CAUSAL PEER EFFECTS IN FINANCIAL DECISION MAKING

The research paper connects three key elements from the study (conducted using neural database of experimental asset market that have tested the fundamental mechanisms that generate peer effect, the neural database was measured using functional magnetic resonance imaging (fMRI); Cary Frydman, 2015- University of Southern California-Marshall School of Business) relating to: experimental control in the laboratory of random peer assignment,; neural activity in testing new prediction explaining peer effect and neural activity in the conduct of trade. The methodology used in the research of peer effect relies on the theory of predicting error, the signal which measures changes in anticipation of the net present value which generates new information. Cognitive neuroscience shows that the prediction error is measured in a certain part of the brain known as the ventral striatum. Measuring the potential value gives insights to economists on which factors affecting the subjective utility. Testing is constructed with 48 patients who were given $100 of experimental money and they were given the opportunity to invest in two separate assets in over two hundred experiments. The experiment showed that subjects converted their final portfolio from experimental currency to real dollars using the exchange rate of 5: 1. In addition to profits from the experiment, subjects were paid a fixed "show-up" fee of$ 20. There are two difficulties in identifying causal peer effect in economic behavior (Minsk, 1993). Correlated behavior between two representatives may potentially be the engine by common shocks of the peer group or endogenous election in the peer group. In addition to the prediction that deals with causal peer effect, there have been further developed predictions that generate different mechanisms of peer effects using neural database. Focus on neural prediction is the neural activity that generates the moment when peers allocation investment is published, respectively the display of "peer decisions". This display is exclusively linked to the processing of information as opposed to considering solutions. This is significant because neuroscience is characterized by neural activity that generates new information in decision making. Thus, neural prediction is determined by the ventral striatum, which predicts the occurrence of peer decisions. The large part of the literature in social psychology suggests that people have a direct need to follow others, especially manifested in situations where there is no objectively correct action, so the cause of intermediaries used peer action as a social anchor on which it bases its behavior. Certain dialectical relationship between neuroscience and neurofinance determines a deeper understanding of financial decision making which leads to different results and different cognitive operations. Our thoughts, although abstract in form, determine procedures of certain neural circuits within our brain. The goal of neuroscience is uncovering these circuits and the possibility of deconstructing complex thought processes in individual components and determine how they integrate into our thought process. The results lead towards the understanding of decision making which shape our future and fate. The market implications, from the aspect of neurofinances, is vital in uncovering deeper knowledge about the effect of emotions and states such as attitudes towards risk, excessive trust, heuristic bias and gender, which finally results in financial decision making on an individual and institutional basis. The implications of fear and corruption in the financial industry can be explained through neurofinance and even give us more choices in the decision process. Social decisions demand an evaluation of costs and benefits for oneself and others. Connected with emotions and caution, the amygdala is involved in decision making and social interactions. The harm caused by the amygdala deteriorates social interaction, while the social neuropeptide oxytocin affects social decisions by changing the function of the amygdala in one aspect. Empirical research, conducted on a sample of randomly selected subjects who were given identical information, shows that on the basis of the neural database gathered from experimental asset market for testing underlying mechanisms which generate peer effect (Cary Frydman, 2015). Experimental evidence of peer effect in individual behavior of trade and neural data were used for testing of experimental mechanisms generating peer effect. Although the mechanisms which create peer effect in laboratory experiments don\u27t suit the quantitative norm they can ensure settings for probing mechanisms using neural database. The methodology of neurofinance replicates the behavior of trade in laboratory conditions which are robustly found in the field

ECONOMIC GROWTH, TECHNOLOGICAL DEVELOPMENT AND CONTEMPORARY EDUCATION

Gospodarski razvitak nacije čvrsto je povezan s gospodarskim rastom i teoretičari ekonomskog rasta uglavnom se slažu da je tehnološki napredak glavna odrednica dugoročnog gospodarskog rasta. Za tehnološki napredak i inovacije, osobito su značajni procesi i aktivnosti istraživanja i razvitka, odnosno difuzije tehnologija. Strategije i gospodarske politike u razvijenim zemljama daju svoj doprinos afirmaciji znanja i intelektualnog kapitala. Autori raspravljaju o ključnim resursima i izvorima konkurentske prednosti u suvremenim ekonomijama zasnovanima na znanju.Economic development of nation is in firm correlation with economic growth. According to modern comprehensions contemporary theoreticians of economic growth mainly agree that technological progress is the main determinant of long-term economic growth. For technological progress and innovations especially significant are processes and activities of research and development, respectively diffusion of technologies. The most extensive frame within which the eficiency of particular economies can be analyzed is the concept of national innovative system. It implies a certain level of interaction and synchronization among subsystems: universities, scientific and research institutions, economic subjects, public administration. Strategies and economic policies in developed countries contribute to affirmation of knowledge and intellectual capital. It is a question of key resources and sources of competitive advantage in contemporary economies based on knowledge

Crises in Southeast Europe (1990-1999): Have we learned anything?

Although Southeast Europe has been a source and scene of wider European conflicts in the twentieth century, crisis management by the EU, NATO, OSCE, succeeded only temporarily in extinguishing the fire and removing the sources of conflict. Therefore, the international community should apply short-term crisis management and devise long-term proposals for the region. The Stability Pact may indeed achieve a stabilization of the region if regional players are included and their long-term goals are incorporated into the integral strategy for the region. Both regional governmental and non-governmental think tanks could significantly contribute to the creation of progressive solutions within the comprehensive strategy for the region and thus to the success of the Stability Pact as the main vehicle of the strategy

IMPACT OF HUMAN DISASTERS AND COVID-19 PANDEMIC ON MENTAL HEALTH: POTENTIAL OF DIGITAL PSYCHIATRY

Deep emotional traumas in societies overwhelmed by large-scale human disasters, like, global pandemic diseases, natural disasters, man-made tragedies, war conflicts, social crises, etc., can cause massive stress related disorders. Motivated by the ongoing global coronavirus pandemic, the article provides an overview of scientific evidence regarding adverse impact of diverse human disasters on mental health in afflicted groups and societies. Following this broader context, psychosocial impact of COVID-19 as a specific global human disaster is presented, with an emphasis on disturbing mental health aspects of the ongoing pandemic. Limited resources of mental health services in a number of countries around the world are illustrated, which will be further stretched by the forthcoming increase in demand for mental health services due to the global COVID-19 pandemic. Mental health challenges are particularly important for the Republic of Croatia in the current situation, due to disturbing stress of the 2020 Zagreb earthquake and the high pre-pandemic prevalence of chronic Homeland War-related posttraumatic stress disorders. Comprehensive approach based on digital psychiatry is proposed to address the lack of access to psychiatric services, which includes artificial intelligence, telepsychiatry and an array of new technologies, like internet-based computer-aided mental health tools and services. These tools and means should be utilized as an important part of the whole package of measures to mitigate negative mental health effects of the global coronavirus pandemic. Our scientific and engineering experiences in the design and development of digital tools and means in mitigation of stress-related disorders and assessment of stress resilience are presented. Croatian initiative on enhancement of interdisciplinary research of psychiatrists, psychologists and computer scientists on the national and EU level is important in addressing pressing mental health concerns related to the ongoing pandemic and similar human disasters

Initial Consideration of the Enterpriseness of the Undergraduate Students in Croatia

The article discusses the interplay between the enterpriseness and higher education. Current attitudes toward enterpriseness of the Croatian undergraduate students of mechanical engineering were collected partially with a questionnaire. The attitudes are analysed and their alignment with the general technology trends discussed

INTERDISCIPLINARY APPROACH TO NEURAL NOISE AND PERCEPTION BIAS IN FINANCIAL DECISION MAKING

The general goal of the interdisciplinary work refers to the research of complex experimental interactions and theoretical works on the subject of neural mechanisms in the perception of decision making; economic and perceptual decision making; high and low volatility bias of the investors perception, and the perception bias during the duration of the stimuli, according to the theory of subsequent effect. The work shows the complex interweaving of scientific achievements in the process of decision making. The given scientific and applicative research leads us towards understanding the levels of complexity of financial decision making with the principles of universality; spatial and temporal fluctuations of input in perceptual decision making (perception can be under the influence of attention and can surface subconsciously without conscious consciousness), possible extending of current results and models from two alternative choices and are they different in respect to spatial and temporal fluctuations ( our capability of deciding can result from random fluctuations in the background of electric noise in the brain) effects on the results of decision making. The focus of this research paper is the analysis of testing the perception of investors which shows us the subsequent effect of volatility, which further indicates the twisted perception after prolonged exposure to extreme levels of volatility. This established framework can give us key insight in the domain of deductive reasoning. Bias in deductions is questioned using the VIX index