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A Bayesian model of knightian uncertainty
al- Najjar, Nabil I.; Weinstein, Jonathan - 2013
A long tradition suggests a fundamental distinction between situations of risk, where true objective probabilities are known, and unmeasurable uncertainties where no such probabilities are given. This distinction can be captured in a Bayesian model where uncertainty is represented by the agent's...
Persistent link: https://www.econbiz.de/10010368245
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The adaptation problem, evolution and normative economics
Qizilbash, Mozaffar - 2007
Amartya Sen has advanced a number of distinct arguments against utilitarianism and 'utility'-based views more generally …
Persistent link: https://www.econbiz.de/10010266706
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Expected Utility theory and the tyranny of catastrophic risks
Buchholz, Wolfgang; Schymura, Michael - 2010
Expected Utility theory is not only applied to individual choices but also to ethical decisions, e.g. in cost … EU theory is able to deal with 'catastrophic risks', i.e. risks of high, but very unlikely losses, in an ethically … appealing way. In this paper we show that this is not the case. Rather, if in the framework of EU theory a plausible level of …
Persistent link: https://www.econbiz.de/10010301695
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A utilitarian notion of responsibility for sustainability
Fünfgelt, Joachim; Baumgärtner, Stefan - 2012
We develop and formalize a utilitarian notion of responsibility for sustainability which is inspired by Singer's (1972) principle and the Brundtland Commission's notion ofsustainability (WCED 1987). We relate this notion of responsibility to established criteria forthe assessment of...
Persistent link: https://www.econbiz.de/10010281771
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Optimal Utilitarian Taxation and Horizontal Equity
Jordahl, Henrik; Micheletto, Luca - 2002
We impose a horizontal equity restriction on the problem of finding the optimal utilitarian tax mix. The horizontal equity constraint requires that individuals with the same ability have to pay the same amount of taxes regardless of their preferences for leisure. Contrary to normal findings, we...
Persistent link: https://www.econbiz.de/10010321773
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A concern about low relative income, and the alignment of utilitarianism with egalitarianism
Stark, Oded; Kobus, Martyna; Jakubek, Marcin - 2011
of others, the optimal income distribution under utilitarianism is equality of incomes. …
Persistent link: https://www.econbiz.de/10010323665
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Optimism, pessimism and the unforeseen: Modelling an endogenous business cycle driven by strong beliefs
Sell, Friedrich L. - 2002
Indicators of trust, confidence, optimism or sentiment among consumers and/or investors, are published continuously in the mass media. More importantly, these indices seem not only to reflect how the state of the real economy is perceived by private agents, but can also help predict the future...
Persistent link: https://www.econbiz.de/10010300404
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Adaptive learning, persistence, and optimal monetary policy
Gaspar, Vítor; Smets, Frank; Vestin, David - 2006
We show that, when private sector expectations are determined in line with adaptive learning, optimal policy responds persistently to cost-push shocks. The optimal response is stronger and more persistent, the higher is the initial level of perceived inflation persistence by the private sector....
Persistent link: https://www.econbiz.de/10011604690
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Endogenous Uncertainty and Market Volatility
Kurz, Mordecai; Motolese, Maurizio - 1999
by the beliefs and actions of agents. The theory of Rational Belief (see Kurz [1994]) permits rational agents to hold … structure of market expectations. To make the case for this theory we present a single RBE model, which builds on developments …
Persistent link: https://www.econbiz.de/10011608491
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Controlling a stock pollutant with endogenous investment and asymmetric information
Karp, Larry; Zhang, Jiangfeng - 2001
Non-strategic firms with rational expectations make investment and emissions decisions. The investment rule depends on firms' beliefs about future emissions policies. We compare emissions taxes and quotas when the (strategic) regulator and (nonstrategic) firms have asymmetric information about...
Persistent link: https://www.econbiz.de/10011608857