Josef Hadar

Bio: Josef Hadar is an academic researcher from Case Western Reserve University. The author has contributed to research in topics: Oligopoly & Economic model. The author has an hindex of 4, co-authored 6 publications receiving 1998 citations.

On expectations and stability

Abstract: In many decision making situations it is necessary for the decision maker to anticipate the actions of his opponents or rivals. In the area of economics this is typically the case in a market in which a number of different brands of a particular product are sold by competing producers. This problem was first formulated and analyzed in 1838 by Augustin Cournot who made the assumption that each producer believes that his rivals will take the same actions in the current period as in the preceding period. One of the implications of the Cournot model which invites serious criticismis the fact that the decision maker never changes his strategy in spite of the fact that his forecasts about his rivals' actions are always wrong. This article considers a number of alternative models into which learning processes are incorporated. One of the main results is that the introduction of a learning rule may be detrimental to the stability of the model. More generally, in choosing among alternative formulations, it may be the case that the model which is most attractive from the point of view of decision making, may turn out to be less stable than other models. Since the reasonableness of the behavioral assumptions as well as the stability of the underlying dynamical process are desirable features of such models, the findings of this research imply the existence of methodological conflicts.

Imperfect Competition with Unknown Demand

Abstract: The increased attention that has recently been directed at informational aspects of economic models clearly points to the need for a serious re-examination of certain traditional theories. Among those that suggest themselves for such a re-evaluation, theories in the general area of imperfect competition deserve a high priority, primarily because of the fact that firms operating in such markets are normally assumed to have complete knowledge of their demand functions. At the heart of this entire issue is one basic problem which may be stated quite simply by posing the following question: can one construct a meaningful and non-empty theory of imperfect competition without the assumption that firms have complete knowledge of their demand functions ? It is the purpose of this paper to show that the answer to this question is in the affirmative. We do this by constructing a model of an imperfectly competitive market in which each firm is assumed to have no information about its demand function (except that it is downward sloping), and we show that this model yields several testable hypotheses that are both interesting and reasonable. We should point out that the basic ideas and methods behind our approach are not entirely novel; efforts in similar directions may be found in the works of Arrow [1], Clower [2], and Day [3].

A theory of anticipated utility

Abstract: A new theory of cardinal utility, with an associated set of axioms, is presented. It is a generalization of the von Neumann-Morgenstern expected utility theory, which permits the analysis of phenomena associated with the distortion of subjective probability.

Financial Development, Growth, and the Distribution of Income

Abstract: A paradigm is presented in which both the extent of financial intermediation and the rate of economic growth are endogenously determined. Financial intermediation promotes growth because it allows a higher rate of return to be earned on capital, and growth in turn provides the means to implement costly financial structures. Thus financial intermediation and economic growth are inextricably linked in accord with the Goldsmith-McKinnon-Shaw view on economic development. The model also generates a development cycle reminiscent of the Kuznet hypothesis. In particular, in the transition from a primitive slow-growing economy to a developed fast-growing one, a nation passes through a stage in which the distribution of wealth across the rich and poor widens.

Lectures on Stochastic Programming: Modeling and Theory

Abstract: List of notations Preface to the second edition Preface to the first edition 1. Stochastic programming models 2. Two-stage problems 3. Multistage problems 4. Optimization models with probabilistic constraints 5. Statistical inference 6. Risk averse optimization 7. Background material 8. Bibliographical remarks Bibliography Index.