Hermann Heinrich Gossen is generally known as the predecessor of Walras, Menger and Jevons in preparing modern economic analysis. What is generally not known is his Fundamental Theorem as a marginal approach to the labour theory of value. This paper presents his Fundamental Theorem in terms of...

In capital budgeting problems future cash flows are discounted using the expected one period returns of the investment. In this paper we establish a theory that relates this approach to the assumption that markets are free of arbitrage. Our goal is to uncover implicit assumptions on the set of...

We consider fundamental questions of arbitrage pricing arising when the uncertainty model is given by a set of possible mutually singular probability measures. With a single probability model, essential equivalence between the absence of arbitrage and the existence of an equivalent martingale...

The Prospect Theory proposes to assess outcomes relative to a reference point (or benchmark). Although the literature recognises the relevance of dynamic benchmarks, most of the applications of Prospect Theory employ static reference points (or a status quo). This paper aims to develop a...

This paper critically analyses the strongly subjectivist approach to exploitation theory recently proposed by Matsuo ([7]), in the context of general convex economies with heterogeneous agents. It is proved that the Fundamental Marxian Theorem is not preserved in his subjectivist approach,...

It is frequently believed, in a quite schizophrenic fashion, that a theory of value must just solve the question of relative prices (a microeconomic problem), being mainly the theory of money the piece needed for determining the absolute or monetary level of prices (a macroeconomic problem). But...

This paper applies the dichotomous theory of choice by Zou (2000a) tothe analysis of investmentstrategies and security markets. Issues concerning individualoptimality, (approximate) arbitrage,capital market equilibrium, and Pareto efficiency are studied undervarious market conditions. Among the...

The author shows that often quoted definitions used in the study of introductory courses in economics for the most part are lacking critical elements that would otherwise provide a more complete understanding of the nature of economic pursuits. The author uses the leading theories and...

The problem of irreversible investment with idiosyncratic risk is studied by interpreting market incompleteness as a source of Knightian uncertainty over the appropriate discount factor. Maxmin utility over multiple priors is used to solve the irreversible investment problem. The notion of...

In a highly competitive environment a product's commercial success depends increasingly more upon the ability to satisfy consumers' preferences that are highly diversified. Since a consumer product typically comprises a host of technological attributes, its market value incorporates all of the...