The rigidity of choice: lifetime savings under information-processing constraints

This paper studies the implications of information-processing limits on the consumption and savings behavior of households through time. It presents a dynamic model in which consumers rationally choose the size and scope of the information they want to process about their fi�nancial possibilities, constrained by a Shannon channel. The model predicts that people with higher degrees of risk aversion rationally choose higher information. This happens for precautionary reasons since, with fi�nite processing rate, risk averse consumers prefer to be well informed about their fi�nancial possibilities before implementing consumption plan. Moreover, numerical results show that consumers with processing capacity constraints have asymmetric responses to shocks, with negative shocks producing more persistent effects than positive ones. This asymmetry results into more savings. I show that the predictions of the model can be effectively used to study the impact of tax reforms on consumers spending. The results are qualitatively consistent with the evidence on tax rebates (2001, 2008).Consumption, Rational Inattention, Dynamic programming

Parameter likelihood of intrinsic ellipticity correlations

Subject of this paper are the statistical properties of ellipticity alignments between galaxies evoked by their coupled angular momenta. Starting from physical angular momentum models, we bridge the gap towards ellipticity correlations, ellipticity spectra and derived quantities such as aperture moments, comparing the intrinsic signals with those generated by gravitational lensing, with the projected galaxy sample of EUCLID in mind. We investigate the dependence of intrinsic ellipticity correlations on cosmological parameters and show that intrinsic ellipticity correlations give rise to non-Gaussian likelihoods as a result of nonlinear functional dependencies. Comparing intrinsic ellipticity spectra to weak lensing spectra we quantify the magnitude of their contaminating effect on the estimation of cosmological parameters and find that biases on dark energy parameters are very small in an angular-momentum based model in contrast to the linear alignment model commonly used. Finally, we quantify whether intrinsic ellipticities can be measured in the presence of the much stronger weak lensing induced ellipticity correlations, if prior knowledge on a cosmological model is assumed.Comment: 14 pages, 8 figures, submitted to MNRA