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Don’t Ignore Inflation Ignorance : An Experimental Analysis of the Degree of Money Illusion in Individual Decision Making

Branger, Nicole - 2019

Money illusion refers to the tendency to evaluate economic transactions in nominal rather than real terms. One manifestation of this phenomenon is the tendency to neglect future inflation in intertemporal investment decisions. Empirical evidence for this “inflation ignorance” is hard to...

Persistent link: https://www.econbiz.de/10012900193

Currency numerosity effects on the perceived value of transactions

Soman, Dilip (contributor); Wertenbroch, Klaus (contributor) - 2002 - [Elektronische Ressource]

Persistent link: https://www.econbiz.de/10001719515

Bütçe açığının cari işlemler üzerindeki etkileri: Teori ve uygulama

Bilgili, Faik; Bilgili, Emine - 1998

). Traditional theory asserts that the BD leads to CAD, given that government expenditures are fixed. As disposable income increases …

Persistent link: https://www.econbiz.de/10015257198

Essays on the term structure of interest rates and long-run risks

Hasseltoft, Henrik - 2009

Persistent link: https://www.econbiz.de/10003918843

Prominent numbers, indices and ratios in exchange rate determination and financial crashes : in Economists' models, in the field and in the laboratory

Pope, Robin; Selten, Reinhard; Kube, Sebastian; Hagen, … - 2009

laboratory. Third, nominalist heuristics are incompatible with expected utility theory which excludes the evaluation stage, and … are also incompatible with prospect theory which assumes that, while the evaluation stage can involve systematic mistakes … model and identify what is a mistake, and b) decision makers can maximise. However, contrary to prospect theory, in the …

Persistent link: https://www.econbiz.de/10003867227

Consumption velocity in a cash costly-credit model

Scheffel, Eric (contributor) - 2008

In a seminal study Hodrick et al. (1991) evaluate the ability of a simple cash-credit model to produce realistic variability in consumption velocity while at the same time successfully explaining other key statistics. Sufficient variability in the latter is found to be associated with far too...

Persistent link: https://www.econbiz.de/10003799523

Carbon pricing and consumer myopia

Antweiler, Werner - 2024

When faced with making economic trade-offs between lower upfront purchase costs and lower operating costs, many consumers experience “capital bias”, a phenomenon that is tantamount to discounting future costs excessively. Consumers may therefore end up with investments that are sub-optimal...

Persistent link: https://www.econbiz.de/10015272125

Default option, risk-aversion and household borrowing behaviour

Größl, Ingrid; Fritsche, Ulrich - 2007

Assuming a risk-neutral bank and assuming household utility to be exponential, we show how under information symmetry the covariance of income and loan repayments may explain higher household borrowings than in the case without default option. Under ex post information asymmetry and positive...

Persistent link: https://www.econbiz.de/10010426364

Saving rates and portfolio choice with subsistence consumption

Achury, Carolina; Hubar, Sylwia; Koulovatianos, Christos - 2011

We analytically show that a common across rich/poor individuals Stone-Geary utility function with subsistence consumption in the context of a simple two-asset portfolio-choice model is capable of qualitatively and quantitatively explaining: (i) the higher saving rates of the rich, (ii) the...

Persistent link: https://www.econbiz.de/10008856389

Exponential-Growth Bias and Lifecycle Consumption

Levy, Matthew - 2015

Exponential-growth bias (EGB) is the tendency for individuals to partially neglect compounding of exponential growth. We develop a model wherein biased agents misperceive the intertemporal budget constraint, and derive conditions for overconsumption and dynamic inconsistency. We construct an...

Persistent link: https://www.econbiz.de/10013036519