We analyze a dynamic and stochastic ecological-economic model of grazing management in semi-arid rangelands. The non-equilibrium ecosystem is driven by stochastic precipitation. A risk averse farmer chooses a grazing management strategy under uncertainty such as to maximize expected utility from...

Ambiguous prospects are ubiquitous in social and economic life, but the psychological foundations of behavior under ambiguity are still not well understood. One of the most robust empirical regularities is the strong correlation between attitudes towards ambiguity and compound risk which...

A service provider sells to homogenous risk-averse consumers through a two-part tariff. The consumers have uncertain tastes toward the service. They subscribe the service before the uncertainty resolves. In contrast with the common view that a monpolist's optimal two-part tariff for homogeneous...