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Two properties of preferences and representations for choice under uncertainty which play an important role in decision … event and which corresponds to the individual's preferences. The conventional Bayesian theory of choice under uncertainty …
Persistent link: https://www.econbiz.de/10011206642
We discuss the unity between the two standard approaches to noncooperative solution concepts for games. The decision-theoretic approach starts from the assumption that the rationality of the players is common knowledge. This leads to the notion of correlated rationalizability. It is shown that...
Persistent link: https://www.econbiz.de/10011206697
Correlations arise naturally in noncooperative games, e.g., in the equivalence between undominated and optimal strategies in games with more than two players. But the noncooperative assumption is that players do not coordinate their strategy choices, so where do these correlations come from? The...
Persistent link: https://www.econbiz.de/10011206775
A paradox of self-reference in beliefs in games is identified, which yields a game-theoretic impossibility theorem akin to Russell's Paradox. An informal version of the paradox is that the following configuration of beliefs is impossible:Ann believes that Bob assumes thatAnn believes that Bob's...
Persistent link: https://www.econbiz.de/10011206790
sanctions-and-rewards mechanism, it is important to consider individual attitudes toward risk and uncertainty. …
Persistent link: https://www.econbiz.de/10010558508
significant uncertainty facing existing sources. Second, EPA’s proposed averaging option for new facilities that will install … creates some new regulatory uncertainty. We also comment on EPA’s decision to combine most coal and gas generators into a …
Persistent link: https://www.econbiz.de/10010558921
The paper studies the interaction between cyclical uncertainty and investment in a stochastic real option framework … of the link between cyclical uncertainty and investment is quantified using simulations of the model. The chief …
Persistent link: https://www.econbiz.de/10010559449
We employed simple gambles to investigate information processing in relation to the compatibility effect. Subjects should be more likely to engage in a deliberative thinking strategy when completing a pricing task rather than a rating task. We used eye-tracking methodology to measure information...
Persistent link: https://www.econbiz.de/10010559825
Uncertainty about product quality is endemic in international trade. We develop a dynamic, two country model where home … initially but known once the product is consumed. We show that this uncertainty generates an information cost of exporting, over … intermediaries in alleviating quality uncertainty. An intermediation technology involving higher marginal cost but lower fixed cost …
Persistent link: https://www.econbiz.de/10010561145
We investigate the importance of explicitly accounting for uncertainty in the determination of optimal global climate … policy. We demonstrate that the marginal risk premium determines the importance of adapting the optimal policy to uncertainty …. Common integrated assessment models (IAM) of climate change suggest uncertainty has little effect because the marginal risk …
Persistent link: https://www.econbiz.de/10010562109