Survival misperception, time inconsistency, and implications for life-cycle saving and welfare

Some empirical studies firmly reveal that people tend to form overly pessimistic survival expectations for relatively less distant ages and overly optimistic survival expectations for relatively more distant ages. We incorporate this observation into a life-cycle continuous time overlapping-generations model of consumption/saving with a general form for a subjective survival function. Resulting time-inconsistent optimal control problem has been analytically solved. At the micro level, time inconsistency leads to higher consumption at young and old ages, but this alone fails to improve lifetime well-being since micro-level decisions made with a lack of information about true mortality are suboptimal. In general equilibrium, however, such time inconsistent behavior with survival misperception is conducive to aggregate capital accumulation and greater equilibrium bequest income. The latter effects can produce substantial welfare gains. We also note that empirically observed old age optimistic bias is an important phenomenon, as it helps to avoid unrealistic very old-age debt accumulation within a life-cycle model. In addition, if for a given level of optimistic bias we increase early-life pessimism, this would result in slower capital accumulation, lower bequest income, and thus be detrimental to welfare. Since recent literature reports that young-age survival pessimism has grown over time, it raises some concerns.

The effectiveness of life-cycle pricing for consumer durables

This quasi-experimental study examines consumer reactions to including projected energy and carbon costs in print ads for a TV, using an online survey of 2566 Australian consumers. This study determines whether consumers' temporal orientation (past vs. future) moderates these reactions. Participants rate ads that include both energy and carbon costs as the most useful for buying a TV and as having higher perceived value. However, this fact does not affect likelihood of purchase. Participants with a high temporal orientation to the past react less favorably to ads that include carbon costs. This study shows that informing consumers about life-cycle costs does not substantially affect purchase decisions for durable goods but affects perceptions of value and usefulness of pricing information in ads.

Marketing strategy: A life cycle approach

Within that framework, the book explains the nature of strategic thinking, covers the theory and practical application of analytics, explores the considerations, constraints and possible strategic marketing choices available at each stage ...

The life-cycle effects of social security in a model with housing and endogenous benefits

This article develops a life-cycle general equilibrium model with heterogeneous agents who make choices of nondurables consumption, investment in homeowned housing and labour supply. Agents retire from an specific age and receive Social Security benefits which are dependant on average past earnings. The model is calibrated, numerically solved and is able to match stylized U.S. aggregate statistics and to generate average life-cycle profiles of its decision variables consistent with data and literature. We also conduct an exercise of complete elimination of the Social Security system and compare its results with the benchmark economy. The results enable us to emphasize the importance of endogenous labour supply and benefits for agents' consumption-smoothing behaviour.

Monopolies life cycle, bureaucratization, and Schumpeterian growth

This paper analyzes the links between the internaI organization of firms and macroeconomic growth. We present a Schumpeterian growth model in which firms face dynamic agency costs. These agency costs are due to the formation of vertical collusions within the organization. To respond to the opportunity of internaI collusion, firms go through a whole life cycle, getting more bureaucratized and Iess efficient over time. vVeak creative destruction in the economy facilitates informal collusion inside firms and exacerbates bureaucratization. As bureaucratization affects the firms' profitability and the return to innovation, stationary equilibrium growth depends in turn on the efficiency of collusive side-contracts within firms.

Life Cycle Models, Heterogeneity of Initial Assets,and Wealth Inequality

Life cycle general equilibrium models with heterogeneous agents have a very hard time reproducing the American wealth distribution. A common assumption made in this literature is that all young adults enter the economy with no initial assets. In this article, we relax this assumption – not supported by the data - and evaluate the ability of an otherwise standard life cycle model to account for the U.S. wealth inequality. The new feature of the model is that agents enter the economy with assets drawn from an initial distribution of assets, which is estimated using a non-parametric method applied to data from the Survey of Consumer Finances. We found that heterogeneity with respect to initial wealth is key for this class of models to replicate the data. According to our results, American inequality can be explained almost entirely by the fact that some individuals are lucky enough to be born into wealth, while others are born with few or no assets.

Life cycle and behaviour of the predaceous mite Cunaxatricha tarsospinosa (Acari: Prostigmata: Cunaxidae)

Life cycle and behaviour of Cunaxatricha tarsospinosa Castro & Den Heyer from rubber trees in Brazil were studied, with Tenuipalpus heveae Baker offered as prey. The study was conducted at 25.4 +/- A 0.2A degrees C, 83 +/- A 5% RH and 12:12 h L:D photophase. The egg stage was the longest immature stage, lasting 17.1 +/- A 1.3 days (mean +/- A SE); total juvenile development was completed in 33.2 +/- A 2.8 days. Lifetime fecundity was 12.0 +/- A 2.2 eggs. Intrinsic rate of population increase was low, suggesting that T. heveae may not be a good prey for the predator. All specimens of C. tarsospinosa collected in the field for this study were females, no males were found. Concurrently, only females were obtained in the laboratory. This seems to be the first report of thelytokous parthenogenesis for cunaxids. Similar to earlier reports for some Cunaxinae and Coleoscirinae, prey were captured when predators were actively searching for them.

Life-cycle inventory for hydroelectric generation: a Brazilian case study

Representative Life-Cycle Inventories (LCIs) are essential for Life-Cycle Assessments (LCAs) quality and readiness. Because energy is such an important element of LCAs, appropriate LCIs on energy are crucial, and due to the prevalence of hydropower on Brazilian electricity mix, the frequently used LCIs are not representative of the Brazilian conditions. The present study developed a LCI of the Itaipu Hydropower Plant, the major hydropower plant in the world, responsible for producing 23.8% of Brazil's electricity consumption. Focused on the capital investments to construct and operate the dam, the LCI was designed to serve as a database for the LCAs of Brazilian hydroelectricity production. The life-cycle boundaries encompass the construction and operation of the dam, as well as the life-cycles of the most important material and energy consumptions (cement, steel, copper, diesel oil, lubricant oil), as well as construction site operation, emissions from reservoir flooding, material and workers transportation, and earthworks. As a result, besides the presented inventory, it was possible to determine the following processes, and respective environmental burdens as the most important life-cycle hotspots: reservoir filling (CO(2) and CH(4) emission: land use); steel life-cycle (water and energy consumption; CO, particulates, SO(x) and NO(x) emissions); cement life-cycle (water and energy consumption; CO(2) and particulate emissions); and operation of civil construction machines (diesel consumption; NO(x) emissions). Compared with another hydropower studies, the LCI showed magnitude adequacy, with better results than small hydropower, which reveals a scale economy for material and energy exchanges in the case of ltaipu Power Plant. (C) 2009 Elsevier Ltd. All rights reserved.