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Full-Text Articles in Social and Behavioral Sciences
The Value Line Enigma Extended - An Examination Of The Performance Of Option Recommendations, Jack B. Broughton, Don M. Chance
The Value Line Enigma Extended - An Examination Of The Performance Of Option Recommendations, Jack B. Broughton, Don M. Chance
Business Faculty Articles and Research
We extend the research on the Value Line Enigma by examining the performance of call recommendations in Value Line Options. Galai's hedge decomposition procedure identifies the components of the calls' returns. Abnormal call returns were most pronounced immediately following the purchase, which is consistent with studies of Value Line's stock rankings. The largest and most significant abnormal performance was by calls assigned the highest rank written on stocks judged by Value Line to be correctly priced. Abnormal call return performance by joint call and stock ranks was consistent with the hypothesis that Value Line identifies underpriced call options.
Rigging The Lobbying Process: An Application Of The All-Pay Auction, Michael R. Baye, Dan Kovenock, Casper G. De Vries
Rigging The Lobbying Process: An Application Of The All-Pay Auction, Michael R. Baye, Dan Kovenock, Casper G. De Vries
Economics Faculty Articles and Research
In a world where a politician can explicitly auction off a prize to the high bidder, the standard auction literature can be used to analyse political behavior. The justice system, however, precludes politicians from explicitly selling the prize to the highest bidder. Thus politicians cannot let it become public knowledge that they are in the business of selling political favors. An institution has emerged in political markets to overcome this constraint which are termed as lobbying. Lobbyists make implicit payments to the politician through campaign contributions. If these up-front payments were rebated to those failing to receive the prize, it …