We study feasible sets of the bargaining problem under two different assumptions: the players are subjective expected utility maximizers or the players are Choquet expected utility maximizers. For the latter case, we consider the effects on bargaining solutions when players become more risk averse and when they become more uncertainty averse. JEL Classification: C78, D81

Machina (2009, 2012) lists a number of situations where standard models of ambiguity aversion are unable to capture plausible features of ambiguity attitudes. Most of these problems arise in choice over prospects involving three or more outcomes. We show that the recursive non-expected utility model of Segal (1987) is rich enough to accommodate all these situations. JEL Classification number: D81

Committee decision making is examined in this study focusing on the role assigned to the committee members. In particular, we are concerned about the comparison between committee performance under specialization and non-specialization of the decision makers. JEL Classification number: D81, D71

The process of environmental regulation is usually a two-step one. In the first step, a standard for environmental quality is set. Then, in the second step, a regulatory mechanism is put in place to achieve the standard. In this paper I show how renewal theory can be used to set the quality standard optimally. JEL Classification: D81, Q20

Based on Jewitt (1986) we try to find a characterization of comparative downside risk aversion and love. The desired characterizations involve the decomposition of the dual of the intersection of two convexity cones. The decomposition holds in the case of downside risk love, but not in the case of downside risk aversion. A counterexample is provided. JEL Classification System: D81.

The concept of stability á la J. von Neumann and O. Morgenstern, which is composed of a pair of internal and external stability requirements, formalizes the idea of standard of behavior. This paper studies the decisiontheoretic foundation of stability, by establishing some epistemic conditions for a “stable” pattern of behavior in the context of strategic interaction. JEL Classification: C70, C...

ABSTRACT We study how the precision of managers’ private post-contract pre-decision information affects pay–performance relation. Endogenizing environment, we find that firms may optimally tie executive pay closer to firm performance as agency problems become more pronounced. Specifically, varying parameters measuring severity problem, identify parameter regions where with pronounced combine un...

Ex-ante regulations and ex-post liabilities for using a new technology will induce additional costs for adopters. The standard model is advanced by including irreversibility and uncertainty and taking into account transaction costs of negotiating possible cost reductions. The case analysed is the coexistence policy for GM crops in the European Union. Results show, the design of the rules and re...

The traditional question of optimally deciding when to cut down a tree is among the most commonly posed questions asked of students learning the technique of dynamic programming. This paper shows that the traditional tree-cutting example is improperly formulated when the question of replanting is addressed, derives the proper method of finding optimal harvest length, and applies this method to ...

Within the prospect theory the paper examines production and hedging decisions of a competitive firm under price uncertainty. We consider the prospect theory for the firm's utility function in the two moment model known as (mu,sigma)-preference. In contrast to the literature our findings show that the production under uncertainty can be larger than in the certainty case. Furthermore, we demonst...