Han, Bing. <br/><br/>
Visibility Bias in the Transmission of Consumption Beliefs and Undersaving / 
Bing Han, David Hirshleifer, Johan Walden. 
 - Cambridge, Mass.  National Bureau of Economic Research  2019. 
 - 1 online resource:  illustrations (black and white); 
 - NBER working paper series  no. w25566 .
 - Working Paper Series (National Bureau of Economic Research)  no. w25566. .
<br/><br/> February 2019. 
<br/><br/> We model visibility bias in the social transmission of consumption behavior. When consumption is more salient than non-consumption, people perceive that others are consuming heavily, and infer that future prospects are favorable. This increases aggregate consumption in a positive feedback loop. A distinctive implication is that disclosure policy interventions can ameliorate undersaving. In contrast with wealth-signaling models, information asymmetry about wealth reduces overconsumption. The model predicts that saving is influenced by social connectedness, observation biases, and demographic structure; and provides a novel explanation for the dramatic drop in savings rates in the US and several other countries in recent decades. 
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