This paper aims to give a brief review on behavioral economics and behavioral finance and discusses some of the previous research on agents' utility functions, applicable…
This paper aims to give a brief review on behavioral economics and behavioral finance and discusses some of the previous research on agents' utility functions, applicable risk measures, diversification strategies and portfolio optimization.
The authors also cover related disciplines such as trading rules, contagion and various econometric aspects.
While scholars could first develop theoretical models in behavioral economics and behavioral finance, they subsequently may develop corresponding statistical and econometric models, this finally includes simulation studies to examine whether the estimators or statistics have good power and size. This all helps us to better understand financial and economic decision-making from a descriptive standpoint.
The research paper is original.
The underlying principle of the Capital Asset Pricing Model (CAPM) is that there is a linear relationship between systematic risk, as measured by beta, and expected share…
The underlying principle of the Capital Asset Pricing Model (CAPM) is that there is a linear relationship between systematic risk, as measured by beta, and expected share returns. The CAPM attempts to describe this relationship by using beta to explain the differences between the expected returns on various shares and share portfolios. The CAPM has been the subject of considerable theoretical investigation and empirical research. The aim of this article is to establish the current knowledge of the usefulness of the CAPM, i.e. whether it provides a reasonable description of reality and whether it is a useful tool for investment decision‐making. The main conclusion drawn from the study is that the CAPM is useful and that it does describe and explain the risk/return relationship. However, other risk factors (i.e. other than beta) may also be useful for explaining share returns. Investors should therefore be cautious when using the model to evaluate investment performance.
Surveys, from an American perspective, the existing literature oneconomic explanations of the behaviour of universities and scholars. Themodern literature is put in…
Surveys, from an American perspective, the existing literature on economic explanations of the behaviour of universities and scholars. The modern literature is put in historical perspective introduced by a brief discussion of the positions of two of the earliest and most distinguished contributors to the literature: Adam Smith and Max Weber. Discusses the human capital and implicit contracts literatures of the behaviour of scholars, the latter elaborated in terms of the issue of tenure. The most common theoretical economic analysis of the university is the view that it is best thought of as a non‐profit organization. Discusses variants of this view, with special attention to the literature on rent‐seeking in academe. Goes on to the empirical literature on the economics of academe in the areas of academic institutions, academic earnings functions, the earnings and status of minority scholars and academic production functions. Briefly considers the relevance of the current literature to the Althoff system, suggesting that Althoff′s able, trusted advisers, and his system of institutes, may have allowed him to avoid several inefficiences that have been identified by economists as present in other academic institutions. Although the centralization of decision making in the hands of one decision maker may be efficient if the decision maker is exceptionally able, more commonly the most efficient system will be a decentralized system that allows for greater diversity and competition. Concludes with a discussion of how hypotheses on the efficiency (and fairness) of various aspects of the Althoff system could, in principle, be tested.
Australian prisons are organised around eight state and territory jurisdictions, and a number of private prison operators. A broad range of structures have evolved over…
Australian prisons are organised around eight state and territory jurisdictions, and a number of private prison operators. A broad range of structures have evolved over 200 years around correctional management in Australia, including the arrangements for the provision of prisoner health. This paper highlights a large number of issues to argue the complex interactions between prisoner health and “public health.” The Australian context provides the backdrop for this discussion.
Does the classical liberal emphasis on freedom of association provide an intellectual cover for bigotry? We formulate this question in economic terms using James…
Does the classical liberal emphasis on freedom of association provide an intellectual cover for bigotry? We formulate this question in economic terms using James Buchanan’s economic approach to ethics, according to which moral values can be understood as preferences about other people’s behaviors. We discuss two possible market failures associated with freedom of association: inter-group externalities and Schelling-type emergent segregation. We show that the classical liberal position about freedom of association, as elaborated in Buchanan and Tullock’s Calculus of Consent, is fully equipped to deal with the first one, but not with the second. The progressive view that some preferences are so offensive that they should be dismissed rather than engaged or negotiated with can be reframed as an attempt to solve the emergent segregation problem, but it is vulnerable to political economy problems of its own, in particular to an inherent tendency to over-expand the meaning of “bigotry.”
Experts respond to the same incentives as people in other areas of human action, and in the same ways. This insight is a truism: Experts are ordinary people, not otherworld creatures. The disciplined pursuit of this common sense observation helps us to reach conclusions about experts that might be surprising or counterintuitive.