The state-contingent approach to production under uncertainty

Abstract

The central claim of this paper is that the state-contingent approach provides the best way to think about all problems in the economics of uncertainty, including problems of consumer choice, the theory of the firm, and principal-agent relationships. This claim is illustrated by recent developments in, and applications of, the state-contingent approach. © Australian Agricultural and Resource Economics Society Inc. and Blackwell Publishing Ltd 2006.