Nishimura, Kiyohiko G.; Ozaki, Hiroyuki - Center for International Research on the Japanese … - 2002
A model of self-feeding fear is presented. Suppose that an economic agent is (1-ƒÃ)~100% certain that uncertainty she faces is characterized by a particular probability measure, but that she has a fear that, with ƒÃ~100% chance, her conviction is completely wrong and she is left perfectly...