1 option
Consumption, Commitmants and Preferences for Risk / Andrew Postlewaite, Larry Samuelson, Dan Silverman.
- Format:
- Book
- Author/Creator:
- Postlewaite, Andrew.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w10527.
- NBER working paper series no. w10527
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2004.
- Summary:
- We examine an economy in which the cost of consuming some goods can be reduced by making commitments to consumption levels independent of the state. For example, it is cheaper to produce housing services via owner-occupied than rented housing, but the transactions costs associated with the former prompt relatively inflexible housing consumption paths. We show that consumption commitments can cause risk-neutral consumers to care about risk, creating incentives to both insure risks and bunch uninsured risks together. For example, workers may prefer to avoid wage risk while bearing an unemployment risk that is concentrated in as few states as possible.
- Notes:
- Print version record
- May 2004.
The Penn Libraries is committed to describing library materials using current, accurate, and responsible language. If you discover outdated or inaccurate language, please fill out this feedback form to report it and suggest alternative language.