Overview
An introduction to the use of probability models for analyzing risk and economic decisions, using spreadsheets to represent and simulate uncertainty.This textbook offers an introduction to the use of probability models for analyzing risks and economic decisions. It takes a learn-by-doing approach, teaching the student to use spreadsheets to represent and simulate uncertainty and to analyze the effect of such uncertainty on an economic decision. Students in applied business and economics can more easily grasp difficult analytical methods with Excel spreadsheets. The book covers the basic ideas of probability, how to simulate random variables, and how to compute conditional probabilities via Monte Carlo simulation. The first four chapters use a large collection of probability distributions to simulate a range of problems involving worker efficiency, market entry, oil exploration, repeated investment, and subjective belief elicitation. The book then covers correlation and multivariate normal random variables; conditional expectation; optimization of decision variables, with discussions of the strategic value of information, decision trees, game theory, and adverse selection; risk sharing and finance; dynamic models of growth; dynamic models of arrivals; and model risk. New material in this second edition includes two new chapters on additional dynamic models and model risk; new sections in every chapter; many new end-of-chapter exercises; and coverage of such topics as simulation model workflow, models of probabilistic electoral forecasting, and real options. The book comes equipped with Simtools, an open-source, free software used througout the book, which allows students to conduct Monte Carlo simulations seamlessly in Excel.
Full Product Details
Author: Roger B. Myerson (University of Chicago) ,
Eduardo Zambrano (Professor, California Polytechnic State University)
Publisher: MIT Press Ltd
Imprint: MIT Press
Edition: second edition
Dimensions:
Width: 17.80cm
, Height: 3.00cm
, Length: 22.90cm
ISBN: 9780262043120
ISBN 10: 0262043122
Pages: 568
Publication Date: 17 December 2019
Recommended Age: From 18 to 99 years
Audience:
College/higher education
,
Tertiary & Higher Education
Format: Hardback
Publisher's Status: Active
Availability: To order
Stock availability from the supplier is unknown. We will order it for you and ship this item to you once it is received by us.
Author Information
Roger B. Myerson is David L. Pearson Distinguished Service Professor of Economics and Public Policy at the University of Chicago and recipient of the 2007 Nobel Memorial Prize in Economic Sciences. Eduardo Zambrano is Professor of Economics and Academic Director of the MS in Quantitative Economics at California Polytechnic State University, San Luis Obispo.
