Related papers: Resolving Aaron's Social Insurance Paradox
In this study we propose a unified model of optimal retirement, consumption and portfolio choice of an individual agent, which encompasses a large class of the models in the literature and provide a general methodology to solve the model.…
Quantifying the impact of regulatory policies on social welfare generally requires the identification of counterfactual distributions. Many of these policies (e.g. minimum wages or minimum working time) generate mass points and/or…
We introduce heterogeneous R&D productivities into an endogenous R&D network formation model, generalizing the framework of Goyal and Moraga-Gonz\'alez (2001). Heterogeneous productivities endogenously create asymmetric gains from…
This paper considers the portfolio management problem of optimal investment, consumption and life insurance. We are concerned with time inconsistency of optimal strategies. Natural assumptions, like different discount rates for consumption…
We demonstrate by mathematical analysis and systematic computer simulations that redistribution can lead to sustainable growth in a society. The human capital dynamics of each agent is described by a stochastic multiplicative process which,…
We present a stylized model with feedback loops for the evolution of a population's wealth over generations. Individuals have both talent and wealth: talent is a random variable distributed identically for everyone, but wealth is a random…
We study a system of $N$ agents, whose wealth grows linearly, under the effect of stochastic resetting and interacting via a tax-like dynamics -- all agents donate a part of their wealth, which is, in turn, redistributed equally among all…
Can constantly comparing ourselves to others lead to overconsumption, ultimately increasing the ecological footprint? How do social comparisons shape green preferences over time? To answer these questions, we develop an environmental…
We study an agent-based model of evolution of wealth distribution in a macro-economic system. The evolution is driven by multiplicative stochastic fluctuations governed by the law of proportionate growth and interactions between agents. We…
Institutions play a critical role in enabling communities to manage common-pool resources and avert tragedies of the commons. However, a fundamental issue arises: Individuals typically perceive participation as advantageous only after an…
We study the gap between the state pension provided by the Italian pension system pre-Dini reform and post-Dini reform. The goal is to fill the gap between the old and the new pension by joining a defined contribution pension scheme and…
The Health and Retirement Study is a longitudinal study of US adults enrolled at age 50 and older. We were interested in investigating the effect of a sudden large decline in wealth on the cognitive score of subjects. Our analysis was…
A new approach for the description of phenomena of social aggregation is suggested. On the basis of psychological concepts (as for instance social norms and cultural coordinates), we deduce a general mechanism for the social aggregation in…
This paper presents a semi-quantitative mathematical model of the changes over time in the statistical distribution of well-being of individuals in a society. The model predicts that when individuals overvalue the more socially conspicuous…
As electricity consumption grows, reducing peak demand--the maximum load on the grid--has become critical for preventing infrastructure strain and blackouts. Pricing mechanisms that incentivize consumers with flexible loads to shift…
Recent initiatives that overstate health insurance coverage for well-being conflict with the recognized antagonistic facts identified by the determinants of health that identify health care as an intermediate factor. By using a network of…
It has been widely observed that capitalization-weighted indexes can be beaten by surprisingly simple, systematic investment strategies. Indeed, in the U.S. stock market, equal-weighted portfolios, random-weighted portfolios, and other…
In search engines, online marketplaces and other human-computer interfaces large collectives of individuals sequentially interact with numerous alternatives of varying quality. In these contexts, trial and error (exploration) is crucial for…
Welfare economics relies on access to agents' utility functions: we revisit classical questions in welfare economics, assuming access to data on agents' past choices instead of their utilities. Our main result considers the existence of…
The sustainability of cooperation is crucial for understanding the progress of societies. We study a repeated game in which individuals decide the share of their income to transfer to other group members. A central feature of our model is…