Ebook: Decision Making Under Risk and Uncertainty: New Models and Empirical Findings

As desired, the infonnation demand correspondence is single valued at equilibrium prices. Hence no planner is needed to assign infonnation allocations to individuals. Proposition 4. For any given infonnation price system p E . P (F *), almost every a E A demands a unique combined infonnation structure (although traders may be indifferent among partial infonnation sales from different information allocations, etc. ). In particular, the aggregate excess demand correspondence for net combined infonnation trades is a continuous function. Proof Uniqueness fails only if an agent can obtain the same expected utility from two or more net combined infonnation allocations. If this happens, appropriate slight perturbations of personal probability vectors destroy the equality unless the utility functions and wealth allocations were independent across states. Yet, when utilities and wealths don't depend on states in S, no infonnation to distinguish the states is desired, so that the demand for such infonnation structures must equal zero. To show the second claim, recall that if the correspondence is single valued for almost every agent, then its integral is also single valued. Finally, note that an upper hemicontinuous (by Proposition 2) correspondence which is single valued everywhere is, in fact, a continuous function. [] REFERENCES Allen, Beth (1986a). "The Demand for (Differentiated) Infonnation"; Review of Economic Studies. 53. (311-323). Allen, Beth (1986b). "General Equilibrium with Infonnation Sales"; Theory and Decision. 21. (1-33). Allen, Beth (1990). "Infonnation as an Economic Commodity"; American Economic Review. 80. (268-273).

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Content:
Front Matter....Pages i-ix
Front Matter....Pages 1-1
Nontransitive Preferences and Normative Decision Theory....Pages 3-10
Healthy Scepticism as an Expected-Utility Explanation of the Phenomena of Allais and Ellsberg....Pages 11-16
Intertemporal Risk-Aversion and Calibration Uncertainty May Explain Violations of the Independence Axiom....Pages 17-23
Decision Versus Policy: An Expected Utility Resolution of the Ellsberg Paradox....Pages 25-35
Comparative Statics For Endogenous Risk....Pages 37-42
Deterministic Transformations: Some Comparative Statistics Results....Pages 43-51
Defining the Mean-Preserving Spread: 3-PT Versus 4-PT....Pages 53-58
Front Matter....Pages 59-59
A Descriptive Model and a Decision Technique....Pages 61-68
Risk Aversion Measures with Expected and Non-Expected Utility....Pages 69-81
Linear Lexicographic State-Dependent Utility....Pages 83-91
On the Foundations of Decision Making Under Partial Information....Pages 93-100
The Bayesian Model of Conditional Preference and Trade Under Uncertainty....Pages 101-104
Consumption Style as Choice Under Risk Static Choice, Dynamic Irrationality and Crimes of Passion....Pages 105-114
Front Matter....Pages 115-115
The Effect of Explicit Probability Estimates on Violations of Subjective Expected Utility Theory in the Allais Paradox....Pages 117-124
Testing Alternative Representations of Behavior Under Uncertainty....Pages 125-132
Generic Utility: Measurements of Risk Functions and Their Robustness....Pages 133-142
Studies on Judgmental Probability Forecasting....Pages 143-150
Risk Attitude, Strength of Preference and Relative Risk Attitude: an Assessment with Multiple Indicators....Pages 151-159
Front Matter....Pages 161-161
A Simple Model of Partial Information Exchange Among Individuals with Different Subjective Probabilities....Pages 163-170
Tests for a Reservation Wage Effect....Pages 171-177
Front Matter....Pages 161-161
Market Uncertainty and Belief Formation with a Finite Number of Events....Pages 179-187
Arbitrage, Rationality, and Equilibrium....Pages 189-199
Adaptive Behavior in Games....Pages 201-210
An Experimental Investigation of Focal Points in Coordination and Bargaining: Some Preliminary Results....Pages 211-219
Some Versions of Newcomb’s Problem are Prisoners’ Dilemmas....Pages 221-230
Foundations for the Theory of Rational Choice with Vague Priors....Pages 231-242
Public Knowledge About Indoor Radon: The Effects of Risk Communication....Pages 243-251
Risk Perceptions and Risk Taking in the Presence of Multiple Risks....Pages 253-260
Back Matter....Pages 261-262

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Content:
Front Matter....Pages i-ix
Front Matter....Pages 1-1
Nontransitive Preferences and Normative Decision Theory....Pages 3-10
Healthy Scepticism as an Expected-Utility Explanation of the Phenomena of Allais and Ellsberg....Pages 11-16
Intertemporal Risk-Aversion and Calibration Uncertainty May Explain Violations of the Independence Axiom....Pages 17-23
Decision Versus Policy: An Expected Utility Resolution of the Ellsberg Paradox....Pages 25-35
Comparative Statics For Endogenous Risk....Pages 37-42
Deterministic Transformations: Some Comparative Statistics Results....Pages 43-51
Defining the Mean-Preserving Spread: 3-PT Versus 4-PT....Pages 53-58
Front Matter....Pages 59-59
A Descriptive Model and a Decision Technique....Pages 61-68
Risk Aversion Measures with Expected and Non-Expected Utility....Pages 69-81
Linear Lexicographic State-Dependent Utility....Pages 83-91
On the Foundations of Decision Making Under Partial Information....Pages 93-100
The Bayesian Model of Conditional Preference and Trade Under Uncertainty....Pages 101-104
Consumption Style as Choice Under Risk Static Choice, Dynamic Irrationality and Crimes of Passion....Pages 105-114
Front Matter....Pages 115-115
The Effect of Explicit Probability Estimates on Violations of Subjective Expected Utility Theory in the Allais Paradox....Pages 117-124
Testing Alternative Representations of Behavior Under Uncertainty....Pages 125-132
Generic Utility: Measurements of Risk Functions and Their Robustness....Pages 133-142
Studies on Judgmental Probability Forecasting....Pages 143-150
Risk Attitude, Strength of Preference and Relative Risk Attitude: an Assessment with Multiple Indicators....Pages 151-159
Front Matter....Pages 161-161
A Simple Model of Partial Information Exchange Among Individuals with Different Subjective Probabilities....Pages 163-170
Tests for a Reservation Wage Effect....Pages 171-177
Front Matter....Pages 161-161
Market Uncertainty and Belief Formation with a Finite Number of Events....Pages 179-187
Arbitrage, Rationality, and Equilibrium....Pages 189-199
Adaptive Behavior in Games....Pages 201-210
An Experimental Investigation of Focal Points in Coordination and Bargaining: Some Preliminary Results....Pages 211-219
Some Versions of Newcomb’s Problem are Prisoners’ Dilemmas....Pages 221-230
Foundations for the Theory of Rational Choice with Vague Priors....Pages 231-242
Public Knowledge About Indoor Radon: The Effects of Risk Communication....Pages 243-251
Risk Perceptions and Risk Taking in the Presence of Multiple Risks....Pages 253-260
Back Matter....Pages 261-262
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