home plants under uncertainty; then, as uncertainty unfolds, they may source the home market from their home plants or from …

A healthy financial system encourages the efficient allocation of capital and risk. The collapse of the house price …

the market. Suppose that a higher investment level makes the realization of high quality more likely. Then, if consumers … distribution of high and low quality that may be put on the market. We uncover two effects that may lead the firm to overinvest in … quality compared to a market with full information: first, an adverse selection effect according to which a sufficiently large …

literature in mathematical finance concerning optimal portfolio allocation and stopping rules? The uncertainty concerns the … but subject to economic constraints. The crises occurred because the market neglected to consider pertinent economic …