1. Institucional Repository Insper
2. Artigos
3. Coleção de Artigos Científicos
4. Cobb-Douglas preferences under uncertainty

Type:	Artigo Científico
Title:	Cobb-Douglas preferences under uncertainty
Author:	Faro, José Heleno
Publication Date:	2013
Original Abstract:	This paper axiomatizes Cobb-Douglas preferences under uncertainty. First, we extend the original Trockel (Econ Lett 30:7–10, 1989)’s axiomatic foundation to a general state space framework based on the Strong Homotheticity Axiom, obtaining also the incomplete case a la Bewley (Decis Econ Financ 25:79–110, 2002). We show that this key axiom for the Cobb-Douglas expected utility specification is refuted by Ellsberg’s uncertainty aversion behavioral pattern. Our main result provides a set of meaningful axioms characterizing Cobb-Douglas min-expected utility preferences, an important class of uncertainty averse preferences for studying the consequences of ambiguity in finance and other fields. Finally, we present briefly how to obtain more general representations like the variational case.
Keywords in original language :	Cobb-Douglas preferences Expected utility Ellsberg paradox Knightian uncertainty Incomplete preferences MEU preferences
Language:	Inglês
CNPq Area:	Ciências Sociais Aplicadas
URI:	https://link.springer.com/article/10.1007/s00199-012-0738-7
Copyright:	O INSPER E ESTE REPOSITÓRIO NÃO DETÊM OS DIREITOS DE USO E REPRODUÇÃO DOS CONTEÚDOS AQUI REGISTRADOS. É RESPONSABILIDADE DOS USUÁRIOS INDIVIDUAIS VERIFICAR OS USOS PERMITIDOS NA FONTE ORIGINAL, RESPEITANDO-SE OS DIREITOS DE AUTOR OU EDITOR
Appears in Collections:	Coleção de Artigos Científicos

Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.