Stabilization arising from PGEM : a review and further developments

The aim of this paper is twofold. First, we review the recent Petrov-Galerkin enriched method (PGEM) to stabilize numerical solutions of BVP's in primal and mixed forms. Then, we extend such enrichment technique to a mixed singularly perturbed problem, namely, the generalized Stokes problem, and focus on a stabilized finite element method arising in a natural way after performing static condensation. The resulting stabilized method is shown to lead to optimal convergences, and afterward, it is numerically validated

Implementing efficient allocations in a model of financial intermediation

In a finite-trader version of the Diamond and Dybvig (J. Polit. Econ. 91 (1983) 401) model, the ex ante efficient allocation is implementable by a direct mechanism (i.e., each trader announces the type of his own ex post preference) in which truthful revelation is the strictly dominant strategy for each trader. When the model is modified by formalizing the sequential-service constraint (cf. Wallace (Fed. Reserve Bank Minneapolis Quart. Rev. 12 (1988) 3)), the truth-telling equilibrium implements the symmetric, ex ante efficient allocation with respect to iterated elimination of strictly dominated strategies

Comprehensive Studies on Using the Richardson extrapolation techniques for Pricing American options under Alternative Stochastic Processes

[[abstract]]Following from the innovation of Geske and Johnson (1984), the Richardson extrapolation technique is frequently used to price American options. Therefore it is very nature for one to ask the following questions: Is it always appropriate to use the Richardson extrapolation technique to value American options? In this study, we try to answer the above critical issue by investigating the valuation of American options using the Richardson extrapolation technique under alternative stochastic processes. Additionally, following from Chang, Chung and Stapleton (2007), we apply the Repeated-Richardson extrapolation method to estimate the interval of true American option values and to determine the number of options needed for an approximation to achieve a given desired accuracy. We then test the feasibility of the estimated error bounds of the American options under alternative stochastic processes as well. Our numerical results show that on average the Repeated-Richardson extrapolation technique outperforms the Richardson extrapolation technique for the valuation of American options under alternative stochastic processes

Dividend policy and catering theory: Evidence from the Taiwan Stock Exchange

[[abstract]]This paper examines the dividend policy for firms listed on the Taiwan Stock Exchange. The sample involves 8935 sample observations during the period 1992-2011. Dividend policies for different types of dividend payers (stock dividends, cash dividends, mixed dividends involving both cash dividends and stock dividends, and no dividends) are investigated. The results are consistent with the prediction of the catering theory in that managers choose a dividend policy to cater to the demand of investors. Dividend payers experience higher market-to-book ratios than those for non-payers. Moreover, among dividend payers, firms distribute more stock dividends than other types of dividends when the dividend premium for stock dividends is positive. In contrast, firms shift from stock dividends to other types of dividends such as mixed dividends and cash dividends when the dividend premium for stock dividends is negative