This paper studies a class of variational problems that arise in the analysis of resource allocation over an infinite horizon. Such problems are characterised by an underlying technology that generates the basic set of feasible programs and by a preference ordering that selects from among these programs an optimal one. The problem of establishing the existence of an optimal program differs from...

Facing a stochastic market wage, which is independent of their own hiring policy, employers offer contracts specifying fixed wage, revenue share and employment duration. In ongoing employment relations it depends on the treatment whether fixed wages can be only increased or also decreased. Will the uncertainty of the future market wage and less wage flexibility lead to temporary employment? And...

This paper takes choice theory to risk or uncertainty. Well-known decision models are axiomatized under the premise that agents can randomize. Under a reversal of order assumption, this convexifies choice sets, and even after imposing the weak axiom of revealed preference and nonemptiness of choice correspondences, the preferences directly revealed by choice may be incomplete or cyclical. Choic...

The Lazarus and Bewley [2005, LB05] evaluation of the Archer and Jacobson [2003, AJ03] methodology was designed to examine various sensitivities of a wind power parameterization that was applied globally to estimate 80 m wind power. Their original work has since been updated in a sequence of papers which has, in part, resulted in a reduction of their original power estimates due to some changes...

I show that the full-insurance model of consumption choice is a reasonable approximation to the more realistic case of no insurance when the adverse shocks take the form of spells of unemployment. Further, my results support the assumption of the Mortensen-Pissarides model that the flow amenity value of unemployment—the value of not having to work—is a constant when stated in units of consumpti...

We study a continuous-time version of the optimal risk-sharing problem with one-sided commitment. In the optimal contract, the agent’s consumption is a time-invariant, strictly increasing function of a single state variable: the maximal level of the agent’s income realized to date. We characterize this function in terms of the agent’s outside option value function and the discounted amount of t...

Homeopathy has remained one of the most controversial medical treatments in the world. It is based on the “like cures like” principle and the idea that serial dilution of a substance renders it not less but more potent. Both of these axioms of homeopathy lack biological plausibility (Sehon and Stanley 2010). Nevertheless, homeopathy was recently cited as one of “the most popular and widely used...

An equilibrium in a game theoretic setting a la Debreu (Proc. Nat. Acad. Sci. (I.S.A. 38 (1954). 886893) and Shafer-Sonnenschein (.I. Mar/z. Econ. 2 (1975), 345-348) with a broader structure is proved. In particular, our framework is general enough to encompass both the Aumann (Economefrica 34 (1966), 1-17) economy of perfect competition and the nonordered preferences setting of MasCole11 (J. M...

We are grateful to the Department of Health for research grant support. The views expressed are those of the authors. 1 Parker H, Newcombe R, Bakx K. The new heroin users: prevalence and characteristics in Wirral, Merseyside. BrJ7 Addiction 1987;82:147-58. 2 Gossop M, Griffiths P, Strang J. Chasing the dragon: characteristics of heroin chasers. BrJ Addiction 1988;83: 1159-62. 3 Bewley TH, Conne...

This paper reconsiders the welfare costs of in‡ation and the welfare gains from …nancial intermediation in a heterogeneous-agent economy where money is held as a store of value (as in Bewley, 1980). Because of heterogeneous liquidity demand, transitory lump-sum money injections can have persistent expansionary e¤ects despite ‡exible prices, and such e¤ects can be greatly ampli…ed by the banking...