Towards Understanding Life Cycle Saving Of Boundedly Rational Agents: A Model With Feasibility Goals - Replaced by CentER Discussion Paper 2010-138

J. Binswanger

Research output: Working paperDiscussion paperOther research output

Abstract

This paper develops a new life cycle model that aims to describe the savings and asset allocation decisions of boundedly rational agents. The paper’s main theoretical contribution is the provision of a simple, tractable and parsimonious framework within which agents make forward looking decisions in the absence of full contingent planning. Instead, agents pursue two simple so-called feasibility goals. The paper uses this framework to shed light on important empirical patterns of asset allocation that are puzzling from the point of view of existing models.
Original languageEnglish
Place of PublicationTilburg
PublisherMacroeconomics
Number of pages45
Volume2008-14
Publication statusPublished - 2008

Publication series

NameCentER Discussion Paper
Volume2008-14

Keywords

  • Behavioral economics
  • bounded rationality
  • equity shares
  • feasibility goals
  • life cycle saving
  • stock market participation

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