14.04 | Fall 2020 | Undergraduate

Intermediate Microeconomic Theory

Lecture 5: Uncertainty and Linear Programs

Farmers in medieval villages faced the risk of starvation and took great pains to diversify that risk as best they could, farming long narrow strips of land. There were also gains from pooling risk across distant villages. Surprisingly, such problems can be formalized with lotteries. Linear program problems capture this and a wide variety of applications.

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Fall 2020
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