Technological innovations and aggregate risk premiums☆

Technological innovations, downside risk, and the modernization of agriculture

We use a randomized experiment in India to show that improved technology enhances agricultural productivity by crowding in modern inputs and cultivation practices. Specifically, we show that a new rice variety that reduces downside risk by providing flood tolerance has positive effects on adoption of a more labor intensive planting method, area cultivated, fertilizer usage, and credit demand. W...

Research and Development , Technological Innovations and Diffusion

1. Importance of Permanent Innovation Activity 2. A System Dynamics Perspective of R&D and Innovation Diffusion Models 2.1. Modeling R&D Processes 2.2. Innovation Diffusion Models 3. Integrating the Models of R&D, Innovation and Diffusion 3.1. Basic Behavior of the Holistic Model 3.2. Interactions between the Stages 3.3. Pricing in the Holistic Model 4. Implications for Management Glossary Bibl...

Recent Technological Innovations in Aquaculture

Variance Risk Premiums

We propose a direct and robust method for quantifying the variance risk premium on financial assets. We show that the risk-neutral expected value of return variance, also known as the variance swap rate, is well approximated by the value of a particular portfolio of options.We propose to use the difference between the realized variance and this synthetic variance swap rate to quantify the varia...

Risk Premiums versus Waiting-Options Premiums: A Simple Numerical Example

This paper investigates how interest rates on liquid assets and excess returns on risky assets are determined when only safe assets can be used as liquid assets when waiting for an informative signal of future payoffs. In particular, we carefully differentiate between a demand for liquid assets while waiting for new information and a demand for safe assets for precautionary reasons. Employing K...