Essays On Uncertainty In Economics
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Author | : Jean-Jacques Laffont |
Publisher | : Harvard University Press |
Total Pages | : 160 |
Release | : 1980 |
Genre | : Business & Economics |
ISBN | : 9780674265554 |
These three elegant essays develop principles central to the understanding of the diverse ways in which imperfect information affects the distribution of resources, incentives, and the evaluation of economic policy. The first concerns the special role that information plays in the allocation process when it is possible to improve accuracy through private investment. The common practice of hiring "experts" whose information is presumably much better than their clients' is analyzed. Issues of cooperative behavior when potential group members possess diverse pieces of information are addressed. Emphasis is placed on the adaptation of the "core" concept from game theory to the resource allocation model with differential information. The second essay deals with the extent to which agents can influence the random events they face. This is known as moral hazard, and in its presence there is a potential inefficiency in the economic system. Two special models are studied: the role of moral hazard in a monetary economy, and the role of an outside adjudicatory agency that has the power to enforce fines and compensation. The final essay discusses the problem of certainty equivalence in economic policy. Conditions under which a full stochastic optimization can be calculated by solving a related, much simpler "certainty equivalence" problem are developed. The reduction in the complexity of calculation involved is very great compared with the potential loss of efficiency.
Author | : Michael Balch |
Publisher | : North-Holland |
Total Pages | : 464 |
Release | : 1974 |
Genre | : Business & Economics |
ISBN | : |
Author | : John L. Lott Jr. |
Publisher | : Routledge |
Total Pages | : 304 |
Release | : 2005-06-23 |
Genre | : Business & Economics |
ISBN | : 1134745605 |
The theory of the firm has recently undergone a dramatic transformation, drawing heavily on the pathbreaking work of Armen Alchian. This volume explores his contribution to the debate, including essays by Harold Demetz, Ben Klein, Jerry Jordan and Art Devany.
Author | : Jacques Drèze |
Publisher | : CUP Archive |
Total Pages | : 460 |
Release | : 1990-05-25 |
Genre | : Business & Economics |
ISBN | : 9780521386975 |
Professor Dreze is a highly respected mathematical economist and econometrician. This book brings together some of his major contributions to the economic theory of decision making under uncertainty, and also several essays. These include an important essay on 'Decision theory under moral hazard and state dependent preferences' that significantly extends modern theory, and which provides rigorous foundations for subsequent chapters. Topics covered within the theory include decision theory, market allocation and prices, consumer decisions, theory of the firm, labour contracts, and public decisions.
Author | : Peter Lewis Klibanoff |
Publisher | : |
Total Pages | : 264 |
Release | : 1994 |
Genre | : |
ISBN | : |
Author | : Alp Simsek |
Publisher | : |
Total Pages | : 244 |
Release | : 2010 |
Genre | : |
ISBN | : |
(cont.) learn about the health of the trading partners of the trading partners of the trading partners, and so on. At some point, the cost of information gathering becomes too unmanageable for banks, uncertainty spikes, and they have no option but to withdraw from loan commitments and illiquid positions. A flight-to-quality ensues, and the financial crisis spreads. The fourth essay, joint with Daron Acemoglu, analyzes the effect of uncertainty of a special kind, that involves economic agents' private actions and anonymous market transactions, on the functioning and efficiency of competitive markets. Despite a sizeable literature, how competitive markets deal with this type of uncertainty remains unclear. A "folk theorem" originating, among others, in the work of Stiglitz maintains that competitive equilibria are always or "generically" inefficient (unless contracts directly specify consumption levels as in Prescott and Townsend, thus bypassing trading in anonymous markets). This essay critically reevaluates these claims in the context of a general equilibrium economy with moral hazard. Our results delineate a range of benchmark situations in which equilibria have very strong optimality properties. They also suggest that considerable care is necessary in invoking the folk theorem about the inefficiency of competitive equilibria with private information.
Author | : Kenneth Joseph Arrow |
Publisher | : Cambridge University Press |
Total Pages | : 412 |
Release | : 1999-01-28 |
Genre | : Business & Economics |
ISBN | : 9780521553551 |
Leading theorists offer insights on the role of uncertainty and information in the market.
Author | : David Aaron Sykes |
Publisher | : |
Total Pages | : 270 |
Release | : 1984 |
Genre | : Probabilities |
ISBN | : |
Author | : Mark Joseph Machina |
Publisher | : |
Total Pages | : 324 |
Release | : 1979 |
Genre | : Risk |
ISBN | : |
Author | : Itzhak Gilboa |
Publisher | : Psychology Press |
Total Pages | : 584 |
Release | : 2004 |
Genre | : Business & Economics |
ISBN | : 9780415324946 |
"This is the first collection to include chapters on this topic, and it can thus serve as an introduction to researchers who are new to the field as well as a graduate course textbook. With this goal in mind, the book contains survey introductions that are aimed at a graduate level student, and help explain the main ideas, and put them in perspective."--BOOK JACKET.