Sources of uncertainty and subjective prices
Autor: | Fabio Maccheroni, Massimo Marinacci, Veronica Roberta Cappelli, Stefania Minardi, Simone Cerreia-Vioglio |
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Jazyk: | angličtina |
Rok vydání: | 2021 |
Předmět: |
Computer science
SOURCE PREFERENCE SOURCE-DEPENDENT UNCERTAINTY ATTITUDES media_common.quotation_subject 05 social sciences SOURCE PREFERENCE SOURCE-DEPENDENT UNCERTAINTY ATTITUDES SUBJECTIVE PRICES COMPETENCE HYPOTHESIS HOME BIAS Certainty Unit of account Key features COMPETENCE HYPOTHESIS 0502 economics and business Econometrics Portfolio 050207 economics General Economics Econometrics and Finance SUBJECTIVE PRICES HOME BIAS 050205 econometrics media_common |
Zdroj: | Journal of the European Economic Association |
Popis: | We develop a general framework to study source-dependent preferences in economic contexts. We behaviorally identify two key features. First, we drop the assumption of uniform uncertainty attitudes and allow for source-dependent attitudes. Second, we introduce subjective prices to compare outcomes across different sources. Our model evaluates profiles source-wise, by computing the source-dependent certainty equivalents; the latter are converted into the unit of account of a common source and then aggregated into a unique evaluation. By viewing time and location as instances of sources, we show that subjective discount factors and subjective exchange rates are emblematic examples of subjective prices. Finally, we use the model to explore the implications on optimal portfolio allocations and home bias. |
Databáze: | OpenAIRE |
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