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  <title>EconStor Collection:</title>
  <link rel="alternate" href="https://hdl.handle.net/10419/68487" />
  <subtitle />
  <id>https://hdl.handle.net/10419/68487</id>
  <updated>2026-04-28T14:09:22Z</updated>
  <dc:date>2026-04-28T14:09:22Z</dc:date>
  <entry>
    <title>The consumption-investment decision of a prospect theory household: A two-period model with an endogenous second period reference level</title>
    <link rel="alternate" href="https://hdl.handle.net/10419/195953" />
    <author>
      <name>Hlouskova, Jaroslava</name>
    </author>
    <author>
      <name>Fortin, Ines</name>
    </author>
    <author>
      <name>Tsigaris, Panagiotis</name>
    </author>
    <id>https://hdl.handle.net/10419/195953</id>
    <updated>2023-11-03T02:08:32Z</updated>
    <published>2018-01-01T00:00:00Z</published>
    <summary type="text">Title: The consumption-investment decision of a prospect theory household: A two-period model with an endogenous second period reference level
Authors: Hlouskova, Jaroslava; Fortin, Ines; Tsigaris, Panagiotis
Abstract: In this paper we analyze the two-period consumption-investment decision of a household with prospect theory preferences and an endogenous second period reference level which captures habit persistence in consumption and in the current consumption reference level. In particular, we examine three types of household depending on how the household's current consumption reference level relates to a given threshold which is equal to the average discounted endowment income. The first type of household has a relatively low reference level (less ambitious household) and can avoid relative consumption losses in both periods. The second type of household (balanced household) always consumes exactly its reference levels. The third type of household has a relatively high reference level (more ambitious household) and cannot avoid to incur relative consumption losses, either now or in the future. Note that these households may act very differently from one another and thus there will often be a diversity of behavior. For all three types we examine how the household reacts to changes in: income (e.g., income fall caused by recession or taxation of endowment income), persistence to consumption, the first period reference level and the degree of loss aversion. Among others we find that the household increases its exposure to risky assets in good economic times if it is less ambitious and in bad economic times if it is more ambitious. We also find that in some cases more income can lead to less happiness. In addition, the less ambitious household and the more ambitious household with a higher time preference will be less happy with a rising persistence in consumption while the more ambitious household with a lower time preference will be happier if it sticks more to its consumption habits. Finally, the household will be happiest for the lowest possible current consumption reference level, i.e., not comparing at all will lead to the highest level of happiness.</summary>
    <dc:date>2018-01-01T00:00:00Z</dc:date>
  </entry>
  <entry>
    <title>Risk, time pressure, and selection effects</title>
    <link rel="alternate" href="https://hdl.handle.net/10419/183482" />
    <author>
      <name>Kocher, Martin</name>
    </author>
    <author>
      <name>Schindler, David</name>
    </author>
    <author>
      <name>Trautmann, Stefan T.</name>
    </author>
    <author>
      <name>Xu, Yilong</name>
    </author>
    <id>https://hdl.handle.net/10419/183482</id>
    <updated>2023-11-28T02:13:11Z</updated>
    <published>2018-01-01T00:00:00Z</published>
    <summary type="text">Title: Risk, time pressure, and selection effects
Authors: Kocher, Martin; Schindler, David; Trautmann, Stefan T.; Xu, Yilong
Abstract: Time pressure is a central aspect of economic decision making nowadays. It is therefore natural to ask how time pressure affects decisions, and how to detect individual heterogeneity in the ability to successfully cope with time pressure. In the context of risky decisions, we ask whether a person's performance under time pressure can be predicted by measurable behavior and traits, and whether such measurement itself may be affected by selection issues. We find that the ability to cope with time pressure varies significantly across decision makers, leading to selected subgroups that differ in terms of their observed behaviors and personal traits. Moreover, measures of cognitive ability and intellectual efficiency jointly predict individuals' decision quality and ability to keep their decision strategy under time pressure.</summary>
    <dc:date>2018-01-01T00:00:00Z</dc:date>
  </entry>
  <entry>
    <title>Does having insurance change individuals' self-confidence?</title>
    <link rel="alternate" href="https://hdl.handle.net/10419/183481" />
    <author>
      <name>Guber, Raphael</name>
    </author>
    <author>
      <name>Kocher, Martin G.</name>
    </author>
    <author>
      <name>Winter, Joachim</name>
    </author>
    <id>https://hdl.handle.net/10419/183481</id>
    <updated>2023-12-07T02:26:24Z</updated>
    <published>2018-01-01T00:00:00Z</published>
    <summary type="text">Title: Does having insurance change individuals' self-confidence?
Authors: Guber, Raphael; Kocher, Martin G.; Winter, Joachim
Abstract: Recent research in contract theory on the effects of behavioral biases implicitly assumes that they are stable, in the sense of not being affected by the contracts themselves. In this paper, we provide evidence that this is not necessarily the case. We show that in an insurance context, being insured against losses that may be incurred in a real-effort task changes subjects' self-confidence. Our novel experimental design allows us to disentangle selection into insurance from the effects of being insured by randomly assigning coverage after subjects revealed whether they want to be insured or not. We find that uninsured subjects are underconfident while those that obtain insurance have well-calibrated beliefs. Our results suggest that there might be another mechanism through which insurance affects behavior than just moral hazard.</summary>
    <dc:date>2018-01-01T00:00:00Z</dc:date>
  </entry>
  <entry>
    <title>Population aging and cross-country redistribution in integrated capital markets</title>
    <link rel="alternate" href="https://hdl.handle.net/10419/183480" />
    <author>
      <name>Davoine, Thomas</name>
    </author>
    <id>https://hdl.handle.net/10419/183480</id>
    <updated>2023-12-10T02:46:05Z</updated>
    <published>2018-01-01T00:00:00Z</published>
    <summary type="text">Title: Population aging and cross-country redistribution in integrated capital markets
Authors: Davoine, Thomas
Abstract: Population aging challenges the financing of social security systems in developed economies, as the fraction of the population in working age declines. The resulting pressure on capital-labor ratios translates into a pressure on factor prices and production. While European countries all face this challenge, the speed at which their population ages differs, and thus the pressure on capital-labor ratios. If capital markets are integrated, differences in population aging may lead to cross-country spillovers, as investors freely seek the best returns on capital. Using a multi-country overlapping-generations model covering 14 European Union countries, I quantify spillovers and find that capital market integration leads to redistribution across countries over the long run. For instance, GDP per capita would on average be 2.9 %-points lower in Germany in each of the next 50 years if capital markets were perfectly integrated and public debts kept constants with increases in labor income taxes, compared to a closed economy case; by contrast, GDP per capita would on average be 2.1 %-points higher in France, whose population ages slower than in Germany. I also show that pension reforms can change the cross-country redistribution patterns, some countries losing from capital market integration without the reform but winning with it.</summary>
    <dc:date>2018-01-01T00:00:00Z</dc:date>
  </entry>
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