Whither Uncertainty?

Hey, John D.

doi:10.2307/2232647

Cited by 12 publications

(5 citation statements)

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“…From the most general theoretical point of view, the SEU framework assumes that people using this approach to make decisions are able to take into account all possible states of the world, the probabilities of each state occurring and the ( ) consequences in terms of utility of each state. This level of foresight is ( ) ( ) far beyond human capabilities see Gans, 1996 andHey, 1982 produced a cogent critique of its use as a practical guide to decision making under uncertainty. In the light of its problems, individuals may conclude that the SEU framework is not going to be a helpful method for enabling them to make decisions.…”

Section: The Subjective Expected Utility Decision Frameworkmentioning

confidence: 99%

Time Diversification: An Essay on the Need to Revisit Finance Theory

Hudson

Keasey

Littler

et al. 1999

Critical Perspectives on Accounting

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Section: The Subjective Expected Utility Decision Frameworkmentioning

confidence: 99%

Time Diversification: An Essay on the Need to Revisit Finance Theory

Hudson

Keasey

Littler

et al. 1999

Critical Perspectives on Accounting

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“…Hey (1983) argued that the complexity of theoretically derived optimization rules precludes their use in the real world. However, the practicality of implementing these decision models is often questioned.…”

Section: Introductionmentioning

confidence: 99%

“…However, the practicality of implementing these decision models is often questioned. Hey (1983) argued that the complexity of theoretically derived optimization rules precludes their use in the real world. Instead, firms use simple rules that are assumed to reflect the decision process modelled in theory.…”

Section: Introductionmentioning

confidence: 99%

Optimal Markup Decisions under Demand Uncertainty

Lohr

Park

1998

Canadian J Agri Economics

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This article examines the consistency with economic theory of a rule of thumb in which a risk-averse firm facing demand uncertaintly sets its price based on a percentage over the price paid to farmers. A testable set of comparative static results determines how the optimal markup is influenced by shifts in key parameters affecting the firm: expected demand, demand uncertainty and average variable costs. The model is tested using data from the wholesale markets for organic lettuce, broccoli and carrots. The results demonstrate that risk-averse wholesalers raise markups as expected demand increases and reduce them as uncertainty increases, consistent with risk-averse behavior. The empirical models show that produce marketing agents monitor shifts in expected demand and demand variability when adjusting markups. Expected demand has a greater impact on markups than demand variability.Nous examinons la cohérence avec la théorie économique d'une méthode au juger selon laquelle une entreprise confrontée à une demande incertaine fixe son prix de vente à un pourcentage donné audessus de celui payé à la production. Un jeu testable de données statiques comparatives permet de déterminer dans quelle mesure la marge commerciale de l'entreprise est sensible aux glissements affectant les paramètres clés qui l'intéressent, notamment le volume de la demande espérée, l'incertitude de la demande et les charges variables moyennes. Nous avons testé la validité du modèle à partir de données concernant le marché au gros de la laitue, du brocoli et de la carotte biologiques. Comme on pouvait s'y attendre, les résultats obtenus montrent que les grossistes prudents, ceux qui évitent les risques; relèvent leur marge à mesure que la demande espérée augmente et qu'ils la réduisent en période d'incertitude de la demande. Les modèles empiriques indiquent que les courtiers en produits frais ajustent les marges commerciales selon les glissements affectant la demande espérée et la variabilité Canadian Journal of Agricultural Economics 46 (1998) 221-232 221 a* Indicates significance at the α = 0.10 level. Tstatistics are in parentheses. Among the other estimates, COSINE t , BAKEHDD t , WATSHDD t are positive and significant.

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“…Farmers' utility functions are 141l measured (Hamal and Anderson, 1982), and subjective probabilities are elicited (Grisley and Kellogg, 1983), even if question -compatible incentives (Knight et al, 1985) are not always used. SEUT has led to a conceptually and mathematically tractable theory of decision but it is not clear that it offers a comprehensive model of decision-making (Gardenfors and Sahlin, 1982;Heiner, 1983;Hey, 1983). SEUT has led to a conceptually and mathematically tractable theory of decision but it is not clear that it offers a comprehensive model of decision-making (Gardenfors and Sahlin, 1982;Heiner, 1983;Hey, 1983).…”

Section: Introductionmentioning

confidence: 99%

Analysis of uncertainty as opposed to risk: An experimental approach

Anand

1990

Agricultural Economics

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Anand, P., 1990. Analysis of uncertainty as opposed to risk: an experimental approach. Agric. Econ., The paper j.jlustrates the scope for enhancing the conceptual apparatus used by agricultural economists to analyse decision-making under conditions of uncertainty. Selected empirical results from experiments on student subjects from three universities are reported. Three issues are considered. First, the reasons for choice and the understanding of a choice problem are examined. Second, attitudes towards different levels of uncertainty are measured. Third, the possibility that apparently non-normative psychological factors influence choice is explored. The paper serves to illustrate and support a number of methodological points. The major points are that a risk-uncertainty distinction is useful (contrary to the aging conventional wisdom of economic theory), that laboratory experiments can potentially provide data of use to agricultural economists, and that predictive models of choice under uncertainty may be more accurate if they take account of psychological variables which influence the decision-making processes of human subjects.

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Whither Uncertainty?

Cited by 12 publications

References 0 publications

Time Diversification: An Essay on the Need to Revisit Finance Theory

Time Diversification: An Essay on the Need to Revisit Finance Theory

Optimal Markup Decisions under Demand Uncertainty

Analysis of uncertainty as opposed to risk: An experimental approach

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