We present a definition of increasing uncertainty, independent of any notion of subjective probabilities, or of any particular model of preferences.Our notion of an elementary increase in the uncertainty of any act corresponds to the addition of an 'elementary bet' which increases consumption by...

The equity premium puzzle shows that using standard parameters and setup, the Consumption-based Capital Asset Pricing Model's (CCAPM's) prediction of the premium associated with systematic risk is out by an order of magnitude.The object of this paper is to consider the implications of each of...

The 'noise trader' model of De Long et al. provides a plausible account of the determination of the equity premium.Extension of the model to allow for privatization of publicly-owned assets yields insights into the positive political economy of privatization and into the normative question of...

Any meaningful reform of the US Social Security system must deal with the system's current outstanding accumulated unfunded liabilities. The authors model these as a once-off financial liability payable 'tomorrow'. They show that if the equity premium puzzle arises from adverse selection...

Any meaningful reform of the US Social Security system must deal with the system's current outstanding accumulated unfunded liabilities. The authors model these as a once-off financial liability payable 'tomorrow'. They show that if the equity premium puzzle arises from adverse selection...

We present a definition of increasing uncertainty, in which an elementary increase in the uncertainty of any act corresponds to the addition of an `elementary bet' that increases consumption by a fixed amount in (relatively) `good' states and decreases consumption by a fixed (and possibly...

In most previous work on strategic trade policy, the form of government intervention has been prescribed in advance. In this paper, the authors apply a solution concept discussed by P. D. Klemperer and M. A. Meyer (1989) for games in which the strategy space consists of the class of all...

We formulate a dynamic framework for an individual decision-maker within which discovery of previously unconsidered propositions is possible. Using a standard game-theoretic representation of the state space as a tree structure generated by the actions of agents (including acts of nature), we...

We present a definition of increasing uncertainty, in which an elementary increase in the uncertainty of any act corresponds to the addition of an `elementary bet' that increases consumption by a fixed amount in (relatively) `good' states and decreases consumption by a fixed (and possibly...