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dc.contributor.authorViefers, Paulen_US
dc.date.accessioned2012-08-24en_US
dc.date.accessioned2012-08-24T14:08:52Z-
dc.date.available2012-08-24T14:08:52Z-
dc.date.issued2012en_US
dc.identifier.urihttp://hdl.handle.net/10419/61311-
dc.description.abstractThis paper investigates the impact of uncertainty on an irreversible investment decisions in the laboratory. Subjects own the option to seize a claim on the future sum of realizations from an (ambiguous) random walk. I contrast model predicitions of the Subjective Expected Utility model (SEU, Savage, 1954) with model predictions made by Multiple-prior Expected Utility models (MEU, Gilboa & Schmeidler, 1989; Epstein & Schneider, 2003b). I present an experimental design that allows to identify behaviorally meaningful deviations from SEU. Observed behavior is at odds with the SEU prediction. On average, subjects in a treatment group, facing an ambiguous random walk, exhibit an ambiguity premium that presents a mark-up on average reservation profits in a control group. Hence, subjects shun to expose themselves to an ambiguous payoff process and invest later than participants facing a risky payoff process.en_US
dc.language.isoengen_US
dc.publisherDeutsches Institut für Wirtschaftsforschung (DIW) Berlinen_US
dc.relation.ispartofseriesDiscussion Papers, German Institute for Economic Research, DIW Berlin 1228en_US
dc.subject.jelD80en_US
dc.subject.jelD83en_US
dc.subject.ddc330en_US
dc.subject.keywordAmbiguity aversionen_US
dc.subject.keywordmultiple priorsen_US
dc.subject.keywordoptimal stoppingen_US
dc.subject.keywordirreversible investmenten_US
dc.titleShould I stay or should I go? A laboratory analysis of investment opportunities under ambiguityen_US
dc.typeWorking Paperen_US
dc.identifier.ppn722221460en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen_US
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