Transcription of Choice under Uncertainty
{{id}} {{{paragraph}}}
Example: quiz answers
Choice under Uncertainty
Choice under UncertaintyJonathan LevinOctober 20061 IntroductionVirtually every decision is made in the face of Uncertainty . While we often rely onmodels of certain information as you ve seen in the class so far, many economicproblems require that we tackle Uncertainty head on. For instance, how should in-dividuals save for retirement when they face Uncertainty about their future income,thereturnondifferent investments, their health and their future preferences? Howshouldfirms choose what products to introduce or prices to set when demand isuncertain? What policies should governments choose when there is uncertaintyabout future productivity, growth, inflation and unemployment?Our objective in the next few classes is to develop a model of Choice behaviorunder Uncertainty . We start with the von Neumann-Morgensternexpected utilitymodel, which is the workhorse of modern economics.
at some behavioral criticisms of the expected utility model, and where they lead. A few comments about these notes. First, I’ll stick pretty close to them in lectures and problem sets, so they should be the firstthingyoutacklewhenyou’re studying. That being said, you’ll probably want to consult MWG and maybe
Loading..
Tags:
Information
Domain:
Source:
Link to this page:
Please notify us if you found a problem with this document: