Although expected utility (EU) theory is a powerful tool for the analysis of decision under risk, it has long been known that individual behavior, in both experimental and market settings, deviates from the predictions of simple EU models. These violations of EU predictions were largely...

In this paper, it is argued that differential awareness plays a crucial role in the operation of financial markets. The interaction between awareness and arbitrage is crucial in explaining both beneficial and harmful financial innovations. Financial crises may be explained as the result of...

In this Supplement we provide foundations for the asset structures used in the main part of the paper, as well as in Appendix A. We use results by Choquet (1966), Kendall (1962) and Polyrakis (1999) to demonstrate how these asset structures can be generated from a general set of assets available...

John Quiggin is an Australian economist and professor at the University of Queensland. He has also held academic positions at the Australian National University and James Cook University. Best known for his work on utility theory, Quiggin is among the top 500 economists in the world according to...

This paper combines insights from the literature on the economics of organisation with traditional models of market structure to construct a theory of equilibrium firm size heterogeneity under the assumption of a homogenous product industry. It is possible that configurations consisting entirely...

This article studies the comparative statics of output subsidies for firms, with monotonic preferences over costs and returns, that face price and production uncertainty. The modeling of deficiency payments, support-price schemes, and stochastic supply shifts in a state-space framework is...