Home > Publications . Search All . Browse All . Country . Browse PSC Pubs . PSC Report Series

PSC In The News

RSS Feed icon

Shaefer and Edin's book ($2 a Day) cited in piece on political debate over plight of impoverished Americans

Eisenberg tracks factors affecting both mental health and athletic/academic performance among college athletes

Shapiro says Americans' low spending reflects "cruel lesson" about the dangers of debt

Highlights

Susan Murphy elected to the National Academy of Sciences

Maggie Levenstein named director of ISR's Inter-university Consortium for Political and Social Research

Arline Geronimus receives 2016 Harold R. Johnson Diversity Service Award

PSC spring 2016 newsletter: Kristin Seefeldt, Brady West, newly funded projects, ISR Runs for Bob, and more

Next Brown Bag

PSC Brown Bags
will resume fall 2016

Consumption Commitments and Employment Contracts

Archived Abstract of Former PSC Researcher

Postlewaite, Andrew, Larry Samuelson, and Daniel Silverman. 2001. "Consumption Commitments and Employment Contracts." PIER Working Paper 06-002Penn Institute for Economic Research.

We examine an economy in which the cost of consuming some goods can be reduced by making commitments to consumption levels independent of the state. For example, it is cheaper to produce housing services via owner-occupied than rented housing, but the transactions costs associated with the former prompt relatively inflexible housing consumption paths. We show that consumption commitments can cause risk-neutral consumers to care about risk, creating incentives to both insure risks and bunch uninsured risks together. For example, workers may prefer to avoid wage risk while bearing an unemployment risk that is concentrated in as few states as possible.

Browse | Search : All Pubs | Next