We present a model of firm investment under uncertainty and partial irreversibility in which uncertainty is represented … impact the optimal investment and disinvestment policies, and how the presence oflarge negative jumps can drastically affect … negative effect of uncertainty on firm investment decisions. We test these predictions on a panel dataset of UK firms: we first …

decreases investment substantially. Theseresults are neither in line with expected utility theory norwith psychologically …This paper experimentally investigates investment behavior.We find that global risk – i.e. risk independent of an agent …’sinvestment decision (like political risk) – substantiallydecreases investment. Also effort to obtain the capital usedfor investment …