A New Framework for the Analysis of Inequality This paper presents a new framework for analyzing inequality that moves beyond the anonymity postulate. We estimate the determinants of sectoral choice and the joint distributions of outcomes across sectors. We determine which components of realized earnings variability are due to uncertainty and which components are due to components of human dive...

Define the riskiness of a gamble as the reciprocal of the absolute risk aversion (ARA) of an individual with constant ARA who is indifferent between taking and not taking that gamble. We characterize this index by axioms, chief among them a “duality” axiom which, roughly speaking, asserts that less risk-averse individuals accept riskier gambles. The index is homogeneous of degree 1, monotonic w...

A discrete public good is provided when total contributions exceed the contribution threshold. I show that for a large class of threshold probability distributions, an increase in threshold uncertainty by 2nd-order stochastic dominance will increase (decrease) equilibrium contributions when the public good value is su ciently high (low). In an experiment designed to test these predictions, beha...

This paper provides two axiomatic derivations of a case-based decision rule. Each axiomatization shows that, if preference orders over available acts in various contexts satisfy certain consistency requirements, then these orders can be numerically represented by maximization of a similarity-weighted utility function. In each axiomatization, both the similarity function and the utility function...

Rational expectations solutions are usually derived by assuming that all state variables relevant to forward-looking behaviour are directly observable, or that they are "...an invertible function of observables" (Mehra and Prescott, 1980). Using a framework that nests linearised DSGE models, we give a number of results useful for the analysis of linear rational expectations models with restrict...

We analyze the value of public information in a competitive endowment economy. We provide a global result that an early release of information about the future state of the economy is desired by all agents, or Pareto improving, if agents disagree about the prospect of the economy and asset markets are complete. We further prove that for certain levels of agents’ disagreement, all agents prefer ...

We investigate the outcome of bargaining when a player’s pay-off from agreement is risky. We find that a risk-averse player typically increases his equilibrium receipts when his pay-off is made risky. This is because the presence of risk makes individuals behave “more patiently” in bargaining. Strong analogies are drawn to the precautionary saving literature. We show that the effect of risk on ...

For an incomplete-information model of public-good provision with interim participation constraints, we show that e¢ cient outcomes can be approximated, with approximately full surplus extraction, when there are many agents and each agent is informationally small. The result holds even if agents’ payo¤s cannot be unambiguously inferred from their beliefs, i.e., even if the so-called BDP propert...

This paper analyses the credibility of author anonymity provided by double-blind review processes. It is argued that authors have strong incentives to disseminate information about their papers before publication. A sample from two economics journals, both using double-blind review processes provides evidence that author revealing information of most accepted papers is available on the Internet...