Showing 1 - 10 of 219
between risk and uncertainty is implemented by applying the Gilboa-Schmeidler maxmin with multiple priors framework to lenders …, ultimate lenders and financial intermediaries. The model is used to investigate the impact of uncertainty about the likelihood … include: (i) An unanticipated increase in bailout uncertainty raises interest rates, the volume of defaults in both the real …
Persistent link: https://www.econbiz.de/10009144737
This paper tests for reference dependence, using data from Impressionist and Contemporary Art auctions. We distinguish … distinguish pure reference dependence from effects due to loss aversion. Thus, we use actual market data to test essential …
Persistent link: https://www.econbiz.de/10005661640
In this Paper we develop a model of intertemporal portfolio choice where an investor accounts explicitly for the possibility of model misspecification. This work is motivated by the difficulty in estimating precisely the probability law for asset returns. Our contribution is to develop a...
Persistent link: https://www.econbiz.de/10005504745
uncertainty as an additive shock to a uniform consumer distribution. The additive shock restricts uncertainty to the mean of the …
Persistent link: https://www.econbiz.de/10004971401
When choosing a contraception method, women base their decisions on their subjective expectations about the realizations of method-related outcomes. Examples of such outcomes include getting pregnant, contracting a sexually transmitted disease (STD) or experiencing side effects. By conducting a...
Persistent link: https://www.econbiz.de/10005791196
In this paper, we show how an investor can incorporate uncertainty about expected returns when choosing a mean … investor is neutral to uncertainty, we consider the case where the investor has multiple priors and is averse to uncertainty … model aversion to uncertainty via a minimization over the set of priors. The multi-prior model has several attractive …
Persistent link: https://www.econbiz.de/10005791415
In this paper, we show how an investor can incorporate uncertainty about expected returns when choosing a mean … investor is neutral to uncertainty, we consider the case where the investor has multiple priors and is averse to uncertainty … model aversion to uncertainty via a minimization over the set of priors. The multi-prior model has several attractive …
Persistent link: https://www.econbiz.de/10005124485
The paper reports the result of an experimental game on asset integration and risk taking. We find evidence that … winnings in earlier rounds affect risk taking in subsequent rounds, but no evidence that real life wealth outside the … experiment affects risk taking. We find some evidence of imitation of the risk taking behavior of others that is distinct from …
Persistent link: https://www.econbiz.de/10011084146
We analyse bidding behaviour in auctions when risk-averse buyers bid for a good whose value is risky. We show that when … risk in the valuations increases, DARA bidders will reduce their bids by more than the appropriate increase in the risk … auctions with affiliated common (interdependent) values. This ‘precautionary bidding’ effect arises because the expected …
Persistent link: https://www.econbiz.de/10005114473
We endogenize the market risk (at given technical risk) in firms’ R&D decisions by introducing stochastic R&D in the … Hotelling model. It is shown that if the technical risk is sufficiently high, the market risk remains low even if firms pursue … similar projects. This leads firms to focus on the most valuable market segment. We then also endogenize technical risk by …
Persistent link: https://www.econbiz.de/10005504272