Rational Consumers

The life cycle/permanent income hypothesis (LCPIH) makes two postulates: people behave with rational expectations, and people do not have self-control problems. If either or both of these postulates do not apply, we cannot obtain a testable implication of the LCPIH. We use Japanese panel data that include responses to self-reported and retrospective questions to elicit individual characteristics such as forward-looking behavior, experience of self-control problems, and use of commitment devices to overcome self-control problems. First, we test the rational expectations hypothesis and find that it holds for the whole sample. We then test the LCPIH implication and find that consumption does not change in response to expected income changes, which we restrict to fit the assumptions of the LCPIH. This result indicates that the LCPIH is a convincing model to account for the behavior of rational consumers who have rational expectations and no self-control problems. Our results also imply that responses to self-reported and retrospective questions are not meaningless when eliciting information on household characteristics.Life cycle/permanent income hypothesis; Excess sensitivity; Rational expectation; Self-control problems; sophisticated and naive.

Self-organized criticality for dendritic readiness potential

Self-organized criticality is a principle explaining avalanche-like phenomena obeying power-laws in integrate-and-fire type dynamical systems. Here, we demonstrate that the behaviorally relevant brain neurons, mediating voluntary and reflexive behaviors in crayfish, show signatures of self-organized criticality. The dendritic activities are into the critical states following power-laws; characterized by scaling functions within neurons; but mapped to the common scaling relation across individuals. The relation is in line with the extracellular neuronal avalanches in vertebrate species which have provided evidence of the critical brain hypothesis. Our intracellular data extend the universality of the hypothesis. In particular, it indicates that the pre-movement buildup activity before the voluntary behavioral onset "from crayfish to human", readiness potential, is shaped by the avalanches. The nervous systems can exploit the universal dynamics for volition across the phylogenetic tree

The Effect of Young Maternal Age on Children's Education Level: Does the Age of Giving Birth Really Matter? (in Japanese)

There is evidence that young mothers do not have the opportunity to accumulate human capital for themselves, which can have a negative effect on theirchildren's outcomes. This study investigates the effect of young maternal ageon children's educational level. No significant direct effect of young maternalage was found, but it did have a significant indirect effect on parental economic conditions and maternal preferences. Our results suggest that young maternal age has no negative effect on children's educational level.

Degree of Competition of Consumer Loan Industry

The purpose of this paper is to estimate the degree of competition of consumer loan industry in Japan utilizing responses to a questionnaire survey conducted by Japan Consumer Finance Association. Estimating the cost function, we found that the industry is characterized by large scale economies. Estimation of Lerner index, H-statistics, degree of noncompetition, and degree of collusion reveals that consumer loan market is highly monopolistic. Consumer loan companies answered to a question that they commit neither interest rate competition nor quantity competition through extending branch-networks. We further investigated the reason why consumer loan market is monopolistic. Market for new customers is characterized by informational asymmetry, usury law, and hyperbolic discounting of borrowers, which makes the market monopolistic. Meanwhile, market for incumbent customers is monopolistic because they would not search for new lenders to avoid switching costs. These findings may be useful to draft new regulations on the industry.consumer loans, degree of competition, scale economy, degree of collusion, H-statistics