Archivio per 20 settembre 2014

20
Set
14

Book Review: Investor Behavior

See on Scoop.itBounded Rationality and Beyond

As companies and governments move away from traditional defined benefit pension plans toward defined contribution plans, the role of the financial adviser has gained greater importance. The work of Harry Markowitz and the birth of modern portfolio theory have given finance professionals a framework for creating the optimal portfolio. Even though numerous models exist for constructing portfolios, it can be difficult to persuade lay investors to make rational choices. Their seemingly irrational decisions can arise from a lack of knowledge or from psychological barriers that prevent them from behaving rationally.

In Investor Behavior: The Psychology of Financial Planning and Investing, H. Kent Baker of American University’s Kogod School of Business and Victor Ricciardi of Goucher College have assembled a collection of 30 articles written by more than three dozen scholars in the field of behavioral finance. The articles encompass a wide range of topics in the psychology of investing, focusing on academic work on financial planning. Even readers who are somewhat familiar with the literature on behavioral finance will benefit because the book addresses a number of topics not usually covered in the mainstream behavioral finance literature.

See on seekingalpha.com

20
Set
14

Nassim Taleb And Josh Barro Went At It On Twitter And Things Got Unpleasant

See on Scoop.itBounded Rationality and Beyond

Nassim Taleb And Josh Barro Went At It On Twitter And Things Got Unpleasant. 

The New York Times’ Josh Barro and the author Nassim Taleb got into a Twitter spat on Thursday.

The topic: GMOs.

And like too many fights on Twitter, things took an ugly personal turn.It began when Taleb took issue with this Josh Barro tweet from Wednesday:

See on businessinsider.com

20
Set
14

When natural selection should optimize speed-accuracy trade-offs

See on Scoop.itBounded Rationality and Beyond

In psychology and neuroscience, and in other disciplines studying decision- making mechanisms, it is often assumed that optimal decision-making means statistical optimality. This is attractive because statistically optimal decision procedure sare known,can be simply implemented in biologically-plausible models, and because such models have been show into give good fits to behavioural as well as neural data. Here we question when statistical optimality is the kind of optimality we should expect natural selection to aim towards, by considering what kind sof loss function should be optimised under different behavioural scenarios. In laboratory settings subjects are often reward edonly on making a correct choice, so optimisation of a zero-one loss function is appropriate, and this is achieved by implementing a statistically- optimal decision procedure that gives the best compromise between speed and accuracy of decision-making. Many naturalistic decisions may also be described by such a loss function; however others, such as selecting food items of potentially different value, appear to be different since the animalis rewarded by the value of the item it chooses regard less of whether it was the best available. We argue that most naturalistic decisions are value-based. Mechanisms that optimise speed-accuracy trade-offs need to be parameterised, using information about the decision problem, in order to deal with value-based decision- making. Mechanisms for value-sensitive decision-making have been described, how ever, which adaptively change between decision-making strategies with out the need for continual reparameterisation. 

See on sheffield.ac.uk

20
Set
14

ECONOMIC INTELLIGENCE AND DECISION MAKING – Part I

See on Scoop.itBounded Rationality and Beyond

Many people question about the way to define EI instruments and objectives in a clear and unambiguous manner. Often, indeed, this skepticism hides the refuse to acknowledge the paramount importance of the economic and financial issues into the global world of intelligence. Many Intelligence scholars, in fact, continue to reject the “globalization” of the Intelligence, as the enlargement of both its spectrum of interest (going from the traditional military and political aspects, to the economical and financial ones, and in perspective towards the medical, physical and astronomical ones), and the geographical areas relevant for the national security (proceeding from the East-West dichotomy to each micro-angles of the world).Due to the global recession, economy and finance constraints “bind” everywhere – in industrialized and developing countries – any public and private functions. Today, in the sovereign and corporate world, the debt stock contracted in the past, and the more and more moderate flow of income seriously limit the exertion of both the full state sovereignty and the management of an optimized business.

See on fabiovanorio.wordpress.com

20
Set
14

Samuelson’s ghosts: Whig history and the reinterpretation of economic theory

See on Scoop.itBounded Rationality and Beyond

Over a quarter of a century has passed since the 1987 publication of Paul A. Samuelson’s historiographical manifesto ‘Out of the closet: A program for the Whig history of economic science’, summarising arguments that had developed during a 16-year debate provoked by his 1971 Journal of Economic Literature article on the Marxian transformation problem. Samuelson’s intervention marked a defining turning point in the evolution of contemporary economic thought.

In the wake of the economic turmoil that opened with the 2007 financial crash, 20 years after Samuelson’s manifesto, criticisms of the quality of economic thought have multiplied. This special issue of Cambridge Journal of Economics offers a timely re-appraisal of the impact of the Whig-historical programme on the economic thinking and practices that have become the target of today’s critics.

The term ‘Whig history’ was originally coined by the English historian Herbert Butterfield (1981 [1931]) to refer to what Peter Boettke (2005)describe as ‘history as written by those perceived to have been the intellectual victors of key debates’. Butterfield’s largely successful purpose was to discredit and eliminate the practice, amongst historians, of presenting the past and its ideas as nothing more than an imperfect form of the present. Since then, awareness of the dangers of such reductionism and the necessity of what Bagchi (2014) calls a ‘contextual’ approach to social knowledge has spread through most of the social sciences.

See on cje.oxfordjournals.org

20
Set
14

The Economists of Tomorrow

See on Scoop.itBounded Rationality and Beyond

Downloadable (with restrictions)! This article presents the case for “assertive pluralism” in economics education and proposes how to achieve it, illustrating the point with reference to the U.K. Subject Benchmark Statement in Economics (SBSE). It proposes a revision of the benchmark, prioritizing the role of “controversy” in the teaching of economics, combined with pluralistic principles that uphold and guarantee critical and independent thinking. This reform is a necessary response to what Colander et al. (2009 ) term the “systemic failure” of economics-the inability of the profession, taken as a whole, to anticipate and understand the financial crash and recession of 2008. Failure on this scale testifies to a more deep-seated weakness in economics than commonly recognized. It arises from what Turner ( Tett 2009 ) terms the regulatory capture of the economics profession by narrow financial interests. The public, and the economics profession, require specific protection against the pressures that have produced this systemic failure. This requires a rethink of the relation of economics to society, founded on a rejection of the idea that the function of economics is to provide a single, unequivocal solution to every problem of policy. Instead, the article explains, good economics should be constrained to evaluate the full range of relevant solutions to any given policy issue, leaving the decisionmakers accountable for the decisions they make on which solution to adopt. Copyright © 2010 American Journal of Economics and Sociology, Inc..

See on ideas.repec.org




Time is real? I think not

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