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Article
The Allocation of Effort Under Uncertainty: The Case of Risk Averse Behavior
Economics
  • John Heineke, Santa Clara University
  • M. K. Block
Document Type
Article
Publication Date
1-1-1973
Publisher
University of Chicago Press
Disciplines
Abstract

This paper analyzes the labor supply decision of a single economic agent within the expected utility framework. Two formulations of the problem are considered: pure income uncertainty and wage rate uncertainty. In each case, the effects on the labor supply decision of changes in both expected returns and the dispersion of returns (about a constant mean) are investigated. Arguments concerning the "disincentive effects" of uncertainty are shown not to be unambiguously supported by theory.

Comments
Copyright © 1973. University of Chicago Press. All rights reserved. http://www.press.uchicago.edu/ucp/journals/journal/jpe.html
Citation Information
Block, M. K., and John Heineke. "The Allocation of Effort under Uncertainty: The Case of Risk-Averse Behavior." Journal of Political Economy 81.2, Part 1 (1973): 376-85.