Search Results - subject:"time inconsistency."

Manzini, Paola; Mariotti, Marco - 2021

In the last twenty years a growing body of experimental evidence has posed a challenge to the standard Exponential Discounting Model of choice over time. Attention has focused on some specific 'anomalies', notably preference reversal and declining discount rates, leading to the formulation of...

Persistent link: https://www.econbiz.de/10013316853

Minority Voting and Long-Term Decisions

Fahrenberger, Theresa; Gersbach, Hans - 2021

In this paper we propose minority voting as a scheme that can partially protect individuals from the risk of repeated exploitation. We consider a committee that meets twice to decide about projects where the first-period project may have a long-lasting impact. In the first period a simple open...

Persistent link: https://www.econbiz.de/10013316931

Macroeconomic Consequences of Distributional Conflicts

Schaefer, Andreas; Steger, Thomas M. - 2021

interaction among major interest groups. We decompose the overall inefficiency into three components: (i) a fundamental time … inconsistency problem; (ii) strategic interaction in the political process; (iii) heterogeneity among individuals and the resulting …

Persistent link: https://www.econbiz.de/10013317028

The Optimal Degree of Discretion in Monetary Policy

Athey, Susan; Atkeson, Andrew; Kehoe, Patrick J. - 2021

specifies the highest allowable inflation rate. The more severe the time inconsistency problem, the more tightly the cap … monetary authority discretion to react to its private information against society's need to guard against the time … inconsistency problem arising from the temptation to stimulate the economy with unexpected inflation. Although this dynamic …

Persistent link: https://www.econbiz.de/10013319354

Measuring the Time-Inconsistency of Us Monetary Policy

Surico, Paolo - 2021

monetary policy time-inconsistency due to Cukierman (2002). In the presence of asymmetric preferences, the monetary authorities …

Persistent link: https://www.econbiz.de/10013319560

Escaping Nash Inflation

Cho, In-Koo; Sargent, Thomas J. - 2021

Mean dynamics govern convergence to rational expectations equilibria of self-referential systems under least squares learning. We highlight escape dynamics that propel away from a rational expectations equilibrium under fixed-gain recursive learning schemes. These learning schemes discount past...

Persistent link: https://www.econbiz.de/10013320318

A Vague Theory of Choice Over Time

Manzini, Paola; Mariotti, Marco - 2021

cyclical preferences. We also present an application to a form of time inconsistency which we dub "the now or never fallacy" …

Persistent link: https://www.econbiz.de/10013320507

Globalization and Human Capital Formation

Andersson, Fredrik; Konrad, Kai A. - 2021

This paper compares education investment in closed and open economies without government and with a benevolent government. The fact that the time consistency problem in taxation can make labor mobility beneficial even if governments are fully benevolent ? which is known from other contexts ? is...

Persistent link: https://www.econbiz.de/10013321040

Bailouts, Time Inconsistency, and Optimal Regulation

Chari, Varadarajan V.; Kehoe, Patrick J. - 2021

the debt-to-value ratio of firms mitigates the time-inconsistency problem by eliminating the incentives of governments to …

Persistent link: https://www.econbiz.de/10013311917

Time Consistent Equilibria in Dynamic Models With Recursive Payoffs and Behavioral Discounting

Balbus, Lukasz; Reffett, Kevin L.; Wozny, Lukasz Patryk - 2021

We prove existence of time consistent equilibria in a wide class of dynamic models with recursive payoffs and generalized discounting involving both behavioral and normative applications. Our generalized Bellman equation method identifies and separates both: recursive and strategic aspects of...

Persistent link: https://www.econbiz.de/10013251894