{"title":"Economic Analysis of the Internalization the Externalities in Environmental Goods","authors":"O. Kopsidas, Andreas Hadjixenophontos","doi":"10.2139/ssrn.3500846","DOIUrl":"https://doi.org/10.2139/ssrn.3500846","url":null,"abstract":"The environment is characterized as a public good. Public goods are goods that provide benefits for society as a whole or part of it, usually regardless of whether the individual people are willing to pay to have these benefits. This proposed project is not viable in profitable terms to private enterprise, so it applied a modified version of the CVM (Contingent Valuation Method) to realize this project. The purpose of the paper is to present a modified model of an internalizing external costs caused by the operation of a manufacturing unit in conjunction with the new reality created. Using the CBA (Cost-Benefit Analysis), all critical parameters problem attributed to a single base assessment, which facilitates decision making process. The basis of evaluation is to compare benefits and costs. It is used the CVM in case study and the results show that there is less sensitivity for restoration of the cultural heritage monuments in comparison with the sensitivity for restoration of the natural and urban environment in general.","PeriodicalId":352857,"journal":{"name":"DecisionSciRN: Other Investment Decision-Making (Sub-Topic)","volume":"3 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-08-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124813374","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Sunk Cost Fallacy in Driving the World’s Costliest Cars","authors":"Teck-Hua Ho, I. Png, Sadat Reza","doi":"10.1287/mnsc.2016.2651","DOIUrl":"https://doi.org/10.1287/mnsc.2016.2651","url":null,"abstract":"We develop a behavioral model of durable good usage with mental accounting for sunk costs. It predicts higher-than-rational usage that attenuates at a rate that increases with sunk costs. Singapore government policy varied the sunk cost of buying a new car. Using Singapore data, we estimate the elasticity of driving with respect to sunk costs to be 0.048, which implies that government policy between 2009 and 2013 was associated with 86 kilometers per month, or 5.6%, more driving. The results are robust to specifying sunk costs as relative to buyer income and estimation with Hong Kong data. We believe this to be the first field evidence of the sunk cost fallacy in usage of a major durable good. The online appendix is available at https://doi.org/10.1287/mnsc.2016.2651. This paper was accepted by John List, behavioral economics.","PeriodicalId":352857,"journal":{"name":"DecisionSciRN: Other Investment Decision-Making (Sub-Topic)","volume":"45 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115559748","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Dynamic Portfolio Choice under Ambiguity and Regime Switching Mean Returns","authors":"Hening Liu","doi":"10.2139/ssrn.992486","DOIUrl":"https://doi.org/10.2139/ssrn.992486","url":null,"abstract":"I examine a continuous-time intertemporal consumption and portfolio choice problem under ambiguity, where expected returns of a risky asset follow a hidden Markov chain. Investors with Chen and Epstein''s (2002) recursive multiple priors utility possess a set of priors for unobservable investment opportunities. We explicitly characterize optimal consumption and portfolio policies in terms of the Malliavin derivatives and stochastic integrals. When the model is calibrated to U.S. stock market data, I find that continuous Bayesian revisions under incomplete information generate ambiguity-driven hedging demands that mitigate intertemporal hedging demands. In addition, ambiguity aversion magnifies the importance of hedging demands in the optimal portfolio policies. Out-of-sample experiments demonstrate the economic importance of accounting for ambiguity.","PeriodicalId":352857,"journal":{"name":"DecisionSciRN: Other Investment Decision-Making (Sub-Topic)","volume":"20 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-12-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128863449","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"An Optimal Hedge Ratio Discussion - One Size Does Not Fit All","authors":"C. Shane Schurter","doi":"10.2139/ssrn.1532457","DOIUrl":"https://doi.org/10.2139/ssrn.1532457","url":null,"abstract":"As institutional investors increase their allocations to non-domestic securities, the associated currency risk becomes an increasingly pertinent subject in need of addressing. Our advisory position on currency hedging is that for most clients, the drawbacks can be significant and the benefits over the long-term may be small and are not guaranteed. There are no easy answers in regards to currency management. In this paper we provide background on the currency market, develop a decision making framework as it pertains to whether or not to hedge currency, and share our thoughts and experience in regards to implementation should clients determine hedging currency is appropriate given their specific circumstances. Contained within Appendix I is a currency hedging decision matrix which summarizes relevant issues for consideration as it pertains to hedging currency. In addition, we’ve developed an Excel-based tool which encompasses the points outlined in the currency hedging decision matrix. This tool allows the user to weight the importance of each factor resulting in a “suggested” hedge ratio. As with any tool such as this, it should be used as guidance in developing an appropriate hedge ratio. Contained within Appendix II are two case studies, detailing institutional investors with unique circumstances, which helps to illustrate the functionality and usefulness of this Excel-based tool.","PeriodicalId":352857,"journal":{"name":"DecisionSciRN: Other Investment Decision-Making (Sub-Topic)","volume":"42 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2009-02-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133678657","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}