Related papers: Corporate transparency and the disposition effect
In the last few decades, numerous experiments have shown that humans do not always behave so as to maximize their material payoff. Cooperative behavior when non-cooperation is a dominant strategy (with respect to the material payoffs) is…
Providing a measure of market risk is an important issue for investors and financial institutions. However, the existing models for this purpose are per definition symmetric. The current paper introduces an asymmetric capital asset pricing…
Employees work in increasingly digital environments that enable advanced analytics. Yet, they lack oversight over the systems that process their data. That means that potential analysis errors or hidden biases are hard to uncover. Recent…
This paper presents a new rationale for a self-interested economic elite voluntarily extending property rights. When agents make endogenous investment decisions, there is a commitment problem. Ex-post, the elite face strong incentives to…
Tolerance implies enduring trying circumstances with a fair and objective attitude. To determine whether evolutionary advantages might be stemming from diverse levels of tolerance in a population, we study a spatial public goods game, where…
We investigate how the relationship between managerial stock incentives and the dividend payout policy is impacted by the business cycle by using the data of S&P 1500 companies during 2000-2018. We find a strong negative relationship…
Miscalibrated beliefs are widely viewed as compromising the quality of employees' decisions. Why, then, might an organization prefer to hire an individual known to be overconfident? This paper develops a theory of organizational demand for…
Previous studies show that information security breaches and privacy violations are important issues for organisations and people. It is acknowledged that decreasing the risk in this domain requires consideration of the technological…
A patient firm interacts with a sequence of consumers. The firm is either an honest type who supplies high quality and never erases its records, or an opportunistic type who chooses what quality to supply and may erase its records at a low…
Transparency is often deemed critical to enable effective real-world deployment of intelligent systems. Yet the motivations for and benefits of different types of transparency can vary significantly depending on context, and objective…
Extracting from shared resources requires making choices to balance personal profit and sustainability. We present the results of a behavioural experiment wherein we manipulate the default extraction from a finite resource. Participants…
One of the long term goals of any college or university is increasing the student retention. The negative impact of student dropout are clear to students, parents, universities and society. The positive effect of decreasing student…
Motivated by cost of computation in game theory, we explore how changing the utilities of players (changing their complexity costs) affects the outcome of a game. We show that even if we improve a player's utility in every action profile,…
Why do some investors delegate financial decisions to supposed experts? We report a laboratory experiment designed to disentangle four possible motives. Almost 600 investors drawn from the Prolific subject pool choose whether or not to…
Understanding the affective, cognitive and behavioural processes involved in risk taking is essential for treatment and for setting environmental conditions to limit damage. Using Temporal Difference Reinforcement Learning (TDRL) we…
We study how a decision-maker can acquire more information from an agent by reducing her own ability to observe what the agent transmits. In a large class of binary-action games, opacity design is just as good as full commitment to actions…
This paper proposes a theory of stock market predictability patterns based on a model of heterogeneous beliefs. In a discrete finite time framework, some agents receive news about an asset's fundamental value through a noisy signal. The…
We have shown, in a series of articles, that a classical description of a large number of economic agents can be replaced by a statistical fields formalism. To better understand the accumulation and allocation of capital among different…
Even in the face of deteriorating and highly volatile demand, firms often invest in, rather than discard, aging technologies. In order to study this phenomenon, we model the firm's profit stream as a Brownian motion with negative drift. At…
We consider trading against a hedge fund or large trader that must liquidate a large position in a risky asset if the market price of the asset crosses a certain threshold. Liquidation occurs in a disorderly manner and negatively impacts…