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Why Uncertainty Matters - Discounting under Intertemporal Risk Aversion and Ambiguity

Traeger, Christian - CESifo - 2012

contribution, the paper extends the smooth ambiguity model by providing a threefold disentanglement between, risk aversion …, ambiguity aversion, and the propensity to smooth consumption over time. …

Persistent link: https://www.econbiz.de/10009645646

Announcing is Bad, Delaying is Worse: Another Pitfall in Well-Intended Climate Policy

Jus, Darko; Meier, Volker - CESifo - 2012

It is frequently observed that the implementation of green policies is delayed compared to the initial announcement. Considering a setting with a representative monopolist extracting a non-renewable resource, we demonstrate that announcing a green policy, but then delaying its implementation, is...

Persistent link: https://www.econbiz.de/10010752787

Optimal Fiscal Policy

Lukkezen, Jasper; Teulings, Coenraad N. - CESifo - 2013

This paper derives and estimates rules for fiscal policy that prescribe the optimal response to changes in unemployment and debt. We combine the reduced-form model of the economy from a linear VAR with a non-linear welfare function and obtain analytic solutions for optimal policy. The variables...

Persistent link: https://www.econbiz.de/10010659180

Experimentation in Two-Sided Markets

Peitz, Martin; Rady, Sven; Trepper, Piers - CESifo - 2015

We study optimal experimentation by a monopolistic platform in a two-sided market. The platform provider is uncertain about the strength of the externality each side is exerting on the other. Setting participation fees on both sides, it gradually learns about these externalities by observing...

Persistent link: https://www.econbiz.de/10011277185

The Value of a Statistical Life under Ambiguity Aversion

Treich, Nicolas - CESifo - 2008

We show that ambiguity aversion increases the value of a statistical life as soon as the marginal utility of wealth is … higher if alive than dead. The intuition is that ambiguity aversion has a similar effect as an increase in the perceived … baseline mortality risk, and thus operates as the “dead anyway” effect. We suggest, however, that ambiguity aversion should …

Persistent link: https://www.econbiz.de/10005406403

When is Ambiguity-Attitude Constant?

Eichberger, Jürgen; Grant, Simon; Kelsey, David - CESifo - 2012

This paper studies how updating affects ambiguity-attitude. In particular we focus on the generalized Bayesian update … of the Jaffray-Phillipe sub-class of Choquet Expected Utility preferences. We find conditions for ambiguity-attitude to … be the same before and after updating. A necessary and sufficient condition for ambiguity-attitude to be unchanged when …

Persistent link: https://www.econbiz.de/10010539152

Impatience and Uncertainty: Experimental Decisions Predict Adolescents' Field Behavior

Sutter, Matthias; Kocher, Martin G.; Rützler, Daniela; … - CESifo - 2011

We study risk attitudes, ambiguity attitudes, and time preferences of 661 children and adolescents, aged ten to … mass index, are less likely to save money and show worse conduct at school. Experimental measures for risk and ambiguity …

Persistent link: https://www.econbiz.de/10009364730

Bringing the Copenhagen Global Climate Change Negotiations to Conclusion

Whalley, John; Walsh, Sean - CESifo - 2008

In this paper we discuss the global negotiations now underway and aimed at achieving new climate change mitigation and other arrangements after 2012 (the end of the Kyoto commitment period). These were initiated in Bali in December 2007 and are scheduled to conclude by the end of 2009 in...

Persistent link: https://www.econbiz.de/10005406010

Modeling Damages in Climate Policy Models: Temperature-Based or Carbon-Based?

Mason, Charles F.; Wilmot, Neil - CESifo - 2015

Economists have analyzed potential for damages from climate change from theoretical analyses and with Integrated Assessment Models (IAMs). Analytical models typically write damages as a function of the carbon stock, while IAMs typically view damages as based on temperatures. In this paper, we...

Persistent link: https://www.econbiz.de/10011212071

Negotiating to Avoid "Gradual" versus "Dangerous" Climate Change: An Experimental Test of Two Prisoners' Dilemma

Barrett, Scott; Dannenberg, Astrid - CESifo - 2014

According to the Framework Convention on Climate Change, global collective action is needed to stabilize “greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous [our emphasis] anthropogenic interference with the climate system.” The Framework Convention thus...

Persistent link: https://www.econbiz.de/10010734324