Consumer surplus analysis under uncertainty: a general equilibrium perspective

DOI10.1016/J.JMATECO.2014.02.001MaRDI QIDQ478134zbMATH OpenOpenAlexFDO

Authors Takashi Hayashi

Publication date 3 December 2014

Published in Journal of Mathematical Economics (Search for Journal in Brave)

Full work available at URL https://doi.org/10.1016/j.jmateco.2014.02.001

zbMATH Keywords

expected consumer surplusgeneral equilibriumHicksian aggregationincomplete asset marketspartial equilibrium

Mathematics Subject Classification ID

Consumer behavior, demand theory (91B42) General equilibrium theory (91B50)

Review text

The author considers the problem of Hicksian aggregation under uncertainty in an environment with asset markets and ex-post spot markets, which are in general incomplete, in a setting of \textit{R. Radner}'s normative theory of competitive equilibrium under uncertainty [Econometrica 36, 31--58 (1968; Zbl 0167.18601)]. The set of commodity characteristics is the interval \(T = [0, 1]\), and the given good under consideration as an element of its partition. The expected consumer surplus for the given individual is a mean value of his state contingent consumptions of the commodity and state-contingent income transfers to him. The preference over state-contingent consumptions is represented via a regular von Neumann-Morgenstern utility function. The main result concerns the limit property of preferences over state-contingent consumption of the good and state-contingent income transfer associated to it, when the good tends to be negligibly small compared to the entire set of commodity characteristics.

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Cites work

• A note on small income effects
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• scientific article; zbMATH DE number 3342731 (Why is no real title available?)
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(3)

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• Expected Consumer's Surplus and the Welfare Effects of Price Stabilization
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