A Conceptual Model of Investor Behavior

Based on a survey of behavioral finance literature, this paper presents a descriptive model of individual investor behavior in which investment decisions are seen as an iterative process of interactions between the investor and the investment environment. This investment process is influenced by a number of interdependent variables and driven by dual mental systems, the interplay of which contributes to boundedly rational behavior where investors use various heuristics and may exhibit behavioral biases. In the modeling tradition of cognitive science and intelligent systems, the investor is seen as a learning, adapting, and evolving entity that perceives the environment, processes information, acts upon it, and updates his or her internal states. This conceptual model can be used to build stylized representations of (classes of) individual investors, and further studied using the paradigm of agent-based artificial financial markets. By allowing us to implement individual investor behavior, to choose various market mechanisms, and to analyze the obtained asset prices, agent-based models can bridge the gap between the micro level of individual investor behavior and the macro level of aggregate market phenomena. It has been recognized, yet not fully explored, that these models could be used as a tool to generate or test various behavioral hypothesis.behavioral finance;financial decision making;agent-based artificial financial markets;cognitive modeling;investor behavior

Organizing the un-Organized? The Rise, Recession and Revival of the Indian Diamond Industry

The Indian diamond industry thrives in the atmosphere of secrecy and informality that envelops the diamond trade and has for long been labeled as an unorganized sector of the economy. However, it resembles a close-knit community composed of thousands of small, medium and large sized CPD ( cut and polished diamonds) units and has grown to become one of the highest foreign exchange earners for the country. The industry exports cut and polished diamonds worth US $ 14 billion annually and enjoys a 95 % market share of the global exports of cut and polished diamond pieces. An in-depth study of the industry reveals that the so called unorganized sector is in fact highly organized and has great potential to offer useful insights to the field of management in terms of new forms of organizing, networking, business processing and for doing international business. This paper presents summary of findings from research conducted in the Indian diamond industry over a period of last four years. Part I includes insights about the remarkable rise, growth and the unique working of the industry. Part II makes use of a case study of a 40 years old large- sized CPD unit to help gain further understanding of the Indian diamond industry. Part III is about the impact of the 2008 global turmoil and of the industry’s revival after a severe recession. The analysis of findings and implications for future research have been discussed.

Emerging Ties-Nigerian Entrepreneurs and Chinese Business Associates

Africa-China relationships consists of various interactions between government officials, to large corporations, and individuals. This article examines the emerging relationship between Africa and China through the ethnography of a Nigerian entrepreneur who seeks to expand his business by selling to Chinese clients. Entrepreneurship is lauded in Nigerian society. China's increasing presence in the country is often presented as a positive economic opportunity for Nigerians, including entrepreneurs. This research highlights the complex nature of business relationships between Nigerian entrepreneurs and Chinese counterparts. To build trust and business ties, the entrepreneur highlighted manages his brand via social media, utilizes social capital, and taps into relatedness and kinship within Chinese business circles

A Conceptual Model of Investor Behavior

Based on a survey of behavioral finance literature, this paper presents a descriptive model of individual investor behavior in which investment decisions are seen as an iterative process of interactions between the investor and the investment environment. This investment process is influenced by a number of interdependent variables and driven by dual mental systems, the interplay of which contributes to boundedly rational behavior where investors use various heuristics and may exhibit behavioral biases. In the modeling tradition of cognitive science and intelligent systems, the investor is seen as a learning, adapting, and evolving entity that perceives the environment, processes information, acts upon it, and updates his or her internal states. This conceptual model can be used to build stylized representations of (classes of) individual investors, and further studied using the paradigm of agent-based artificial financial markets. By allowing us to implement individual investor behavior, to choose various market mechanisms, and to analyze the obtained asset prices, agent-based models can bridge the gap between the micro level of individual investor behavior and the macro level of aggregate market phenomena. It has been recognized, yet not fully explored, that these models could be used as a tool to generate or test various behavioral hypothesis

Self-aware trader: a new approach to safer trading

Traders are required to work in the financial market with highly complex information and to perform efficiently under high levels of psychological pressure. Multiple disciplines, from programs with artificial intelligence to complex mathematical functions, are used to help traders in their effort to maximize profits. However, an essential problem not yet considered in this rapidly evolving environment is that traders are not supported to adequately manage how stress influences their decisions. This paper takes into consideration the negative influences of stress on individuals and proposes a system designed to support traders by providing them with information that can reduce the likelihood of poor decision-making. The system has been designed considering both technical and physiological aspects to make information available in a suitable way. Biometric sensors are used to collect data associated with stress, a software platform then analyses this information and displays it to the trader. The resulting system is capable of making individual traders, as well as teams of traders, self-aware of their levels of stress. The system has been tested in real environments and the results provide evidence that self-aware traders benefit from the system by reducing risky decision-making

Smart Grid Technologies in Europe: An Overview

The old electricity network infrastructure has proven to be inadequate, with respect to modern challenges such as alternative energy sources, electricity demand and energy saving policies. Moreover, Information and Communication Technologies (ICT) seem to have reached an adequate level of reliability and flexibility in order to support a new concept of electricity network—the smart grid. In this work, we will analyse the state-of-the-art of smart grids, in their technical, management, security, and optimization aspects. We will also provide a brief overview of the regulatory aspects involved in the development of a smart grid, mainly from the viewpoint of the European Unio

The Tobin Tax A Review of the Evidence

The debate about the Tobin Tax, and other financial transaction taxes (FTT), gives rise to strong views both for and against. Unfortunately, little of this debate is based on the now considerable body of evidence about the impact of such taxes. This review attempts to synthesise what we know from the available theoretical and empirical literature about the impact of FTTs on volatility in financial markets. We also review the literature on how a Tobin Tax might be implemented, the amount of revenue that it might realistically produce, and the likely incidence of the tax. We conclude that, contrary to what is often assumed, a Tobin Tax is feasible and, if appropriately designed, could make a significant contribution to revenue without causing major distortions. However, it would be unlikely to reduce market volatility and could even increase it.Tobin tax, financial transaction taxes, volatility, revenue, incidence, feasibility

Emerging Artificial Societies Through Learning

The NewTies project is implementing a simulation in which societies of agents are expected to de-velop autonomously as a result of individual, population and social learning. These societies are expected to be able to solve environmental challenges by acting collectively. The challenges are in-tended to be analogous to those faced by early, simple, small-scale human societies. This report on work in progress outlines the major features of the system as it is currently conceived within the project, including the design of the agents, the environment, the mechanism for the evolution of language and the peer-to-peer infrastructure on which the simulation runs.Artificial Societies, Evolution of Language, Decision Trees, Peer-To-Peer Networks, Social Learning

A comparative study of the marketing of cotton in India and America.

Thesis (M.B.A.)--Boston University Includes bibliographical references (leaves p. 121)