《微观经济学microeconomics》英文版.pptVIP

Long Run and Short Run Cost Function Marginal cost Average cost The short run cost function The linkage between long run and short run cost * . Duality: Cost and Production Function Recovering the production function from the cost function Duality Isoquant: The slope of isoquant: Isocost curve: The slope of isocost: * . ECON501 Lecture Note 7 Choice Under Uncertainty * . Structure Expected Utility Theory Lottery Preference over Lottery The Expected Utility Function The Expected Utility Theorem Money Lotteries and Risk Aversion Money Lottery Risk Aversion: Definition Risk Aversion: Measurement * . Lottery ( p.168) A simple lottery (Definition 6.B.1) A compound lottery (Definition 6.B.2) A reduced lottery * . Preference over Lotteries Properties ( p.171 ) Complete Transitive Continuous Independence axiom * . The Expected Utility Function (Definition 6.B.5) The utility function U has an expected utility form if: (Proposition 6.B.1) A utility function U has an expected utility form if and only if it is linear: (Proposition 6.B.2) Suppose that U is a v.N-M expected utility function, then U’ is another v.N-M function if and only if : * . The Expected Utility Theorem (Proposition 6.B.3): suppose that the rational preference relation on the space of lottery satisfies the continuity and independence axioms, then this relation admits a utility representation of the expected utility form. Proof * . Money Lotteries Money Lotteries: v.N-M expected utility function: * . Risk Aversion: Definition The decision maker is risk averse if and only if The certainty equivalent of F(.) The probability premium * . Risk Aversion Equivalent Statements ( p.187 ) The decision maker is risk averse. u(.) is concave. Example: insurance * . Measurement of Risk Aversion ( p.190 ) The Arrow-Pratt coefficient of absolute risk aversion (Definition 6.C.3) Comparisons across individual (Proposition 6.C.2) Comparisons across wealth levels The coefficient of relative risk