Broll, Udo; Welzel, Peter; Wong, Kit - In: Open Economies Review 26 (2015) 1, pp. 109-119
This paper examines the behavior of the regret-averse firm under exchange rate uncertainty. Regret-averse preferences … random spot exchange rate can take on either a low value or a high value with positive probability, we show that the … conventional results may not hold, particularly when the firm is sufficiently regret-averse and the low spot exchange rate is very …