Finance and the Economics of Uncertainty

Finance and the Economics of Uncertainty explores the growing range of economic decisions that are conducted under uncertainty both on the personal level, as well as by large firms. * Analyzes the allocation of risk in the context of the current literature, as well as emphasizes the role of information in decisions and prices. Economics and Finance of Uncertainty explores the growing range of economic decisions that are conducted under uncertainty both on the personal level – such as individual savings, insurance, portfolio choices – as well as by large firms, including insurance companies and stock exchanges, that utilize financial tools to facilitate the exchange of risks. Presenting the basic principles and discussing them in a unified framework within elementary models, this text analyzes the allocation of risk in the context of the current literature, and emphasizes the role of information in decisions and prices. Including end-of-chapter exercises, this book provides students with a tool for understanding the theoretical analysis of decision-making under uncertainty, and its applications to the world of economics and finance. Finance and the Economics of Uncertainty explores the growing range of economic decisions that are conducted under uncertainty both on the personal level, as well as by large firms. Analyzes the allocation of risk in the context of the current literature, as well as emphasizes the role of information in decisions and prices. Includes end-of-chapter exercises that supply the necessary tools for a comprehensive understanding of the field.