Showing 1 - 10 of 1,348
We introduce learning in a Brock-Mirman environment and study the effect of risk generated by the planner's econometric activity on optimal consumption and investment. Here, learning introduces two sources of risk about future payoffs: structural uncertainty and uncertainty from the anticipation...
Persistent link: https://www.econbiz.de/10014051128
We consider an industry with firms that produce a final good emitting pollution to different degree as a side effect. Pollution is regulated by a tradable quota system where some quotas may have been allocated at the outset, i.e. before the quota market is opened. We study how volatility in...
Persistent link: https://www.econbiz.de/10003828934
Ambiguous assets are characterized as assets where objective and subjective probabilities of tomorrow's asset-returns are ill-defined or may not exist, e.g., bitcoin, volatility indices or any IPO. Investors may choose to diversify their portfolios of fiat money, stocks and bonds by investing...
Persistent link: https://www.econbiz.de/10012862320
We consider an industry with firms that produce a final good emitting pollution to different degree as a side effect. Pollution is regulated by a tradable quota system where some quotas may have been allocated at the outset, i.e. before the quota market is opened. We study how volatility in...
Persistent link: https://www.econbiz.de/10014208513
In this paper we study the link between elections, fiscal policy and economic growth/fluctuations. The set-up is a dynamic stochastic general equilibrium model of growth and endogenously chosen fiscal policy, in which two political parties can alternate in power. The party in office chooses...
Persistent link: https://www.econbiz.de/10001900202
We conduct an experimental test of the long-standing conjecture that autonomy increases motivation and task performance. Subjects face a menu consisting of two projects: risky and safe. The probability that the risky project succeeds depends on the subject's effort. In one treatment, subjects...
Persistent link: https://www.econbiz.de/10012907381
Robust control theory is a tool for assessing decision rules when a decision maker distrusts either the specification of transition laws or the distribution of hidden state variables or both. Specification doubts inspire the decision maker to want a decision rule to work well for a ∅ of models...
Persistent link: https://www.econbiz.de/10014025622
Humans are often characterized as Bayesian reasoners. Here, we question the core Bayesian assumption that probabilities reflect degrees of belief. Across 10 studies, we find that people instead reason in a digital manner, assuming that uncertain information is either true or false when using...
Persistent link: https://www.econbiz.de/10014033580
This paper proposes an operationally simple and easily generalizable methodology to incorporate climate change damage uncertainty into Integrated Assessment Models (IAMs). Uncertainty is transformed into a risk-premium, damage-correction, region-specific factor by extracting damage distribution...
Persistent link: https://www.econbiz.de/10011451668
In this paper we study the link between elections, fiscal policy and economic growth/fluctuations. The set-up is a dynamic stochastic general equilibrium model of growth and endogenously chosen fiscal policy, in which two political parties can alternate in power. The party in office chooses...
Persistent link: https://www.econbiz.de/10011511068