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on Utility Models and Prospect Theory |
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Issue of 2022‒06‒27
fifteen papers chosen by |
| By: | , Muhammadyusril |
| Abstract: | catatan tugas resume ekonomi mikro tentang teori nilai guna (utility) |
| Date: | 2022–04–23 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:5vj2t&r= |
| By: | Azilla, Hanum |
| Abstract: | Teori nilai guna yaitu teori ekonomi yang mempelajari kepuasan atau kenikmatan yang diperoleh seorang konsumen dari mengkonsumsikan barang-barang tertentu. |
| Date: | 2022–04–20 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:qngmh&r= |
| By: | Aisyah, Nuraisyah |
| Abstract: | Utility atau nilai guna sering digunakan sebagai istilah untuk menjelaskan mengenai suatu manfaat barang atau komoditas tertentu. Pada teori keseimbangan, diketahui bahwa teori keseimbangan menggambarkan antara kesesuaian antara permintaan dan penawaran. Permintaan timbul karena konsumen memerlukan manfaat dari komoditas yang diminta. Manfaat inilah yang dikenal dengan istilah utilitas (utility). |
| Date: | 2022–04–21 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:m3q9h&r= |
| By: | Eric Luxenberg; Stephen Boyd |
| Abstract: | We consider the problem of choosing an optimal portfolio, assuming the asset returns have a Gaussian mixture (GM) distribution, with the objective of maximizing expected exponential utility. In this paper we show that this problem is convex, and readily solved exactly using domain-specific languages for convex optimization, without the need for sampling or scenarios. We then show how the closely related problem of minimizing entropic value at risk can also be formulated as a convex optimization problem. |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2205.04563&r= |
| By: | Ngan Ha Duong; Tien Thanh Dam; Thuy Anh Ta; Tien Mai |
| Abstract: | We study a joint facility location and budget planning problem in a competitive market under random utility maximization (RUM) models. The objective is to locate new facilities and make decisions on the budgets (or costs) to spend on the new facilities, aiming to maximize an expected captured customer demand, assuming that customers choose a facility among all available facilities according to a RUM model. We examine two RUM frameworks in the discrete choice literature, namely, the additive and multiplicative RUM. While the former has been widely used in facility location problems, we are the first to explore the latter in the context. We show that, under the additive RUM framework, the resulting cost optimization problem becomes highly non-convex and may have several local optimum solutions. In contrast, the use of the multiplicative RUM brings several advantages to the competitive facility location problem. More precisely, we show that the cost optimization problem under the multiplicative RUM can be solved efficiently by a general convex optimization solver or can be reformulated as a conic quadratic program and handled by a conic solver available in some optimization tools such as CPLEX or GUROBI. Furthermore, we consider a joint location and cost optimization problem and propose three approaches to solve the problem, namely, an equivalent conic reformulation, a multi-cut outer-approximation algorithm, and a local search heuristic. We provide numerical experiments based on synthetic instances of various sizes to evaluate the performances of the proposed algorithms in solving the cost optimization and joint location and cost optimization problems. |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2205.07345&r= |
| By: | Devansh Jalota; Yinyu Ye |
| Abstract: | In a Fisher market, agents (users) spend a budget of (artificial) currency to buy goods that maximize their utilities, and producers set prices on capacity-constrained goods such that the market clears. The equilibrium prices in such a market are typically computed through the solution of a convex program, e.g., the Eisenberg-Gale program, that aggregates users' preferences into a centralized social welfare objective. However, the computation of equilibrium prices using convex programs assumes that all transactions happen in a static market wherein all users are present simultaneously and relies on complete information on each user's budget and utility function. Since, in practice, information on users' utilities and budgets is unknown and users tend to arrive over time in the market, we study an online variant of Fisher markets, wherein users enter the market sequentially. We focus on the setting where users have linear utilities with privately known utility and budget parameters drawn i.i.d. from a distribution $\mathcal{D}$. In this setting, we develop a simple yet effective algorithm to set prices that preserves user privacy while achieving a regret and capacity violation of $O(\sqrt{n})$, where $n$ is the number of arriving users and the capacities of the goods scale as $O(n)$. Here, our regret measure represents the optimality gap in the objective of the Eisenberg-Gale program between the online allocation policy and that of an offline oracle with complete information on users' budgets and utilities. To establish the efficacy of our approach, we show that even an algorithm that sets expected equilibrium prices with perfect information on the distribution $\mathcal{D}$ cannot achieve both a regret and constraint violation of better than $\Omega(\sqrt{n})$. Finally, we present numerical experiments to demonstrate the performance of our approach relative to several benchmarks. |
| Date: | 2022–04 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2205.00825&r= |
| By: | Hao Wu (Hunan University); Rene van den Brink (Vrije Universiteit Amsterdam); Arantza Estevez-Fernandez (Vrije Universiteit Amsterdam) |
| Abstract: | This paper analyzes the allocation of the total toll collected in a highway among its segments. Based on different toll charging rules, we propose the Segments Equal Sharing method, the Exits Equal Sharing method, and the Entrances Equal Sharing method. We provide axioms and characterize these methods used to distribute the toll. Besides, we show how these methods can be obtained by applying the Shapley value to associated coalitional transferable utility games. |
| Keywords: | Highway toll allocation problem, Axiomatic characterization, Shapley value |
| JEL: | R49 C71 |
| Date: | 2022–06–07 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20220036&r= |
| By: | Najjar, Nadilah Anisah |
| Abstract: | Kurva kepuasan sama (indifference curve) adalah kurva yang menghubungkan titik-titik kombinasi dari konsumsi (atau pembelian) barang-barang yang menghasilkan tingkat kepuasan yang sama. Kurva kepuasan sama memperlihatkan semua kombinasi dari pilihan konsumen yang memberikan tingkat kepuasan atau utility yang sama bagi seseorang atau konsumen. |
| Date: | 2022–04–21 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:ah746&r= |
| By: | Kirill Borissov (European University at St.Petersburg, Russia); Mikhail Pakhnin (European University at St.Petersburg, Russia); Ronald Wendner (University of Graz, Austria) |
| Abstract: | We consider a neoclassical growth model with quasi-hyperbolic discounting under Kantian optimization: each temporal self acts in a way that they would like every future self to act. We introduce the notion of a Kantian policy as an outcome of Kantian optimization in a given class of policies. We derive and characterize a Kantian policy in the class of policies with a constant saving rate for an economy with log-utility and Cobb--Douglas production technology and an economy with isoelastic utility and linear production technology. In all cases, the Kantian saving rate is higher than the saving rate of sophisticated agents, and a Kantian path Pareto dominates a sophisticated path. |
| Keywords: | Quasi-hyperbolic discounting; time inconsistency; kantian equilibrium; sophisticated agents; saving rate; welfare. |
| JEL: | C70 D15 D91 E21 O40 |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:grz:wpaper:2022-03&r= |
| By: | Bugra Caskurlu; Fatih Erdem Kizilkaya |
| Abstract: | Hedonic games are a prominent model of coalition formation, in which each agent's utility only depends on the coalition she resides. The subclass of hedonic games that models the formation of general partnerships, where output is shared equally among affiliates, is referred to as hedonic games with common ranking property (HGCRP). Aside from their economic motivation, HGCRP came into prominence since they are guaranteed to have core stable solutions that can be found efficiently. We improve upon existing results by proving that every instance of HGCRP has a solution that is Pareto optimal, core stable and individually stable. The economic significance of this result is that efficiency is not to be totally sacrificed for the sake of stability in HGCRP. We establish that finding such a solution is {\bf NP-hard} even if the sizes of the coalitions are bounded above by $3$; however, it is polynomial time solvable if the sizes of the coalitions are bounded above by $2$. We show that the gap between the total utility of a core stable solution and that of the socially-optimal solution (OPT) is bounded above by $n$, where $n$ is the number of agents, and that this bound is tight. Our investigations reveal that computing OPT is inapproximable within better than $O(n^{1-\epsilon})$ for any fixed $\epsilon > 0$, and that this inapproximability lower bound is polynomially tight. However, OPT can be computed in polynomial time if the sizes of the coalitions are bounded above by $2$. |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2205.11939&r= |
| By: | , Aisyah |
| Abstract: | Ilmu ekonomi adalah bagian ilmu sosial yang mempelajari manusia bagaimana menentukan pilihan dalam menggunakan sumber daya (resource) untuk menghasilkan benda (comodity) yang diperoleh untuk memenuhi kebutuhan sehari-hari agar memperoleh guna atau manfaat (utility) yang sebesar-besarnya. Adapun menurut pendapat para ahli mengenai pengertian ekonomi mikro diantaranya : Menurut sadono sukirno Ilmu ekonomi adalah menganalisa atau melihat dari sudut pandang dari biaya dan keuntungan yang diperoleh ketika SDA itu dikelola. Menurut N.G. Mankiw Ilmu ekonomi adalah studi tentang bagaimana masyarakat mengelola sumber daya yang selalu terbatas dan langka. |
| Date: | 2022–04–20 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:qbr32&r= |
| By: | Nika Haghtalab; Nicole Immorlica; Brendan Lucier; Markus Mobius; Divyarthi Mohan |
| Abstract: | We study a communication game between a sender and receiver where the sender has access to a set of informative signals about a state of the world. The sender chooses one of her signals, called an ``anecdote'' and communicates it to the receiver. The receiver takes an action, yielding a utility for both players. Sender and receiver both care about the state of the world but are also influenced by a personal preference so that their ideal actions differ. We characterize perfect Bayesian equilibria when the sender cannot commit to a particular communication scheme. In this setting the sender faces ``persuasion temptation'': she is tempted to select a more biased anecdote to influence the receiver's action. Anecdotes are still informative to the receiver but persuasion comes at the cost of precision. This gives rise to ``informational homophily'' where the receiver prefers to listen to like-minded senders because they provide higher-precision signals. In particular, we show that a sender with access to many anecdotes will essentially send the minimum or maximum anecdote even though with high probability she has access to an anecdote close to the state of the world that would almost perfectly reveal it to the receiver. In contrast to the classic Crawford-Sobel model, full revelation is a knife-edge equilibrium and even small differences in personal preferences will induce highly polarized communication and a loss in utility for any equilibrium. We show that for fat-tailed anecdote distributions the receiver might even prefer to talk to poorly informed senders with aligned preferences rather than a knowledgeable expert whose preferences may differ from her own. We also show that under commitment differences in personal preferences no longer affect communication and the sender will generally report the most representative anecdote closest to the posterior mean for common distributions. |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2205.13461&r= |
| By: | Tolstoguzov, Oleg; Belykh, Anastasia |
| Abstract: | This article deals with the context of a new rationality in modeling due to the climate agenda and the introduction of ESG-type principles. We studied a geosystem with homogeneous natural-territorial complexes with the same geological basement, mesoforms of relief and industrial-territorial complexes. They function in a unified institutional climate. In this case, the focus is on the mesoscale of systems. The institutional order is based on the relationship between private and general institutions, and on organizational features of regions. The Dixit-Stiglitz monopolistic competition model is used to account for financial performance and utility in an equilibrium industry with high nature intensity. What is new is the introduction of the concept of social brands associated with ecosystem services and used simultaneously to account for the utility and customization of the new economic order, as well as the introduction of a social discount rate (a discount factor). Social brands create a certain “green” meaningful context in relation to natural capital and acting brands through social platforms. Thus, the society, through the mechanism of social brands, is offered a new format of interactions in which the structure of social brands becomes a priority in relation to the productive structure of the economy. |
| Keywords: | climate agenda; natural and social geosystems; utility; social discount; social brand |
| JEL: | Q56 Q57 R58 |
| Date: | 2022–02–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:113164&r= |
| By: | Kelishomi, Moghaddasi Ali (Loughborough University); Sgroi, Daniel (University of Warwick) |
| Abstract: | We find a strong relationship between risk-loving preferences and cognitive ability which becomes stronger as adherence to the generalized axiom of revealed preference (a proxy for rationality) increases. Our results are taken from a field study of individuals at the very bottom of the income distribution in a developing nation. Our results for some of the poorest in the world support recent findings drawn from subjects in wealthy Western nations, suggesting there may be a stable relationship between risk preferences and cognitive ability for the human population as a whole irrespective of socio-economic status. |
| Keywords: | risk, cognitive ability, rationality, generalized axiom of revealed preference, field experiment, low incomes, developing nation |
| JEL: | I11 I12 I18 C93 D03 |
| Date: | 2022–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15266&r= |
| By: | Rick van der Ploeg; Johannes Emmerling; Ben Groom |
| Abstract: | A formula is derived for the social cost of carbon (SCC) that takes account of intragenerational income inequality and its evolution with economic growth. The social discount rate (SDR) should be adjusted to account for intragenerational and intergenerational inequality aversion and for risk aversion. If growth increases (reduces) intra-generational inequality, the SDR is lower (higher) and the SCC higher (lower) than along an inequality-neutral growth path, especially if intra-generational and intergenerational inequality aversion are higher. The same qualitative result is shown for two welfare specifications, one with a representative agent with equally distributed equivalent (EDE) income and the other considers individuals separately across the income distribution. The latter specification causes an additional impact of income inequality on the SDR and SCC because individuals are compared both within and between time periods. Our preferred EDE calibration to a scenario in which global intragenerational inequality declines over time, leads to a SCC in 2020 of $70/tCO2 compared to a value of $85/tCO2 without the effect of inequality. |
| Keywords: | social discount rate, social cost of carbon, intra- and intergenerational inequality aversion, risk aversion, inequality, growth, uncertainty |
| JEL: | C61 D31 D62 D81 G12 H23 Q54 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9777&r= |