This paper contains an analysis of a simple principal-agent problem illustrating possible problems that may arise when the prinicpal ascribes to the agent subjective probabilities and utilities that are implied by the subjective expected utility model but do not represent the agent's beliefs and...

In this paper we study the implications of random discount rates of future generations for saving behavior and capital holdings in steady-state competitive equilibrium. We examine conditions under which this randomness is sufficient for households other than the most patient to save, thus...

The paper explores the uniqueness properties of the subjective probabilities in two axiomatizations of state-dependent preferences. Karni, Schmeider and Vind's (KSV) system depends on selecting an arbitrary probability, ans as such, does not guarantee the uniqueness of the derived subjective...