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The impact of uncertainty on firms' investment outlays is subject to an ongoing debate. Theory identifies several channels. Irreversibility, financing constraints and risk aversion make a negative relationship between uncertainty and investment likely. On the other hand, the ability of firms to...
Persistent link: https://www.econbiz.de/10001511636
Experiments in psychology, where subjects estimate confidence intervals to a series of factual questions, have shown that individuals report far too narrow intervals. This has been interpreted as evidence of overconfidence in the preciseness of knowledge, a potentially serious violation of the...
Persistent link: https://www.econbiz.de/10001790875
This paper investigates the effects of uncertainty on the macro economy by replicating its micro effects on individual subjective beliefs. In our model, the representative household has smooth ambiguity preferences and is uncertain about which scenario the economy will be in the next period:...
Persistent link: https://www.econbiz.de/10014364652
that data is made available for modeling as soon as it is actually published, which prevents information leakage. Employing … information losses that occur when the entirety of uncertainty-related reporting is employed. Different UPI topics tend to offset … one other. The RollingLDA technique helps disentangling the information hidden in the analysis corpus. …
Persistent link: https://www.econbiz.de/10015272160
This experimental paper investigates the impact of emotions on risk and return estimates of stocks. Participants rate well-known blue-chip firms on an emotional scale and forecast risk and return of the firms' stock. We find that positive emotions lead to a prediction of high return and low...
Persistent link: https://www.econbiz.de/10003919373
This paper analyses the formation of international environmental agreements (IEAs) under uncertainty, focusing on the role of learning and risk aversion. It bridges two strands of literature: one focused on the role learning for the success of IEA formation when countries are risk neutral and...
Persistent link: https://www.econbiz.de/10010234539