Context dependence and consistency in dynamic choice under uncertainty: the case of anticipated regret

We examine if and to what extent choice dispositions can allow dependence on contexts and maintain consistency over time, in a dynamic environment under uncertainty. We focus on a 'minimal' case of context dependence, opportunity dependence due to being affected by anticipated regret. There are two sources of potential inconsistency, one is arrival of information and the other is changing opportunities. First, we go over the general method of resolution of potential inconsistency, by taking any kinds of inconsistency as given constraints. Second, we characterize a class of choice dispositions that are consistent to information arrival but may be inconsistent to changing opportunities. Finally, we consider the full requirement of dynamic consistency and show that it necessarily implies independence of choice opportunities.

Fair social decision under uncertainty and belief disagreements

This paper aims to address two issues related to simultaneous aggregation of utilities and beliefs. The first one is related to how to integrate both inequality and uncertainty considerations into social decision making. The second one is related to how social decision should take disagreements in beliefs into account. To accomplish this, whereas individuals are assumed to abide by Savage model’s of subjective expected utility, society is assumed to prescribe, either to each individual when the ex ante individual well-being is favored or to itself when the ex post individual well-being is favored, acting in accordance with the maximin expected utility theory of Gilboa and Schmeidler (J Math Econ 18:141–153, 1989). Furthermore, it adapts an ex ante Pareto-type condition proposed by Gayer et al. (J Legal Stud 43:151–171, 2014), which says that a prospect Pareto dominates another one if the former gives a higher expected utility than the latter one, for each individual, for all individuals’ beliefs. In the context where the ex ante individual welfare is favored, our ex ante Pareto-type condition is shown to be equivalent to social utility taking the form of a MaxMinMin social welfare function, as well as to the individual set of priors being contained within the range of individual beliefs. However, when the ex post individual welfare is favored, the same Pareto-type condition is shown to be equivalent to social utility taking the form of a MaxMinMin social welfare function, as well as to the social set of priors containing only weighted averages of individual beliefs

Intertemporal substitution and recursive smooth ambiguity preferences

In this paper, we establish an axiomatically founded generalized recursive smooth ambiguity model that allows for a separation among intertemporal substitution, risk aversion, and ambiguity aversion. We axiomatize this model using two approaches: the second-order act approach à la Klibanoff, Marinacci, and Mukerji (2005) and the two-stage randomization approach à la Seo (2009). We characterize risk attitude and ambiguity attitude within these two approaches. We then discuss our model's application in asset pricing. Our recursive preference model nests some popular models in the literature as special cases.Ambiguity, ambiguity aversion, risk aversion, intertemporal substitution, model uncertainty, recursive utility, dynamic consistency

Smallness of a commodity and partial equilibrium analysis

Partial equilibrium analysis has a conceptual dilemma that its object should be negligibly small in order to be free from income effect but then the consumer does not care for it and the notion of willingness to pay for it does not make sense. In the setting of a continuum of commodities, we propose a limiting procedure which transforms the general many-commodity framework into a partial single-commodity framework. In the limit, willingness to pay for a commodity is established as a density notion and it is shown to be free from income effect. This pins down an exact relationship between general equilibrium analysis and partial equilibrium analysis

Developing an Indicator for Environment Improvement Potential in the Agricultural Sector

Agriculture and forestry produce various environmental benefits such as CO2 absorption and water storage as well as food and energy crops. Environmental benefits contribute to improving the environment. This means agriculture has the potential to improve the environment. By measuring such potential, we can understand agriculture's affect on the environment. However, both environmental loads and benefits should be taken into account because agriculture produces not only environmental benefits but also environmental loads, and both affect the agricultural potential for improving the environment. Furthermore, as potential cannot be calculated by a single environmental factor, it is necessary to consider various environmental factors in the measurements. Therefore, a new comprehensive indicator is required for understanding the potential to improve the environment. To develop the indicator, the National Accounting Matrix including Environmental Accounts (NAMEA) is applied to manage information concerning economies and environments, and the Ecological Footprint (EF) can also be adapted to integrate individual environmental factors. In this paper, a new indicator is introduced that measures the agricultural sector's potential for improving the environment. A trial estimation of the indicator is done by using a case study from Hokkaido, Japan.Environmental Economics and Policy, Q56, Q57,

Investment in time preference and long-run distribution

This paper presents a simple dynamic general equilibrium model in which each household can make a costly investment in patience capital at each time. We show that the interior long-run steady state is unstable, in the sense that per household, there is a one-dimensional curve lying in the two-dimensional space of its patience capital and physical capital amounts, and convergence happens only when its initial pair falls exactly on the curve. Households with the initial vectors falling in the upper side of the curve invest more in patience capital, which leads themselves to save more, and hence, the consumption level grows in the long run. Households with the initial vectors falling in the lower side opt out from investing in patience capital, leading to a decay of patience level, which leads themselves to save less and hence they perish in the long run. We also show a possibility that there is an expanding swing between the two classes

On the relationship between textures and cooling rates of quenched angrites

The Tenth Symposium on Polar Science/Special session: [OA] Antarctic meteorites, Thur. 5 Dec. / 3F Multipurpose conference room, National Institute of Polar Researc