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Uncertainty in Economic Theory : Routledge Frontiers of Political Economy - Itzhak Gilboa

Uncertainty in Economic Theory

Routledge Frontiers of Political Economy

By: Itzhak Gilboa (Editor)

Hardcover

Published: 24th June 2004
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Recent decades have witnessed developments in decision theory that propose an alternative to the accepted Bayesian view. According to this view, all uncertainty can be quantified by probability measures. This view has been criticized on empirical as well as conceptual grounds. David Schmeidler has offered an alternative way of thinking about decision under uncertainty, which has become popular in recent years. This book provides a review and an introduction to this new decision theory under uncertainty. The first part focuses on theory: axiomatizations, the definition of uncertainty aversion, the issue of updating and independence, and so forth. The second part deals with applications to economic theory, game theory, and finance. With a wide variety of contributions of the highest order, the book can be considered to be extremely authoritative. This is the first collection to include papers on this topic, and it can thus serve as an introduction to researchers who are new to the field or a graduate course textbook. With this goal in mind, the book contains survey introductions that are aimed at a graduate level student, and help explain the main ideas, as well as put them in perspective.

List of contributorsp. xii
Prefacep. xv
Theoryp. 1
Introductionp. 3
Preference axiomatizations for decision under uncertaintyp. 20
Defining ambiguity and ambiguity attitudep. 36
Introduction to the mathematics of ambiguityp. 46
Subjective probability and expected utility without additivityp. 108
Maxmin expected utility with non-unique priorp. 125
A simple axiomatization of nonadditive expected utilityp. 136
Updating ambiguous beliefsp. 155
A definition of uncertainty aversionp. 171
Ambiguity made precise: a comparative foundationp. 209
Stochastically independent randomization and uncertainty aversionp. 244
Decomposition and representation of coalitional gamesp. 261
Applicationsp. 281
An overview of economic applications of David Schmeidler's models of decision making under uncertaintyp. 283
Ambiguity aversion and incompleteness of contractual formp. 303
Ambiguity aversion and incompleteness of financial marketsp. 336
A quartet of semigroups for model specification, robustness, prices of risk, and model detectionp. 364
Uncertainty aversion, risk aversion, and the optimal choice of portfoliop. 419
Intertemporal asset pricing under Knightian uncertaintyp. 429
Sharing beliefs: between agreeing and disagreeingp. 472
Equilibrium in beliefs under uncertaintyp. 483
The right to remain silentp. 522
On the measurement of inequality under uncertaintyp. 531
Indexp. 541
Table of Contents provided by Rittenhouse. All Rights Reserved.

ISBN: 9780415324946
ISBN-10: 0415324947
Series: Routledge Frontiers of Political Economy
Audience: Tertiary; University or College
Format: Hardcover
Language: English
Number Of Pages: 576
Published: 24th June 2004
Publisher: Taylor & Francis Ltd
Country of Publication: GB
Dimensions (cm): 23.5 x 15.9  x 3.81
Weight (kg): 1.0
Edition Number: 1