What happens when the anchoring and adjustment heuristic of Tversky and Kahneman (1974) is incorporated in the standard consumption-based capital asset pricing model (CCAPM)? The surprising finding is that it not only resolves the high equity-premium and low risk-free rate puzzles with a low...

The Walrasian model has played a central role in all aspects of economics. The purpose of this paper is to propose a general modeling of differential information in the spirit of the Arrow-Debreu model and following the Radner tradition but away from the usual measurability conception. We...

This article analyzes the effect of speculation on the economic welfare from various criteria, using a simple Edgeworth box within a three-period Walrasian competition framework. Here “speculation” is defined as a series of transition processes of each agent’s spontaneous production of...

We introduce uncertainty into a pure exchange economy and establish a connection between Shannon’s differential entropy and uniqueness of price equilibria. The following conjecture is proposed under the assumption of a uniform probability distribution: entropy is minimal if and only if the...

We consider an overlapping generations model à la Diamond (1965) with two additional ingredients: altruism and an asset (or land) bringing non-stationary positive dividends (or fruits). We study the global dynamics of capital stocks and asset values as well as the interplay between them. Asset...

I study the consumption responses of heterogeneous households following changes in both house prices and interest rates. I show the common assumption that household period utility is separable in housing and consumption can be consistent with the observed co-movement between these two series...