Essays on Economic Behavior Under Uncertainty

Description

"In addition to an introductory essay, this volume is roughly divided into three parts. Part 1 comprises two papers that deal with the conceptual development of the conditional expected utility framework. Part 2 includes five papers on various micro-aspects of behavior under uncertainty. The five papers in part 3 are concerned with welfare economics and general equilibrium. The last paper, as indicated by its title, was originally a comment on the Kesten—Stigum paper. Since it also provides an excellent discussion on uncertainty and on the problem of modeling an appropriate equilibrium concept, we felt that by making it the last paper, it would also serve as a concluding remark for the volume." - Preface - List of contributors 1. "Chapter 1. Some Introductory Remarks On Behavior Under Uncertainty", M. Balch and S. Wu 1.1. Introduction 1.2. Behavioral determinants 1.3. Structural responses to uncertainty Part 1 2. "Chapter 2. On The Foundations Of Decision Making Under Uncertainty", Peter C. Fishburn 2.1. Introduction 2.2. Act-event pairs 2.3. Extraneous probabilities and mixture sets 2.4. The basic model 2.5. Finitely additive probability measures 2.6. Measurable and bounded conditional acts - Comments: "On recent developments in subjective expected utility", Michael Balch 3. "Chapter 3. Subjective Expected Utility For Conditional Primitives", Michael Balch and Peter C. Fishburn 3.1. Introduction 3.2. Theory core 3.3. Theory closure - Comments: -- "The interpretation of conditional expected-utility theories", David H. Krantz and R. Duncan Luce -- "Frameworks for preference", Richard C. Jeffrey -- "Remarks on ‘Subjective expected utility for conditional primitives’", Ethan D. Bolker -- "Some comments on some axioms for decision making under uncertainty", John W. Pratt -- Reply to comments Part 2 4. "Chapter 4. Ventures, Bets And Initial Prospects", Clifford Hildreth 4.1 Introduction 4.2 Utility of gain 4.3 A possible decomposition 4.4 One-dimensional families of ventures 4.5 Bets 4.6 To bet or not to bet 4.7 Example I: a specialty crop 4.8 Example II: a merchant 4.9 Example III: a patient 4.10. Example IV: fixed money income - Comments: -- "On ‘Ventures, bets and initial prospects’", James C. Hickman -- "On some facets of betting", Daniel McFadden 5. "Chapter 5. Stochastic Dominance In Choice Under Uncertainty", Josef Hadar and William Russell 5.1. Introduction 5.2. Basic definitions and properties 5.3. Stochastic dominance and preference 5.4. Applications 5.5. Conclusion - Comments: -- "On ‘Stochastic dominance in choice under uncertainty’", Koichi Hamada -- "On ‘Stochastic dominance in choice under uncertainty’", Gerald L. Nordquist 6. "Chapter 6. Consumption And Portfolio Choices With Transaction Costs", Robin Mukherjee and Edward Zabel 6.1. Introduction 6.2. A model of consumption and portfolio choice 6.3. Fixed transaction cost — portfolio choice 6.4. Fixed transaction cost — the consumption policy 6.5. Conclusions 6.6 Appendix: An alternative formulation of the fixed transaction cost model - Comments: -- "On ‘Consumption and portfolio choices with transaction costs’", Hayne E. Leland -- "On consumer consumption and portfolio decisions with transactions costs", Stephen A. Ross 7. "Chapter 7. The Economics Of Queues: A Brief Survey", David Levhari and Eytan Sheshinski 7.1. Introduction 7.2. The Naor model 7.3. Optimum bribing model 7.4. Optimization in queues without priorities 7.5. Queues with priorities - Comments: "On ‘The economics of queues: a brief survey’", Warren J. Boe 8. "Chapter 8. On The Economic Theory Of Agency And The Principle Of Similarity", Stephen A. Ross 8.1. Introduction 8.2. Basic problem 8.3. Similarity, efficiency, and linearity 8.4. Properties of fee schedule under similarity 8.5. Properties of fee schedule under efficiency 8.6. Conclusion 8.7. Appendix - Comments: "On the theory of economic agency", Leonard Mirman Part 3 9. "Chapter 9. Notes On Welfare Economics, Information And Uncertainty", J. A. Mirrlees 9.1. Introduction 9.2. Redistribution and risk-taking 9.3. The characterization of households 9.4. The consumer’s information 9.5 Appendix - Comments: "Notes on welfare economics, information and uncertainty", Peter Diamond 10. "Chapter 10. Preexisting Contracts And Temporary General Equilibrium", Jerry Green 10.1. Introduction 10.2. Previous work on preexisting contracts 10.3. Codes of conduct and non-economic penalties in general equilibrium models 10.4. The model 10.5. Individual behavior 10.6. Equilibrium 10.7. Conclusion - Comments: -- "On preexisting contracts and temporary equilibria", Bernt P. Stigum -- Reply to comments 11. "Chapter 11. Competitive Resource Allocation Over Time Under Uncertainty", Bernt P. Stigum 11.1. Introduction 11.2. Statement of results 11.3. Conclusion 11.4. Appendix: Proofs of theorems 11.1—11.4 - Comments: "On sequences of temporary equilibrium", John O. Ledyard 12. "Chapter 12. Balanced Growth Under Uncertainty In Decomposable Economies", Harry Kesten and Bernt P. Stigum 12.1. Introduction and statement of results 12.2. Auxiliary lemmas 12.3. A basic convergence theorem 12.4. Proofs of theorems 12.1 and 12.2 - Comments: -- "Balanced growth under uncertainty in decomposable economies", Roy Radner -- "On the application spectrum for the Kesten—Stigum theory", Michael Balch 13. "Chapter 13. The Kesten-Stigum Model And The Treatment Of Uncertainty In Equilibrium Theory", Mordecai Kurz 13.1. Introduction 13.2. Review of the Kesten—Stigum theory 13.3. Exogenous vs. endogenous uncertainties 13.4. Endogenous uncertainty and its consequences 13.5. Uncertainty and expectations: a search for a new equilibrium concept - Bibliography - Appendix - Author Index - Subject Index