Efficiency under Uncertainty and Non‐convexity
Evaluating the Role of Probabilities
Bibliographic Data
| ID | 9728501 |
|---|---|
| Authors | Jean‐paul Chavas (0000-0003-1733-3277, University of Wisconsin–Madison), Walter Briec (0000-0001-8411-2146, Université de Perpignan) |
| Year | 2019 |
| Volume | 86 |
| Issue | 344 |
| Pages | 832-853 |
| Publication date | 2019-10-01 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | Economica (JOURNAL) |
| Journal identifiers | ISSN: 0013-0427 • E-ISSN: 1468-0335 |
| Publisher | Wiley (PUBLISHER • GB) |
| DOI | 10.1111/ecca.12293 |
| OpenAlex | W2899078833 |
| Language | EN |
| References cited | 36 |
This paper investigates the economics of uncertainty using a state‐contingent approach with a focus on the role of non‐convexity. Under efficiency, the slopes of a separating hypersurface measures state‐contingent prices. As argued by Yaari, normalized state‐contingent prices provide a measure of subjective probabilities. But efficiency under non‐convexity can require non‐linear pricing. The analysis identifies non‐convexity conditions under which probability assessments are not appropriate. Implications for economic and welfare analysis under uncertainty are discussed
Convexity · Econometrics · Economics · Financial economics · Focus (optics) · Hypersurface · Mathematical economics · Measure (data warehouse) · State (computer science) · Welfare · Climate Change Policy and Economics · Computer Science · Decision-Making and Behavioral Economics · Economic and Environmental Valuation · Mathematics
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| Citation velocity | historical |
|---|---|
| Highly cited | No |