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Behavioral Economics Commons

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Selected Works

Selected Works

2008

Articles 1 - 11 of 11

Full-Text Articles in Behavioral Economics

Applying Regret Theory To Investment Choices: Currency Hedging Decisions☆, Sébastien Michenaud, Bruno Solnik Aug 2008

Applying Regret Theory To Investment Choices: Currency Hedging Decisions☆, Sébastien Michenaud, Bruno Solnik

Sébastien Michenaud

We apply regret theory, an axiomatic behavioral theory, to derive closed-form solutions to optimal currency hedging choices. Investors experience regret of not having chosen the ex post optimal hedging decision. Hence, investors anticipate their future experience of regret and incorporate it in their objective function. We derive a model of financial decision-making with two components of risk: traditional risk (volatility) and regret risk. We find results that are in sharp contrast with traditional expected utility, loss aversion, or disappointment aversion theories. We discuss the empirical implications of our model and its ability to explain observed hedging behavior.


Distinguishing Owner Compensation From Profit In Closely Held Companies: In Search Of A Responsibility Premium, Michael Sack Elmaleh Jun 2008

Distinguishing Owner Compensation From Profit In Closely Held Companies: In Search Of A Responsibility Premium, Michael Sack Elmaleh

Michael Sack Elmaleh

The application of the income method of valuation requires that owner compensation be distinguished from free cash flow. The “proper” parsing of compensation and free cash flow can be the largest point of contention in contested valuation disputes. The preferred method of parsing is the substitution method which says that the proper allocation should be based on the wage that would have to be paid to a non owner employee. In this article I argue that owner employees carry additional responsibilities that are not normally borne by non owner employees. These additional responsibilities require that a premium be paid the …


Pre-Test Assessment, Thomas D. Berry May 2008

Pre-Test Assessment, Thomas D. Berry

Thomas D Berry

Pre-tests are a non-graded assessment tool used to determine pre-existing subject knowledge. Typically pre-tests are administered prior to a course to determine knowledge baseline, but here they are used to test students prior to topical material coverage throughout the course. While counterintuitive, the pre-tests cover material the student is not expected to know, but serve as a motivational tool and a road map for the students, resulting in improved course performance.


Does Volatility In Government Borrowing Leads To Higher Inflation? Evidence From Pakistan, Safdar Khan Dec 2007

Does Volatility In Government Borrowing Leads To Higher Inflation? Evidence From Pakistan, Safdar Khan

Safdar Khan

No abstract provided.


An Analysis Of Pakistan’S Vulnerability To Crisis, Safdar Khan Dec 2007

An Analysis Of Pakistan’S Vulnerability To Crisis, Safdar Khan

Safdar Khan

No abstract provided.


A Note On Sustained Economic Growth For Pakistan, Safdar Khan Dec 2007

A Note On Sustained Economic Growth For Pakistan, Safdar Khan

Safdar Khan

No abstract provided.


Estimating Output Gap For Pakistan Economy: Structural And Statistical Approaches, Safdar Khan Dec 2007

Estimating Output Gap For Pakistan Economy: Structural And Statistical Approaches, Safdar Khan

Safdar Khan

No abstract provided.


Antidotes To High School Economics (Mis-)Education On World Hunger, Julie A. Nelson Dec 2007

Antidotes To High School Economics (Mis-)Education On World Hunger, Julie A. Nelson

Julie A. Nelson

No abstract provided.


Much Ado About Pluralities: Pride And Precedent Amidst The Cacophy Of Concurrences, And Re-Percolation After Rapanos, Donald J. Kochan, Melissa M. Berry, Matthew J. Parlow Dec 2007

Much Ado About Pluralities: Pride And Precedent Amidst The Cacophy Of Concurrences, And Re-Percolation After Rapanos, Donald J. Kochan, Melissa M. Berry, Matthew J. Parlow

Donald J. Kochan

Conflicts created by concurrences and pluralities in court decisions create confusion in law and lower court interpretation. Rule of law values require that individuals be able to identify controlling legal principles. That task is complicated when pluralities and concurrences contribute to the vagueness or uncertainty that leaves us wondering what the controlling rule is or attempting to predict what it will evolve to become. The rule of law is at least handicapped when continuity or confidence or confusion infuse our understanding of the applicable rules. This Article uses the recent U.S. Supreme Court decision in Rapanos v. United States to …


Democracy Autocracy And Macroeconomic Performance In Pakistan, Nasir Iqbal, Sardar Javaid Iqbal Khan, Muhammad Irfan Chani Dec 2007

Democracy Autocracy And Macroeconomic Performance In Pakistan, Nasir Iqbal, Sardar Javaid Iqbal Khan, Muhammad Irfan Chani

Muhammad Irfan Chani

Pakistan showed a healthy growth rate of 5.6 percent during the entire history and faced many ups and downs in economic growth due to dramatic changes in political regimes. The literature shows mixed results regarding the impact of autocracy or democracy on economic growth. The aggregate growth of the economy under autocracy remained better as compared to democratic period. Financial indicators show consistent path through out the history of Pakistan. Different trade policies are designed in different regime to run the external sector and the impact of each policy was different.


Analytical Thomism: Traditions In Dialogue, Mario Šilar Dec 2007

Analytical Thomism: Traditions In Dialogue, Mario Šilar

Mario Šilar

No abstract provided.