IDEAS home Printed from https://ideas.repec.org/p/fth/tilbur/9572.html
   My bibliography  Save this paper

Consumer's Welfare and Change in Stochatstic Partial- Equilibrium Price

Author

Listed:
  • Stennek, J.

Abstract

First, I show that the expected consumer's surplus is equivalent to ex ante compensating variation if and only if the consumer is risk neutral, and the consumer's income elasticity of demand for the commodity is zero. Moreover, the conditions are equivalent to the von Neuman - Morgenstern utility function being quasi-linear. Second, I show that the expected consumer's surplus is an approximation for the consumer's welfare, measured by expected utility, also if the expenditure share is small. Third, I propose a formula to evaluate approximately the consumer's welfare, measured both by expected utility and by ex ante compensating variation, when the above conditions are not met.
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Stennek, J., 1995. "Consumer's Welfare and Change in Stochatstic Partial- Equilibrium Price," Papers 9572, Tilburg - Center for Economic Research.
    • Handle: RePEc:fth:tilbur:9572
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Mehra, Rajnish & Prescott, Edward C., 1985. "The equity premium: A puzzle," Journal of Monetary Economics, Elsevier, vol. 15(2), pages 145-161, March.
    2. Rogerson, William P, 1980. "Aggregate Expected Consumer Surplus as a Welfare Index with an Application to Price Stabilization," Econometrica, Econometric Society, vol. 48(2), pages 423-436, March.
    3. Schmalensee, Richard, 1972. "Option Demand and Consumer's Surplus: Valuing Price Changes under Uncertainty," American Economic Review, American Economic Association, vol. 62(5), pages 813-824, December.
    4. Willig, Robert D, 1976. "Consumer's Surplus without Apology," American Economic Review, American Economic Association, vol. 66(4), pages 589-597, September.
    5. Alison J. Kirby, 1988. "Trade Associations as Information Exchange Mechanisms," RAND Journal of Economics, The RAND Corporation, vol. 19(1), pages 138-146, Spring.
    6. Turnovsky, Stephen J & Shalit, Haim & Schmitz, Andrew, 1980. "Consumer's Surplus, Price Instability, and Consumer Welfare," Econometrica, Econometric Society, vol. 48(1), pages 135-152, January.
    7. Helms, L. Jay, 1984. "Comparing stochastic price regimes : The limitations of expected surplus measures," Economics Letters, Elsevier, vol. 14(2-3), pages 173-178.
    8. Carl Shapiro, 1986. "Exchange of Cost Information in Oligopoly," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 53(3), pages 433-446.
    9. Riordan, Michael H & Sappington, David E M, 1987. "Awarding Monopoly Franchises," American Economic Review, American Economic Association, vol. 77(3), pages 375-387, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Stennek, Johan, 1999. "The expected consumer's surplus as a welfare measure," Journal of Public Economics, Elsevier, vol. 73(2), pages 265-288, August.
    2. Wright, Brian D. & Williams, Jeffrey C., 1986. "Measurement of Consumer Gains from Market Stabilization," CUDARE Working Papers 198343, University of California, Berkeley, Department of Agricultural and Resource Economics.
    3. Charles Blackorby & David Donaldson & John A. Weymark, 2008. "Hicksian Surplus Measures of Individual Welfare Change When There is Price and Income Uncertainty," Studies in Choice and Welfare, in: Prasanta K. Pattanaik & Koichi Tadenuma & Yongsheng Xu & Naoki Yoshihara (ed.), Rational Choice and Social Welfare, pages 195-213, Springer.
    4. Malueg, David A. & Tsutsui, Shunichi O., 1996. "Duopoly information exchange: The case of unknown slope," International Journal of Industrial Organization, Elsevier, vol. 14(1), pages 119-136.
    5. Sjaak Hurkens, 2014. "Bayesian Nash equilibrium in “linear” Cournot models with private information about costs," International Journal of Economic Theory, The International Society for Economic Theory, vol. 10(2), pages 203-217, June.
    6. David P. Baron, 1978. "Price Regulation, Quality, and Asymmetric Information," Discussion Papers 359, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    7. Kjell Hausken, 2017. "Security Investment, Hacking, and Information Sharing between Firms and between Hackers," Games, MDPI, vol. 8(2), pages 1-23, May.
    8. Xiaotong Li, 2022. "An evolutionary game‐theoretic analysis of enterprise information security investment based on information sharing platform," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(3), pages 595-606, April.
    9. Goltsman, Maria & Pavlov, Gregory, 2014. "Communication in Cournot oligopoly," Journal of Economic Theory, Elsevier, vol. 153(C), pages 152-176.
    10. John Asker & Chaim Fershtman & Jihye Jeon & Ariel Pakes, 2020. "A computational framework for analyzing dynamic auctions: The market impact of information sharing," RAND Journal of Economics, RAND Corporation, vol. 51(3), pages 805-839, September.
    11. Duarte Brito & Pedro Pereira & João Vareda, 2016. "Can More Information About Rivals' Costs Decrease Welfare?," Manchester School, University of Manchester, vol. 84(2), pages 251-269, March.
    12. Jin, Jim Y., 1996. "A test for information sharing in Cournot oligopoly," Information Economics and Policy, Elsevier, vol. 8(1), pages 75-86, March.
    13. Jeremy Bertomeu & John Harry Evans & Mei Feng & Ayung Tseng, 2021. "Tacit Collusion and Voluntary Disclosure: Theory and Evidence from the U.S. Automotive Industry," Management Science, INFORMS, vol. 67(3), pages 1851-1875, March.
    14. Denter, Philipp & Morgan, John & Sisak, Dana, 2011. ""Where Ignorance is Bliss, 'tis Folly to be Wise": Transparency in Contests," Economics Working Paper Series 1128, University of St. Gallen, School of Economics and Political Science.
    15. John S. Hughes & Jennifer L. Kao, 1991. "Economic implications of alternative disclosure rules for research and development costs," Contemporary Accounting Research, John Wiley & Sons, vol. 8(1), pages 152-169, September.
    16. Cramton, Peter C & Palfrey, Thomas R, 1990. "Cartel Enforcement with Uncertainty about Costs," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 31(1), pages 17-47, February.
    17. Simon GB Cowan & Simon Cowan, 2002. "Marginal Cost Pricing versus Insurance," Economics Series Working Papers 102, University of Oxford, Department of Economics.
    18. Gerald A. Feltham & Frank B. Gigler & John S. Hughes, 1992. "The effects of line†of†business reporting on competition in oligopoly settings," Contemporary Accounting Research, John Wiley & Sons, vol. 9(1), pages 1-23, September.
    19. Jinhua Zhao & Catherine L. Kling, 2009. "Welfare Measures when Agents can Learn: A Unifying Theory," Economic Journal, Royal Economic Society, vol. 119(540), pages 1560-1585, October.
    20. Kirby, Alison J., 2004. "The product market opportunity loss of mandated disclosure," Information Economics and Policy, Elsevier, vol. 16(4), pages 553-577, December.

    More about this item

    Keywords

    CONSUMPTION; RISK; DEMAND;
    All these keywords.

    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • D1 - Microeconomics - - Household Behavior
    • D60 - Microeconomics - - Welfare Economics - - - General
    • D69 - Microeconomics - - Welfare Economics - - - Other

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fth:tilbur:9572. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Thomas Krichel (email available below). General contact details of provider: https://edirc.repec.org/data/cekubnl.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.