This paper argues that radical uncertainty is the outcome of standard market activity. The theoretical findings are corroborated with empirical analyses. The model example is applied to asset pricing and radical uncertainty is found a solution to various asset pricing "puzzles". In conclusion,...

In situations of what we now describe as radical uncertainty, the core model of agent behaviour, of rational autonomous agents with stable preferences, is not useful. Instead, a different principle, in which the decisions of an agent are based directly on the decisions and strategies of other...

The study seeks to identify the determinants of a firm's foreign entry mode choice and the impact of mode selection on firm performance for the specific case of R&D - a topic so far not investigated in entry mode research. Separate estimates of a Heckman selection model for Austria and...

Macroeconomic models that are based on either the rational expectations hypothesis (REH) or behavioral considerations share a core premise: all future market outcomes can be characterized ex ante with a single overarching probability distribution. This paper assesses the empirical relevance of...

Parliament is the place where politicians make laws to set the policy direction of countries. Non-involvement of different voices such as gender, race and ethnicity in policy decisions may create an inequality in policy-making. Regarding gender, previous literature suggests that women and men...

In spite of superficial similarities, the way in which uncertainty is understood as a feature of the crisis by mainstream economics is very different from Keynesian fundamental uncertainty. The difference stems from the mainstream habit of thinking in terms of a full-information benchmark, where...

Correspondence studies are nowadays viewed as the most compelling avenue to test for hiring discrimination. However, these studies suffer from one fundamental methodological problem, as formulated by Heckman and Siegelman (The Urban Institute audit studies: Their methods and findings. In M. Fix,...

Keynes' mathematical Treatise addresses what some call 'radical uncertainty', which he thought endemic in world affairs and whose appreciation underpinned much of his later work. In contrast, the mainstream view in economics, as elsewhere, has been that even if radical uncertainty exists, either...

Ever since the emergence of economics as a distinct scientific discipline, policy makers have turned to economic models to guide policy interventions. If policy makers seek to enhance growth of an open capitalist economy, they have to take into account, firstly, the uncertainties,...

This paper presents a model of parental decision making where parents care about consumption and the human capital of the children. Preferences over these goods can differ within households. Parents will agree to cooperate (stay married) if the utility they get from coordinating time inputs (ie...