We find a necessary and sufficient condition for ex-ante trade when agents are non-expected utility maximizers. The condition is that they share subjective beliefs. Our result holds for a class of convex preferences that contains many functional forms used in applications. In a special case of expected utility, the condition becomes exactly the common prior assumption. It can also be articulate...

I consider a model of directed search in which strategic sellers advertise general trading mechanisms. A mechanism determines the number of buyers that will get served and the side payments as a function of ex post realized demand. After observing these advertisements buyers simultaneously visit exactly one seller. Each buyer’s expected utility depends on the visiting decisions of other buyers....

Boltzmann’s discrete approach to the theory of ensembles and the ergodic hypothesis and modern ap-

Allergic asthma continues to represent a huge health burden worldwide and is largely treated by non-selective immunosuppressive drugs, which often prove ineffective. The hygiene hypothesis proposes that the increased incidence of allergy and asthma in Western countries observed in the last 50 years is due to environmental changes that include improved hygiene and a lack of infections. The immun...

In this paper we propose a workpractice approach towards operationalizing the coordination of mega-projects. The approach matured over several years in development practice at Ericsson, a major supplier of telecommunication products and services worldwide. Key points in the approach are the management of critical dependencies and the construction of a communal understanding on how to coordinate...

This paper contains an analysis of a simple principal-agent problem illustrating possible problems that may arise when the prinicpal ascribes to the agent subjective probabilities and utilities that are implied by the subjective expected utility model but do not represent the agent’s beliefs and valuations. In particular, it is possible that an incentive contract designed by the principal induc...

We study a model of non-Bayesian updating, based on the Hypothesis Testing model of Ortoleva (2012), for ambiguity averse agents. Agents ranks acts following the MaxMin Expected Utility model of Gilboa and Schmeidler (1989) and when they receive new information they update their set of priors as follows: If the information is such that all priors in the original set of priors assign to it a pro...

The transportation business sector, along with many others, has not, to a large extent, evaluated the possibility of gaining advantages through the use of more elaborated decision tools for operational decision making. This article presents a case study where an interval based decision tool was used for transportation business applications. The investigation was made in collaboration with a wel...

We discuss an economy which is subject to aggregate productivity shocks affecting all factors of production. The additional presence of income risk shifts the margin where agents save out of precautionary motives downwards, such that it does no longer correspond to logarithmic preferences.

This paper develops an approach to testing the adequacy of both classical and Bayesian models given sample data. An important feature of the approach is that we are able to test the practical scientiic hypothesis of whether the true underlying model is close to some hypothesized model. The notion of closeness is based on measurement precision and requires the introduction of a metric for which ...