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A Principal-Agent Model of Sequential Testing

Gerardi, Dino; Maestri, Lucas - Cowles Foundation for Research in Economics, Yale University - 2008

This paper analyzes the optimal provision of incentives in a sequential testing context. In every period the agent can acquire costly information that is relevant to the principal's decision. Neither the agent's effort nor the realizations of his signals are observable. First, we assume that the...

Persistent link: https://www.econbiz.de/10005593245

A Reexamination of the Consumption Function Using Frequency Domain Regressors

Corbea, Dean; Ouliaris, Sam; Phillips, Peter C.B. - Cowles Foundation for Research in Economics, Yale University - 1991

This paper reexamines the permanent income hypothesis (PIH) in the frequency domain. Using a simple model, we demonstrate that the PIH implies the marginal propensity to consume (MPC) out of zero frequency income is unity. The PIH also implies that the MPC out of transitory (or high frequency)...

Persistent link: https://www.econbiz.de/10005463988

Insurance in Extended Family Networks

Attanasio, Orazio; Mommaerts, Corina; Meghir, Costas - Cowles Foundation for Research in Economics, Yale University - 2015

We investigate partial insurance and group risk sharing in extended family networks. Our approach is based on decomposing income shocks into group aggregate and idiosyncratic components, allowing us to measure the extent to which each is insured, having accounted for public insurance programs....

Persistent link: https://www.econbiz.de/10011210466

The Effect of Language on Economic Behavior: Evidence from Savings Rates, Health Behaviors, and Retirement Assets

Chen, M. Keith - Cowles Foundation for Research in Economics, Yale University - 2011

Languages differ widely in the ways they encode time. I test the hypothesis that languages that grammatically associate the future and the present, foster future-oriented behavior. This prediction arises naturally when well-documented effects of language structure are merged with models of...

Persistent link: https://www.econbiz.de/10009275590

Hyperbolic Discounting Is Rational: Valuing the Far Future with Uncertain Discount Rates

Farmer, J. Doyne; Geanakoplos, John - Cowles Foundation for Research in Economics, Yale University - 2009

Conventional economics supposes that agents value the present vs. the future using an exponential discounting function. In contrast, experiments with animals and humans suggest that agents are better described as hyperbolic discounters, whose discount function decays much more slowly at large...

Persistent link: https://www.econbiz.de/10005010141

Dynamic Moral Hazard without Commitment

Horner, Johannes; Samuelson, Larry - Cowles Foundation for Research in Economics, Yale University - 2015

We study a discrete-time model of repeated moral hazard without commitment. In every period, a principal finances a … the returns of a successful project unbeknownst the principal. The absence of commitment is reflected both in the solution … period to the next. We show that removing commitment from the equilibrium concept is relatively innocuous -- if the players …

Persistent link: https://www.econbiz.de/10011170126

Market Valuation of Accrued Social Security Benefits

Geanakoplos, John; Zeldes, Stephen P. - Cowles Foundation for Research in Economics, Yale University - 2009

One measure of the health of the Social Security system is the difference between the market value of the trust fund and the present value of benefits accrued to date. How should present values be computed for this calculation in light of future uncertainties? We think it is important to use...

Persistent link: https://www.econbiz.de/10005036152

Reforming Social Security with Progressive Personal Accounts

Geanakoplos, John; Zeldes, Stephen P. - Cowles Foundation for Research in Economics, Yale University - 2008

The heated debate about how to reform Social Security has come to a standstill because the view of most Democrats (that Social Security must be a defined benefits plan similar in spirit to the current system) seems irreconcilable with the proposals supported by many Republicans (to create a...

Persistent link: https://www.econbiz.de/10005010140

The Dynamic Pivot Mechanism

Bergemann, Dirk; Valimaki, Juuso - Cowles Foundation for Research in Economics, Yale University - 2008

We consider truthful implementation of the socially efficient allocation in an independent private-value environment in which agents receive private information over time. We propose a suitable generalization of the pivot mechanism, based on the marginal contribution of each agent. In the...

Persistent link: https://www.econbiz.de/10005463962

The Dynamic Pivot Mechanism

Bergemann, Dirk; Valimaki, Juuso - Cowles Foundation for Research in Economics, Yale University - 2008

Persistent link: https://www.econbiz.de/10008547443