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Probability Models for Economic Decisions

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ISBN-10: 0534423817

ISBN-13: 9780534423810

Edition: 2005

Authors: Roger B. Myerson, Curt Hinrichs, Tom Ziolkowski

List price: $265.95
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Learn to use probability in complex realistic situations with PROBABILITY MODELS FOR ECONOMIC DECISIONS. This introduction to the use of probability models for analyzing risks and economic decisions uses Microsoft Excel spreadsheets for the analytic work. As a result of the emphasis on spreadsheet modeling, you'll also develop sophisticated spreadsheet skills.
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Book details

List price: $265.95
Copyright year: 2005
Publisher: Brooks/Cole
Publication date: 10/20/2004
Binding: Hardcover
Pages: 432
Size: 7.50" wide x 9.25" long x 0.75" tall
Weight: 1.782
Language: English

Roger B. Myerson is Harold L. Stuart Professor of Decision Sciences at the J. L. Kellogg Graduate School of Management, Northwestern University. He is a Fellow of the Econometric Society.

Simulation and Conditional Probability
Getting Started with Simtools in Excel
How to Toss Coins in a Spreadsheet
A Simulation Model of 20 Sales Calls
Analysis Using Excel's Data-Table Command
Conditional Independence
A Continuous Random Skill Variable from a Triangular Distribution
Probability Trees and Bayes' Rule
Advanced Spreadsheet Techniques: Constructing a Table with Multiple Inputs
Using Models
Summary
Exercises
Discrete Random Variables
Unknown Quantities in Decisions Under Uncertainty
Charting a Probability Distribution
Simulating Discrete Random Variables
Expected Value and Standard Deviation
Estimates from Sample Data
Accuracy of Sample Estimates
Decision Criteria
Multiple Random Variables
Summary
Exercises
Utility Theory with Constant Risk Tolerance
Taking Account of Risk Aversion: Utility Analysis with Probabilities
Utility Analysis from Simulation Data
The More General Assumption of Linear Risk Tolerance
Advanced Technical Note on Utility Theory
Advanced Technical Note on Constant Risk Tolerance
Summary
Exercises
Continuous Random Variables
Normal Distributions
EXP and LN
Lognormal Distributions
Generalized Lognormal Distributions
Subjective Probability Assessment
A Decision Problem with Discrete and Continuous Unknowns
Certainty Equivalents of Normal Lotteries
Other Probability Distributions
Summary
Exercises
Correlation and Multivariate Normal Random Variables
Joint Distributions of Discrete Random Variables
Covariance and Correlation
Linear Functions of Several Random Variables
Estimating Correlations from Data
Making Multivariate Normal Random Variables with CORAND and NORMINV
Portfolio Analysis with Multivariate Normal Asset Returns
Excel Solver and Efficient Portfolio Design
Subjective Assessment of Correlations
Using CORAND with Non-Normal Random Variables
More About Linear Functions of Random Variables
Summary
Exercises
Conditional Expectation
Dependence Among Random Variables
Estimating Conditional Expectations and Standard Deviations
The Expected-Posterior Law in a Discrete Example
Backwards Analysis of Conditional Expectations in Tree Diagrams
Conditional Expectation Relationships and Correlation
Uncertainty About a Probability
Linear Regression Models
Regression Analysis and Least-Squared Errors
Summary
Exercises
Optimization of Decision Variables
General Techniques for Using Simulation in Decision Analysis
Strategic Use of Information
Decision Trees
A Simple Bidding Problem
The Winner's Curse
Analyzing Competitive Behavior
Summary
Exercises
Risk Sharing and Finance
Optimal Risk Sharing in a Partnership of Individuals with Constant Risk Tolerance
Optimality of Linear Rules in the Larger Class of Nonlinear Sharing Rules
Risk Sharing Subject to Moral-Hazard Incentive Constraints
Piecewise-Linear Sharing Rules with Moral Hazard
Corporate Decision Making and Asset Pricing in the Stock Market
Fundamental Ideas of Arbitrage Pricing Theory
Summary
Exercises
Dynamic Models of Growth and Arrivals
Net Present Value
Forecasting Models
Forecasting Example: Goeing Case
Brownian-Motion Growth Models
Log-Optimal Investment Strategies
Exponential Arrival Models
Queuing Models
A Simple Inventory Model
Project Length and Critical Tasks
Summary
Exercises
Excel Add-Ins for Use with This Book
Bibliographic Note
Index