In this paper, a general binomial lattice framework, which is both computationally simple and numerically accurate, is developed for pricing real estate derivatives with stochastic interest rate. To obtain a computationally simple binomial tree with constant volatility, the transformation method...

This paper studies the effects of ambiguity aversion and ambiguity on optimal decisions, which must be taken in advance at a point when the future state of the world is ambiguous. Holding risk preferences, beliefs, and time preferences fixed, we use lattice-based monotone comparative statics to...