THE ANALYTICS OF UNCERTAINTY AND INFORMATION --
‘AN EXPOSITORY SUR}
by
J. Hirehleifer
and
John G. Riley
University of California,
Los Angeles
*
"A slightly condensed version of this paper is forthcoming in the
Journal of Economic Literature.
UCLA
Department of Economics
Working Paper #159
July 1979The Analytics of Uncertainty and Information --
An Expository Survey
by
J. HIRSHLEIFER
and
JOHN G, RILEY
University of California,
Los Angeles
‘Among the very large number of people who provided
comments and suggestions, we would like to thank most
especially Fritz Machlup, Robert A. Jones, Mark
Perlman, and Richard J. Zeckhauser. J. Hirshleifer's
work on this paper was supported in part by National.
Science Foundation grant No. SOC75-15697 and by a
grant from the Foundation for Research in Economics
and Education. John G. Riley's work was supported in
part by National Science Foundation grant No. SOC79-07573.Part
1
CONTENTS:
‘THE ECONOMICS OF UNCERTAINTY
1.1 Decision Under Uncertainty
1.1.1 The Menu of Acts
1.1.2 The Probability Function
1.1.3 The Consequence Function
1.1.4 The Utility Function and the Expected-Utility Rule
1.1.5 Risk-Aversion, and the Risk-Bearing Optimum of the
Individual
1.2 Market Equilibrium Under Uncertainty
haring
1.2.2 Insurance
1.2.3 Complete and Incomplete Market Regimes, the Stock—
market Economy, and Optimal Production Decisions
1.2.4 Other Applications
‘THE ECONOMICS OF INFORMATION .
2.1 Informational Decision-Making
2.1.1 Acquisition of Information
2.1.2 Other Informational Activities
2.1.3 Emergent Information and the Value of Flexibility
2.2 Public Information and Market Equilibrium
2.2.1 Equilibrium in Complete versus Incomplete Market
Regimes
2.2.2 Speculation
2.3 The Economics of Research and Invention
2.4 Informational Advantage and Market Revelation of Information
2.4.1 Signalling
2.4.2 Informational Inferences from Market Prices
2.5 Rational Expectations and Informational Efficiency
References
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