Discounting and Divergence of Opinion
Napp, Clotilde; Marin, Jean-Michel; Jouini, Elyès (2010), Discounting and Divergence of Opinion, Journal of Economic Theory, 145, 2, p. 830-859. http://dx.doi.org/10.1016/j.jet.2010.01.002
TypeArticle accepté pour publication ou publié
External document linkhttp://halshs.archives-ouvertes.fr/halshs-00176636/fr/
Journal nameJournal of Economic Theory
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Abstract (EN)The objective of this paper is to adopt a general equilibrium model and determine the socially efficient discount factor and discount rate when there are heterogeneous anticipations about the future of the economy as well as heterogeneous time preference rates. Among others we tackle the following questions. Is the socially efficient discount factor an arithmetic average of the individual subjectively anticipated discount factors as in the certainty equivalent approach of Weitzman (1998, 2001) ? As a sort of additional risk or uncertainty, can beliefs dispersion lead to lower discount rates ? Is it socially efficient, when diversity of opinion is taken into account, to reduce the discount rate per year for more distant horizons ? More generally, what is then the shape of the yield curve ?
Subjects / KeywordsHeterogeneous Anticipations; Equilibrium models; Beliefs; Risk free rate; Discount rate
Showing items related by title and author.
Jouini, Elyès; Ben Mansour, Selima; Napp, Clotilde; Marin, Jean-Michel; Robert, Christian P. (2008) Article accepté pour publication ou publié