We examine the impact of ambiguity, or Knightian uncertainty, on the capital structure decision, using a static … tradeoff theory model in which agents are both ambiguity and risk averse. The model provides the well-known result that greater … risk---the uncertainty over outcomes---leads firms to decrease leverage. Conversely, the model indicates that greater …

We investigate the importance of ambiguity, or Knightian uncertainty, in executives' decisions about when to exercise …

uncertainty about future income triggers saving because of loss aversion. We extend their theoretical analysis to also consider …

The effects of sentiment should be strongest during times of heightened valuation uncertainty. As such, we document a … significant amplifying role for market uncertainty in the relation between sentiment and aggregate investment. A one …-standard-deviation increase in uncertainty more than doubles the effect of sentiment on investment. Moreover, allowing uncertainty …