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Investment Size and Firm's Value under Profit Sharing Regulation
Moretto, Michele; Panteghini, Paolo; Scarpa, Carlo - CESifo - 2003
’s investment of endogenous size. Using a real option approach in continuous time, we show that profit sharing does not affect a … total investment. We also evaluate the reduction in the firm’s value due to profit sharing, linking this reduction to the …
Persistent link: https://www.econbiz.de/10005405789
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A Note on the Computation of the Equity Premium and the Market Value of Firm Equity
Heer, Burkhard; Maussner, Alfred - CESifo - 2010
Turnovsky (1995) derives in a continuous-time model of a decentralized economy that the correct specification of the firm’s objective function is to maximize the initial value of its outstanding securities. The firm value is the discounted flow of real earnings. For the discrete-time version...
Persistent link: https://www.econbiz.de/10008534021
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Cyclical Asset Returns in the Consumption and Investment Goods Sector
Heer, Burkhard; Maussner, Alfred; Süssmuth, Bernd - CESifo - 2013
We document the empirical fact that asset prices in the consumption-goods and investment-goods sector behave almost …
Persistent link: https://www.econbiz.de/10010690381
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Asset Returns, the Business Cycle, and the Labor Market: A Sensitivity Analysis for the German Economy
Heer, Burkhard; Maussner, Alfred - CESifo - 2011
We review the labor market implications of recent real-business-cycle models that successfully replicate the empirical equity premium. We document the fact that all models considered in this survey with the exception of Boldrin, Christiano, and Fisher (2001) imply a negative correlation of...
Persistent link: https://www.econbiz.de/10008872218
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Log-Normal Approximation of the Equity Premium in the Production Model
Heer, Burkhard; Maussner, Alfred - CESifo - 2010
The conditional equity premium in the model with production is often approximated by assuming a jointly log-normal distribution of the marginal rate of substitution in consumption and the marginal productivity of capital. We show that, for standard parameterization, this premium is about one...
Persistent link: https://www.econbiz.de/10008833923
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The Impact of Uncertainty on the European Energy Market: A Scenario Aggregation Approach
Brekke, Kjell Arne; Golombek, Rolf; Kaut, Michal; … - CESifo - 2013
We present a simple approach to transform a deterministic numerical model, where several agents simultaneously make decisions, into a stochastic model. This approach, which builds on scenario aggregation, a numerical method developed to solve decision problems under uncertainty, is used to build...
Persistent link: https://www.econbiz.de/10010720640
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Reason, Intuition, and Time
Sahm, Marco; Weizsäcker, Robert K. von - CESifo - 2014
We study the influence of reason and intuition on decision making over time. Facing a sequence of similar problems, agents can either decide rationally according to expected utility theory or intuitively according to case-based decision theory. Rational decisions are more precise but create...
Persistent link: https://www.econbiz.de/10011103391
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The Capital Structure of Multinational Companies under Tax Competition
Panteghini, Paolo - CESifo - 2006
This article studies the relationship between debt policies of multinational companies (MNCs) and governments’ tax strategies. In the first part, it is shown that the ability to shift income from high- to low-tax countries affects MNCs’ financial choices. In the second part we show how...
Persistent link: https://www.econbiz.de/10005765711
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The Irreversibility Premium
Chirinko, Robert S.; Schaller, Huntley - CESifo - 2008
When investment is irreversible, theory suggests that firms will be “reluctant to invest.” This reluctance creates a … wedge between the discount rate guiding investment decisions and the standard Jorgensonian user cost (adjusted for risk). We …
Persistent link: https://www.econbiz.de/10005766040
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Fundamentals, Misvaluation, and Investment: The Real Story
Chirinko, Robert S.; Schaller, Huntley - CESifo - 2007
Is real investment fully determined by fundamentals or is it sometimes affected by stock market misvaluation? We … introduce three new tests that: measure the reaction of investment to sales shocks for firms that may be overvalued; use Fama … misvaluation into standard investment equations to estimate the quantitative effect of misvaluation on investment. Overall, the …
Persistent link: https://www.econbiz.de/10005766115