ECO204
Uncertainty 1 & 2
Overview
Ajaz Hussain, Economics, University of Toronto (STG)
,Ahead: Uncertainty 1 & Uncertainty 2
All “annotated” algebra, topics, (additional) examples, exercises
solutions) are in:
Uncertainty 1: Decision Making Under Uncertainty
“Chapter: Uncertainty I”
Uncertainty 2: Risk Avoidance
“Chapter: Uncertainty II”
,Uncertainty in Commerce
“Uncertainty in Business” (See Damodaran (NYU) “Valuation”)
Estimation Micro uncertainty Discrete risk
Uncertainty Uncertainty about “Discrete risky events”
“Wrong model” or market, products, (Drug failing a FDA
incorrect estimated competitive stage trial or
model inputs landscape, quality of Nationalization of a
management team company)
versus versus versus
Economic uncertainty Macro uncertainty Continuous risk
Unexpected Uncertainty about Due to ongoing
fundamental changes company profits changes in interest
in markets/ economy. impacted by macro rates or economic
Current models “out economic growth
of sync” environment
http://www.ianayr
(No “https”
, Examples: Decision Making Under Uncertainty
Yield Management (“Project 1 with uncertainty” -- com
Test audiences à Movie endings
Tasty 0 calories ≻ Anal leakage?
Uncertainty 1 & 2
Overview
Ajaz Hussain, Economics, University of Toronto (STG)
,Ahead: Uncertainty 1 & Uncertainty 2
All “annotated” algebra, topics, (additional) examples, exercises
solutions) are in:
Uncertainty 1: Decision Making Under Uncertainty
“Chapter: Uncertainty I”
Uncertainty 2: Risk Avoidance
“Chapter: Uncertainty II”
,Uncertainty in Commerce
“Uncertainty in Business” (See Damodaran (NYU) “Valuation”)
Estimation Micro uncertainty Discrete risk
Uncertainty Uncertainty about “Discrete risky events”
“Wrong model” or market, products, (Drug failing a FDA
incorrect estimated competitive stage trial or
model inputs landscape, quality of Nationalization of a
management team company)
versus versus versus
Economic uncertainty Macro uncertainty Continuous risk
Unexpected Uncertainty about Due to ongoing
fundamental changes company profits changes in interest
in markets/ economy. impacted by macro rates or economic
Current models “out economic growth
of sync” environment
http://www.ianayr
(No “https”
, Examples: Decision Making Under Uncertainty
Yield Management (“Project 1 with uncertainty” -- com
Test audiences à Movie endings
Tasty 0 calories ≻ Anal leakage?
