In a strategy-proof mechanism, implementation theory mostly assumes that each agent is rational in the sense that the agent reveals its true preference to induce its most preferred outcome. This assumption is sufficient to guarantee that the agent seeks such an outcome, but not necessary because...

I study how the cognitive demands of financial planning shape household decisionmaking with respect to consumption out of windfall income shocks. I build a quantitative model of bounded rationality in which reoptimization is costly. Households respond to windfall income shocks by choosing a...

The transition to neighborhood-scale district heating in the Netherlands frequently stalls due to the challenge of achieving a collective agreement among individual homeowners. To explore the micro-dynamics of this collective action problem, this paper introduces an agent-based model that...

Purpose This study aims to elucidate the dynamics of monetary and fiscal policy interactions in Brazil, focusing on the impacts of positive shocks in government consumption and interest rates. By comparing rational and behavioral agent responses, it clarifies how these frameworks influence gross...

This paper integrates overprecision-a form of overconfidence where individuals overestimate the accuracy of their beliefs-into a canonical rational inattention model. We show that overprecision distorts belief updating directly by biasing the perceived value of new information and indirectly by...

Inadequate financial literacy and overconfidence in financial knowledge, coupled with the use of mobile payments (MPs), may contribute to harmful financial behaviors. While the relationship between financial knowledge confidence and financial behaviors is well documented, there is limited...