Timing decisions under model uncertainty
Please note this speaker will be remote. The talk will be streamed to Seminar Room C.
We study the effect of ambiguity on timing decisions. An agent faces a stopping problem with an uncertain stopping payoff and a stochastic deadline. The agent is unsure about the correct model quantifying the uncertainty and seeks to maximize her payoff guarantee over all plausible models. If model uncertainty only concerns the deadline, the agent optimally exits as soon as this is optimal under one of the models. In contrast, if there is also uncertainty about the stopping payoff, the agent wants to wait at a point in time where she originally intends to exit. To prevent this from happening, a forward looking agent may then opt to stop prematurely.
Date: 10 June 2022, 14:15 (Friday, 7th week, Trinity 2022)
Venue: Manor Road Building, Manor Road OX1 3UQ
Venue Details: Seminar Room C or Register for online
Speaker: Sarah Auster (University of Bonn)
Organising department: Department of Economics
Part of: Nuffield Economic Theory Seminar
Booking required?: Recommended
Booking url: https://zoom.us/meeting/register/tJUld-uhqz8uGN1RQmc5-vrnQWKAqocTa8Zd
Audience: Public
Editor: Emma Heritage