Showing 1 - 10 of 829
Stimulated by Frank Knight's work, "Risk, Uncertainty and Profit," I present a theory of innovation based on what I term Knightian decision theory. This theory includes a concept of uncertainty aversion, a behavioral property that makes people reluctant to undertake new unevaluatable risks. This...
Persistent link: https://www.econbiz.de/10005463850
Sufficient conditions are given for large replica games without side payments to have non-empty approximate cores for all sufficiently large replications. No "balancedness" assumptions are required. The conditions are superadditivity, a very weak boundedness condition, and convexity of the...
Persistent link: https://www.econbiz.de/10005463856
Persistent link: https://www.econbiz.de/10005463862
We consider the relationship between the length of life of individuals and the assets they own and their influence on trustless trade. In particular in some structures a role for government or an outside bank may be called for to support an equilibrium. An example of an OLG model with production...
Persistent link: https://www.econbiz.de/10005463864
Persistent link: https://www.econbiz.de/10005463878
Persistent link: https://www.econbiz.de/10005463882
This note examines the effect of changes in risk aversion on the optimal portfolio choice in a complete market. It is shown that an agent who is less risk averse in the Pratt (1964) sense than another will choose a portfolio whose payoff is distributed as the other's payoff plus a nonnegative...
Persistent link: https://www.econbiz.de/10005463883
This paper analyzes the behavior of posterior distributions under the Jeffreys prior in a simultaneous equations model. The case under study is that of a general limited information setup with n + 1 endogenous variables. The Jeffreys prior is shown to give rise to a marginal posterior density...
Persistent link: https://www.econbiz.de/10005463888
Psychological experiments demonstrate that people exhibit a taste for consistency. Individuals are inclined to interpret new evidence in ways that confirm their pre-existing beliefs. They also tend to change their beliefs to enhance the desirability of their past actions. I present a model that...
Persistent link: https://www.econbiz.de/10005463891
Persistent link: https://www.econbiz.de/10005463903