Showing 1 - 10 of 171
We axiomatize preferences that can be represented by a monotonic aggregation of subjective expected utilities generated by a utility function and some set of i.i.d. probability measures over a product state space, S1. For such preferences, we define relevant measures, show that they are treated...
Persistent link: https://www.econbiz.de/10010780802
We define a behavioral concept of relevance in the context of decision making under uncertainty.  We argue that this concept provides a sensible answer to the question "What probabilistic environments do an individuals' preferences reveal as mattering to her decisions?" under a symmetry...
Persistent link: https://www.econbiz.de/10010605069
The conjunction fallacy occurs whenever probability compounds are thought of as more likely than its component probabilities alone. In the experiment we present, subjects chose between simple and compound lotteries after some practice. Depending on the condition, they were given more or less...
Persistent link: https://www.econbiz.de/10010605216
avoid classic moral hazard problems and to insure the guarantors against default, each country would pay a risk premium … the fall-out from housing market crises are the most relevant economic fundamentals.  Formula-based risk spreads based on … long-run growth than mere fiscal contraction.  Putting more weight on incentives that come from risk spreads, than on …
Persistent link: https://www.econbiz.de/10011004159
GARCH models are employed.  We find that during the current period of market dislocations and times of increased risk …
Persistent link: https://www.econbiz.de/10011004255
This paper provides a positive theory about the contractual form of procurement contracts under cost uncertainty …
Persistent link: https://www.econbiz.de/10005047709
This paper presents a pairwise matching model with two-sided information asymmetry to analyse the impact of information costs on endogenous network building and matching by information intermedairies. The framework innovates by examining the role of information costs on incentives for trade...
Persistent link: https://www.econbiz.de/10004977860
The epistemic program in game theory uses formal models of interactive reasoning to provide foundations for various …
Persistent link: https://www.econbiz.de/10005047723
This paper offers a simple but rich framework to study communication subject to various constraints such as anonymity requirements, equal treatment of multiple agents, overconfidence of an expert, and garbling, by extending the cheap talk model of Crawford and Sobel (1982). Common to these...
Persistent link: https://www.econbiz.de/10005047765
We present a model in which a principal delegates the choice of project to an agent with different preferences. A project`s characteristics are verifiable once presented to the principal, but the principal does not know how many projects are available to the agent. The principal chooses the set...
Persistent link: https://www.econbiz.de/10005047815