WebCarroll and Kimball (1996) prove that the consumption function is concave if infinitely-lived risk-averse households have a utility function which exhibits Hyperbolic Absolute Risk … WebThere are locked costs (FC) that contribute until concavity of the cost function. There are also variable costs (VC) welche may be concave, linear alternatively bulbous. If we have on the concave part of VC, total fees (TC) must also …
Optimal Investment in an Illiquid Market with Search Frictions and ...
Webdomains for which even some linear functions (which are both concave and convex) are not continuous. 3 Concavity, Convexity, and Di erentiability. A di erentiable function is concave i it lies on or below the tangent line (or plane, for N>1) at any point. Theorem 6. Let C RN be non-empty, open and convex and let f : C!R be di erentiable. Web1 de out. de 2012 · Carroll (1992) observes that many of the differences can be attributed to the concavity of the consumption function under uncertainty, but he does not describe … cs go infinity cheat
On the Concavity of the Consumption Function with Liquidity …
Web2 de ago. de 2024 · More or less, yes. Making the right assumption on the shape of the utility function allows you to prove existence or uniqueness of the equilibrium. The exact assumption you need depends on what exactly you are trying to prove and how general you want your result to be. In the case of concavity, it also makes the equilibrium easier to … Webliquidity constraints generate a concavity in the consumption function. However, ana-lytics of the concavity due to liquidity constraints has remained unknown until recently. Carroll and Kimball (2001) made the –rst important attempt in setting an analytical foundation and showed the concavity of the consumption function when the … WebThe parameter b governs the degree of concavity of the consumption function. The higher b, the sooner the derivative of approximate consumption function converges to its limit, •. Carroll and Kimball (1996) show that uncertainty reduces consumption for each level of cash-on-hand. So the higher is uncertainty, the larger has to be b. eaa chapter 1246