MAKING RETIREMENT DECISIONS WITHOUT ELICITING UTILITIES (JOINT WITH S. KAKADE AND O. RONEN)

Abstract:We study the problem of how one should invest for retirement.Typically before this problem can be solved, a detailed utilityfunction needs to be elicited: the utility for consumption, thedis-utility for working, the utility for passing on inheritance, thediscount factor to trade-off utilities at different times, etc.  Oncethese are all known, backwards induction solves the problem.  But,people are notoriously bad at making these judgments.  So can we offeradvice which doesn't depend on knowing their utility?This talk will present some simple stylized facts that are useful inmaking these decisions.

Location: 
Elath Hall, 2nd floor, Feldman Building, Edmond J. Safra Campus
Dates: 
Friday, June 8, 2007 - 10:00 to 12:00
Old Lecturers: 
DEAN FOSTER
Old Lecturers University: 
UNIVERSITY OF PENNSYLVANIA