Strategic intergenerational bequests with stochastic convex production

B-Tier
Journal: Economic Theory
Year: 1996
Volume: 8
Issue: 2
Pages: 367-376

Score contribution per author:

2.011 = (α=2.01 / 1 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

This note reconsiders the well-known model of strategic bequest* altruistic growth, but with stochastic production satisfying a strong convexity condition: The probability that the next stock exceeds any given level is concave in investment. Existence of a Markov-stationary equilibrium consumption schedule, which is continuous and with all slopes in [0, 1], is established. Under smooth data and interiority assumptions, this schedule is differentiable, and marginal consumption is in (0, 1). This property allows for a rigorous and straightforward treatment of the equilibrium characterization problem.

Technical Details

RePEc Handle
repec:spr:joecth:v:8:y:1996:i:2:p:367-376
Journal Field
Theory
Author Count
1
Added to Database
2026-01-24