, waiting is valuable because uncertainty is revealed over time. The fair price (or compensation) that the individual agrees to … depend on the utility function and underlying uncertainty. After the decision of exchange had been made, valuation ex post … discount factors assuming different utility functions and models of uncertainty, and demonstrate that our explanation of …

This paper shows that, with (partial) irreversibility, higher uncertainty reduces the impact effect of demand shocks on … investment. Uncertainty increases real option values making firms more cautious when investing or disinvesting. This is confirmed … both numerically for a model with a rich mix of adjustment costs, time-varying uncertainty, and aggregation over investment …

Uncertainty appears to vary strongly over time, temporarily rising by up to 200% around major shocks like the Cuban … Missile crisis, the assassination of JFK and 9/11. This paper offers the first structural framework to analyze uncertainty …. The parameterized model is then used to simulate a macro uncertainty shock, which produces a rapid drop and rebound in …

Uncertainty varies strongly over time, rising by 50% to 100% in recessions and by up to 200% after major economic and … political shocks. This paper shows that higher uncertainty reduces the responsiveness of R&D to changes in business conditions … - a “caution-effect” - making it more persistent over time. Thus, uncertainty will play a critical role in shaping the …