Showing 1 - 10 of 366
entrepreneurial priors, and Bayesian updating. The paper also explores connections to effectuation theory, finding that formal …
Persistent link: https://www.econbiz.de/10015326500
Uncertainty is a ubiquitous concern emphasized by policymakers. We study how uncertainty affects decision-making by the Federal Open Market Committee (FOMC). We distinguish between the notion of Fed-managed uncertainty vis-a-vis uncertainty that emanates from within the economy and which the Fed...
Persistent link: https://www.econbiz.de/10014436980
Econometricians invest substantial effort in constructing standard errors that yield valid inference under a hypothetical data-generating process. This paper asks a fundamental question: Are the uncertainty statements reported by applied researchers consistent with empirical frequencies? The...
Persistent link: https://www.econbiz.de/10015421913
Why did the real interest rate decline and the equity premium increase over the last 30 years? This paper assesses the role of uncertainty and credit market frictions. We quantify a model with heterogeneous households using data on asset prices and macro aggregates, as well as on households'...
Persistent link: https://www.econbiz.de/10014512052
In the face of rising climate risk, financial institutions may adapt by transferring such risk to securitizers that … to climate risk may be a drop in the ocean of cash flows. This paper builds a data set of the entire securitization chain … optimal deals by finding the portfolio weights in an asset demand system that targets return and risk. Extrapolating wildfire …
Persistent link: https://www.econbiz.de/10014512098
In the past two decades, a number of banks joined global initiatives aimed to mitigate climate change by "greening" their asset portfolios. We study whether banks that made such commitments have a different emission exposure of their portfolios of syndicated loans than banks that did not. We...
Persistent link: https://www.econbiz.de/10015056201
"Economic evaluation of climate policy traditionally treats uncertainty by appealing to expected utility theory. Yet … such circumstances, it has been argued that the axioms of expected utility theory may not be the correct standard of … of abatement is more sensitive to risk aversion than to ambiguity aversion because, according to our data, the inter …
Persistent link: https://www.econbiz.de/10012454966
This paper examines the regulation of technological innovation direction under uncertainty about potential harms. We develop a model with two competing technological paths and analyze various regulatory interventions. Our findings show that market forces tend to inefficiently concentrate...
Persistent link: https://www.econbiz.de/10014635704
. We focus on regret theory and the use of "regret lotteries" for motivating behavior change. Here, findings from one … theory and experiments, we replicate regret lotteries as the superior one-shot incentive; however, for repeated decisions the …
Persistent link: https://www.econbiz.de/10014635722
We propose a framework where perceptions of uncertainty are driven by the interaction between cognitive constraints and the way that people learn about it--whether information is presented sequentially or simultaneously. People can learn about uncertainty by observing the distribution of...
Persistent link: https://www.econbiz.de/10014486240