I show that, due to imperfect risk sharing, aggregate shocks to uncertainty about idiosyncratic return on investment …, with an idiosyncratic uncertainty shock, investment in physical capital can remain low even after the stock market and firm … idiosyncratic investment risk can explain, qualitatively, the aftermath of financial panics -- elevated risk premia, a sharp and …

investment and expected returns. In imperfectly competitive industries, a firm's exposure to systematic risk is jointly affected … by its own investment strategy and the investment strategies of its industry peers, such that the dynamics of its …

how both the linear and non-linear Schrödinger equations can be used in an optimal investment strategy …

Traditional finance theory suggests that riskier investments should yield higher returns. Challenging this notion … aversion, resulting in lower return investment choices. Therefore, we assess whether incentives associated with stock option … compensation (“vega”), presumed to increase managers' appetite for risk, uniformly yield higher returns on R&D investment. Our …

. The result is a negative and economically significant relation between pension risk and corporate investment. The effect … is confined to investment decisions that require discount rate estimates. Moreover, it is stronger if project value is … more sensitive to such estimates. Because of this bias, firms miss valuable investment opportunities. The results survive …

investment/risk link overturns key findings from prior incomplete contracting studies. We find that, if the investing manager has … his own share of the investment-induced risk premium (we label this a "risk transfer"), whereas the principal internalizes …' incentives to invest in relationship-specific assets. The optimal PPS thus trades off investment and effort incentives …

This paper studies the effect of interest rates on investment in an environment where firms make irreversible … delaying investment. These two forces combine to generate an aggregate investment demand curve that is always a backward …-bending function of the interest rate. At low rates, increasing the interest rate stimulates investment by raising the cost of delay …

This paper theoretically investigates the effect of uncertainty about future investment on expected stock returns …. Based on a real options framework, we incorporate the learning-by-doing effect to analyze the irreversible investment … problem. In our investment decision framework, the timing of expansion is endogenous and results from a value …

This paper studies the effect of interest rates on investment in an environment where firms make irreversible … delaying investment. These two forces combine to generate an aggregate investment demand curve that is always a backward …-bending function of the interest rate. At low rates, increasing the interest rate stimulates investment by raising the cost of delay …