The power of priors: How confirmation bias impacts market prices

One form of confirmation bias is the tendency for people to ignore information that is inconsistent with their current beliefs. While confirmation bias is the subject of both analytical models and experiments in accounting and finance, its effect on market prices has not been studied due to limitations associated with traditional financial markets. In eleven real-money movie box office prediction markets, confirmation bias was induced in all traders via the explanation effect, i.e. a requirement to submit a box office forecast and an explanation prior to trading. When all traders are subject to confirmation bias, market prices do not accurately reflect new, value-relevant information. However, in comparable a set of seven real-money movie prediction markets that included both traders who have not been subject to explanation requirement and those who have, we find efficient incorporation of new information into market prices. This study extends our knowledge of the conditions under which individual trader biases affect market prices and provides potential insights into open questions about forecasting errors among financial analysts.

Crenças sobre a avaliação e retenção escolar nos professores portugueses

The present research aims to understand which conceptions and beliefs Portuguese teachers have about assessment in compulsory school, and whether if their beliefs are in line with the guidelines on national education policy. Moreover, it aims to understand why Portuguese teachers use grade repetition as a common resource when it is not scientifically recommended. To do so, a focus group was conducted, and a survey carried out with a sample of Portuguese teachers’ population, with a 95% confidence level and a margin of error of 2.3%. Those procedures led to the conclusion that Portuguese teachers have personal beliefs towards assessment and grade repetition that have an impact on their practice and succeed in superimposing themselves on national educational policies and scientific recommendations.info:eu-repo/semantics/publishedVersio

Private Information, Overconfidence and Trader Returns in Prediction Markets

In lab experiments on the value of information in financial markets, groups of “insiders” are randomly chosen to receive perfect information. However, in typical (non-experimental) financial markets, investors often engage in extensive fundamental analysis, a process which may result in over-confidence in one’s private information. In this study, we examine trading volume, prices and trader returns in a set of four real money prediction markets where the values of securities are tied to a movie’s box office performance. Before the markets opened, every trader submitted a detailed forecast of the movie’s future performance. Therefore, all traders have self-generated private information, the accuracy of which can only be known ex-post.            As expected, the volume and timing of trading were consistent with over-confidence. In three of the four markets, contract prices were consistent with the prior information equilibrium. In those three markets, traders whose forecast was associated with the winning contract had significantly higher returns than traders whose forecasts suggested that another contract would pay off. In the other market, there were no significant differences in returns across trader groups. This research suggests that when traders are overconfident and trade accordingly, there can value to being better informed if the information is accurate.

Induced liver injury after high-dose methylprednisolone in a patient with multiple sclerosis

A 33-year-old woman with multiple sclerosis, medicated with high doses of methylprednisolone, cyclophosphamide and glatiramer acetate, was referred to our department due to acute liver injury. The laboratory investigation was normal except for weakly positive antinuclear antibodies. Cyclophosphamide and glatiramer acetate were suspended, and intravenous immunoglobulin with maintenance of high doses of methylprednisolone was initiated. The patient developed another episode of acute hepatitis so the immunoglobulin was stopped. After that, she had three more episodes of elevation of liver enzymes with no hepatic insufficiency while medicated only with high doses of methylprednisolone. At this time, liver biopsy showed focal centrilobubar hepatocyte necrosis with minimal interface hepatitis. After the high doses of methylprednisolone were suspended, the patient remained asymptomatic, with normal hepatic enzymes. This case emphasises that, although rare, induced liver injury after high doses of methylprednisolone can occur.info:eu-repo/semantics/publishedVersio

INCENTIVE AND ACCURACY ISSUES IN MOVIE PREDICTION MARKETS

We compare the forecasts of nineteen movie box office results from real money (Iowa Electronic Market) and play money (Hollywood Stock Exchange) prediction markets. The forecasts were not significantly different, contrary to recent research on incentives and prediction market accuracy. Proponents of play money incentives suggest that (play) wealth concentrates in the hands of knowledgeable traders over time. This should lead to improved accuracy over time. A longitudinal analysis of results (1999-2002) from the play money Hollywood Stock Exchange fails to find significant improvement over time. This may be due to an increased number of less knowledgeable traders who, nevertheless, provide liquidity in the market

Can Investing Diaries be Hazardous to Your Financial Health?

Business writers and academics have suggested keeping an investing diary to avoid hindsight bias. In the diary, investors justify their predictions of future events, e.g., “This stock will go up because…” Eliminating hindsight bias should improve future returns. However, psychological research on the “explanation effect” suggests that justifying one’s predictions in writing induces overconfidence and, by consequence, reduces current returns. We test these propositions in a set of prediction markets populated by two types of traders: forecasters who completed a required investing diary task and non-forecasters who did not. The portfolios of forecasters were significantly over-invested in securities associated with the forecaster’s prediction. This is consistent with prior psychological research and a clear sign of investor over-confidence. We further find that forecasters with accurate predictions have higher returns than those with inaccurate predictions. However, the returns for forecasters with inaccurate predictions were generally no worse than the returns of the non-forecasters. Our results suggest that while keeping an investing diary may lead to biased portfolios, it does not have an overall negative effect on current returns. Therefore, contrary to expectations, there is not a trade-off between the long-term and short-term effects of an investing diary

Monitoring Pharmacy Student Adherence to World Health Organization Hand Hygiene Indications Using Radio Frequency Identification

Objective. To assess and improve student adherence to hand hygiene indications using radio frequency identification (RFID) enabled hand hygiene stations and performance report cards. Design. Students volunteered to wear RFID-enabled hospital employee nametags to monitor their adherence to hand-hygiene indications. After training in World Health Organization (WHO) hand hygiene methods and indications, student were instructed to treat the classroom as a patient care area. Report cards illustrating individual performance were distributed via e-mail to students at the middle and end of each 5-day observation period. Students were eligible for individual and team prizes consisting of Starbucks gift cards in $5 increments. Assessment. A hand hygiene station with an RFID reader and dispensing sensor recorded the nametag nearest to the station at the time of use. Mean frequency of use per student was 5.41 (range: 2-10). Distance between the student’s seat and the dispenser was the only variable significantly associated with adherence. Student satisfaction with the system was assessed by a self-administered survey at the end of the study. Most students reported that the system increased their motivation to perform hand hygiene as indicated. Conclusion. The RFID-enabled hand hygiene system and benchmarking reports with performance incentives was feasible, reliable, and affordable. Future studies should record video to monitor adherence to the WHO 8-step technique

Exposure to Parathion Effect on General Population and Asthmatics

There has been much lay and medical concern regarding toxic effects of insecticides on the general population. In addition to direct toxic effects, it is suspected that insecticidal application has deleterious physical effects on persons with respiratory diseases. To evaluate some of these problems, the authors have attempted to quantitate actual absorption, symptoms, and laboratory evidence of intoxication in persons with varying degrees of exposure to parathion. By means of controlled observations, the respiratory effect of application of this compound on persons with bronchial asthma was also measured. The results suggest that the effect of this chemical on the general population is negligible