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Comparative Statics Predictions (comparative + static_prediction)

Distribution by Scientific Domains

Business, Economics, Finance and Accounting	100%

Selected Abstracts

Comparative Statics Predictions for Changes in Uncertainty in the Portfolio and Savings Problems

BULLETIN OF ECONOMIC RESEARCH, Issue 1 2001
Gyemyung Choi
The paper investigates comparative statics effects of changes in uncertainty for a general family of problems that encompasses both the portfolio and saving decisions. Conditions are derived on preferences that are necessary and sufficient for unambiguous comparative statics predictions. The paper consolidates and completes the statement of restrictions on attitudes toward risk,bearing needed for determinate predictions in the portfolio and saving problems. [source]

Why Do Managers Diversify Their Firms?

THE JOURNAL OF FINANCE, Issue 1 2003
Agency Reconsidered
We develop a contracting model between shareholders and managers in which managers diversify their firms for two reasons: to reduce idiosyncratic risk and to capture private benefits. We test the comparative static predictions of our model. In contrast to previous work, we find that diversification is positively related to managerial incentives. Further, the link between firm performance and managerial incentives is weaker for firms that experience changes in diversification than it is for firms that do not. Our findings suggest that managers diversify their firms in response to changes in private benefits rather than to reduce their exposure to risk. [source]

Comparative Statics for a Decision Model with Two Choice Variables and Two Random Variables: A Mean,Standard Deviation Approach

THE MANCHESTER SCHOOL, Issue 4 2001
Gyemyung Choi
The decision model with two choice variables and two random variables, an extension of Feder, or Just and Pope, is examined here. Under the mean,standard deviation framework we derive the comparative statics results concerning the effects of a change in the mean, variance and covariance of the random parameters. Some restrictions on the random variables and on the decision model are considered for unambiguous comparative statics predictions. [source]