Uncertainty in Economics

Individual Choice in a Static Setting: J.S. Tamerin and H.L.P. Resnik, Risk Taking by Individual Option--Case Study--Cigarette Smoking, in "Perspectives on Benefit Risk Decision Making." A. Tversky and D. Kahneman, Judgment under Uncertainty: Heuristics and Biasis. J.H. Dre:ze, Axiomatic Theories of Choice, Cardinal Utility and Subjective Probability: A Review, in "Allocation under Uncertainty: Equilibrium an Optimality," (J. Dreze, ed.). J.W. Pratt, Risk Aversion in the Small and in the Large. Exercise on Demand for Insurance. M.E. Yaari, Some Remarks on Measures of Risk Aversion and Their Uses. M. Rothschild and J.E. Stiglitz, Increasing Risk I: A Definition. Comment. Notes and Exercises on Increasing Risk. H.E. Leland, Savings and Uncertainty: The Precautionary Demand for Saving. Exercise on Savings under Uncertainty. Three Omitted Topics: Mean-Variance Analysis, the Expected Value of Information, and Auctions. T.J. Rothenberg and K.R. Smith, The Effect of Uncertainty on Resource Allocation. General Equilibrium in a Static Setting: G. Debreu, "Theory of Value." References. Exercise on Equilibrium Prices and Consumption. Comment. R. Radner, Competitive Equilibrium under Uncertainty. Comment. P. Diamond, The Role of a Stock Market in a General Equilibrium Model with Technological Uncertainty. Comment. Exercise on Uniform Pricing. G. Akerlof, The Market for Lemons: Qualitative Uncertainty and the Market Mechanism. Comment. Notes and Exercises on the Use of Imperfect Information. M. Rothschild and J. Stiglitz, Equilibrium in Competitive Insurance Markets: An Essay on the Economics of Imperfect Information. Comment. M. Spence, Job Market Signaling. Exercise: A Signaling Equilibrium with a Continuum of Skill Classes. Comment. M.V. Pauly, Overinsurance and Public Provision of Insurance: The Roles of Moral Hazard and Adverse Selection. Exercises on Optimal Insurance. Comment. B. Holmstrom, Moral Hazard and Observability. K.J. Arrow, Uncertainty and the Welfare Economics of Medical Care. S. Cheung, Transaction Costs, Risk Aversion, and the Choice of Contractual Arrangements. Comment. Two Omitted Topics: Product Liability and Workers' Compensation. K.J. Arrow and R. Lind, Uncertainty and the Evaluation of Public Investments. Comment. Sequential Choice and Equilibrium with Limited Information: M. Rothschild, Searching for the Lowest Price When the Distribution of Prices is Unknown. Exercises on Search Rules. Central Planning, Monopoly, Duopoly. M. Rothschild, Models of Market Organization with Imperfect Information: A Survey. Comment. Exercise on Information and Prices. G. Butters, Equilibrium Distributions of Sales and Advertising Prices. R. Lucas, Jr., and E. Prescott, Equilibrium Search and Unemployment. Comment. P. Diamond, Wage Determination and Efficiency in Search Equilibrium. P. Diamond, Aggregate Demand Management in Search Equilibrium. J. Hirshleifer, The Private and social Value of Information and the Reward to Inventive Activity.