Thanks, Stephanie. I would be happy to join the list, too.

📄 Dive into the paper for the full story:

Quick-Fixing: Near-Rationality in Consumption Savings Behavior
with Joel Flynn, George Nikalakoudis (who is on the job market!), and Karthik Sastry

papers.ssrn.com/sol3/papers....

A calibrated model based on our survey generates 3x more size-dependence in aggregate consumption responses to transfer shocks than the rational benchmark.

Households' quick-fixing types account for 49% of the variance in MPCs across households, despite not being predictable by other demographic and economic information.

… before they abruptly switch to similar consumption policies for large shocks.

68% of households follow one of four simple quick-fix consumption rules for small shocks:

Consumption fixers: MPC = 0 (save everything)
Savings fixers: MPC = 1 (spend everything)
Consumption prioritizers: MPC = 1 for gains but 0 for losses
Savings prioritizers: MPC = 0 for gains but 1 for losses

Survey evidence from 5,000 US households reveals what these quick-fixes look like.

Most households choose extreme MPCs of 0 or 1 for small shocks but transition to moderate and stable interior MPCs for larger shocks, generating the “bowtie” shape of the MPC distribution below.

Our model shows that even small reoptimization costs can lead to large deviations from rational behavior (Akerlof and Yellen, 1985). The result? Households often rely on "quick-fixes": simple, approximate solutions.

Do you rethink your entire consumption-saving strategy every time your income fluctuates? Probably not! Like most of us, you might prefer simple "quick fixes" to fully reoptimizing.

We explore this near-rationality in household behavior and embed it into a standard consumption-savings model.

Shout-out to the past organizers and initiators of this event, the founding mothers and fathers: Kai Barron, Teodora Boneva, Stephanie Heger, Silvia Saccardo, and Paolina Medina.

A big thank you for the great work over the last years!

Contributions from all areas and applications of behavioral economics are welcome, including empirical and theoretical research.

Organizing committee: Cuimin Ba, Luca Henkel, Mattie Toma, and me.

Check out the paper at drive.google.com/file/d/1-_VP...

We find that disagreement in return expectations has deep roots: mental models of the stock market differ across economic agents.

And they can drastically differ from standard economic theories among important groups of households and professionals who advise and trade for them.