Investment Under Demand Uncertainty: the Newsboy Problem Revisited.

In this article we study the effect of uncertainty on an entrepreneur who must choose the capacity of his business before knowing the demand for his product. The unit profit of operation is known with certainty but there is no flexibility in our one-period framework. We show how the introduction of global uncertainty reduces the investment of the risk neutral entrepreneur and, even more, that the risk averse one. We also show how marginal increases in risk reduce the optimal capacity of both the risk neutral and the risk averse entrepreneur, without any restriction on the concave utility function and with limited restrictions on the definition of a mean preserving spread. These general results are explained by the fact that the newsboy has a piecewise-linear, and concave, monetary payoff witha kink endogenously determined at the level of optimal capacity. Our results are compared with those in the two literatures on price uncertainty and demand uncertainty, and particularly, with the recent contributions of Eeckhoudt, Gollier and Schlesinger (1991, 1995).

Relative Uncertainty and Additively Representable Set Rankings

This paper proposes a definition of relative uncertainty aversion for decision models under complete uncertainty. It is shown that, for a large class of decision rules characterized by a set of plausible axioms, the new criterion yields a complete ranking of those rules with respect to the relative degree of uncertainty aversion they represent. In addition, we address a combinatorial question that arises in this context, and we examine conditions for the additive representability of our rules.

Investment Under Demand Uncertainty: the Newsboy Problem Revisited.

In this article we study the effect of uncertainty on an entrepreneur who must choose the capacity of his business before knowing the demand for his product. The unit profit of operation is known with certainty but there is no flexibility in our one-period framework. We show how the introduction of global uncertainty reduces the investment of the risk neutral entrepreneur and, even more, that the risk averse one. We also show how marginal increases in risk reduce the optimal capacity of both the risk neutral and the risk averse entrepreneur, without any restriction on the concave utility function and with limited restrictions on the definition of a mean preserving spread. These general results are explained by the fact that the newsboy has a piecewise-linear, and concave, monetary payoff witha kink endogenously determined at the level of optimal capacity. Our results are compared with those in the two literatures on price uncertainty and demand uncertainty, and particularly, with the recent contributions of Eeckhoudt, Gollier and Schlesinger (1991, 1995).

The Efficient Use of Multiple Sources of a Nonrenewable Resource under Supply Cost Uncertainty

Uncertainties as to future supply costs of nonrenewable natural resources, such as oil and gas, raise the issue of the choice of supply sources. In a perfectly deterministic world, an efficient use of multiple sources of supply requires that any given market exhausts the supply it can draw from a low cost source before moving on to a higher cost one; supply sources should be exploited in strict sequence of increasing marginal cost, with a high cost source being left untouched as long as a less costly source is available. We find that this may not be the efficient thing to do in a stochastic world. We show that there exist conditions under which it can be efficient to use a risky supply source in order to conserve a cheaper non risky source. The benefit of doing this comes from the fact that it leaves open the possibility of using it instead of the risky source in the event the latter’s future cost conditions suddenly deteriorate. There are also conditions under which it will be efficient to use a more costly non risky source while a less costly risky source is still available. The reason is that this conserves the less costly risky source in order to use it in the event of a possible future drop in its cost.

A lexical semantic study of Dene Suliné, an Athabaskan language

Cette thèse constitue une étude systématique du lexique du déné sųłiné, une langue athabaskane du nord-ouest canadien. Elle présente les définitions et les patrons de combinatoire syntaxique et lexicale de plus de 200 unités lexicales, lexèmes et phrasèmes, qui représentent une partie importante du vocabulaire déné sųłiné dans sept domaines: les émotions, le caractère humain, la description physique des entités, le mouvement des êtres vivants, la position des entités, les conditions atmospheriques et les formations topologiques, en les comparant avec le vocubulaire équivalent de l'anglais. L’approche théorique choisie est la Théorie Sens-Texte (TST), une approche formelle qui met l’accent sur la description sémantique et lexicographique empiriques. La présente recherche relève d'importantes différences entre le lexique du déné sųłiné et celui de l'anglais à tous les niveaux: dans la correspondence entre la représentation conceptuelle, considérée (quasi-)extralinguistique, et la structure sémantique; dans les patrons de lexicalisation des unités lexicales, et dans les patrons de combinatoire syntaxique et lexicale, qui montrent parfois des traits propres au déné sųłiné intéressants.

Revealed Preference and Choice under Uncertainty

We employ the theory of rational choice to examine whether observable choices from feasible sets of prospects can be generated by the optimization of some underlying decision criterion under uncertainty. Rather than focusing on a specific theory of choice, our objective is to formulate a general approach that is designed to cover the various decision criteria that have been proposed in the literature. We use a mild dominance property to define a class of suitable choice criteria. In addition to rationalizability per se, we characterize transitive and Suzumura consistent rationalizability in the presence of dominance.

Contracting for innovation under knightian uncertainty

At any given point in time, the collection of assets existing in the economy is observable. Each asset is a function of a set of contingencies. The union taken over all assets of these contingencies is what we call the set of publicly known states. An innovation is a set of states that are not publicly known along with an asset (in a broad sense) that pays contingent on those states. The creator of an innovation is an entrepreneur. He is represented by a probability measure on the set of new states. All other agents perceive the innovation as ambiguous: each of them is represented by a set of probabilities on the new states. The agents in the economy are classified with respect to their attitude towards this Ambiguity: the financiers are (locally) Ambiguity-seeking while the consumers are Ambiguity-averse. An entrepreneur and a financier come together when the former seeks funds to implement his project and the latter seeks new profit opportunities. The resulting contracting problem does not fall within the standard theory due to the presence of Ambiguity (on the financier’s side) and to the heterogeneity in the parties’ beliefs. We prove existence and monotonicity (i.e., truthful revelation) of an optimal contract. We characterize such a contract under the additional assumption that the financiers are globally Ambiguity-seeking. Finally, we re-formulate our results in an insurance framework and extend the classical result of Arrow [4] and the more recent one of Ghossoub. In the case of an Ambiguity-averse insurer, we also show that an optimal contract has the form of a generalized deductible.

The Relation Between Depressive Symptoms and Semantic Memory in Amnestic Mild Cognitive Impairment and in Late-Life Depression

Semantic deficits have been documented in the prodromal phase of Alzheimer’s disease, but it is unclear whether these deficits are associated with non-cognitive manifestations. For instance, recent evidence indicates that cognitive deficits in elders with amnestic mild cognitive impairment (aMCI) are modulated by concomitant depressive symptoms. The purposes of this study were to (i) investigate if semantic memory impairment in aMCI is modulated according to the presence (aMCI-D group) or absence (aMCI group) of depressive symptoms, and (ii) compare semantic memory performance of aMCI and aMCI-D groups to that of patients with late-life depression (LLD). Seventeen aMCI, 16 aMCI-D, 15 LLD, and 26 healthy control participants were administered a semantic questionnaire assessing famous person knowledge. Results showed that performance of aMCI-D patients was impaired compared to the control and LLD groups. However, in the aMCI group performance was comparable to that of all other groups. Overall, these findings suggest that semantic deficits in aMCI are somewhat associated with the presence of concomitant depressive symptoms. However, depression alone cannot account solely for the semantic deficits since LLD patients showed no semantic memory impairment in this study. Future studies should aim at clarifying the association between depression and semantic deficits in older adults meeting aMCI criteria.

Neural changes associated with semantic processing in healthy aging despite intact behavioral performance

Semantic memory recruits an extensive neural network including the left inferior prefrontal cortex (IPC) and the left temporoparietal region, which are involved in semantic control processes, as well as the anterior temporal lobe region (ATL) which is considered to be involved in processing semantic information at a central level. However, little is known about the underlying neuronal integrity of the semantic network in normal aging. Young and older healthy adults carried out a semantic judgment task while their cortical activity was recorded using magnetoencephalography (MEG). Despite equivalent behavioral performance, young adults activated the left IPC to a greater extent than older adults, while the latter group recruited the temporoparietal region bilaterally and the left ATL to a greater extent than younger adults. Results indicate that significant neuronal changes occur in normal aging, mainly in regions underlying semantic control processes, despite an apparent stability in performance at the behavioral level.