Collective Investment Decision Making with Heterogeneous Time Preferences /
Gollier, Christian.
Collective Investment Decision Making with Heterogeneous Time Preferences / Christian Gollier, Richard Zeckhauser. - Cambridge, Mass. National Bureau of Economic Research 2003. - 1 online resource: illustrations (black and white); - NBER working paper series no. w9629 . - Working Paper Series (National Bureau of Economic Research) no. w9629. .
April 2003.
We examine the investment decision problem of a group whose members have heterogeneous time preferences. In particular, they have different discount factors for utility, possibly not exponential. We characterize the properties of efficient allocations of resources and of shadow prices that would decentralize such allocations. We show in particular that the term structure of interest rates is decreasing when all members have DARA preferences. Heterogeneous groups should not use exponential discounting for their collective investment decisions even if all agents discount exponentially. We also exhibit conditions that lead the representative agent to have a rate of impatience that decreases with GDP per capita.
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Mode of access: World Wide Web.
Collective Investment Decision Making with Heterogeneous Time Preferences / Christian Gollier, Richard Zeckhauser. - Cambridge, Mass. National Bureau of Economic Research 2003. - 1 online resource: illustrations (black and white); - NBER working paper series no. w9629 . - Working Paper Series (National Bureau of Economic Research) no. w9629. .
April 2003.
We examine the investment decision problem of a group whose members have heterogeneous time preferences. In particular, they have different discount factors for utility, possibly not exponential. We characterize the properties of efficient allocations of resources and of shadow prices that would decentralize such allocations. We show in particular that the term structure of interest rates is decreasing when all members have DARA preferences. Heterogeneous groups should not use exponential discounting for their collective investment decisions even if all agents discount exponentially. We also exhibit conditions that lead the representative agent to have a rate of impatience that decreases with GDP per capita.
System requirements: Adobe [Acrobat] Reader required for PDF files.
Mode of access: World Wide Web.