6,068 research outputs found
Reification and Truthmaking Patterns
Reification is a standard technique in conceptual modeling, which consists of including in the domain of discourse entities that may otherwise be hidden or implicit. However, deciding what should be rei- fied is not always easy. Recent work on formal ontology offers us a simple answer: put in the domain of discourse those entities that are responsible for the (alleged) truth of our propositions. These are called truthmakers. Re-visiting previous work, we propose in this paper a systematic analysis of truthmaking patterns for properties and relations based on the ontolog- ical nature of their truthmakers. Truthmaking patterns will be presented as generalization of reification patterns, accounting for the fact that, in some cases, we do not reify a property or a relationship directly, but we rather reify its truthmakers
Herd behavior and contagion in financial markets
Imitative behavior and contagion are well-documented regularities
of financial markets. We study whether they can occur in a two-asset
economy where rational agents trade sequentially. When traders have
gains from trade, informational cascades arise and prices fail to aggregate
information dispersed among traders. During a cascade all
informed traders with the same preferences choose the same action,
i.e., they herd. Moreover, herd behavior can generate financial contagion.
Informational cascades and herds can spill over from one asset to
the other, pushing the price of the other asset far from its fundamental
value
Herding and price convergence in a laboratory financial market
We study whether herding can arise in a laboratory financial market
in which agents trade sequentially. Agents trade an asset whose
value is unknown and whose price is efficiently set by a market maker.
We show that the presence of a price mechanism destroys the possibility
of herding. Most agents follow their private information and
prices converge to the fundamental value. This result contrasts with
the case of a fixed price, where herding and cascades arise. When the
price moves, however, agents may behave as contrarian, i.e., they may
trade against the market, something not accounted for by the theory.
Finally, we study whether informational cascades arise when trade is
costly (e.g, because of a Tobin tax). With trade costs, most subjects
rationally decided not to trade and the price was unable to aggregate
private information efficiently
Herd behavior and contagion in financial markets
We study a sequential trading financial market where there are gains from trade, that is, where informed traders have heterogeneous private values. We show that an informational cascade (i.e., a complete blockage of information) arises and prices fail to aggregate information dispersed among traders. During an informational cascade, all traders with the same preferences choose the same action, following the market (herding) or going against it (contrarianism). We also study financial contagion by extending our model to a two-asset economy. We show that informational cascades in one market can be generated by informational spillovers from the other. Such spillovers have pathological consequences, generating long-lasting misalignments between prices and fundamentals
Social learning with coarse inference
We study social learning by boundedly rational agents. Agents take a decision in sequence, after observing their predecessors and a private signal. They are unable to understand their predecessors’ decisions in their finest details: they only understand the relation between the
aggregate distribution of actions and the state of nature. We show that, in a continuous action space, compared to the rational case, agents put more weight on early signals. Despite this behavioral bias, beliefs converge to the truth. In a discrete action space, instead, convergence
to the truth does not occur even if agents receive signals of unbounded precisions
Transaction costs and informational cascades in financial markets: theory and experimental evidence
We study the effect of transaction costs (e.g., a trading fee or
a transaction tax, like the Tobin tax) on the aggregation of private
information in financial markets. We analyze a financial market à
la Glosten and Milgrom, in which informed and uninformed traders
trade in sequence with a market maker. Traders have to pay a cost in
order to trade. We show that, eventually, all informed traders decide
not to trade, independently of their private information, i.e., an informational
cascade occurs. We replicated our financial market in the
laboratory. We found that, in the experiment, informational cascades
occur when the theory suggests they should. Nevertheless, the ability
of the price to aggregate private information is not significantly
affected
Herd behavior in financial markets: an experiment with financial market professionals
We study herd behavior in a laboratory financial market with financial market professionals. An important novelty of the experimental design is the use of a strategy-like method. This allows us to detect herd behavior directly by observing subjects' decisions for all realizations of their private signal. In the paper, we compare two treatments: one in which the price adjusts to the order flow in such a way that herding should never occur, and one in which the presence of event uncertainty makes herding possible. In the first treatment, subjects seldom herd, in accordance with both the theory and previous experimental evidence on student subjects. A proportion of subjects, however, engage in contrarianism, something not accounted for by the theory. In the second treatment, the proportion of herding decisions increases, but not as much as the theory would suggest. Moreover, contrarianism disappears altogether. In both treatments, in contrast with what theory predicts, subjects sometimes prefer to abstain from trading, which affects the process of price discovery negatively
Averting economic collapse and the solipsism bias
We study the behavior of experimental subjects who have to make a sequence of risky investment decisions in the presence of network externalities. Subjects follow a simple heuristic-investing after positive experiences and reducing their propensity to invest after a failure. This result contrasts with the theoretical findings of Jeitschko and Taylor [Jeitschko, T.D., Taylor, C., 2001. Local discouragement and global collapse: A theory of coordination avalanches. Amer. Econ. Rev. 91 (1), 208-224] in which even agents who have only good experiences eventually stop investing because they account for the fact that others with worse experiences will quit. This can trigger sudden economic collapse-a coordination avalanche-even in the most efficient Bayesian equilibrium. In the experiment, subjects follow their own experiences and disregard the possible bad experiences of others-thus exhibiting behavior that we term "solipsism bias." Solipsism results in sustained investment activity and thus averts complete collapse. (c) 2005 Elsevier Inc. All rights reserved
Canister for Producing TMA Trails in the Upper Atmosphere
Payload canister for producing trimethyl aluminum trails in upper atmosphere using Nike-Cajun or Nike-Apache rocke
- …