scholarly journals Human Capital Accumulation and the Evolution of Overconfidence

Games ◽  
2020 ◽  
Vol 11 (4) ◽  
pp. 46
Author(s):  
Luis Santos-Pinto
Keyword(s):  
Human Capital ◽  
Financial Markets ◽  
Continuous Time ◽  
Capital Accumulation ◽  
Field Data ◽  
Working Life ◽  
Human Capital Accumulation ◽  
Subjective Assessments ◽  
Chess Players ◽  
Distribution Of Income

This paper studies the evolution of overconfidence over a cohort’s working life. To do this, the paper incorporates subjective assessments into a continuous time human capital accumulation model with a finite horizon. The main finding is that the processes of human capital accumulation, skill depreciation, and subjective assessments imply that overconfidence first increases and then decreases over the cohort’s working life. In the absence of skill depreciation, overconfidence monotonically increases over the cohort’s working life. The model generates four additional testable predictions. First, everything else equal, overconfidence peaks earlier in activities where skill depreciation is higher. Second, overconfidence is lower in activities where the distribution of income is more dispersed. Third, for a minority of individuals, overconfidence decreases over their working life. Fourth, overconfidence is lower with a higher market discount rate. The paper provides two applications of the model. It shows the model can help make sense of field data on overconfidence, experience, and trading activity in financial markets. The model can also explain experimental data on the evolution of overconfidence among poker and chess players.

Path from human capital to economic growth: A free highway or a complicated labyrinth?

2017 ◽  
pp. 5-23 ◽  
Author(s):  
I. Lyubimov
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Education Policy ◽  
Financial Markets ◽  
Capital Accumulation ◽  
Human Capital Accumulation ◽  
Limited Effect ◽  
Rights Protection ◽  
Property Rights Protection

In this paper, we consider a number of causes which can potentially explain why human capital accumulation policies might have limited effect on economic growth. Mixed empirical results can be found in the literature, both supporting and questioning the key role of human capital as an important cause of economic growth. We focus on the latter and start from pointing at inaccurate indicators of human capital accumulation, such as the average years of schooling, which might not reflect with acceptable level of accuracy the level of human capital accumulated in a particular economy. We then consider the role of other causes of economic growth, such as property rights protection or financial markets development, which might affect the demand for human capital, thus potentially limiting the effect of a policy affecting the supply of human capital. We then discuss the efficiency of human capital distribution among various activities in a particular economy and argue that the way the economy uses its human capital stock might matter for its growth rates. Finally we point at potential flaws in education policy, which might result in slow accumulation of human capital.

scholarly journals GENES, LEGITIMACY AND HYPERGAMY: ANOTHER LOOK AT THE ECONOMICS OF MARRIAGE

2015 ◽  
Vol 81 (4) ◽  
pp. 331-377 ◽  
Author(s):  
Gilles Saint-Paul
Keyword(s):  
Human Capital ◽  
Capital Accumulation ◽  
Single Women ◽  
Human Capital Accumulation ◽  
Marriage Markets ◽  
Men And Women ◽  
Trade Off ◽  
Mating Opportunities ◽  
The City ◽  
Distribution Of Income

Abstract:In order to credibly “sell” legitimate children to their spouse, women must forego more attractive mating opportunities. This paper derives the implications of this observation for the pattern of matching in marriage markets, the dynamics of human capital accumulation, and the evolution of the gene pool. A key consequence of the trade-off faced by women is that marriage markets will naturally tend to behypergamous– that is, a marriage is more likely to be beneficial to both parties relative to remaining single, the greater the man’s human capital, and the lower the woman’s human capital. As a consequence, it is shown that the equilibrium can only be of two types. In the “Victorian” type, all agents marry somebody of the same rank in the distribution of income. In the “Sex and the City” (SATC) type, women marry men who are better ranked than themselves. There is a mass of unmarried men at the bottom of the distribution of human capital, and a mass of single women at the top of that distribution. It is shown that the economy switches from a Victorian to an SATC equilibrium as inequality goes up.The model sheds light on how marriage affects the returns to human capital for men and women. Absent marriage, these returns are larger for women than for men but the opposite may occur if marriage prevails. Finally, it is shown that the institution of marriage may or may not favour human capital accumulation depending on how genes affect one’s productivity at accumulating human capital.

Human Capital Accumulation and Resource Abundance

2011 ◽  
pp. 66-77
Author(s):  
O. Vasilieva
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Capital Accumulation ◽  
Relevant Literature ◽  
Harmful Effect ◽  
Human Capital Accumulation ◽  
Resource Abundance ◽  
Empirical Results ◽  
Theoretical Predictions ◽  
Crowd Out

Does resource abundance positively affect human capital accumulation? Or, alternatively, does it «crowd out» the human capital leading to the deterioration of economic growth? The paper gives an overview of the relevant literature and discusses both theoretical and empirical results obtained regarding the connection between human capital accumulation and resource abundance. It shows that despite some theoretical predictions about the harmful effect of resource abundance on human capital accumulation, unambiguous evidence of such impact that would be robust with respect to the change of resource abundance parameter has not been obtained yet.

Sign in / Sign up

Export Citation Format

Share Document