Journal Article Interpersonal Comparability and Social Choice Theory Get access Kevin W. S. Roberts Kevin W. S. Roberts MIT and St Catherine's College, Oxford Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 47, Issue 2, January 1980, Pages 421–439, https://doi.org/10.2307/2297002 Published: 01 January 1980 Article history Received: 01 July 1976 Accepted: 01 March 1979 Published: 01 January 1980

Journal Article Possibility Theorems with Interpersonally Comparable Welfare Levels Get access Kevin W. S. Roberts Kevin W. S. Roberts Massachusetts Institute of Technology and St. Catherine's College, Oxford Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 47, Issue 2, January 1980, Pages 409–420, https://doi.org/10.2307/2297001 Published: 01 January 1980 Article history Received: 01 April 1976 Accepted: 01 January 1978 Published: 01 January 1980

A manufacturing firm can increase its capacity through expansion at existing sites, opening new plants, or relocating to new, larger space. These options are in fact not very good substitutes for one another. This paper argues why one might be preferred to the others and supports its view of the capacity choice with detailed evidence from over 400 plants in New England.

For the regression equation C = A,B + e where A is a p x q stochastic matrix whose elements are independently distributed and contemporaneously correlated with the elements of 8, the lth moment of the least squares estimator of (3 exists if and only if l < p - q + 1. In particular, this implies that the lth moment of the k-class estimator of the coefficients of the G1 -1 non-normalizing endogenous variables of an equation with K1 included and K2 excluded exogenous variables in a simultaneous system with N observations exists if and only if 1 < M where

This paper considers a problem faced by players who are involved in a sequence of games: not necessarily the same games, not necessarily with the same opponents, and not necessarily under conditions of complete information. The players are assumed to act in response to stationary Markovian hypotheses which they form about the actions of their opponents. Conditions are explored which require that these hypotheses be correct on average and that the players actions be optimal in response to their hypotheses.

Modern contingent pricing theory (CPT) dates its genesis from the pioneering work of Arrow [1] and Debreu [9] in the context of complete markets. Beja [2, 3] demonstrated the application of contingent pricing concepts to incomplete markets. The approach has been applied to the valuation of options (Cox and Ross [7]; Rubinstein [30]) and a variety of other financial instruments (e.g., Ross [28])- Tne fundamental insight of CPT is that in arbitrage-free markets complex securities may always be viewed as additive combinations of simple “state-claims” having positive value which, in effect, pay off one unit if and only if a given state is attained at a given date. Concurrently, the continuoustime viewpoint pioneered by Black and Scholes [4] and Merton [22] has grown in significance. The basic simplification of the continuous-time approach is that relevant valuation quantities may all be expressed in terms of the first two moments, i.e., mean and variance, of the state variable distributions employed. When CPT adopts a continuous-time format, it has been shown (Garman [13]) that a basic differential equation holds for all securities; that differential equation involves, of course, the state-claim values, the distributional parameters of state variable evolution, and the prices and dividends of securities. Alternatively, somewhat stronger assumptions which lead to the existence of a rational consensus investor allow thedifferential equation to be expressed in terms of marginal utilities (Cox, Ingersoll, and Ross [8]). This paper applies the techniques of continuous-time CPT to the foreign exchange market. Since we wish to substantively treat inflationary and productive sources of risk in two countries, four state variables are necessarily involved. In a sense, therefore, this is an ambitious attempt since the mostcomplex continuous-time models to date (e.g.. Brennan and Schwartz [5]), have substantively treated only two state variables. Such complexity is simplified through the use of some compact notation, but not by the use of ad hoc modeling. Indeed, it should be emphasized that the present treatment is a full-equilibrium approach, and that while the compact quality of the notation might be made to incorporate a significant amount of possible additional structure, nothing here is inconsistent with a complete equilibrium.

In the theoretical literature of finance, it has been assumed for some time that capital markets are efficient, with security prices reflecting all available information [10]. One purpose of this paper is to consider market efficiency in the context of rights offerings. It has recently been suggested, for example, that rights offerings afford positive abnormal returns [17, 18]. This view was immediately countered by the comment that the number of rights issued, and inversely the issue price, cannot affect the market value of the total exrights equity market [21, p. 44]. No empirical evidence was offered on either side, however.