منابع مشابه
Search and Knightian uncertainty
Suppose that "uncertainty" about labor market conditions has increased. Does this change induce an unemployed worker to search longer, or shorter? This paper shows that the answer is drastically different depending on whether an increase in "uncertainty" is an increase in risk or that in true uncertainty in the sense of Frank Knight. We show in a general framework that, while an increase in ris...
متن کاملReturn Predictability under Knightian Uncertainty
The predictability of stock and bond excess returns is investigated from an investment perspective in the presence of Knightian uncertainty. Uncertainty about the return distribution is formalized with the maxmin expected utility approach of Gilboa and Schmeidler (1989). It is analyzed how risk and uncertainty aversion di¤er in their e¤ects on optimal portfolio choice. Most importantly, it is s...
متن کاملIrreversible investment and Knightian uncertainty
When firms make a decision about irreversible investment, they may not have complete confidence about their perceived probabilitymeasure describing future uncertainty. Theymay think other probabilitymeasures perturbed from the original one are also possible. Such uncertainty, characterized by not a single probability measure but a set of probability measures, is called “Knightian uncertainty.” ...
متن کاملQuality, Exchange, and Knightian Uncertainty
Sociologists have long recognized that stable patterns of exchange within a market depend on the ability of market actors to solve the problem of cooperation. Less well recognized and understood is a second problem that must be solved – the problem of Knightian uncertainty. This chapter posits that the problem of Knightian uncertainty occurs not only in the market; it underlies a variety of exc...
متن کاملKnightian uncertainty and moral hazard
This paper presents a principal-agent model in which the agent has imprecise beliefs. We model this situation formally by assuming the agent’s preferences are incomplete as in Bewley (1986) [2]. In this setting, incentives must be robust to Knightian uncertainty. We study the implications of robustness for the form of the resulting optimal contracts. We give conditions under which there is a un...
متن کاملذخیره در منابع من
با ذخیره ی این منبع در منابع من، دسترسی به آن را برای استفاده های بعدی آسان تر کنید
ژورنال
عنوان ژورنال: Theory and Decision
سال: 2013
ISSN: 0040-5833,1573-7187
DOI: 10.1007/s11238-013-9404-1