By Shinsuke Ikeda, Hideaki Kiyoshi Kato, Fumio Ohtake, Yoshiro Tsutsui

This ebook collects vital contributions in behavioral economics and comparable subject matters, in general via jap researchers, to supply new views for the long run improvement of economics and behavioral economics. the amount focuses specifically on fiscal experiences that research interactions of a number of brokers and/or industry phenomena through the use of behavioral economics types. Reflecting the various fields of the editors, the booklet captures huge impacts of behavioral economics on a variety of themes in economics. these matters contain parental altruism, monetary progress and improvement, the relative and everlasting source of revenue hypotheses, wealth distribution, asset cost bubbles, auctions, seek, contracts, body of workers administration and industry potency and anomalies in monetary markets. The bankruptcy authors have extra newly written addenda to the unique articles within which they tackle their very own next works, supplementary analyses, distinctive details at the underlying facts and/or fresh literature surveys. this may aid readers to additional comprehend contemporary advancements in behavioral economics and comparable research.

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Additional resources for Behavioral Interactions, Markets, and Economic Dynamics: Topics in Behavioral Economics

Example text

11). hO u / sufficiently small. h/ D 1: If hO u is strictly higher than h2 , the child is perceived to be sufficiently mature and therefore the child’s rate of time preference is insensitive to the change in his or her level of human capital. Then, the lemma states that, starting from any initial h2 , the parent’s uncertainty decreases over time. Clearly, such an h2 must be larger if or is larger or if ı is smaller. hO u / is not less than 1, ˆ can be greater than 1. In fact, we can show that the following proposition holds: Proposition 1 Suppose that ct D exp.

HO t jt /2 ht2 C ! 11a). ht jt /2 . ht = 2t /C1 < 1. Since F 0 < 1 automatically implies the stability, for a divergence to occur, it is necessary to have F 0 > 1. hO t jt /: The question is whether there exists a combination of parameters with which there is a non-empty set of beliefs that can cause the expectation process to diverge. h/ D 1, be h1 and h2 , which exist if ct D exp. Áht / with Á > 0. 1 ı /2 /= 2 . h/ ! h/ ! C1. h1 ; h2 /; there exists a range of hO t jt , R. h1 ; h2 /, such that any value of hO t jt in R.

HO u / is not less than 1, ˆ can be greater than 1. In fact, we can show that the following proposition holds: Proposition 1 Suppose that ct D exp. h/> 1. Then, (i) there exists a combination of parameter values such that there exists a level of N 2 and the associated range of hO u , R. 1 ı /2 /= 2 / and any hO u 2 R. N 2 /, ˚ is greater than one, (ii) given an updated belief (hO u , h2 ) and the parameter values that satisfy the condition described in (i), the parent’s expectation process becomes divergent, and (iii) hL is decreasing and hH is increasing in N 2 .

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