Preferences for risk in a dynamic model with consumption commitments
the consumers who start saving in order to increase consumption of the commitment good in the future become risk lovers. We also argue that such behavior is likely to arise due to the presence of borrowing constraints; therefore suggesting that in the economies with consumption commitments borrowing constraints can make uninsured risk desirable (in contrast, it is known that in standard models borrowing constraints increase the cost of uninsured risk).
|Date of creation:||2007|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.EconomicDynamics.org/society.htm
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Marjorie Flavin & Shinobu Nakagawa, 2004. "A Model of Housing in the Presence of Adjustment Costs: A Structural Interpretation of Habit Persistence," NBER Working Papers 10458, National Bureau of Economic Research, Inc.
- Andrew Postlewaite & Larry Samuelson & Dan Silverman, 2006.
"Consumption Commitments and Employment Contracts,"
321307000000000145, UCLA Department of Economics.
- Andrew Postlewaite & Larry Samuelson & Dan Silverman, 2006. "Consumption Commitments and Employment Contracts," PIER Working Paper Archive 06-028, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania, revised 07 Dec 2006.
- Andrew Postlewaite & Larry Samuelson & Dan Silverman, 2001. "Consumption Commitments and Employment Contracts," PIER Working Paper Archive 06-002, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania, revised 14 Jan 2006.
- Athreya, Kartik B., 2002. "Welfare implications of the Bankruptcy Reform Act of 1999," Journal of Monetary Economics, Elsevier, vol. 49(8), pages 1567-1595, November.
- Galina Vereshchagina & Hugo A. Hopenhayn, 2009.
"Risk Taking by Entrepreneurs,"
American Economic Review,
American Economic Association, vol. 99(5), pages 1808-30, December.
- Stephen H. Shore & Todd Sinai, 2010.
"Commitment, Risk, and Consumption: Do Birds of a Feather Have Bigger Nests?,"
The Review of Economics and Statistics,
MIT Press, vol. 92(2), pages 408-424, May.
- Stephen H. Shore & Todd Sinai, 2005. "Commitment, Risk, and Consumption: Do Birds of a Feather Have Bigger Nests?," NBER Working Papers 11588, National Bureau of Economic Research, Inc.
When requesting a correction, please mention this item's handle: RePEc:red:sed007:567. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christian Zimmermann)
If references are entirely missing, you can add them using this form.