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Social and Behavioral Sciences Commons™
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Full-Text Articles in Social and Behavioral Sciences
Consequences Of Information Asymmetry On Corporate Risk Management, Howard J. Merrill Iii
Consequences Of Information Asymmetry On Corporate Risk Management, Howard J. Merrill Iii
Applied Economics Theses
This paper will demonstrate the impact information asymmetry has on risk management. There is a noticeable impact within the context of consumer credit risk. If a firm is able to recognize this, they can make improved credit decisions that will reduce the consequences. The theoretical impact will be presented while depicting areas of risk management that are susceptible to information asymmetry. We find a direct impact on the development of scoring models, credit policies, and origination volume. These results hold for banks with portfolios consisting of consumer credit products and small business loans. Once known, banks can better tailor their …
Behavioral Economics And The Effects Of Psychology On The Stock Market, Justin L. Nagy
Behavioral Economics And The Effects Of Psychology On The Stock Market, Justin L. Nagy
Applied Economics Theses
The purpose of this thesis is to study the contributions behavioral economics and finance have had on the understanding on how the stock market works. The idea that psychology plays a role in influencing the stock market can be dated back to Adam Smith who wrote about individual’s behavior in his work Theory of Moral Sentiments. It wasn’t until the latter half of the 20th century that behavioral economics became accepted as a counter to Eugene Fama’s widely accepted theory of Efficient Market Hypothesis. This paper will analyze the development of behavioral economics, review the main contributors to the field …