?url_ver=Z39.88-2004&rft_id=127&rft_val_fmt=info%3Aofi%2Ffmt%3Akev%3Amtx%3Adc&rft.relation=http%3A%2F%2Feprints.imtlucca.it%2F2222%2F&rft.title=Investment+and+uncertainty+with+recursive+preferences&rft.creator=Ticchi%2C+Davide&rft.subject=HB+Economic+Theory&rft.description=This+paper+analyses+the+relationship+between+uncertainty+and+investment+when+firms+are+risk+averse+and+have+a+costant+return+to+scale+technology.+Using+recursive+preferences%2C+the+paper+demonstrates+that+not+only+the+degree+of+risk+aversion+is+important+in+determining+the+sign+of+the+investment+uncertainty+relationship+but+that+the+intertemporal+substitution+elasticity+also+plays+a+crucial+role.+The+model+presented+suggests+the+existence+of+a+positive+relationship+between+investment+and+uncertainty+for+reasonable+values+of+the+parameters.+In+the+second+part+of+the+paper+we+extend+the+analysis+taking+into+consideration+the+presence+of+adjustment+costs+in+the+investment+process.+Except+for+particular+values+of+the+preference+parameters%2C+the+uncertainty-investment+relationship+has+a+not+a+definite+sign+anymore.&rft.date=2000-01&rft.type=Working+Paper&rft.type=NonPeerReviewed&rft.identifier=++Ticchi%2C+Davide++Investment+and+uncertainty+with+recursive+preferences.++Technical+Report++%23127%2F2000++++++++(Unpublished)+++&rft.relation=127