Showing 1 - 10 of 239
There is evidence that tax rates have varied considerably through time. In the postwar years, changes in business taxation in the U.S. have occurred at a pace of approximately every three years. The purpose of this research is to examine the implications of tax risk and persistence on...
Persistent link: https://www.econbiz.de/10005416801
I present a simple model that formalizes Kahneman's (1973) ideas and experimental work on attention limitations. In addition, I extend his framework to account for the interaction between attention and memory deficits. In particular, I propose that individuals optimally allocate their divisible,...
Persistent link: https://www.econbiz.de/10005416835
People are generally reluctant to accept risk. In particular, people overvalue sure gains, relative to outcomes which are merely probable. At the same time, people are also more willing to accept bets when payoffs involve losses rather than gains. I consider how far adaptive learning can go in...
Persistent link: https://www.econbiz.de/10005416848
A contest model is constructed to examine the existence of conference bias in college basketball's Ratings Percentage Index (RPI). Though a general RPI bias has been identified in previous literature, this is the first study to address whether the bias is random or systematic in nature. Within...
Persistent link: https://www.econbiz.de/10005416923
This paper examines how the incumbency advantage is related to ideological voting or legislative shirking that causes the incumbents to diverge from the preference of the median voter using aggregate data for the U.S. House of Representatives between 1948 and 2000. I find that a rise in the...
Persistent link: https://www.econbiz.de/10005416947
Pooled forecasts frequently outperform individual forecasts of economic time series. This paper shows that the introduction of model uncertainty into the formation of expectations can account for the regularity. We conjecture that agents learn in a Bayesian way, using an optimally designed...
Persistent link: https://www.econbiz.de/10005416954
Dependent background risks which have functional forms are introduced into Lucas economies. This paper determines the conditions on preferences to guarantee the monotonicity of asset prices, when dependent background risks satisfy the monotonicity and the single crossing conditions.
Persistent link: https://www.econbiz.de/10005416968
Abel (2002) proposes a resolution of the riskfree rate and the equity premium puzzles by considering pessimism and doubt. Pessimism is characterized by subjective probabilistic beliefs about consumption growth rates that are stochastically dominated by the objective distribution. The subjective...
Persistent link: https://www.econbiz.de/10005416970
If its utility function is everywhere increasing and concave, rank-dependent expected utility shares a troubling property with expected utility aversion to the same moderate-stakes risk at every wealth level implies an extreme aversion to large-stakes risks. In fact, the problem may be even...
Persistent link: https://www.econbiz.de/10005416998
Experimental research on decision making under risk has until now always employed choice data in order to evaluate the empirical performance of expected utility and the alternative non-expected utility theories. The present paper performs a similar analysis which relies on pricing data instead...
Persistent link: https://www.econbiz.de/10011165898