We propose a model of portfolio selection under ambiguity, based on a two-stage valuation procedure which disentangles … ambiguity and ambiguity aversion. The model does not imply 'extreme pessimism' from the part of the investor, as multiple priors …

-announced schedule de facto acts as a commitment not to adjust in intermediate periods. We find that at short horizons gains from such … commitment outweigh welfare costs of central bank's inaction. Second, we solve for the optimal frequency of policy adjustment and …

degrees of credibility, in which commitment and discretion become special cases of what we call quasi commitment. The monetary … policy authority is assumed to formulate optimal commitment plans, to be tempted to renege on them, and to succumb to this … from commitment accrue at relatively low levels of credibility. In our benchmark calibration, a commitment expected to last …

¡°government-bank-firm¡±, we show that the government¡¯s non-commitment and banking bailout cause inefficiency in the contact … relationship. Moreover, after introducing collusion possibility, non-commitment of the government increases the stakes, or bribes … other equilibrium where she sticks to her commitment and excludes collusion from the contract relationship. Here, collusion …

We study the value of commitment in contests and tournaments when there are costs for the follower to observe the … itself. We show that this distinction matters significantly: When observation is costly, the value of commitment vanishes … tournaments, the value of commitment is preserved completely, provided that the observation costs are sufficiently small. …

. While temptation is commonly understood to give rise to a demand for commitment, it is shown that `temptation by future …