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Stochastic models in consumer theory
Vlčková, Ivona ; Kopa, Miloš (advisor) ; Dvořák, Marek (referee)
The goal of this bachelor's thesis is the stochastic extension of deterministic models with a special attention to finding the consumer's optimum. The first chapter is devoted to utility theory, defining basic notions and it also studies characteristics of utility functions and indifference curves. Futhermore, the consumer's optimum is described from the perspective of marginal utility. At the end of this chapter, optimization problems are provided, including their solutions, and finally we examine the effect of price changes of particular goods and income. This effect is described and solved via the substitution and income effect. The second chapter shows the stochastic extension of the above mentioned models. Using the quantile function, we obtain the optimum in the case of random income and we use mean values for the case of random prices. Eventually, a considerable part of this work is devoted to scenario theory, which is also used in the final example.
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