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on Utility Models and Prospect Theories |
| By: | Jeff Richardson (Centre for Health Economics, Monash University); John McKie (Centre for Health Economics, Monash University) |
| Date: | 2005–01 |
| URL: | http://d.repec.org/n?u=RePEc:mhe:chewps:2005-153&r=upt |
| By: | Pivato, Marcus |
| Abstract: | `Relative Utilitarianism' (RU) is a version of classical utilitarianism, where each person's utility function is rescaled to range from zero to one. As a voting system, RU is vulnerable to preference exaggeration by strategic voters. The Groves-Clarke Pivotal Mechanism elicits truthful revelation of preferences by requiring each voter to `bid' a sum of real money to cast a pivotal vote. However, this neglects wealth effects and gives disproportionate power to rich voters. We propose a variant of the Pivotal Mechanism using fixed allotments of notional `voting money'; this `Voting Money Pivotal Mechanism' (VMPM) is politically egalitarian and immune to wealth effects. In the large-population limit, the only admissible (i.e. weakly undominated) voting strategies in the VMPM are approximately truthful revelations of preferences; thus the VMPM yields an arbitrarily close approximation of RU. |
| Keywords: | Relative Utilitarianism; Groves-Clarke; pivotal mechanism; demand-revealing mechanism; voting dollars; point voting |
| JEL: | D71 D63 |
| Date: | 2006–10–30 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:627&r=upt |
| By: | T. DEMUYNCK; A. SCHOLLAERT |
| Abstract: | This note focuses on the use of utility monotonic perturbations as a means of modelling the mutation process in evolutionary models. We show that a game has a detailed balanced and utility monotonic perturbation if and only if it is an ordinal potential game. We also show that utility monotonicity is not strong enough to serve as an equilibrium refinement device for ordinal potential games. An equilibrium refinement device that is applicable to a general class of games must, therefore, satisfy a stronger utility monotonicity condition while the detailed balance condition can no longer hold. We believe that a tightening of the bounds on the magnitude of stationary distributions could substantially further research in this topic. |
| Date: | 2006–09 |
| URL: | http://d.repec.org/n?u=RePEc:rug:rugwps:06/408&r=upt |
| By: | T. DEMUYNCK |
| Abstract: | Many theories of consumer demand impose specific properties on the preference relations, e.g. convexity, monotonicity or homotheticity. Existing nonparametric tests which allow us to single out the preference relations that do not satisfy these properties are only valid in very specific contexts. This paper is an attempt to address this lacuna in the literature. We provide a theorem on the existence of complete binary extensions that satisfy properties which are closed under intersection. From this theorem we derive necessary and su_cient conditions for the existence of convex, homothetic and monotonic orderings on general domains. |
| Date: | 2006–09 |
| URL: | http://d.repec.org/n?u=RePEc:rug:rugwps:06/407&r=upt |
| By: | Carmen Herrero (Department of Economics, Universidad de Alicante); Ricardo Martinez (Department of Economics, Universidad de Alicante & Department of Economics, Universidad Pablo de Olavide) |
| Abstract: | We consider allocation problems with indivisible goods when agents' preferences are single-peaked. We propose natural rules (called up methods) to solve such a class of problems. We analyzed the properties those methods satisfy and we provide a characterization of them. We also prove that these methods can be interpreted as extensions to the indivisible case of the so-called equal-distance rule. |
| Keywords: | Allocation problem, indivisibilities, single-peaked preferences, standard of comparison, up method. |
| JEL: | D61 D63 D74 |
| Date: | 2006–11 |
| URL: | http://d.repec.org/n?u=RePEc:pab:wpaper:06.30&r=upt |
| By: | Bazhanov, Andrei; Hartwick, John |
| Abstract: | Beckmann's interaction model has each resident touching base in face-to-face activity with every other resident at the other's residence per unit time. We re-work his resulting ''interaction city'' with each resident ''operating with'' a Cobb-Douglas utility function. Similar but somewhat ''richer'' outcomes occur. We also investigate a new case with intermediate dispersion of face-to-face activity, one with scale economies in trip-making. |
| Keywords: | Household spatial interactions; Dispersed residential activity |
| JEL: | R14 D11 |
| Date: | 2006–11–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:766&r=upt |
| By: | Fugarolas Álvarez-Ude, Guadalupe; Hervés-Beloso, Carlos |
| Abstract: | The Walrasian model has played a central role in all aspects of economics. The purpose of this paper is to propose a general modeling of differential information in the spirit of the Arrow-Debreu model and following the Radner tradition but away from the usual measurability conception. We provide a characterization of better informed agents in order to firstly formalize an essential feature known as part of some oral tradition: a decisionmaker prefers more information to less. |
| Keywords: | Uncertainty; differential information; information sets; informational feasibility and better informed agents |
| JEL: | D80 C65 D50 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:612&r=upt |