Heterogeneity Clause Samples

Heterogeneity. ‌ In the standard setting, it can be easily observed that several forms of heterogeneity known at the beginning of the life cycle (deterministic) can be naturally incorporated in the pension contract. These heterogeneity characteristics could raise the question whether a different life cycle should be used a priori. The hetero- geneity characteristics will be identified and summarized in Table 2. Table 2: An overview of the heterogeneity characteristics Heterogeneity number Heterogeneity characteristic 1 Risk preferences 2 Starting salary and assumed wage profile 3 Targeted replacement rates 4 Pension contributions 5 Survival probabilities In Alserda et al. (2016) [3] it is concluded that pension plan participants have a significant variation in their risk preferences. The Merton model takes care of this by allowing for infinitely many life cycle profiles. In practice, only a few asset allocation strategies are offered. An important heterogeneous aspect is the wage difference at the start of the life cycle. Observe in this con- text the difference in starting salary for high educated versus low educated persons. Wage differences could also arise from gender discrimination, although it is undesirable to implement this in the life cycle. Also differences in the assumed wage profile based on education level will be present. This is easy to incorporate since the model could be adapted by imposing a different labor income, implying a different structure of the human capital (4). From Knoef et al. (2014) [37] it was concluded that significant differences exist between the actual re- placement rates. The conclusion of ▇▇ ▇▇▇▇▇▇▇ and Knoef (2015) [15] might be even more interesting since heterogeneity exists across the targeted replacement rate and minimal replacement rate. It is assumed that this is known at the beginning of the life cycle. It might not be so trivial to adapt the CRRA utility function

Heterogeneity. As discussed in the previous section, home devices differ from each other in terms of underlying medium used for con- nectivity, the power required, battery lifetime, the processor speeds, available memory, etc. One of the key challenges in designing a suitable security solution is that these devices also do not have the same way of allowing the owner to interact with them. They vary in both their input capability (ranging from a full-fledged keyboard to a single button or switch) and output capability (from a color screen to a single LED).