微观经济学uncertaintyandconsumerbehavior(编辑修改稿)

微观经济学uncertaintyandconsumerbehavior(编辑修改稿)内容摘要：

Risky job has expected ine = $20,000 with expected utility = 14 Point F Certain job has expected ine = $20,000 with utility = 16 Point D 169。 2020 Pearson Education, Inc. Chapter 5 49 Ine ($1,000) Utility The consumer is risk averse because she would prefer a certain ine of $20,000 to an uncertain expected ine = $20,000 E 10 10 20 14 16 18 0 16 30 A C D Risk Averse Utility Function F 169。 2020 Pearson Education, Inc. Chapter 5 50 Preferences Toward Risk A person is said to be risk neutral if they show no preference between a certain ine, and an uncertain ine with the same expected value Constant marginal utility of ine 169。 2020 Pearson Education, Inc. Chapter 5 51 Risk Neutral Expected value for risky option is the same as utility for certain oute E(I) = ()($10,000) + ()($30,000) = $20,000 E(u) = ()(6) + ()(18) = 12 This is the same as the certain ine of $20,000 with utility of 12 169。 2020 Pearson Education, Inc. Chapter 5 52 Ine ($1,000) 10 20 Utility 0 30 6 A E C 12 18 The consumer is risk neutral and is indifferent between certain events and uncertain events with the same expected ine. Risk Neutral 169。 2020 Pearson Education, Inc. Chapter 5 53 Preferences Toward Risk A person is said to be risk loving if they show a preference toward an uncertain ine over a certain ine with the same expected value Examples: Gambling, some criminal activities Increasing marginal utility of ine 169。 2020 Pearson Education, Inc. Chapter 5 54 Risk Loving Expected value for risky option – point F E(I) = ()($10,000) + ()($30,000) = $20,000 E(u) = ()(3) + ()(18) = Certain ine is $20,000 with utility of 8 – point C Risky alternative is preferred 169。 2020 Pearson Education, Inc. Chapter 5 55 Ine ($1,000) Utility 0 10 20 30 The consumer is risk loving because she would prefer the gamble to a certain ine. Risk Loving 3 A E C 8 18 F 169。 2020 Pearson Education, Inc. Chapter 5 56 Preferences Toward Risk The risk premium is the maximum amount of money that a riskaverse person would pay to avoid taking a risk The risk premium depends on the risky alternatives the person faces 169。 2020 Pearson Education, Inc. Chapter 5 57 Risk Premium – Example From the previous example A person has a .5 probability of earning $30,000 and a .5 probability of earning $10,000 The expected ine is $20,000 with expected utility of 14 169。 2020 Pearson Education, Inc. Chapter 5 58 Risk Premium – Example Point F shows the risky scenario – the utility of 14 can also be obtained with certain ine of $16,000 This person would be willing to pay up to $4000 (20 – 16) to avoid the risk of uncertain ine Can show this graphically by drawing a straight line between the two points – line CF 169。 2020 Pearson Education, Inc. Chapter 5 59 Ine ($1,000) Utility 0 10 16 Here, the risk premium is $4,000 because a certain ine of $16,000 gives the person the same expected utility as the uncertain ine with expected value of $20,000. 10 18 30 40 20 14 A C E G 20 Risk Premium F Risk Premium – Example 169。 2020 Pearson Education, Inc. Chapter 5 60 Risk Aversion and Ine Variability in potential payoffs increases the risk premium Example: A job has a .5 probability of paying $40,000 (utility of 20) and a .5 chance of paying 0 (utility of 0). 169。 2020 Pearson Education, Inc. Chapter 5 61 Risk Aversion and Ine Example (cont.): The expected ine is still $20,000, but the expected utility falls to 10  E(u) = ()u($0) + ()u($40,000) = 0 + .5(20) = 10 The certain ine of $20,000 has utility of 16 If person must take new job, their utility will fall by 6 169。 2020 Pearson Education, Inc. Chapter 5 62 Risk Aversion and Ine Example (cont.): They can get 10 units of utility by taking a certain job paying $10,000 The risk premium, therefore, is $10,000 (. they would be willing to give up $10,000 of the $20,000 and have the same E(u) as the risky job 169。 2020 Pearson Education, Inc. Chapter 5 63 Risk Aversion and Ine The greater the variability, the more the person would be willing to pay to avoid the risk, and the larger the risk premium 169。 2020 Pearson Education, Inc. Chapter 5 64 Risk Aversion and Indifference Curves Can describe a person’s risk aversion using indifference curves that relate expected ine to variability of ine (standard deviation) Since risk is undesirable, greater risk requires greater expected ine to make the person equally well off Indifference curves are therefore upward sloping 169。 2020 Pearson Education, Inc. Chapter 5 65 Risk Aversion and Indifference Curves Standard Deviation of Ine Expected Ine Highly Risk Averse: An increase in standard deviation requires a large increase in ine to maintain satisfaction. U1 U2 U3 169。 2020 Pearson Education, Inc. Chapter 5 66 Risk Aversion and Indifference Curves Standard Deviation of Ine Expected Ine Slightly Risk Averse: A large increase in standard deviation requires only a small increase in ine to maintain satisfaction. U1 U2 U3 169。 2020 Pearson Education, Inc. Chapter 5 67 Reducing Risk  Consumers are generally risk averse and therefore want to reduce risk  Three ways consumers attempt to reduce risk are: 1. Diversification 2. Insurance 3. Obtaining more information 169。 2020 Pearson Education, Inc. Chapter 5 68 Reducing Risk Diversification Reducing risk by allocating resources to a variety of activities whose outes are not closely related Example: Suppose a firm has a choice of selling air conditioners, heaters, or both The probability of it being hot or cold is How does a firm decide what to sell? 169。 2020 Pearson Education, Inc. Chapter 5 69。