Individual subjects are experimentally tested for precautionary saving. We use a simplified experimental framework and decision supporting tool to show that subject's consumption is consistent with precautionary saving. We find that subjects overact in changing current income. However, those over-reactions cancel each other, and subject's consumption behavior is close to the optimal solutions on average.
|Number of pages||8|
|Publication status||Published - 2010 Jun 18|
ASJC Scopus subject areas
- Economics, Econometrics and Finance(all)