TY  - UNPD
A1  - Groneck, Max
A1  - Ludwig, Alexander
A1  - Zimper, Alexander
T1  - A life-cycle model with ambiguous survival beliefs
T2  - SAFE working paper series ; No. 73
N2  - On average, "young" people underestimate whereas "old" people overestimate their chances to survive into the future. We adopt a Bayesian learning model of ambiguous survival beliefs which replicates these patterns. The model is embedded within a non-expected utility model of life-cycle consumption and saving. Our analysis shows that agents with ambiguous survival beliefs (i) save less than originally planned, (ii) exhibit undersaving at younger ages, and (iii) hold larger amounts of assets in old age than their rational expectations counterparts who correctly assess their survival probabilities. Our ambiguity-driven model therefore simultaneously accounts for three important empirical findings on household saving behavior.
T3  - SAFE working paper - 73 
KW  - Cumulative prospect theory
KW  - Choquet expected utility
KW  - Dynamic inconsistency
KW  - Life-cycle hypothesis
KW  - Saving puzzles
Y1  - 2014
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/35017
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30:3-350177
IS  - October 20, 2014
PB  - SAFE
CY  - Frankfurt am Main
ER  -