Similar Search Results

The Optimal Amount of Attention to Capital Income Risk and Heterogeneous Precautionary Saving Behavior

Yin, Penghui - 2019

This paper studies attention allocation behavior of rationally inattentive consumers who have CRRA preferences, face uninsured capital income risk, and suffer from an information-processing capacity constraint. For given attention devoted to capital income risk, we solve for the optimal...

Persistent link: https://www.econbiz.de/10012892117

How changing prudence and risk aversion affect optimal saving

Bauer, Christian; Buchholz, Wolfgang - 2008

function change. Increasing prudence alone will induce higher savings only if, for certain combinations of the interest rate …

Persistent link: https://www.econbiz.de/10010264467

Advantageous Selection Without Moral Hazard (with an Application to Life Care Annuities)

De Donder, Philippe; Leroux, M.‐L; Salanié, François - 2022

Advantageous (or propitious) selection occurs when an increase in the premium of an insurance contract induces high … insurance demand are high. We then move to standard settings satisfying the single-crossing property and show that advantageous … face two mutually exclusive risks that are bundled together in a single insurance contract. We exemplify this last case …

Persistent link: https://www.econbiz.de/10014083046

Insurance for Catastrophes - Indemnity vs. Parametric Insurance with Imperfect Information

Feess, Eberhard; Jordan, Cathrin; Noy, Ilan - 2022

Insurance for natural hazards - earthquakes, hurricanes, or pandemics - is rarely comprehensively adopted without …. Efforts to close this insurance gap include the introduction of parametric (index) insurance products for various catastrophic … risks. We compare parametric to indemnity insurance in a simple model where the insurance company has superior information …

Persistent link: https://www.econbiz.de/10013296268

Changes in risk and the demand for saving

Eeckhoudt, Louis; Schlesinger, Harris - 2008

How does risk affect saving? Empirical work typically examines the effects of detectible differences in risk within the data. How these differences affect saving in theoretical models depends on the metric one uses for risk. For labor-income risk, second-degree increases in risk require prudence...

Persistent link: https://www.econbiz.de/10010264428

School Choice and Loss Aversion

Meisner, Vincent; Wangenheim, Jonas von - 2021

Evidence suggests that participants in direct student-proposing deferred-acceptance mechanisms (DA) play dominated strategies. To explain the data, we introduce expectation-based loss aversion into a school-choice setting and characterize choice-acclimating personal equilibria in DA. We find...

Persistent link: https://www.econbiz.de/10013310767

The Pygmalion effect : an agency model with reference dependent preferences

Daido, Kohei; Itoh, Hideshi - 2005

We attempt to formulate and explain two types of self-fulfilling prophecy, called the Pygmalion effect (if a supervisor thinks her subordinates will succeed, they are more likely to succeed) and the Galatea effect (if a person thinks he will succeed, he is more likely to succeed). To this...

Persistent link: https://www.econbiz.de/10010261169

Perceived Relative Wealth and Risk Taking

Fehr, Dietmar; Reichlin, Yannick - 2021

We show that perceptions of relative rank in the wealth distribution shape individuals’ willingness to take risks. Using a representative large-scale survey, we manipulate perceptions of relative standing by randomly varying response categories when asking respondents about their wealth level....

Persistent link: https://www.econbiz.de/10013215212

Mechanism Design with Narratives

Lang, Matthias - 2020

Individuals use narratives as rationales or justifications to make their claims more convincing. I provide a general framework for partial verifiability based on narratives. Narratives give many reasons and arguments. The receiver derives the message's meaning by aggregating these reasons; her...

Persistent link: https://www.econbiz.de/10012824823

Flexible contracts

Gottardi, Piero; Tallon, Jean Marc; Ghirardato, Paolo - 2010

This paper studies the costs and benefits of delegating decisions to superiorly informed agents relative to the use of rigid, non discretionary contracts. Delegation grants some flexibility in the choice of the action by the agent, but also requires the use of an appropriate incentive contract...

Persistent link: https://www.econbiz.de/10010266080