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Persistent link: https://www.econbiz.de/10011350610
Many empirical studies on intertemporal choice report preference reversals in the sensethat a preference between a small reward to be received soon and a larger reward to bereceived later reverses as both rewards are equally delayed. Such preference reversals arecommonly interpreted as...
Persistent link: https://www.econbiz.de/10011379439
This paper analyzes sin goods consumption when individuals exhibit present-focused preferences. It considers three types of present focus: present-bias with varying degrees of naiveté, Gul-Pesendorfer preferences, and a dual-self approach. We investigate the incentives to deviate from healthy...
Persistent link: https://www.econbiz.de/10012206092
We provide explicit solutions to life-cycle utility maximization problems simultaneously involving dynamic decisions on investments in stocks and bonds, consumption of perishable goods, and the rental and the ownership of residential real estate. House prices, stock prices, interest rates, and...
Persistent link: https://www.econbiz.de/10003838420
This paper combines income and expenditure with time use data to provide a unique picture of the time paths of labour supplies, saving and full consumption for two-adult households over the life cycle. These data are used to test the life cycle model presented in the paper, at the core of which...
Persistent link: https://www.econbiz.de/10013319460
full efficiency. The effect of the inability to commit across time on the savings level is examined under a tractable …
Persistent link: https://www.econbiz.de/10001731772
"Buffer-stock" models of saving are now standard in the consumption literature. This paper builds theoretical foundations for rigorous understanding of the main features of such models, including the existence of a target wealth ratio and the proposition that aggregate consumption growth equals...
Persistent link: https://www.econbiz.de/10009236804
We analyse life-cycle saving decisions when households use simple heuristics, or rules of thumb, rather than solve the underlying intertemporal optimization problem. We simulate life-cycle saving decisions using three simple rules and compute utility losses relative to the solution of the...
Persistent link: https://www.econbiz.de/10009375746
whether subjects treat debt differently than savings. Two treatments create environments where either saving or borrowing is …
Persistent link: https://www.econbiz.de/10010487750
full efficiency. The effect of the inability to commit across time on the savings level is examined under a tractable …
Persistent link: https://www.econbiz.de/10011511104