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The Distribution of Ambiguity Attitudes
Gaudecker, Hans-Martin von; Wogrolly, Axel; Zimpelmann, … - 2022
This paper analyzes the stability and distribution of ambiguity attitudes using a broad population sample. Using high-powered incentives, we collected six waves of data on ambiguity attitudes about financial markets—our main application—and climate change. Estimating a structural stochastic...
Persistent link: https://www.econbiz.de/10014241994
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Behavioral New Keynesian Models : Learning vs. Cognitive Discounting
Meggiorini, Greta; Milani, Fabio - 2021
This paper estimates a New Keynesian model with new and old behavioral elements. Agents in the model exhibit cognitive discounting, or myopia: they discount variables far into the future at higher rates than typically implied in the benchmark model. We investigate the model under different...
Persistent link: https://www.econbiz.de/10013229788
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A Comparison of Regret Theory and Salience Theory for Decisions under Risk
Herweg, Fabian - 2020
Two non-transitive theories to model decision making under risk are regret theory (Loomes and Sugden, 1982, 1987) and … salience theory (Bordalo, Gennaioli, and Shleifer, 2012). While the psychological underpinning of these two approaches is … of choice behavior. We investigate the overlap between these theories and show that original regret theory (Loomes and …
Persistent link: https://www.econbiz.de/10012850081
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Cognitive Uncertainty
Enke, Benjamin - 2019
This paper introduces a formal definition and an experimental measurement of the concept of cognitive uncertainty: people's subjective uncertainty about what the optimal action is. This concept allows us to bring together and partially explain a set of behavioral anomalies identified across four...
Persistent link: https://www.econbiz.de/10012857912
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Asymmetries in Risk Premia, Macroeconomic Uncertainty and Business Cycles
Görtz, Christoph - 2019
A large literature suggests that the expected equity risk premium is countercyclical. Using a variety of different measures for this risk premium, we document that it also exhibits growth asymmetry, i.e. the risk premium rises sharply in recessions and declines much more gradually during the...
Persistent link: https://www.econbiz.de/10012858207
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Investment Responses to Tax Policy Under Uncertainty
Guceri, Irem - 2019
How does economic uncertainty affect the impact of tax policy? We exploit a natural experiment in which two very …
Persistent link: https://www.econbiz.de/10012859606
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Testing the Dismal Theorem
Anthoff, David; Tol, Richard S.J - 2021
Weitzman's Dismal Theorem has that the expected net present value of a stock problem with a stochastic growth rate with unknown variance is unbounded. Cost-benefit analysis can therefore not be applied to greenhouse gas emission control. We use the Generalized Central Limit Theorem to show that...
Persistent link: https://www.econbiz.de/10013239336
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The Impact of Aggregate Uncertainty on Firm-Level Uncertainty
Easaw, Joshy; Grimme, Christian - 2021
We analyse the extent to which firm-level uncertainty is affected by aggregate uncertainty. Firm-level uncertainty is constructed from a large and monthly panel dataset of manufacturing firms. We find that aggregate uncertainty has a positive and robust impact on firm-level uncertainty. This...
Persistent link: https://www.econbiz.de/10013239562
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Disastrous Discretion : Ambiguous Decision Situations Foster Political Favoritism
Schneider, Stephan A.; Kunze, Sven - 2022
Allocation decisions are vulnerable to political influence, but it is unclear in which situations politicians use their discretionary power in a partisan manner. We analyze the allocation of presidential disaster declarations in the United States, exploiting the spatiotemporal randomness of...
Persistent link: https://www.econbiz.de/10013291703
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Ambiguous Protection
Gründler, Klaus; Hillman, Arye - 2021
Import regulations are globally the most prevalent form of intervention in international trade. The regulations should, under rules of the WTO, protect consumers and the environment but can be used to protect producers. We investigate the ambiguity of intent. We set out a model that when applied...
Persistent link: https://www.econbiz.de/10013246466