parsimonious models that are easily estimated. In addition, we emphasize the need for deeper understanding of the links between …

using standard models. The welfare costs associated with an inefficient allocation of resources over the business cycle can …

decision making under uncertainty proposed in the earlier chapters of this handbook. This chapter begins with static theories …

known that individual behavior, in both experimental and market settings, deviates from the predictions of simple EU models … generalizations of, EU theory began to appear, most notably prospect theory of Kahneman and Tversky. Dozens of generalized EU models … appeared in the 1980s and early 1990s. Of these, the most prominent classes were rank-dependent models, betweenness models and …