We instillate rational cognition and learning in "seemingly riskless" choices and judgments. Preferences and possibilities are given in a stochastic sense and based on revisable expectations. The theory predicts experimental preference reversals and passes a sharp econometric test of the status...

In this article we study the effect of uncertainty on an entrepreneur who must choose the capacity of his business before knowing the demand for his product.

The paper investigates the pricing of derivative securities with calendar-time maturities.

We analyze an alternative to the standard rationalizability requirement for observed choice bu considering non-deteriorating selections.

In the last decade, the potential macroeconomic effects of intermittent large adjustments in microeconomic variables such as prices, investment, consumption of durables or employment- a behaviour which may be justified by the presence of kinked adjustment costs- have been studied in models where...

In the presence of moral hazard, received agency theory predicts the "Marshallian inefficiency" of agricultural tenancy contracts, meaning that inputs per hectare on sharecropped land will differ from that on owned land. In this paper, we test for the presence of Marshallian inefficiency using a...

At any given point in time, the collection of assets existing in the economy is observable. Each asset is a function of a set of contingencies. The union taken over all assets of these contingencies is what we call the set of publicly known states. An innovation is a set of states that are not...

We provide an analytical overview of the distortionary eects of some common forms of taxes faced by the nonrenewable resources sector of the economy. In the category of taxes meant specifically to capture the resource rent, we look at a specific severance tax, an ad valorem severance tax, a...

Optimum commodity taxation theory asks how to raise a given amount of tax revenue while minimizing distortions. We reexamine Ramsey's inverse elasticity rule in presence of Hotelling-type non-renewable natural resources. Under standard assumptions borrowed from the...