Even if an asset has no fundamental uncertainty with a constant dividend process, a stochastic sentiment …

Climate change is real and dangerous. Exactly how bad it will get, however, is uncertain. Uncertainty is particularly … sensitivity in fact be bad news? The lowered bottom value also implies higher uncertainty about the temperature increase, a …

Recent models of banking under asymmetric information argue that depositors penalize banks that offer high-risk … deposits. Focusing on New York City banks in the 1920's and 1930's, this study examines how banks manage risk during normal … alternative means of satisfying depositors' preferences for low-risk deposits (i.e. low asset risk versus high capital). During …

equilibrium model with a fund offering the risk-adjusted market portfolio (RAMP), ambiguity averse investors hold the fund and an … optimal portfolio based on only one information source (price versus private signal). Asset risk premia satisfy the CAPM with …

outcomes under standard assumptions about the structure of household preferences. Our analysis highlights the critical role of … extremely high risk aversion would achieve a higher expected utility by holding a portfolio of stocks rather than bonds …

of certainty equivalence can be misleading. Under more plausible specifications of preferences toward risk, uncertainty … consumption to news about income. Moreover, changes in the amount of uncertainty are a potentially important source of …

equity further improve diversification and raise the entrepreneur's valuation of the firm. Finally, entrepreneurial risk … by a generalized tradeoff model where leverage via risky non-recourse debt provides significant diversification benefits …. More risk-averse entrepreneurs default earlier, but also choose higher leverage, even though leverage makes his equity more …