ERN: Intertemporal Choice & Discounting (Topic)最新文献

Renegotiation and Dynamic Inconsistency: Contracting with Non-Exponential Discounting 再协商与动态不一致:非指数折扣契约

ERN: Intertemporal Choice & Discounting (Topic) Pub Date : 2021-02-01 DOI: 10.2139/ssrn.3442367

Doruk Cetemen, F. Z. Feng, Can Urgun

引用次数: 2

Tapping Home Equity: Income and Spending Trends Around Cash-Out Refinances and HELOCs 利用房屋净值:围绕现金再融资和HELOCs的收入和支出趋势

ERN: Intertemporal Choice & Discounting (Topic) Pub Date : 2020-12-03 DOI: 10.2139/ssrn.3742341

Diana Farrell, Fiona Greig, Chen Zhao

{"title":"Tapping Home Equity: Income and Spending Trends Around Cash-Out Refinances and HELOCs","authors":"Diana Farrell, Fiona Greig, Chen Zhao","doi":"10.2139/ssrn.3742341","DOIUrl":"https://doi.org/10.2139/ssrn.3742341","url":null,"abstract":"Approximately two thirds of American families own a home and for most homeowners, their house is also their most important source of wealth. Homeowners are currently sitting on historically high levels of home equity and the potential withdrawal of this home equity has important implications for consumption at the macroeconomic and household levels. In this report, we examine the extent to which liquidating home equity boosts consumption, as well as how income dynamics around equity extraction may play a role in influencing households’ decision to draw from this source of wealth. Using loan-level servicing data from Chase mortgage customers combined with corresponding Chase deposit account data from 2012 to 2018, we create a sample of more than 50,000 homeowners who either obtained a cash-out refinance or drew on a home equity line of credit (HELOC). We find that for homeowners who cash-out refinanced, most refinanced into a lower interest rate but a higher monthly payment because of a larger loan balance. Also, after controlling for secular trends, homeowners who obtained a cash-out refinance had no change in income whereas homeowners who extracted equity via a HELOC experienced declining income. For both groups, consumption spiked considerably as soon as the liquidated equity flowed into the bank account but quickly settled to steady state-levels at a higher level, 5 percent and 7 percent above baseline for HELOCs and cash-out refinances, respectively. After one year, cash-out refinance homeowners spent 33 percent of their total equity extracted while those with a HELOC spent 47 percent overall. For both sample groups, these marginal propensities to consume (MPCs) were highest for younger homeowners and those with higher loan-to-values (LTVs). Taken together, these findings have important implications for macroeconomic and housing policies.","PeriodicalId":443703,"journal":{"name":"ERN: Intertemporal Choice & Discounting (Topic)","volume":"54 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-12-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133478847","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

引用次数: 0

How Preferences for Round Numbers Affect Choices: Stickiness and Jumpiness in Credit Card Payments 整数偏好如何影响选择:信用卡支付的粘性和跳跃性

ERN: Intertemporal Choice & Discounting (Topic) Pub Date : 2020-07-06 DOI: 10.2139/ssrn.3564728

Hiroaki Sakaguchi, John Gathergood, Neil Stewart

引用次数: 1

Do Dual Discounting Equations Reconcile Exponential Banks with Their Hyperbolic Customers? 对偶贴现方程能调和指数银行和它们的双曲客户吗?

ERN: Intertemporal Choice & Discounting (Topic) Pub Date : 2020-05-13 DOI: 10.2139/ssrn.3600507

Michael Osborne

{"title":"Do Dual Discounting Equations Reconcile Exponential Banks with Their Hyperbolic Customers?","authors":"Michael Osborne","doi":"10.2139/ssrn.3600507","DOIUrl":"https://doi.org/10.2139/ssrn.3600507","url":null,"abstract":"There is an apparent rift between the way banks calculate and the way humans think. On the one hand, exponential discounting has played a centuries-long, lead role in financial analysis. On the other hand, experiments by behavioral economists demonstrate that hyperbolic discounting is better than exponential at explaining human inter-temporal behavior. The result is scope for misunderstanding between financial institutions and their customers because many financial products involve calculations alien to consumer thinking. Calls for improving consumer financial literacy are symptoms of this disconnect. This article queries past experimental results by examining the underlying theory using the concept of duality. Two dual expressions are derived: one expression is dual to the exponential discounting equation and the other is dual to the hyperbolic. Each dual contains the full array of interest rates implied by every root solving its source equation. An array includes the negative and complex-valued interest rates ignored for centuries on the grounds that they lack economic meaning. Recent research, however, demonstrates that an array of rates does possess economic meaning. This finding legitimizes the duals, removing a barrier to their inclusion in financial analysis. Duality offers possible reconciliation between the two approaches to discounting. The two dual expressions display a similarity and a difference. The similarity is in their structure, implying the two approaches to discounting are not as different as experimentalists suppose. The difference is in their components, this difference suggesting new experiments that may support or deny the proposed reconciliation. Dual equations also suggest policy advice.","PeriodicalId":443703,"journal":{"name":"ERN: Intertemporal Choice & Discounting (Topic)","volume":"162 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-05-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128628188","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

引用次数: 0

Present Bias 存在偏见

ERN: Intertemporal Choice & Discounting (Topic) Pub Date : 2019-09-16 DOI: 10.2139/ssrn.3474231

Anujit Chakraborty

引用次数: 13

Everything in Moderation: Foundations and Applications of the Satiation Model 一切适度:饱和模型的基础和应用

ERN: Intertemporal Choice & Discounting (Topic) Pub Date : 2019-02-23 DOI: 10.2139/ssrn.3340643

Manel Baucells, Lin Zhao

{"title":"Everything in Moderation: Foundations and Applications of the Satiation Model","authors":"Manel Baucells, Lin Zhao","doi":"10.2139/ssrn.3340643","DOIUrl":"https://doi.org/10.2139/ssrn.3340643","url":null,"abstract":"Models in which current utility depends solely on current consumption (a.k.a. time-separable preferences) are widely acknowledged to be unrealistic, especially when attempting to describe preferences over consumption rates. Alternatively, one may stipulate that instant utility also depends on a state, for example, some stock of past consumption. Escaping the gravitational pull of time separability, however, is difficult because (1) the behavioral axioms that characterize the state and the instant utility are not known, (2) how to elicit the preference parameters—most notably the initial level of the state and the decay rate—is not known, and (3) managerial applications where state-dependent preferences produce interesting insights and solutions are scarce. This paper makes advances on these three fronts by proposing a novel set of axioms that characterize the satiation model, a proof of concept on how to elicit all preference parameters using consumption rates, and a mixed-integer linear formulation to solve the optimal design of experiential services under satiation. Our preferences introduce a de-satiation motive, absent in separable preferences, and we explore how to optimally manage this motive. This paper was accepted by David Simchi-Levi, decision analysis.","PeriodicalId":443703,"journal":{"name":"ERN: Intertemporal Choice & Discounting (Topic)","volume":"119 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-02-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127581146","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

引用次数: 7

The Social Rate of Time Preference and the Social Discount Rate 社会时间偏好率与社会折现率

ERN: Intertemporal Choice & Discounting (Topic) Pub Date : 2018-12-06 DOI: 10.2139/ssrn.3297241

Mark A. Moore, A. Vining

{"title":"The Social Rate of Time Preference and the Social Discount Rate","authors":"Mark A. Moore, A. Vining","doi":"10.2139/ssrn.3297241","DOIUrl":"https://doi.org/10.2139/ssrn.3297241","url":null,"abstract":"This paper explains the conceptual basis for the social rate of time preference (STP) and why it is the appropriate method of choosing the social discount rate (SDR), compared to the most prominent alternative method: the social opportunity cost of capital (SOC). We recommend that for intragenerational projects in the United States, a rate of 3.5 percent is appropriate. For long-term intergenerational effects, we recommend using declining rates. Obtaining the SDR is intrinsically a normative exercise in a second-best world. Policymakers should maximize a social welfare function that equals the present value of current and future utility from per capita consumption. In the presence of economic growth, there will be greater future consumption possibilities. Given the assumption of diminishing marginal utility of income, the consumption of a wealthier, future society should be discounted. Displaced private investment should be accounted for by first multiplying by the shadow price of capital, but this will not generally be necessary as most government interventions mainly affect consumption. Systematic risk should be handled by conversion of expected net benefits into certainty equivalents before discounting at the risk-free SDR, but empirically this effect is typically too small to matter. Among governments there is increased adoption of both the STP method and the use of time-declining rates. Even governments using other approaches are lowering their rates, and most OECD countries now apply rates in the 3 to 5.5 percent range.","PeriodicalId":443703,"journal":{"name":"ERN: Intertemporal Choice & Discounting (Topic)","volume":"110 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-12-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131074431","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

引用次数: 13

Information Nudges and Self Control 信息推动和自我控制

ERN: Intertemporal Choice & Discounting (Topic) Pub Date : 2018-04-13 DOI: 10.2139/ssrn.3162013

Thomas Mariotti, Nikolaus Schweizer, Nora Szech, Jonas von Wangenheim

引用次数: 5

Time Consistency and Utility Weighted Discount Rates 时间一致性和效用加权折现率

ERN: Intertemporal Choice & Discounting (Topic) Pub Date : 2018-01-13 DOI: 10.2139/ssrn.3101522

O. Mbodji

引用次数: 0

Sunk Cost as a Self-Management Device 沉没成本作为一种自我管理手段

ERN: Intertemporal Choice & Discounting (Topic) Pub Date : 2017-11-28 DOI: 10.2139/ssrn.2830409

Fuhai Hong, Wei Huang, Xiaojian Zhao

引用次数: 19