The model is motivated by data showing that the Australian production of local manufactures is hurt by depreciations and invigorated by appreciations. The paper briefly presents such evidence and then proceeds to a theoretical analysis. The model aims at capturing short-to-medium run exchange...

Divide the decisionmaker's future into: (i) a pre-outcome period (lasting from the decision until the outcome of that decision is known), and (ii) a sequel post-outcome period (beginning when the outcome becomes known). Anticipated emotions in both periods may influence the decision, in...

Expected utility theory does not directly deal with the utility of chance. It has been suggested in the literature (Samuelson 1952, Markowitz 1959) that this can be remedied by an approach which explicitly models the emotional consequences which give rise to the utility of chance. We refer to...