent way as more information is becoming available. Our main result is that the agent's...

Persistent link: https://www.econbiz.de/10012734662

Time Consistency and Bureaucratic Budget Competition

Kessing, Sebastian - 2006

High employment protection in the public sector results in strategic over-employment if government divisions compete for budgets in a dynamic setting. Bureaucrats who are interested in maximising their divisions' output employ excess labor, since this induces the sponsor to provide complementary...

Persistent link: https://www.econbiz.de/10012779343

Inflation Band Targeting and Optimal Inflation Contracts

Mishkin, Frederic S. - 2006

Persistent link: https://www.econbiz.de/10012779650

Does the Time Inconsistency Problem Make Flexible Exchange Rates Look Worse than You Think?

Armenter, Roc; Bodenstein, Martin - 2006

The Barro-Gordon inflation bias has provided the most influential argument for fixed exchange rate regimes. However, with low inflation rates now widespread, credibility concerns seem no longer relevant. Why give up independent monetary policy to contain an inflation bias that is already under...

Persistent link: https://www.econbiz.de/10014054897

Oil Price Dynamics and Monetary Policy in a Heterogeneous Monetary Union

Clausen, Volker; Wohltmann, Hans-Werner - In: Jahrbücher für Nationalökonomie und Statistik 233 (2013) 2, pp. 159-187

Summary This paper analyzes the dynamic effects of oil price increases in a small two-country monetary union with asymmetric wage adjustment equations. Common oil price shocks lead during the adjustment process to temporary divergences in output and inflation and also to reversals in the...

Persistent link: https://www.econbiz.de/10014609438