Although the link between risk aversion and diminishing marginal utility of wealth is academically well established, theoretical discussions concerning its empirical validity remain. The presented, review-type paper aims to briefly examine theoretical roots responsible for the different views on...

Fluctuations in income and population are imperative elements for changing the structure of food demand. In perspective of the significance of food demand examination for provinces of Pakistan, thisstudy investigatesthe demand elasticities and household consumption behaviour both at the...

In the present paper, we investigate the Merton portfolio management problem in the context of non-exponential discounting, a context that gives rise to time-inconsistency of the decision-maker. We consider equilibrium policies within the class of open-loop controls that are characterized, in...

Habit persistence across six U.S. tourism sub-industries is estimated using a dynamic forward looking model. Estimates show that habits largely determine current expenditure for air transportation, shopping, accommodation, and other transportation. Estimated uncompensated price elasticities find...

Long-term data show that the dynamic efficiency condition rg holds when g is represented by the average growth rate of real GDP if r is the average real rate of return on equity, E(re ), but not if r is the risk-free rate, rf . This pattern accords with a simple disaster-risk model calibrated to...

We present a new partial equilibrium theory of price adjustment, based on consumer loss aversion. In line with prospect theory, the consumers’ perceived utility losses from price increases are weighted more heavily than the perceived utility gains from price decreases of equal magnitude. Price...