A Note on Complementarity Over Time

No abstract availabl

Stochastic Dominance and Comparative Risk Aversion

No abstract availabl

Weak* Axiom of Independence and the Non-Expected Utility Theory

The axiomatic foundation of the expected utility theory (which states that given a set of uncertain prospects individuals pick up the prospect which yields the highest expected utility) was first laid down by Von Neumann and Morgenstern (1947). This axiom has come under severe criticisms in recent years. A large number of experiments have shown that in making decisions involving uncertain prospects people frequently violate the independence axiom. In this paper we shall consider the problem of choice under uncertainty from a wider point of view and we shall examine the nature of the restriction imposed by the axiom of independence. We shall use the mean-variance utility function to prove our point. Then we shall consider a weak version of the independence axiom namely the weak* axiom of independence. This is the point of departure from the expected utility theory to the realm of the non-expected utility theory. The weak* axiom allows aversion to pure uncertainty and, in the context of the mean-variance utility theory, it is compatible with utility being an increasing function of expected returns at all levels

Distributive Justice and Allocation by the Market: On the Characterisation of a Fair Market Economy

After critically examining different notions of fairness in allocating goods and leisure in an economy with production, the paper considers an alternative approach to distributive justice and discusses the concept of a fair market economy

Efficiency and Consistency in Group Decisions

The paper introduces a concept of “efficiency set" in the context of group decisions and analyses its properties. If the set contains a single element, then the Borda rule finds it. Otherwise, the group needs a value function to choose from the efficient alternatives. Two value functions, with considerations for the number of participants who are badly affected by the choice, have been discussed. It turns out that the consistency axiom of group choice imposes a constraint, on the form of the value function, with questionable normative significance

The Marshallian Consumer

No abstract availabl

Factor-Supply Responses and the Gross-Substitute System

Although the inputs are not normally gross-substitutes in their demand, the Jacobian matrixof all excess demand functions, corresponding to both outputs and inputs, may satisfy the gross substitute requirements if, apart from the final goods being gross-substitutes in their demand, allinputs are substitutes in supply

A Note on the Generalised Measures of Risk Aversion

This paper is concerned with generalised scalar measures of risk aversion. A measure R which may meaningfully be applied to both unidimensional risks (risk in income or wealth) and multidimensional risks has been constructed. In case of identical preferences, we have also constructed an alternative measure of risk aversion R* which is shown to be related to the Khilstrom-Mirman measure. This relationship explains the nature of the Khilstrom-Mirman measure

Monopolistic Competition in a Large Economy

Fort a small economy, the equilibrium under monopolistic competition may not be Pareto optimal. The paper deals with the condition for the existence and Pareto optimality of equilibrium under monopolistic competition in a large economy with differentiated products