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Evaluation of Growing Business: Which Method, What Risks?

Lantz, Jean-Sebastien; Hikkerova, Lubica; Mili, Mehdi; … - Institut de Préparation à l'Administration et à la … - 2014

Evaluate a growing company is always a difficult exercise because the valuation depends on the appreciation of many …

Persistent link: https://www.econbiz.de/10010891118

Do experimental auction estimates pass the scope test?

Loureiro, Maria L.; Gracia, Azucena; Nayga, Rodolfo M. - In: Journal of Economic Psychology 37 (2013) C, pp. 7-17

Scope insensitivity is a popular anomaly in many valuation studies. Although scope insensitivity is a problem that may … be present in any valuation method, most previous literature has focused on evaluating scope sensitivity within the … context of contingent valuation applications. Nevertheless, it is necessary to understand the demand-revealing properties of …

Persistent link: https://www.econbiz.de/10010679027

Risk Premia, diverse belief and beauty contests

Kurz, Mordecai; Motolese, Maurizio - Volkswirtschaftliche Fakultät, … - 2006

We present a theoretical and empirical evaluation of the role of market belief in the structure of risk premia. To that end we employ a familiar asset pricing model for which we develop in detail the belief structure. The novelty in this development is the treatment of individual and market...

Persistent link: https://www.econbiz.de/10005619538

Ambiguity, risk and asset returns in continuous time

Chen, Zengjing; Epstein, Larry G. - University of Rochester - Center for Economic Research … - 2000

Existing models in stochastic continuous-time settings assume that beliefs are represented by a probability measure. As illustrated by the Ellsberg Paradox, this feature rules out a priori any concern with ambiguity. This paper formulates a continuous-time intertemporal version of...

Persistent link: https://www.econbiz.de/10005503965

Risk-bearing and Entrepreneurship

Newman, Andrew - C.E.P.R. Discussion Papers - 2007

In the 'Knightian' theory of entrepreneurship, entrepreneurs provide insurance to workers by paying fixed wages and bear all the risk of production. This paper endogenizes entrepreneurial risk by allowing for optimal insurance contracts as well as the occupational self-selection. Moral hazard...

Persistent link: https://www.econbiz.de/10005504306

Five Open Questions About Prediction Markets

Wolfers, Justin; Zitzewitz, Eric - C.E.P.R. Discussion Papers - 2006

Interest in prediction markets has increased in the last decade, driven in part by the hope that these markets will prove to be valuable tools in forecasting, decision-making and risk management - in both the public and private sectors. This paper outlines five open questions in the literature,...

Persistent link: https://www.econbiz.de/10005504341

The Gambler's and Hot-Hand Fallacies: Theory and Applications

Rabin, Matthew; Vayanos, Dimitri - C.E.P.R. Discussion Papers - 2007

We develop a model of the gambler's fallacy -- the mistaken belief that random sequences should exhibit systematic reversals. We show that an individual who holds this belief and observes a sequence of signals can exaggerate the magnitude of changes in an underlying state but underestimate their...

Persistent link: https://www.econbiz.de/10005504387

An Institutional Theory of Momentum and Reversal

Vayanos, Dimitri; Woolley, Paul - C.E.P.R. Discussion Papers - 2008

We propose a rational theory of momentum and reversal based on delegated portfolio management. A competitive investor can invest through an index fund or an active fund run by a manager with unknown ability. Following a negative cashflow shock to assets held by the active fund, the investor...

Persistent link: https://www.econbiz.de/10005504572

A Search-Based Theory of the On-the-Run Phenomenon

Vayanos, Dimitri; Weill, Pierre-Olivier - C.E.P.R. Discussion Papers - 2006

We propose a model in which assets with identical cash flows can trade at different prices. Infinitely-lived agents can establish long positions in a search spot market, or short positions by first borrowing an asset in a search repo market. We show that short-sellers can endogenously...

Persistent link: https://www.econbiz.de/10005504616

Price versus Quantity Discrimination in Optimal IPOs

Bennouri, Moez; Falconieri, Sonia - Tinbergen Institute - 2001

This paper addresses the issue of the choice of the optimal instrument to sell new shares, this choice being price versus quantity discrimination (rationing). Previous results in the literature (Benveniste and Wilhelm, 1990) show that the issuing firm would be better off if allowed to use both...

Persistent link: https://www.econbiz.de/10005504901