This chapter proposes a portfolio choice model that describes investors’ adaptation to climate change as a temporal process, in which investors’ perception of climate hazards shapes their preferences and decisions over the duration of their financial portfolios. Investors tend to revise,...

Technological advancements in the ICT sector have enabled the development of online platforms that have drastically transformed the e-commerce landscape. The rise of the sharing economy isa key in point. Academics claim that this change is causing a noticeable shift in consumers’ habitsfrom...

The issue of market efficiency attracted the attention of academics since the existence of financial markets. Over time, two schools of thoughts were established: the efficient markets school and the behavioral finance school. Proponents of the former believed in the Efficient Markets Hypothesis...

This paper proposes a novel approach of classifying and modeling the nonlinear behavior of commodity prices using regime-switching models with exogenous transition variables. The approach rests on using the International Commercial Terms (Incoterms), also known as border prices, to classify...

Bitcoin’s energy hunger has recently triggered a heated debate in academic literature due to its massive energy consumption and carbon footprint. Unfortunately, it is difficult to measure Bitcoin’s actual electricity consumption, and literature on the topic produces inconsistent estimates...

Investors’ awareness of climate risks and attention to green investments are on the rise especially after the Paris Agreement. It stands to reason that this rise in awareness has an impact on the connection between clean energy prices and oil and technology stock prices. In this paper, we test...

Despite the increasing significance of clean energy, the sector has not gained its formal status yet as a separate asset class. Instead, individual clean securities are scattered over conventional classes. We examine the reward of grouping clean equities into a separate new class. Using data...

In finance, investment decisions are commonly based on Markowitz's ex-ante mean-variance (MV) portfolio problem. The static ex-post trading problem, however, is completely absent. In this paper, we propose a theoretical extension of the MV framework by adding a time dimension so that the...

The rational choice model under certainty and the discounted utility (DU) and expected utility (EU) models under uncertainty are criticized for their inability to capture many observed temporal behaviors, e.g., satiation, habit formation, and change-of-taste. By considering consumption as an...

We posit that climate risk is a plausible determinant of clean energy prices. Using a recent novel climate-related investor sentiment excerpted by search (CRISES) data set, we construct several daily physical and transition climate risk indexes between October 13, 2010, and June 24, 2022. We use...