We examine how severity of financial constraints influences a firm's choice of accounting policy. This paper shows that firms with mild financial constraints choose an aggressive accounting policy and those with severe financial constraints choose a conservative accounting policy

This paper considers production and hedging decisions of firms under ambiguous price risk. We display that the separation property and the full hedging theorem hold in the presence of ambiguity. We also determine the condition that ambiguity aversion increases optimal hedging position

This study examines how basis ambiguity influences the demand for index insurance. Ambiguity is introduced into the statistical relationship between the loss and the index because they are more difficult to guess than the occurrence of the loss and the index individually. Basis ambiguity lowers...

It is observed that stock price fluctuations are slowly in upward phases like bubble, but fast in downward phases like its burst. This paper provides a new theoretical explanation of this phenomenon, especially why stock price drops sharply, based on the timing of stock sales. Investors tend to...

We conducted the trust game experiments with Japanese university students and international students. In the beginning of the trust game, the general attributes of subjects such as gender, school year, faculty and birthplace are mutually informed. All the international students are assigned as...