Welfare Measures when Agents can Learn

A Unifying Theory

Datos Bibliográficos

ID9708889
AutoresJinhua Zhao (0000-0002-1929-7583, Michigan State University), Corbin L Kling (0000-0002-4785-7154, Iowa State University), Catherine L Kling (Iowa State University)
Año2009
Volumen119
Número540
Páginas1560-1585
Fecha de publicación2009-10-01
Peer ReviewedSí
Open AccessSí
TipoARTICLE
RevistaThe Economic Journal (JOURNAL)
Identificadores de la revistaISSN: 0013-0133 • E-ISSN: 1468-0297
EditorialOxford University Press (OUP) (PUBLISHER)
DOI10.1111/j.1468-0297.2009.02272.x
OpenAlexW2156452054
IdiomaEN
Citas recibidas1
Referencias citadas25

We extend Graham's (1981) welfare analysis under uncertainty to a dynamic environment where the agent can delay and obtain information. The dynamic willingness to pay locus unifies the concepts of option price, dynamic WTP, commitment costs and quasi-option value. Option price (dynamic WTP) corresponds to the "ex ante" WTP when the agent ignores (recognises) the learning opportunity. The commitment cost, or the difference between option price and dynamic WTP, equals the annualised and monetised quasi-option value. State contingent contracts have added value by allowing trading among agents with heterogeneous access to future information and delay opportunities. Copyright © The Author(s). Journal compilation © Royal Economic Society 2009

Contingent valuation · Economics · Ex-ante · Incentive · Microeconomics · Option value · Value (mathematics · Welfare · Willingness to pay · Computer Science · Economic and Environmental Valuation · Economic Policies and Impacts · Fiscal Policy and Economic Growth