This paper considers the investment decision of a firm where it has to decide about the timing and capacity. We obtain that in a fast growing market, right after investment the firm produces below capacity, where the utilization rate (the proportion of capacity that is used for production right...

Consider a monopolist who sells a durable good, and repairs the good if it breaks down. Suppose that contracts that specify future repair prices cannot be written, so that there is an aftermarket" situation. When consumers are risk-averse, the monopolist chooses inefficiently high repair prices;...

This paper studies the effects of asset specificity on the performance of procurement auctions with subcontracting and asset sales.The analysis highlights the role of several asset features like transfer costs, type of alternative uses and maintenance requirements.It is argued that, if...

We combine data from a risk preference elicitation experiment conducted on a representative sample via the Internet with laboratory data on student subjects for the same experiment in order to investigate effects of implementation mode and of subject pool selection. We find that the frequency of...

We analyse risk preferences using an experiment with real incentives in a representative sample of 1,422 Dutch respondents. Our econometric model incorporates four structural parameters that vary with observed and unobserved characteristics: Utility curvature, loss aversion, preferences towards...

Attitudes towards risk play a major role in many economic decisions. In empirical studies one quite often assumes that attitudes towards risk do not vary across individuals. This papers questions this assumption and analyses which factors influence an individual's risk attitude. Based on...