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Uncertainty and Change : Survey Evidence of Firms' Subjective Beliefs
Bachmann, Rüdiger; Carstensen, Kai; Lautenbacher, Stefan; … - 2021
This paper studies how managers plan under uncertainty. In a new survey panel on German manufacturing firms, we show that uncertainty reflects change: Planning incorporates higher subjective uncertainty about future sales growth when the firm has just experienced unusual growth, and more so if...
Persistent link: https://www.econbiz.de/10013314695
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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
offer an important policy opportunity to encourage investment …
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
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Agreed and Disagreed Uncertainty
Gambetti, Luca; Tsoukalas, John D.; Korobilis, Dimitris; … - 2023
When agents’ information is imperfect and dispersed, existing measures of macroeconomic uncertainty based on the forecast error variance have two distinct drivers: the variance of the economic shock and the variance of the information dispersion. The former driver increases uncertainty and...
Persistent link: https://www.econbiz.de/10014348100