Expectation in Economics.

Shackle, G. L. S.

doi:10.2307/2217133

Cited by 30 publications

(34 citation statements)

References 0 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…keeping options open). Young (2001) replaces expected utility maximization by Shackle's (1949) approach, which pays attention to potential surprise and uncertainty-induced demand failures. Krysiak and Krysiak (2006) present an analysis of uncertainty and irreversibility by demanding that an allocation is envy-free, leading to an interpretation of sustainability as an intertemporal distribution in which no future generation prefers to live at an earlier point in history.…”

Section: Inspiration From Existing Economic and Evolutionary Modelsmentioning

confidence: 99%

Optimal diversity: Increasing returns versus recombinant innovation

Bergh

2008

Journal of Economic Behavior & Organization

133

View full text Add to dashboard Cite

Choices regarding diversity play an important role in economics and innovation management, but often remain implicit. Once made explicit, the objectives of efficiency and diversity are usually posed as in conflict, as efficiency relates positively and diversity negatively to various increasing returns to scale in markets. Such a perspective, however, neglects the benefits of diversity in terms of realizing system improvements through recombinant innovation or spillovers. The latter implies a contribution of diversity to long-term efficiency. Dominant economic approaches that address diversity, such as option value and real options theories, regard benefits of diversity as exogenous. This paper proposes a simple model of variable, endogenous diversity to analyze the optimal balance between increasing returns to scale and recombinant innovation. It is discussed under which conditions one of four solutions is optimal: complete specialization regardless of which option, complete specialization in one specific option, symmetric diversity (perfect balance), and asymmetric diversity. The results give rise to a number of policy insights.

show abstract

Section: Inspiration From Existing Economic and Evolutionary Modelsmentioning

confidence: 99%

Optimal diversity: Increasing returns versus recombinant innovation

Bergh

2008

Journal of Economic Behavior & Organization

133

View full text Add to dashboard Cite

show abstract

“…The credit crunch of 2007-2008 provides the most spectacular recent examples, but Shackle (1949) was drawing attention to the inevitability of such surprising events in macroeconomics and finance long before. One cannot evade their implications for rational decision theory by saying that experts should bring more computing power to bear.…”

Section: Bayes' Rulementioning

confidence: 99%

On the Foundations of Decision Theory

Binmore

2017

Homo Oecon

View full text Add to dashboard Cite

“…Then, it introduces a priority weight by jointly evaluating each known outcome of a performance measure for computing project impacts and its degree of surprise pair. Finally, it identifies and standardizes the focus gain and focus loss values relative to an expected outcome from maximum priority weights (Ford and Ghose, 1998;Shackle, 1949;Young, 2001). …”

Section: Uncertainty Considerations In Asset Managementmentioning

confidence: 99%

Trade-off Analysis Methodology for Asset Management

Bai¹,

Labi²,

Li³

2008

View full text Add to dashboard Cite

Prepared in cooperation with the Indiana Department of Transportation and Federal Highway Administration. AbstractIn an era that is characterized by funding limitations, increased stakeholder participation, and the need for increased accountability and transparency, transportation agencies seek to ensure that comprehensive evaluation processes are identified and used for decision-making. Consistent with such processes is the incorporation of multiple performance criteria from different program areas, optimization of decisions under constrained budgets, and investigation of trade-offs between program areas, performance measures, budgetary levels, risk levels, and performance thresholds. To help INDOT carry out these processes, this study developed theoretical constructs for scaling and amalgamation of the different performance measures, and for analyzing the different kinds of trade-offs. The scaling of performance measures yields a consistent or dimensionless unit to make them comparable. Amalgamation combines the weighted and scaled performance measures to yield a single utility value that represents the overall desirability of a candidate project. This report documents, with examples, a number of alternative methods for scaling and amalgamation. Also, recognizing that project outcomes are not always known with certainty, the analysis was done for the deterministic (certainty) as well as the probabilistic (uncertainty) scenarios. For the uncertainty scenario, the report addressed two cases: the risk case, where the project outcomes (in terms of the performance measures) have a known probability distribution; and the pure uncertainty case, where the probability distributions of project outcomes are unknown. For risk case, the report presents a method that utilizes the mathematical expectation of the project impacts derived from the probability distribution of the performance measures. For the uncertainty case, the report describes, with numerical examples, Shackle's model that can be used in addressing the problem. Finally, the report describes how INDOT can carry out an investigation of trade-offs such as changing the performance threshold and shifting budgets from one program area to another. To facilitate implementation, the report includes a set of spreadsheets that are based on hypothetical project data. 17.

show abstract

Expectation in Economics.

Cited by 30 publications

References 0 publications

Optimal diversity: Increasing returns versus recombinant innovation

Optimal diversity: Increasing returns versus recombinant innovation

On the Foundations of Decision Theory

Trade-off Analysis Methodology for Asset Management

Contact Info

Product

Resources

About