Hendrik S. Houthakker
|Died||April 15, 2008 83) (aged|
|Institution|| Harvard University |
|Field|| Behavioral economics |
|Alma mater||University of Amsterdam|
| Christopher A. Sims |
Hendrik Samuel Houthakker (December 31, 1924 – April 15, 2008) was a prominent American economist.
Houthakker was born in Amsterdam to a Dutch-Jewish family.His father was a prominent art dealer. As a teenager he lived through the Nazi occupation of the Netherlands and, according to an interview he gave to the Valley News , was once arrested by the Gestapo but escaped and was sheltered for some months by a Roman Catholic family. He completed his graduate work at the University of Amsterdam in 1949. He taught at Stanford University from 1954 to 1960 and then completed the rest of his career at Harvard University. In 1961 he was elected as a Fellow of the American Statistical Association. Houthakker served on President Nixon's Council of Economic Advisers from 1969 to 1971, where he advocated replacing the International Monetary Fund's pegged exchange rate system with a flexible peg.
Houthakker's contributions to economic theory have been summarized by Pollak (1990).He is particularly well known for the Strong Axiom of Revealed Preference, to which his name is often attached. This paper reconciles Paul Samuelson's revealed preference approach to demand theory with the earlier ordinal utility approach of Eugene Slutsky and Sir John Hicks, by showing that demand functions satisfy his Strong Axiom if and only if they can be generated by maximising a set of preferences that are "well-behaved" in the sense that they satisfy the axioms of choice theory, that is, they are reflexive, transitive, complete, monotonic, convex and continuous—essentially the conditions required for a Hicksian approach to demand theory.
Houthakker's wife, Anna-Teresa Tymieniecka, was a Polish-born philosopher and founder of the World Phenomenology Institute; they were married for 52 years, up to his death. Through her he became friendly with Karol Wojtyła, subsequently Pope John Paul II.
Barack Obama Sr. (Barack Obama's father) worked as a research assistant for Houthakker over the summer in 1963 at Harvard.
Rational choice theory refers to a set of guidelines that help understand economic and social behaviour. The theory postulates that an individual will perform a cost-benefit analysis to determine whether an option is right for them. It also suggests that an individual's self-driven rational actions will help better the overall economy. Rational choice theory looks at three concepts: rational actors, self interest and the invisible hand.
Within economics, the concept of utility is used to model worth or value. Its usage has evolved significantly over time. The term was introduced initially as a measure of pleasure or happiness within the theory of utilitarianism by moral philosophers such as Jeremy Bentham and John Stuart Mill. The term has been adapted and reapplied within neoclassical economics, which dominates modern economic theory, as a utility function that represents a single consumer's preference ordering over a choice set but is not comparable across consumers. This concept of utility is personal and is based on choice rather than on the pleasure received, and so is more rigorously specified than the original concept but makes it less useful for ethical decisions.
Kenneth Joseph Arrow was an American economist, mathematician, writer, and political theorist. He was the joint winner of the Nobel Memorial Prize in Economic Sciences with John Hicks in 1972.
In social choice theory, Arrow's impossibility theorem, the general possibility theorem or Arrow's paradox is an impossibility theorem stating that when voters have three or more distinct alternatives (options), no ranked voting electoral system can convert the ranked preferences of individuals into a community-wide ranking while also meeting a specified set of criteria: unrestricted domain, non-dictatorship, Pareto efficiency, and independence of irrelevant alternatives. The theorem is often cited in discussions of voting theory as it is further interpreted by the Gibbard–Satterthwaite theorem. The theorem is named after economist and Nobel laureate Kenneth Arrow, who demonstrated the theorem in his doctoral thesis and popularized it in his 1951 book Social Choice and Individual Values. The original paper was titled "A Difficulty in the Concept of Social Welfare".
Gérard Debreu was a French-born economist and mathematician. Best known as a professor of economics at the University of California, Berkeley, where he began work in 1962, he won the 1983 Nobel Memorial Prize in Economic Sciences.
The expected utility hypothesis is a popular concept in economics that serves as a reference guide for decisions when the payoff is uncertain. The theory recommends which option rational individuals should choose in a complex situation, based on their risk appetite and preferences.
In decision theory, subjective expected utility is the attractiveness of an economic opportunity as perceived by a decision-maker in the presence of risk. Characterizing the behavior of decision-makers as using subjective expected utility was promoted and axiomatized by L. J. Savage in 1954 following previous work by Ramsey and von Neumann. The theory of subjective expected utility combines two subjective concepts: first, a personal utility function, and second a personal probability distribution.
Social choice theory or social choice is a theoretical framework for analysis of combining individual opinions, preferences, interests, or welfares to reach a collective decision or social welfare in some sense. A non-theoretical example of a collective decision is enacting a law or set of laws under a constitution. Social choice theory dates from Condorcet's formulation of the voting paradox. Kenneth Arrow's Social Choice and Individual Values (1951) and Arrow's impossibility theorem in it are generally acknowledged as the basis of the modern social choice theory. In addition to Arrow's theorem and the voting paradox, the Gibbard–Satterthwaite theorem, the Condorcet jury theorem, the median voter theorem, and May's theorem are among the more well known results from social choice theory.
Revealed preference theory, pioneered by economist Paul Anthony Samuelson in 1938, is a method of analyzing choices made by individuals, mostly used for comparing the influence of policies on consumer behavior. Revealed preference models assume that the preferences of consumers can be revealed by their purchasing habits.
Hirofumi Uzawa was a Japanese economist.
Christopher Albert "Chris" Sims is an American econometrician and macroeconomist. He is currently the John J.F. Sherrerd '52 University Professor of Economics at Princeton University. Together with Thomas Sargent, he won the Nobel Memorial Prize in Economic Sciences in 2011. The award cited their "empirical research on cause and effect in the macroeconomy".
Alan Bennett Krueger was an American economist who was the James Madison Professor of Political Economy at Princeton University and Research Associate at the National Bureau of Economic Research. He served as Assistant Secretary of the Treasury for Economic Policy, nominated by President Barack Obama, from May 2009 to October 2010, when he returned to Princeton. He was nominated in 2011 by Obama as chair of the White House Council of Economic Advisers, and served in that office from November 2011 to August 2013. He was among the 50 highest ranked economists in the world according to Research Papers in Economics.
Justice in economics is a subcategory of welfare economics. It is a "set of moral and ethical principles for building economic institutions." Economic justice aims to create opportunities for every person to have a dignified, productive and creative life that extends beyond simple economics.
Jason Furman is an American economist and professor at Harvard University's John F. Kennedy School of Government and a Senior Fellow at the Peterson Institute for International Economics. On June 10, 2013, Furman was named by President Barack Obama as chair of the Council of Economic Advisers (CEA). Furman has also served as the Deputy Director of the National Economic Council, which followed his role as an advisor to candidate Obama during the 2008 presidential campaign.
Michael Braverman Goodman Froman is an American lawyer who served as the U.S. Trade Representative from 2013 to 2017. He was Assistant to the President of the United States and Deputy National Security Advisor for International Economic Affairs, a position held jointly at the National Security Council and the National Economic Council. In that position he served as the United States sherpa to the G7, G8, and G20 summits of economic powers. On May 2, 2013 President Barack Obama nominated him to succeed Ambassador Ron Kirk as the U.S. Trade Representative. He was confirmed on June 19, 2013.
In economics and other social sciences, preference is the order that a person gives to alternatives based on their relative utility, a process which results in an optimal "choice". Preferences are evaluations, they concern matters of value, typically in relation to practical reasoning. Instead of the prices of goods, personal income, or availability of goods, the character of the preferences is determined purely by a person's tastes. However, persons are still expected to act in their best interest. Rationality suggests that people act in ways which serves their best interest when they are faced with a decision. Meaning when given a set of options, you must necessarily have a set of preferences.
In psychology, economics and philosophy, preference is a technical term usually used in relation to choosing between alternatives. For example, someone prefers A over B if they would rather choose A than B. Preferences are central to decision theory because of this relation to behavior. As connative states, they are closely related to desires. The difference between the two is that desires are directed at one object while preferences concern a comparison between two alternatives, of which one is preferred to the other.
In expected utility theory, a lottery is a discrete distribution of probability on a set of states of nature. The elements of a lottery correspond to the probabilities that each of the states of nature will occur, e.g.. Much of the theoretical analysis of choice under uncertainty involves characterizing the available choices in terms of lotteries.
Robert A. Pollak is an economist. Pollak has made contributions to the specification and estimation of consumer demand systems, social choice theory, the theory of the cost of living index, and since the early 1980s, to the economics of the family and to demography. He is currently the Hernreich Distinguished Professor of Economics at Washington University in St Louis, holding joint appointments in the Faculty of Arts & Sciences and in the Olin Business School.
Marshall S. Smith is an American educator. He has held academic positions at Harvard University, the University of Wisconsin at Madison, and Stanford University, where he was Dean of the School of Education. He has also held positions in the Gerald Ford, Jimmy Carter, Bill Clinton, and Barack Obama White House administrations.