On The Relationship between Illiquidity, Aggregate Market Return and Conditional Volatility of the NIFTY Index

This study investigated the relationship between daily returns and illiquidity of the NIFTY Index (one of the broad based market indices of the National Stock Exchange of India). In this paper, illiquidity was used as an exogenous variable in the EGARCH (1, 1) framework. The empirical results clearly indicate the presence of a liquidity premium in the National Stock Exchange of India, as evidenced by the positive relationship between illiquidity and returns of the NIFTY Index. They also imply a relationship between liquidity and volatility since illiquidity was used as an exogenous variable in estimating the mean equation and hence it influenced the values of the residuals. The lags of residuals, lags of conditional standard deviation, and lags of conditional variance in turn were inputs in the determination of (the natural logarithm of) conditional variance in the EGARCH framework.JEL classification: G10; G12; C22.Keywords: Illiquidity; Return; Conditional Volatilit

Cognition and framing in sequential bargaining for gains and losses

Noncooperative game-theoretic models of sequential bargaining give an underpinning to cooperative solution concepts derived from axioms, and have proved useful in applications (see Osborne and Rubinstein 1990). But experimental studies of sequential bargaining with discounting have generally found systematic deviations between the offers people make and perfect equilibrium offers derived from backward induction (e.g., Ochs and Roth 1989). We have extended this experimental literature in two ways. First, we used a novel software system to record the information subjects looked at while they bargained. Measuring patterns of information search helped us draw inferences about how people think, testing as directly as possible whether people use backward induction to compute offers. Second, we compared bargaining over gains that shrink over time (because of discounting) to equivalent bargaining over losses that expand over time. In the games we studied, two players bargain by making a finite number of alternating offers. A unique subgame-perfect equilibrium can be computed by backward induction. The induction begins in the last period and works forward. Our experiments use a three-round game with a pie of $5.00 and a 50-percent discount factor (so the pie shrinks to$2.50 and $1.25 in the second and third rounds). In the perfect equilibrium the first player offers the second player$1.25 and keeps $3.75

Implications of Local Conflicts on Bilateral Relations: Cases of the Land Boundary and Enclave Conflicts on India-Bangladesh Relationship

The thesis argues that for long, inquiries on borders and borderland issues/conflicts have prioritised statist perspectives, whereby their representation comes to be articulated through the lens of its interests. In such discernments, inquiries into the ‘local’ interests, local productions of the space, and progressions of adaptation and resilience have been relegated to the footnotes of analysis. The problematique of the local’s non-appearance emerges within the processes of identifying, categorising and mediating in conflicts; which at the borders have predominantly remained contained by the rubrics of state power and national interests. The thesis engages with the resultant gaps which emerge between the indicated and observable outcomes of these processes in local sites of conflict, by problematising their corroborating pragmatisms and theoretical rationalisations. Moreover, by deconstructing the essentialisms of state credo which accentuate the practicalisation of its power, the research identifies the position of the local, as an integral component of a conflict setting, despite its nonappearance in analyses and dominant, discursive productions. Taking the Land Boundary Agreement (2015) as the case of review, the research explores the implications that this national-interest based bilateral action had at the local levels of its implementation. It departs from a conventional impact analysis of resolution processes, by shifting the focus of its inquiry to understanding the local and its multiple variations, evinced through negotiations between constituent actors and the state in navigating systemic and structural shifts brought about by the latter’s intercessions. Thereby repositioning the assessment of effectiveness of resolution policies upon the observable impacts these mediations render at the local levels, rather than in terms of their actualisation of abstract, national interests. By integrating the perspective of the ‘local’ in assessing the localised impacts of bilateral conflict resolution, the research brings forth certain reconfigurations in the conceptualisation of bilateralism and within larger theoretical models of comprehending state power and national interests. The focused inquiry into the local brings forth critical details which allows for the extension of understanding state power and its interactions with local socio-spatial configurations beyond their ideologised and normative renderings in predominant exemplifications. The research therefore reconfigures the position of the local in International Relations as a static spatial disaggregation. In accounting for the adaptations evinced at different points in its direct interactions with the state and its power, or indirectly with the categorisations of identity and spatiality it imposes, the thesis situates the local as a polyvalent and dynamic socio-spatial configuration. The concomitant theoretical reconfigurations it posits, attempts to secure the local as a relevant point of inquiry and analysis in studying state power and the impacts of its interactions with other comparable units in the regional and world systems. This recognition necessitates changes in the perceptions of objectivity and normativity underlying statist categorisations of conflict and enumerations of identity and spatiality in such settings. Such a step works against binarised depictions of the local and its associated processes as existing in opposition or in diffidence to the state and the prescriptions of its power. The spatial variegations underlying the impacts of the national on specific locales or of processes of bilateral mediation on local conflicts establishes a representative relationality between the state and the local; whereby their dynamics are not textured by prevalent paradigmatic essentialisms, but upon representative assessments of local realities. The study’s engagement with the local, highlights key discernments into borderland realities, as well as that of conflict settings to understanding the different ways in which the state’s power competes with, and accommodates, more localised processes operational at these territorially disaggregated and ‘notionally peripheral’ sites. These processes comprise both cooperative and conflictual frameworks of engagement between state and non-state actors, representing a more realistic struggle between change and constancy, which constitutes an integral component of any conflict setting. By incorporating these alternative perspectives within larger theoretical paradigms of state power, the thesis interpolates the ‘local’ as a key referent in comprehending the ‘national’ and thereby shifting the foundations of the latter’s invariable categorisation in International Relations discourse to incorporate considerations of inclusivity and reflexivity

Detecting Failures of Backward Induction: Monitoring Information Search in Sequential Bargaining

We did experiments in a three-round bargaining game where the (perfect) equilibrium offer was $1.25 and an equal split was$2.50. The average offer was $2.11. Patterns of information search (measured with a computerized information display) show limited lookahead rather than backward induction. Equilibrium theories which adjust for social utilities (reflecting inequality-aversion or reciprocity) cannot explain the results because they predict subjects will make equilibrium offers to “robot” players, but offers to robots are only a little lower. When trained subjects (who quickly learned to do backward induction) bargained with untrained subjects, offers ended up halfway between equilibrium and$2.11

Detecting Failures of Backward Induction: Monitoring Information Search in Sequential Bargaining

We ran three-round sequential bargaining experiments in which the perfect equilibrium offer was $1.25 and an equal split was$2.50. Subjects offered $2.11 to other subjects,$1.84 to “robot” players (who are known to play subgame perfectly), and $1.22 to robots after instruction in backward induction. Measures of information search showed that subjects did not look at the amounts being divided in different rounds in the correct order, and for the length of time, necessary for backward induction, unless they were specifically instructed. The results suggest that most of the departure from perfect equilibrium is due to limited computation and some is due to fairness