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Deutsches Institut für Wirtschaftsforschung (DIW), Berlin >
DIW-Diskussionspapiere >
Please use this identifier to cite or link to this item:
http://hdl.handle.net/10419/61311
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Full metadata record
| DC Field | | Value | | Language |
| dc.contributor.author | | Viefers, Paul | | en_US |
| dc.date.accessioned | | 2012-08-24 | | en_US |
| dc.date.accessioned | | 2012-08-24T14:08:52Z | | - |
| dc.date.available | | 2012-08-24T14:08:52Z | | - |
| dc.date.issued | | 2012 | | en_US |
| dc.identifier.uri | | http://hdl.handle.net/10419/61311 | | - |
| dc.description.abstract | | This 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.iso | | eng | | en_US |
| dc.publisher | | Deutsches Institut für Wirtschaftsforschung (DIW) Berlin | | en_US |
| dc.relation.ispartofseries | | Discussion Papers, German Institute for Economic Research, DIW Berlin 1228 | | en_US |
| dc.subject.jel | | D80 | | en_US |
| dc.subject.jel | | D83 | | en_US |
| dc.subject.ddc | | 330 | | en_US |
| dc.subject.keyword | | Ambiguity aversion | | en_US |
| dc.subject.keyword | | multiple priors | | en_US |
| dc.subject.keyword | | optimal stopping | | en_US |
| dc.subject.keyword | | irreversible investment | | en_US |
| dc.title | | Should I stay or should I go? A laboratory analysis of investment opportunities under ambiguity | | en_US |
| dc.type | | Working Paper | | en_US |
| dc.identifier.ppn | | 722221460 | | en_US |
| dc.rights | | http://www.econstor.eu/dspace/Nutzungsbedingungen | | en_US |
| Appears in Collections: | | Publikationen von Forscherinnen und Forschern des DIW DIW-Diskussionspapiere
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