On average, "young" people underestimate whereas "old" people overestimate their chances to survive into the future. We adopt a Bayesian learning model of ambiguous survival beliefs which replicates these patterns. The model is embedded within a non-expected utility model of life-cycle...

We construct and solve a dynamically inconsistent Choquet expected utility life-cycle model for naive and sophisticated agents, respectively. Pollak (1968) shows that the realized saving behavior of naive and sophisticated agents be- comes identical for a logarithmic period-utility function. As...

Psychological evidence suggests that people's learning behavior is often prone to a 'myside bias' or 'irrational belief persistence' in contrast to learning behavior exclusively based on objective data. In the context of Bayesian learning such a bias may result in diverging posterior beliefs and...