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Investment under Uncertainty and Correlated Privately Known Costs
Dehghani, Mohammad Hossein - 2019
's cost. When market risk increases, the equilibria can exist only when the firm is less certain …
Persistent link: https://www.econbiz.de/10012905574
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Uncertainty and Robustness of Surplus Extraction
Lopomo, Giuseppe - 2018
This paper studies a robust version of the classic surplus extraction problem, in which the designer knows only that the beliefs of each type belong to some set, and designs mechanisms that are suitable for all possible beliefs in that set. We derive necessary and sufficient conditions for full...
Persistent link: https://www.econbiz.de/10012908507
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The Pricing of Composition Uncertainty
Aliyev, Nihad - 2018
The "quant crisis" of 2007 and subsequent unfolding of the global financial crisis highlighted the importance of the "crowded-trade" problem (not being able to know how many others are taking the same position). To investigate the crowded trading, we present a model in which informed and...
Persistent link: https://www.econbiz.de/10012910555
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Strategies under Strategic Uncertainty
Mass, Helene - 2019
I investigate the decision problem of a player in a game of incomplete information who faces uncertainty about the other players' strategies. I propose a new decision criterion which works in two steps. First, I assume common knowledge of rationality and eliminate all strategies which are not...
Persistent link: https://www.econbiz.de/10012895797
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Rational Delay of Effort in Projects with Uncertain Requirements
Külpmann, Philipp - 2018
We analyze a dynamic moral hazard problem in teams with imperfect monitoring in continuous time. In the model, players are working together to achieve a breakthrough in a project while facing a deadline. The effort needed to achieve a breakthrough is unknown but players have a common prior about...
Persistent link: https://www.econbiz.de/10012937113
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The Texas shoot-out under Knightian Uncertainty
Bauch, Gerrit; Riedel, Frank - 2022
valuations around the median. A risk neutral co-owner prefers to be the chooser, even strictly so for any valuation under low …
Persistent link: https://www.econbiz.de/10013174846
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Strategies under strategic uncertainty
Mass, Helene - 2018
I investigate the decision problem of a player in a game of incomplete information who faces uncertainty about the other players' strategies. I propose a new decision criterion which works in two steps. First, I assume common knowledge of rationality and eliminate all strategies which are not...
Persistent link: https://www.econbiz.de/10011946016
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Robust contracting under common value uncertainty
Auster, Sarah - In: Theoretical economics : TE ; an open access journal in … 13 (2018) 1, pp. 175-204
A buyer makes an offer to a privately informed seller for a good of uncertain quality. Quality determines both the seller's valuation and the buyer's valuation, and the buyer evaluates each contract according to its worst-case performance over a set of probability distributions. This paper...
Persistent link: https://www.econbiz.de/10011855861
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Uncertainty, Risk and Information
Bonanno, Giacomo - 2020
the addition of several new chapters on risk sharing, asymmetric information, adverse selection, signaling and moral …
Persistent link: https://www.econbiz.de/10012846042
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The firm under uncertainty : capital structure and background risk
Broll, Udo; Wong, Keith K.P. - 2010
uncertainty. The firm faces additional sources of uncertainty that are aggregated into a background risk. We show that the firm … always chooses its optimal debt-equity ratio to minimize the weighted average cost of capital, irrespective of the risk …. When the background risk is either additive or multiplicative, we provide reasonable restrictions on the firm's preferences …
Persistent link: https://www.econbiz.de/10003971039