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Climate policies under climate model uncertainty : max-min and min-max regret

Rezai, Armon; Ploeg, Frederick van der - 2017 - Revised May 2017

Temperature responses and optimal climate policies depend crucially on the choice of a particular climate model. To illustrate, the temperature responses to given emission reduction paths implied by the climate modules of the well-known integrated assessments models DICE, FUND and PAGE are...

Persistent link: https://www.econbiz.de/10011718250

Public good provision with robust decision making

Angelopulos, Kōnstantinos I.; Oikonomidēs, Geōrgios; … - 2012

In this paper, we study a two-country dynamic setup with environmental externalities and potential model misspecification in relation to this public good. Under model uncertainty, robust policies help to correct the inefficiencies associated with free riding on public good provision, implying...

Persistent link: https://www.econbiz.de/10009682338

Fear of model misspecification and the robustness premium

Angelopulos, Kōnstantinos; Malley, James R. - 2010

Robust decision making implies welfare costs or robustness premia when the approximating model is the true data generating process. To examine the importance of these premia at the aggregate level we employ a simple two-sector dynamic general equilibrium model with human capital and introduce an...

Persistent link: https://www.econbiz.de/10008697052

Environmental policy under model uncertainty : a robust optimal control approach

Funke, Michael (contributor); Paetz, Michael (contributor) - 2007

Persistent link: https://www.econbiz.de/10003496553

The ambiguity triangle : uncovering fundamental patterns of behavior under uncertainty

Burghart, Dan; Epper, Thomas; Fehr, Ernst - 2015

risk preferences. Here, we develop an analogous tool for choice under uncertainty - the ambiguity triangle - and show that … characterize this heterogeneity with finite-mixture estimates of a one-parameter extension of Expected Utility Theory wherein 48 …

Persistent link: https://www.econbiz.de/10011286466

Uncertainty and fiscal policy in an asymmetric monetary union

Hefeker, Carsten (contributor); Zimmer, Blandine (contributor) - 2008

The paper examines the monetary-fiscal interactions in a monetary union model with uncertainty due to imperfect central bank transparency. We first show that monetary uncertainty disciplines fiscal policymakers and thereby reduces taxes, average inflation and output distortions. However, as more...

Persistent link: https://www.econbiz.de/10003749682

Collective risk-taking decisions with heterogeneous beliefs

Gollier, Christian - 2003

degree of pessimism of the representative agent is the mean of the individual ones weighted by their index of absolute risk …

Persistent link: https://www.econbiz.de/10011507677

Guaranteed renewable life insurance under demand uncertainty

Hoy, Michael; Mirza, Afrasiab; Sadanand, Asha B. - 2018

literature that, when there is (only) risk type uncertainty, the optimal GR contract with renewal price set at the actuarially … fair price for low risk types provides full insurance against reclassification risk. We develop a model that includes … unpredictable (and unobservable) fluctuations in demand for life insurance as well as changes in risk type (observable) over …

Persistent link: https://www.econbiz.de/10011864322

Policy coordination under model disagreement and uncertainty

Hefeker, Carsten; Neugart, Michael - 2019

What are the incentives for governments to coordinate their policies internationally when there is model disagreement and uncertainty? We build a model where countries disagree on policy targets and how policies affect the economies, and show that uncertainty not only determines the type of...

Persistent link: https://www.econbiz.de/10011966668

Export decision under risk

Sousa, José de; Disdier, Anne-Célia; Gaigné, Carl - 2016

regularities by developing a new firmbased trade model wherein managers are risk averse. Higher volatility induces the reallocation …

Persistent link: https://www.econbiz.de/10011547934