Risk, Uncertainty and Profit

Risk, Uncertainty and Profit

Author: Frank H. Knight

Publisher: Cosimo, Inc.

Published: 2006-11-01

Total Pages: 401

ISBN-13: 1602060053

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A timeless classic of economic theory that remains fascinating and pertinent today, this is Frank Knight's famous explanation of why perfect competition cannot eliminate profits, the important differences between "risk" and "uncertainty," and the vital role of the entrepreneur in profitmaking. Based on Knight's PhD dissertation, this 1921 work, balancing theory with fact to come to stunning insights, is a distinct pleasure to read. FRANK H. KNIGHT (1885-1972) is considered by some the greatest American scholar of economics of the 20th century. An economics professor at the University of Chicago from 1927 until 1955, he was one of the founders of the Chicago school of economics, which influenced Milton Friedman and George Stigler.


Book Synopsis Risk, Uncertainty and Profit by : Frank H. Knight

Download or read book Risk, Uncertainty and Profit written by Frank H. Knight and published by Cosimo, Inc.. This book was released on 2006-11-01 with total page 401 pages. Available in PDF, EPUB and Kindle. Book excerpt: A timeless classic of economic theory that remains fascinating and pertinent today, this is Frank Knight's famous explanation of why perfect competition cannot eliminate profits, the important differences between "risk" and "uncertainty," and the vital role of the entrepreneur in profitmaking. Based on Knight's PhD dissertation, this 1921 work, balancing theory with fact to come to stunning insights, is a distinct pleasure to read. FRANK H. KNIGHT (1885-1972) is considered by some the greatest American scholar of economics of the 20th century. An economics professor at the University of Chicago from 1927 until 1955, he was one of the founders of the Chicago school of economics, which influenced Milton Friedman and George Stigler.

Managing Risk and Uncertainty

Managing Risk and Uncertainty

Author: Richard Friberg

Publisher: MIT Press

Published: 2015-11-13

Total Pages: 395

ISBN-13: 0262528193

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A comprehensive framework for assessing strategies for managing risk and uncertainty, integrating theory and practice and synthesizing insights from many fields. This book offers a framework for making decisions under risk and uncertainty. Synthesizing research from economics, finance, decision theory, management, and other fields, the book provides a set of tools and a way of thinking that determines the relative merits of different strategies. It takes as its premise that we make better decisions if we use the whole toolkit of economics and related fields to inform our decision making. The text explores the distinction between risk and uncertainty and covers standard models of decision making under risk as well as more recent work on decision making under uncertainty, with a particular focus on strategic interaction. It also examines the implications of incomplete markets for managing under uncertainty. It presents four core strategies: a benchmark strategy (proceeding as if risk and uncertainty were low), a financial hedging strategy (valuable if there is much risk), an operational hedging strategy (valuable for conditions of much uncertainty), and a flexible strategy (valuable if there is much risk and/or uncertainty). The book then examines various aspects of these strategies in greater depth, building on empirical work in several different fields. Topics include price-setting, real options and Monte Carlo techniques, organizational structure, and behavioral biases. Many chapters include exercises and appendixes with additional material. The book can be used in graduate or advanced undergraduate courses in risk management, as a guide for researchers, or as a reference for management practitioners.


Book Synopsis Managing Risk and Uncertainty by : Richard Friberg

Download or read book Managing Risk and Uncertainty written by Richard Friberg and published by MIT Press. This book was released on 2015-11-13 with total page 395 pages. Available in PDF, EPUB and Kindle. Book excerpt: A comprehensive framework for assessing strategies for managing risk and uncertainty, integrating theory and practice and synthesizing insights from many fields. This book offers a framework for making decisions under risk and uncertainty. Synthesizing research from economics, finance, decision theory, management, and other fields, the book provides a set of tools and a way of thinking that determines the relative merits of different strategies. It takes as its premise that we make better decisions if we use the whole toolkit of economics and related fields to inform our decision making. The text explores the distinction between risk and uncertainty and covers standard models of decision making under risk as well as more recent work on decision making under uncertainty, with a particular focus on strategic interaction. It also examines the implications of incomplete markets for managing under uncertainty. It presents four core strategies: a benchmark strategy (proceeding as if risk and uncertainty were low), a financial hedging strategy (valuable if there is much risk), an operational hedging strategy (valuable for conditions of much uncertainty), and a flexible strategy (valuable if there is much risk and/or uncertainty). The book then examines various aspects of these strategies in greater depth, building on empirical work in several different fields. Topics include price-setting, real options and Monte Carlo techniques, organizational structure, and behavioral biases. Many chapters include exercises and appendixes with additional material. The book can be used in graduate or advanced undergraduate courses in risk management, as a guide for researchers, or as a reference for management practitioners.

Risk, Uncertainty and Government

Risk, Uncertainty and Government

Author: Pat O'Malley

Publisher: Routledge

Published: 2012-09-10

Total Pages: 292

ISBN-13: 113531179X

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Both risk and uncertainty are neo-liberal concepts, which can be viewed as complementary techniques for governing diverse aspects of life, rather than natural states of things. This new book examines the way these constructs govern the production of wealth through 'uncertain' speculation and 'calculable' investment formulae. The way in which risk and uncertainty govern the minimisation of harms through insurance and through the uncertain practices of 'reasonable foresight' is discussed, and O Malley looks at the way these same techniques were historically forged out of moral and social beliefs about how to govern properly. In addition, the book analyzes is how, during this process, ideas such as 'contract' and distinctions between insurance and gambling were invented to order to 'properly' govern the risky and uncertain future.


Book Synopsis Risk, Uncertainty and Government by : Pat O'Malley

Download or read book Risk, Uncertainty and Government written by Pat O'Malley and published by Routledge. This book was released on 2012-09-10 with total page 292 pages. Available in PDF, EPUB and Kindle. Book excerpt: Both risk and uncertainty are neo-liberal concepts, which can be viewed as complementary techniques for governing diverse aspects of life, rather than natural states of things. This new book examines the way these constructs govern the production of wealth through 'uncertain' speculation and 'calculable' investment formulae. The way in which risk and uncertainty govern the minimisation of harms through insurance and through the uncertain practices of 'reasonable foresight' is discussed, and O Malley looks at the way these same techniques were historically forged out of moral and social beliefs about how to govern properly. In addition, the book analyzes is how, during this process, ideas such as 'contract' and distinctions between insurance and gambling were invented to order to 'properly' govern the risky and uncertain future.

Bank Liquidity Creation and Financial Crises

Bank Liquidity Creation and Financial Crises

Author: Allen Berger

Publisher: Academic Press

Published: 2015-11-24

Total Pages: 294

ISBN-13: 0128005319

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Bank Liquidity Creation and Financial Crises delivers a consistent, logical presentation of bank liquidity creation and addresses questions of research and policy interest that can be easily understood by readers with no advanced or specialized industry knowledge. Authors Allen Berger and Christa Bouwman examine ways to measure bank liquidity creation, how much liquidity banks create in different countries, the effects of monetary policy (including interest rate policy, lender of last resort, and quantitative easing), the effects of capital, the effects of regulatory interventions, the effects of bailouts, and much more. They also analyze bank liquidity creation in the US over the past three decades during both normal times and financial crises. Narrowing the gap between the "academic world" (focused on theories) and the "practitioner world" (dedicated to solving real-world problems), this book is a helpful new tool for evaluating a bank’s performance over time and comparing it to its peer group. Explains that bank liquidity creation is a more comprehensive measure of a bank’s output than traditional measures and can also be used to measure bank liquidity Describes how high levels of bank liquidity creation may cause or predict future financial crises Addresses questions of research and policy interest related to bank liquidity creation around the world and provides links to websites with data and other materials to address these questions Includes such hot-button topics as the effects of monetary policy (including interest rate policy, lender of last resort, and quantitative easing), the effects of capital, the effects of regulatory interventions, and the effects of bailouts


Book Synopsis Bank Liquidity Creation and Financial Crises by : Allen Berger

Download or read book Bank Liquidity Creation and Financial Crises written by Allen Berger and published by Academic Press. This book was released on 2015-11-24 with total page 294 pages. Available in PDF, EPUB and Kindle. Book excerpt: Bank Liquidity Creation and Financial Crises delivers a consistent, logical presentation of bank liquidity creation and addresses questions of research and policy interest that can be easily understood by readers with no advanced or specialized industry knowledge. Authors Allen Berger and Christa Bouwman examine ways to measure bank liquidity creation, how much liquidity banks create in different countries, the effects of monetary policy (including interest rate policy, lender of last resort, and quantitative easing), the effects of capital, the effects of regulatory interventions, the effects of bailouts, and much more. They also analyze bank liquidity creation in the US over the past three decades during both normal times and financial crises. Narrowing the gap between the "academic world" (focused on theories) and the "practitioner world" (dedicated to solving real-world problems), this book is a helpful new tool for evaluating a bank’s performance over time and comparing it to its peer group. Explains that bank liquidity creation is a more comprehensive measure of a bank’s output than traditional measures and can also be used to measure bank liquidity Describes how high levels of bank liquidity creation may cause or predict future financial crises Addresses questions of research and policy interest related to bank liquidity creation around the world and provides links to websites with data and other materials to address these questions Includes such hot-button topics as the effects of monetary policy (including interest rate policy, lender of last resort, and quantitative easing), the effects of capital, the effects of regulatory interventions, and the effects of bailouts

Understanding Risks and Uncertainties in Energy and Climate Policy

Understanding Risks and Uncertainties in Energy and Climate Policy

Author: Haris Doukas

Publisher: Springer

Published: 2018-12-10

Total Pages: 271

ISBN-13: 3030031527

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This open access book analyzes and seeks to consolidate the use of robust quantitative tools and qualitative methods for the design and assessment of energy and climate policies. In particular, it examines energy and climate policy performance and associated risks, as well as public acceptance and portfolio analysis in climate policy, and presents methods for evaluating the costs and benefits of flexible policy implementation as well as new framings for business and market actors. In turn, it discusses the development of alternative policy pathways and the identification of optimal switching points, drawing on concrete examples to do so. Lastly, it discusses climate change mitigation policies’ implications for the agricultural, food, building, transportation, service and manufacturing sectors.


Book Synopsis Understanding Risks and Uncertainties in Energy and Climate Policy by : Haris Doukas

Download or read book Understanding Risks and Uncertainties in Energy and Climate Policy written by Haris Doukas and published by Springer. This book was released on 2018-12-10 with total page 271 pages. Available in PDF, EPUB and Kindle. Book excerpt: This open access book analyzes and seeks to consolidate the use of robust quantitative tools and qualitative methods for the design and assessment of energy and climate policies. In particular, it examines energy and climate policy performance and associated risks, as well as public acceptance and portfolio analysis in climate policy, and presents methods for evaluating the costs and benefits of flexible policy implementation as well as new framings for business and market actors. In turn, it discusses the development of alternative policy pathways and the identification of optimal switching points, drawing on concrete examples to do so. Lastly, it discusses climate change mitigation policies’ implications for the agricultural, food, building, transportation, service and manufacturing sectors.

Investment under Uncertainty

Investment under Uncertainty

Author: Robert K. Dixit

Publisher: Princeton University Press

Published: 2012-07-14

Total Pages: 484

ISBN-13: 1400830176

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How should firms decide whether and when to invest in new capital equipment, additions to their workforce, or the development of new products? Why have traditional economic models of investment failed to explain the behavior of investment spending in the United States and other countries? In this book, Avinash Dixit and Robert Pindyck provide the first detailed exposition of a new theoretical approach to the capital investment decisions of firms, stressing the irreversibility of most investment decisions, and the ongoing uncertainty of the economic environment in which these decisions are made. In so doing, they answer important questions about investment decisions and the behavior of investment spending. This new approach to investment recognizes the option value of waiting for better (but never complete) information. It exploits an analogy with the theory of options in financial markets, which permits a much richer dynamic framework than was possible with the traditional theory of investment. The authors present the new theory in a clear and systematic way, and consolidate, synthesize, and extend the various strands of research that have come out of the theory. Their book shows the importance of the theory for understanding investment behavior of firms; develops the implications of this theory for industry dynamics and for government policy concerning investment; and shows how the theory can be applied to specific industries and to a wide variety of business problems.


Book Synopsis Investment under Uncertainty by : Robert K. Dixit

Download or read book Investment under Uncertainty written by Robert K. Dixit and published by Princeton University Press. This book was released on 2012-07-14 with total page 484 pages. Available in PDF, EPUB and Kindle. Book excerpt: How should firms decide whether and when to invest in new capital equipment, additions to their workforce, or the development of new products? Why have traditional economic models of investment failed to explain the behavior of investment spending in the United States and other countries? In this book, Avinash Dixit and Robert Pindyck provide the first detailed exposition of a new theoretical approach to the capital investment decisions of firms, stressing the irreversibility of most investment decisions, and the ongoing uncertainty of the economic environment in which these decisions are made. In so doing, they answer important questions about investment decisions and the behavior of investment spending. This new approach to investment recognizes the option value of waiting for better (but never complete) information. It exploits an analogy with the theory of options in financial markets, which permits a much richer dynamic framework than was possible with the traditional theory of investment. The authors present the new theory in a clear and systematic way, and consolidate, synthesize, and extend the various strands of research that have come out of the theory. Their book shows the importance of the theory for understanding investment behavior of firms; develops the implications of this theory for industry dynamics and for government policy concerning investment; and shows how the theory can be applied to specific industries and to a wide variety of business problems.

Risk, Choice, and Uncertainty

Risk, Choice, and Uncertainty

Author: George G. Szpiro

Publisher: Columbia University Press

Published: 2020-01-07

Total Pages: 413

ISBN-13: 0231550979

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At its core, economics is about making decisions. In the history of economic thought, great intellectual prowess has been exerted toward devising exquisite theories of optimal decision making in situations of constraint, risk, and scarcity. Yet not all of our choices are purely logical, and so there is a longstanding tension between those emphasizing the rational and irrational sides of human behavior. One strand develops formal models of rational utility maximizing while the other draws on what behavioral science has shown about our tendency to act irrationally. In Risk, Choice, and Uncertainty, George G. Szpiro offers a new narrative of the three-century history of the study of decision making, tracing how crucial ideas have evolved and telling the stories of the thinkers who shaped the field. Szpiro examines economics from the early days of theories spun from anecdotal evidence to the rise of a discipline built around elegant mathematics through the past half century’s interest in describing how people actually behave. Considering the work of Locke, Bentham, Jevons, Walras, Friedman, Tversky and Kahneman, Thaler, and a range of other thinkers, he sheds light on the vast scope of discovery since Bernoulli first proposed a solution to the St. Petersburg Paradox. Presenting fundamental mathematical theories in easy-to-understand language, Risk, Choice, and Uncertainty is a revelatory history for readers seeking to grasp the grand sweep of economic thought.


Book Synopsis Risk, Choice, and Uncertainty by : George G. Szpiro

Download or read book Risk, Choice, and Uncertainty written by George G. Szpiro and published by Columbia University Press. This book was released on 2020-01-07 with total page 413 pages. Available in PDF, EPUB and Kindle. Book excerpt: At its core, economics is about making decisions. In the history of economic thought, great intellectual prowess has been exerted toward devising exquisite theories of optimal decision making in situations of constraint, risk, and scarcity. Yet not all of our choices are purely logical, and so there is a longstanding tension between those emphasizing the rational and irrational sides of human behavior. One strand develops formal models of rational utility maximizing while the other draws on what behavioral science has shown about our tendency to act irrationally. In Risk, Choice, and Uncertainty, George G. Szpiro offers a new narrative of the three-century history of the study of decision making, tracing how crucial ideas have evolved and telling the stories of the thinkers who shaped the field. Szpiro examines economics from the early days of theories spun from anecdotal evidence to the rise of a discipline built around elegant mathematics through the past half century’s interest in describing how people actually behave. Considering the work of Locke, Bentham, Jevons, Walras, Friedman, Tversky and Kahneman, Thaler, and a range of other thinkers, he sheds light on the vast scope of discovery since Bernoulli first proposed a solution to the St. Petersburg Paradox. Presenting fundamental mathematical theories in easy-to-understand language, Risk, Choice, and Uncertainty is a revelatory history for readers seeking to grasp the grand sweep of economic thought.

Uncertainty

Uncertainty

Author: Millett Granger Morgan

Publisher: Cambridge University Press

Published: 1990-08-31

Total Pages: 376

ISBN-13: 113993581X

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The authors explain the ways in which uncertainty is an important factor in the problems of risk and policy analysis. This book outlines the source and nature of uncertainty, discusses techniques for obtaining and using expert judgment, and reviews a variety of simple and advanced methods for analyzing uncertainty.


Book Synopsis Uncertainty by : Millett Granger Morgan

Download or read book Uncertainty written by Millett Granger Morgan and published by Cambridge University Press. This book was released on 1990-08-31 with total page 376 pages. Available in PDF, EPUB and Kindle. Book excerpt: The authors explain the ways in which uncertainty is an important factor in the problems of risk and policy analysis. This book outlines the source and nature of uncertainty, discusses techniques for obtaining and using expert judgment, and reviews a variety of simple and advanced methods for analyzing uncertainty.

Climate Policy Uncertainty and Investment Risk

Climate Policy Uncertainty and Investment Risk

Author: William Blyth

Publisher: OECD Publishing

Published: 2007

Total Pages: 152

ISBN-13:

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This publication examines how uncertainty in climate change policy may affect investment behaviour in the power sector and how the costs of transition to a low-carbon economy may be addressed. For power companies, where capital stock is intensive and long-lived, those risks rank among the biggest and can create an incentive to delay investment. The analysis show that the risk premiums of climate change uncertainty can add 40 per cent of construction costs of the plant for power investors, and 10 per cent of price surcharges for the electricity end-users. It also looks at the sensitivity of different power sector investment decisions to different risks and considers the implications for policy development and design.


Book Synopsis Climate Policy Uncertainty and Investment Risk by : William Blyth

Download or read book Climate Policy Uncertainty and Investment Risk written by William Blyth and published by OECD Publishing. This book was released on 2007 with total page 152 pages. Available in PDF, EPUB and Kindle. Book excerpt: This publication examines how uncertainty in climate change policy may affect investment behaviour in the power sector and how the costs of transition to a low-carbon economy may be addressed. For power companies, where capital stock is intensive and long-lived, those risks rank among the biggest and can create an incentive to delay investment. The analysis show that the risk premiums of climate change uncertainty can add 40 per cent of construction costs of the plant for power investors, and 10 per cent of price surcharges for the electricity end-users. It also looks at the sensitivity of different power sector investment decisions to different risks and considers the implications for policy development and design.

Handbook of the Economics of Risk and Uncertainty

Handbook of the Economics of Risk and Uncertainty

Author: Mark Machina

Publisher: Newnes

Published: 2013-11-14

Total Pages: 897

ISBN-13: 0444536868

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The need to understand the theories and applications of economic and finance risk has been clear to everyone since the financial crisis, and this collection of original essays proffers broad, high-level explanations of risk and uncertainty. The economics of risk and uncertainty is unlike most branches of economics in spanning from the individual decision-maker to the market (and indeed, social decisions), and ranging from purely theoretical analysis through individual experimentation, empirical analysis, and applied and policy decisions. It also has close and sometimes conflicting relationships with theoretical and applied statistics, and psychology. The aim of this volume is to provide an overview of diverse aspects of this field, ranging from classical and foundational work through current developments. Presents coherent summaries of risk and uncertainty that inform major areas in economics and finance Divides coverage between theoretical, empirical, and experimental findings Makes the economics of risk and uncertainty accessible to scholars in fields outside economics


Book Synopsis Handbook of the Economics of Risk and Uncertainty by : Mark Machina

Download or read book Handbook of the Economics of Risk and Uncertainty written by Mark Machina and published by Newnes. This book was released on 2013-11-14 with total page 897 pages. Available in PDF, EPUB and Kindle. Book excerpt: The need to understand the theories and applications of economic and finance risk has been clear to everyone since the financial crisis, and this collection of original essays proffers broad, high-level explanations of risk and uncertainty. The economics of risk and uncertainty is unlike most branches of economics in spanning from the individual decision-maker to the market (and indeed, social decisions), and ranging from purely theoretical analysis through individual experimentation, empirical analysis, and applied and policy decisions. It also has close and sometimes conflicting relationships with theoretical and applied statistics, and psychology. The aim of this volume is to provide an overview of diverse aspects of this field, ranging from classical and foundational work through current developments. Presents coherent summaries of risk and uncertainty that inform major areas in economics and finance Divides coverage between theoretical, empirical, and experimental findings Makes the economics of risk and uncertainty accessible to scholars in fields outside economics