creator: Segal, Uzi
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Coherent Odds and Subjective Probability
subject- – WP513
- – 2001-10-11
- – application/pdf
Min, Max, and Sum
description- – This paper provides characterization theorems for preferences. The main assumption is partial separability, where changing a common component of two vectors does not reverse strict preferences, but may turn strict preferences into indifference. We discuss applications of our results to social choice.
- – WP512
- – 2001-10-11
- – application/pdf
On the Economic Meaning of Machina's FrÚchet Differentiability Assumption
description- – This note shows that Machina's (1982) assumption that preferences over lotteries are smooth has some economic implications. We show that FrÚchet differentiability implies that preferences represent second order risk aversion (as well as conditional second order risk aversion). This implies, among other things, that decision makers buy full insurance only at the absence of marginal loading. We also show that with constant absolute and relative risk aversion, expected value maximization, second order risk aversion, and FrÚchet differentiability are equivalent.
- – WP511
- – 2001-10-11
- – application/pdf
Super Majoritarianism and the Endowment Effect
description- – The American and some other constitutions entrench property rights by requiring super majoritarian voting amending or revoking their own provisions. Following Buchanan and Tullock [5], this paper analyzes individuals' interests behind a veil of ignorance, and shows that under some standard assumptions, a (simple) majoritarian rule should be adopted. This result changes if one assumes that prefer- ences are consistent with the behavioral phenomenon known as the endowment effect."It then follows that (at least some) property rights are best defended by super majoritarian protection. The paper then shows that its theoretical results are consistent with a number of doctrines underlying American Constitutional Law.
- – WP510
- – 2002-03-18
- – application/pdf
Democratically Elected Aristocracies
description- – The article suggests a formal model of a two-tier voting procedure, which unlike traditional voting systems does not presuppose that ev- ery vote counts the same. In deciding a particular issue voters are called in the first round to assign categories of their fellow-citizens with differential voting power (or weights) according to the special position or concern individuals are perceived as having with regard to that issue. In the second stage, voters vote on the issue itself accord- ing to their substantive view and their votes are counted in the light of the differential weights assigned in the first round. We analyze the formal and the philosophical reasons that support the model.
- – WP529
- – 2002-03-18
- – application/pdf
Ex-Post Egalitarianism
subject- – WP563
- – 2003-06-01
- – application/pdf
Fair bias
description- – This paper takes a simple, informal suggestion by Broome and another more explicit suggestion by Kamm for how to deal with asymmetric claims and shows how they can be interpreted to be consistent with two different social welfare functions: Sum-of-square-roots of individual utilities, and product of utilities. These functions are then used to analyze more complicated situations but I show that the first yields more intuitive results, and a better compromise of efficiency and justice, than the other.
- – 2004-02-09
- – application/pdf
Objective Subjective Probabilities
description- – This note shows that if the space of events is sufficiently rich and the subjective probability function of each individual is non-atomic, then there is a sigma-algebra of events over which everyone will have the same probability function, and moreover, the range of these probabilities is the whole [0, 1] segment.
- – WP616
- – 2005-07-03
- – application/pdf
Calibration Results for Non-Expected Utility Theories
description- – Rabin proved that a low level of risk aversion with respect to small gambles leads to a high, and absurd, level of risk aversion with respect to large gambles. Rabin's arguments strongly depend on expected utility theory, but we show that similar arguments apply to almost all non-expected utility theories.
- – WP645
- – 2006-07-24
- – application/pdf
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