Generalized microeconomics
By: Jiří Hlaváček and Michal Hlaváček ; reviewed by Jan Pelikán, Milan Žák ; edited by Jan Havlíček
Contributors: Hlaváček, Michal, author; Pelikán, Jan, reviewer; Žák, Milan, reviewer; Havlíček, Jan, editor
Publisher: Karolinum Press
Published: 2013
Place of publication: [Prague, Czech Republic]
Language: eng
Number of pages: 207
ISBN-13: 9788024627212; 9788024620244
Copyright date: 2013
Subjects: Microeconomics; Microéconomie; BUSINESS & ECONOMICS; Industries; General
Description: The generalization of microeconomics (maximization of probability of agent's survival) enabled model description of economic rationality even in the fields, where profit maximization is not suitable, like redistribution, non-profit sector, both positive and negative externalities, centrally planned economy etc. When profit criterion is adequate, the general criterion is identical with profit maximization.
Notes: Includes bibliographical references and index.
Table of contents: title: Foreword; 1. The generalized principle of economic rationality; 1.1 Alternatives to the homo economicus paradigm; 1.2 Minimization of the subjective probability of economic extinction; 1.3 Pareto distribution of the probability of survival; 1.3.1 First-order Pareto probability distribution; 1.3.2 Second-order Pareto probability distribution; 1.3.3 General Pareto probability distribution; 2. Modelling risk and hedging against it; 2.1 Probability of survival for income as a random variable; 2.2 Formulation of the Leningrad casino problem; 2.3 Model of the St. Petersburg paradox.; title: 3. Moral hazard and adverse selection in the context of maximization of the probability of economic survival3.1 Principal-agent model; 3.1.1 Adverse selection; 3.1.2 Moral hazard; 3.2 Application of generalized microeconomics: Maximization of the probability of economic survival; 3.2.1 Threat to the agent due to extinction of the principal; 3.2.2 Adverse selection in the context of probability of survival; 3.2.3 Moral hazard in the context of probability of survival; 3.2.4 Comparison of the standard homo economicus with a survival-probability-maximizing agent.; title: 4. The demand function in the insurance market: Comparison of maximization of the Pareto probability of survival with the von Neumann-Morgenstern EU theory and Kahneman-Tversky prospect theory4.1 Insurance in the model of maximization of an agent's Pareto probability of (economic) survival; 4.2 Insurance demand in the von Neumann-Morgenstern model of maximization of the expected utility of income (EU theory); 4.3 Insurance demand in the Kahneman-Tversky model (prospect theory, PT); 4.4 C omparison of the demand functions of models A, B, and C (from the previous three sections).; title: 5. Modelling non-profit institutions: The university supply function5.1 Economic rationality in the non-profit sector; 5.2 An optimization model of university behaviour; 5.3 University supply function; 6. Behaviour of a firm ina centrally planned economy-the homo se assecurans model; 6.1 Set of feasible production situations in a centrally planned economy; 6.2 The index planning method and the criterion of a producer in a centrally planned economy; 6.3 Maximization of the absolute reserve.; title: 6.4 Maximization of the relative reserve (i.e. maximization of the pareto probability of survival in a CPE)7. Model of an economy with widespread corporate insolvency; 7.1 The problem of secondary insolvency; 7.2 Models of decision-making in an economy with widespread secondary insolvency; 7.2.1 Model A: minimax strategy; 7.2.2 Model B: minimum extinction risk strategy; 8. The producer's optimum under increasing returns to scale; 8.1 Model A: uniform distributions of the probability of extinction w.r.t. price.