Relying on internationally comparable input-output tables, the paper compares the cost of distribution services to market prices in Italy, Japan and the United States between 1970 and 1990, for various types of final buyers and for various product groups. While this ratio is shown to be stable...

Suppose that "uncertainty" about labor market conditions has increased. Does this change induce an unemployed worker to search longer, or shorter? This paper shows that the answer is drastically different depending on whether an increase in "uncertainty" is an increase in risk or that in true...

Jones and Ostroy (1984) argue that money,as an asset of the least transaction cost, offers exibility to its holder, which other assets cannot provide. We extend the idea of Jones and Ostroy into a truely dynamic framework of infinite horizon with a risk-neutral decision-maker. We then...

In many industrialized economies, there is sharp contrast between rigid prices in product markets and volatile prices in commodity and asset markets. This paper presents an explanation of this phenomenon in the framework of imperfect competition and heterogeneous expectations. However, the...

A set of axioms which characterizes a preference representable by the iterated Choquet expected utility is presented. This objective function is attractive since it possesses a feature of dynamical consistency. Furthermore,we show that under the same axioms the conditional preference is...

Suppose that an economic agent is (1|ƒÃ)~100% certain that uncertainty she faces is characterized by a particular probability measure, but that she has a fear that, with ƒÃ~100% chance, her conviction is completely wrong and she is left perfectly ignorant about the true measure in the...

A model of self-feeding fear is presented. Suppose that an economic agent is (1-ƒÃ)~100% certain that uncertainty she faces is characterized by a particular probability measure, but that she has a fear that, with ƒÃ~100% chance, her conviction is completely wrong and she is left perfectly...

This paper investigates whether or not the natural selection mechanism (NSM) of economic Darwinism works in severe recessions. Although standard firm models imply the importance of NSM in an economy by showing firm's rational behavior on entry, surviv-ing, and exit leads to macro-level TFP...

In contrast to the traditional model of uncertainty, where the uncertainty is characterized by a single distribution function that a decision maker faces, the Knightian-uncertainty approach characterizes it as a set of distributions rather than a single one. Hence, learning in the context of...

When firms decide about irreversible investment, they may not have perfect confidence about their perceived probability measure describing future uncertainty. They may think other probability measures perturbed from the original one are also probable. Uncertainty characterized by not a single...