This paper proposes an aggregative model of Total Factor Productivity (TFP) in the spirit of Houthakker (1955-1956). It considers a frictional labor market where production units are subject to idiosyncratic shocks and jobs are created and destroyed as in Mortensen and Pissarides (1994). An...

We extend expected utility theory to situations in which the prizes incloude feelings about living with uncertainty. We provide two examples to show the impact of these anticipatory feelings on decision making.