Abstract
In order to take a decision in an uncertainty context, it is necessary, from a theoretical point of view, to build a model and specify all the consequences in every possible state of the world. In applied work this method is much too involved.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Bibliography
Henry, C. 1974. Investment decisions under uncertainty: The irreversible effect. American Economic Review 64: 1996–2012.
Malinvaud, E. 1969. First order certainty equivalence. Econometrica 37: 706–718.
Simon, H. 1956. Dynamic programming under uncertainty with a quadratic criterion function. Econometrica 24: 74–81.
Theil, H. 1954. Econometric models and welfare maximization. Weltwirtschaftigsches Archiv 72: 60–83.
Theil, H. 1957. A note on certainty equivalence in dynamic planning. Econometrica 25: 346–349.
Author information
Authors and Affiliations
Editor information
Copyright information
© 2018 Macmillan Publishers Ltd.
About this entry
Cite this entry
Freixas, X. (2018). Certainty Equivalence. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95189-5_369
Download citation
DOI: https://doi.org/10.1057/978-1-349-95189-5_369
Published:
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-95188-8
Online ISBN: 978-1-349-95189-5
eBook Packages: Economics and FinanceReference Module Humanities and Social SciencesReference Module Business, Economics and Social Sciences