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A Tractable Model of Buffer Stock Saving

Carroll, Christopher D. - 2009

We present a tractable model of the effects of nonfinancial risk on intertemporal choice. Our purpose is to provide a simple framework that can be adopted in fields like representative-agent macroeconomics, corporate finance, or political economy, where most modelers have chosen not to...

Persistent link: https://www.econbiz.de/10012463386

Do Lottery Payments Induce Savings Behavior : Evidence from the Lab

Filiz-Ozbay, Emel - 2013

This paper presents the results of a laboratory experiment designed to investigate whether the option of a Prize Linked … Savings (PLS) product alters the likelihood that subjects choose to delay payment. By comparing PLS and standard savings … men, self-reported lottery players, and subjects with low bank account balances. We use the results of our experiment to …

Persistent link: https://www.econbiz.de/10012459532

Confidence and the Propagation of Demand Shocks

Angeletos, Marios - 2020

We revisit the question of why shifts in aggregate demand drive business cycles. Our theory combines intertemporal substitution in production with rational confusion (or bounded rationality) in consumption. The first element allows aggregate supply to respond to shifts in aggregate demand...

Persistent link: https://www.econbiz.de/10012481250

Defaults and Attention : The Drop Out Effect

Caplin, Andrew - 2012

When choice options are complex, policy makers may seek to reduce decision making errors by making a high quality option the default. We show that this positive effect is at risk because such a policy creates incentives for decision makers to "drop out" by paying no attention to the decision and...

Persistent link: https://www.econbiz.de/10012460671

Thinking Ahead : The Decision Problem

Bolton, Patrick - 2005

individual decision maker's thinking process as a thought-experiment that takes time and let the decision maker "think ahead …

Persistent link: https://www.econbiz.de/10012466804

The Welfare Cost of Retirement Uncertainty

Caliendo, Frank N. - 2016

Uncertainty about the timing of retirement is a major financial risk with implications for decision making and welfare over the life cycle. We estimate that the standard deviation of the difference between retirement expectations and actual retirement dates ranges from 4.28 to 6.92 years. We...

Persistent link: https://www.econbiz.de/10012456070

Estimating Dynamic Discrete Choice Models with Hyperbolic Discounting, with an Application to Mammography Decisions

Fang, Hanming - 2010

We extend the semi-parametric estimation method for dynamic discrete choice models using Hotz and Miller's (1993) conditional choice probability (CCP) approach to the setting where individuals may have hyperbolic discounting time preferences and may be naive about their time inconsistency. We...

Persistent link: https://www.econbiz.de/10012462218

Risk Preferences Are Not Time Preferences : Discounted Expected Utility with a Disproportionate Preference for Certainty

Andreoni, James - 2010

Risk and time are intertwined. The present is known while the future is inherently risky. Discounted expected utility provides a simple, coherent structure for analyzing decisions in intertemporal, uncertain environments. However, we document robust violations of discounted expected utility,...

Persistent link: https://www.econbiz.de/10012462308

Cognitive Uncertainty in Intertemporal Choice

Enke, Benjamin; Graeber, Thomas Wilhelm - National Bureau of Economic Research - 2021

This paper studies the relevance of cognitive uncertainty - subjective uncertainty over one's utility-maximizing action - for understanding and predicting intertemporal choice. The main idea is that when people are cognitively noisy, such as when a decision is complex, they implicitly treat...

Persistent link: https://www.econbiz.de/10012794605

Minimax-Regret Climate Policy with Deep Uncertainty in Climate Modeling and Intergenerational Discounting

DeCanio, Stephen J.; Manski, Charles F.; Sanstad, Alan H. - National Bureau of Economic Research - 2022

Integrated assessment models have become the primary tools for comparing climate policies that seek to reduce greenhouse gas emissions. Policy comparisons have often been performed by considering a planner who seeks to make optimal trade-offs between the costs of carbon abatement and the...

Persistent link: https://www.econbiz.de/10012938685