EconPapers    
Economics at your fingertips  
 

Welfare Measures when Agents can Learn: A Unifying Theory

Jinhua Zhao () and Catherine Kling ()

Economic Journal, 2009, vol. 119, issue 540, 1560-1585

Abstract: We extend Graham's (1981) welfare analysis under uncertainty to a dynamic environment where the agent can delay and obtain information. The dynamic willingness to pay locus unifies the concepts of option price, dynamic WTP, commitment costs and quasi-option value. Option price (dynamic WTP) corresponds to the "ex ante" WTP when the agent ignores (recognises) the learning opportunity. The commitment cost, or the difference between option price and dynamic WTP, equals the annualised and monetised quasi-option value. State contingent contracts have added value by allowing trading among agents with heterogeneous access to future information and delay opportunities. Copyright © The Author(s). Journal compilation © Royal Economic Society 2009.

Date: 2009
References: Add references at CitEc
Citations: View citations in EconPapers (4) Track citations by RSS feed

Downloads: (external link)
http://www.blackwell-synergy.com/doi/abs/10.1111/j.1468-0297.2009.02272.x link to full text (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Welfare Measures When Agents Can Learn: A Unifying Theory (2009)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ecj:econjl:v:119:y:2009:i:540:p:1560-1585

Ordering information: This journal article can be ordered from
http://www.blackwell ... al.asp?ref=0013-0133

Access Statistics for this article

Economic Journal is currently edited by Martin Cripps, Steve Machin, Woulter den Haan, Andrea Galeotti, Rachel Griffith and Frederic Vermeulen

More articles in Economic Journal from Royal Economic Society Contact information at EDIRC.
Bibliographic data for series maintained by Wiley-Blackwell Digital Licensing ().

 
Page updated 2019-12-04
Handle: RePEc:ecj:econjl:v:119:y:2009:i:540:p:1560-1585