An agronomic crop growth model—the Decision Support System for Agro-Technology Transfer—and a constant relative risk aversion utility function are used to examine corn irrigation strategies in Mitchell County, Georgia. Precipitation contracts are designed to help farmers manage risk. Three conclusions originate from the findings. First, the optimal irrigation strategy can greatly increase produ...

Preference reversals occur when different (but formally equivalent) elicitation methods reveal conflicting preferences over two alternatives. This paper shows that when people have fuzzy preferences i.e. when they choose in a probabilistic manner, their observed decisions can generate systematic preference reversals. A simple model of probabilistic choice and valuation can account for a higher ...

The aim of this paper is to propose a model of decision-making for lotteries. Lottery qualities are the key concepts of the theory. Qualities allow the derivation of optimal decision-making processes and are taken explicitly into account for lottery evaluation. Our contribution explains the major violations of the expected utility theory for decisions on two-point lotteries and shows the necess...

This note demonstrates that a certain class of stochastic problems for determination of optimal fertilizer application rates in the presence of fertilizer carry-over can be simplified to static, certainly equivalent problems. Conditions required for certainty equivalence to hold are: (1) fertilizer carry-over is agronomically equivalent to applied fertilizer; and (2) some addition of fertilizer...

We consider a model in which a trader aims to maximize expected risk-adjusted profit while trading a single security. In our model, each price change is a linear combination of observed factors, impact resulting from the trader’s current and prior activity, and unpredictable random effects. The trader must learn coefficients of a price impact model while trading. We propose a new method for sim...

This paper considers the joint problem of model estimation and implementation of monetary policy in the face of uncertainty regarding the process of structural change in the economy. We model unobserved structural change through time variation in the natural rates of interest and unemployment. We show that certainty equivalent optimal policies perform poorly when there is model uncertainty abou...

Prevailing theories of judgmental contrasts propose mechanisms ranging from relatively low versus high degrees of thought. The present research tests the hypothesis that the degree of thought involved in producing judgmental contrast has important implications. In three experiments, participants’ ability or motivation to engage in effortful thinking was manipulated. In Experiment 1, varying per...

In this paper it is shown how false operator responses due to missing or uncertain data can be significantly reduced or eliminated. Perhaps the most well-known of such effects are the various ‘edge effects’ which invariably occur at the edges of the input data set. Further, it is shown how operators having a higher degree of selectivity and higher tolerance against noise can be constructed usin...