We study a model of the seller of an asset who is liable for damages to buyers of the asset if, after the sale, the seller is discovered to have failed to disclose an estimate of the asset’s value that the seller knew prior to sale. The model yields some surprising predictions concerning how the seller’s disclosure decision changes with changes in the severity of this liability, and with other ...

System dynamics (SD) may amplify asset and liability management (ALM) methodology capability to be risk oriented. Therefore, this paper aims to apply SD principles to ALM models, in the specific case of pension funds. Conceptual issues assigned to ALM variables are described and a dynamic ALM approach, based on SD general principles and risk factors, is then examined. Risk must be defined in ta...