Asset Return Dynamics and Learning

This paper advocates a theory of expectation formation that incorporates many of the central motivations of behavioral finance theory while retaining much of the discipline of the rational expectations approach. We provide a framework in which agents, in an asset pricing model, underparameterize their forecasting model in a spirit similar to Hong, Stein, and Yu (2005) and Barberis, Shleifer, and Vishny (1998), except that the parameters of the forecasting model, and the choice of predictor, are determined jointly in equilibrium. We show that multiple equilibria can exist even if agents choose only models that maximize (risk-adjusted) expected profits. A real-time learning formulation yields endogenous switching between equilibria. We demonstrate that a real-time learning version of the model, calibrated to U.S. stock data, is capable of reproducing many of the salient empirical regularities in excess return dynamics such as under/overreaction, persistence, and volatility clustering.Asset pricing, misspecification, behavioral finance, predictability, adaptive learning

Learning about Risk and Return: A Simple Model of Bubbles and Crashes

This paper demonstrates that an asset pricing model with least-squares learning can lead to bubbles and crashes as endogenous responses to the fundamentals driving asset prices. When agents are risk-averse they need to make forecasts of the conditional variance of a stock¡¯s return. Recursive updating of both the conditional variance and the expected return implies several mechanisms through which learning impacts stock prices. Extended periods of excess volatility, bubbles and crashes arise with a frequency that depends on the extent to which past data is discounted. A central role is played by changes over time in agents¡¯ estimates of risk.Risk, Asset Pricing, Bubbles, Adaptive Learning.

The ability of cryotherapy to effect vertical jump and single-legged hop test

Cryotherapy is an important component in the management and rehabilitation of musculoskeletal injuries that occur due to sports participation. Cryotherapy is described as the therapeutic application of any substance to the body which results in the withdrawal of heat from the body (Tsang, 1997). This cold modality is used initially when caring for injuries that are acute or chronic. The main reason for using cryotherapy in acute injury management is to lower the temperature of the injured tissue, which reduces the metabolic rate and helps the tissue to survive the period of hypoxia following an injury (Merrick, 1993). The effects of cryotherapy include pain relief, reduction of muscle spasm, and a decrease in cellular metabolism. This cooling will also decrease nerve conduction velocity, cause joint stiffness, and can also prolong a muscle\u27s action potential (Evans, 1995)

Spectroscopically Peculiar Type Ia Supernovae and Implications for Progenitors

In a recent paper Li et al. (2000) reported that 36 percent of 45 Type Ia supernovae (SNe Ia) discovered since 1997 in two volume-limited supernova searches were spectroscopically peculiar, and they suggested that because this peculiarity rate is higher than that reported for an earlier observational sample by Branch et al. (1993), it is now more likely that SNe Ia are produced by more than one kind of progenitor. In this paper I discuss and clarify the differences between the results of Li et al. and Branch et al. and I suggest that multiple progenitor systems are now less likely than they were before.Comment: 11 pages; accepted by PASP; several minor changes, 2 references added, main conclusions unchange

Adaptive learning, endogenous inattention, and changes in monetary policy

This paper develops an adaptive learning formulation of an extension to the Ball, Mankiw, and Reis (2005) sticky information model that incorporates endogenous inattention. We show that, following an exogenous increase in the policymaker’s preferences for price vs. output stability, the learning process can converge to a new equilibrium in which both output and price volatility are lower.Monetary policy ; Information theory

Elementary School Students\u27 Quantitative Reasoning: Processing Whole Numbers and Proportions

Elementary school-aged children have great difficulty reasoning proportionally and struggle with fractions and decimals, theoretically because proportions do not abide by the same principles as more familiar whole number quantities. The present study examines individual differences in proportional reasoning and whole number representations and tests a prediction for a nonlinearity in the development of relations between the two. Pre-kindergarten through fifth-grade students completed a battery of computerized tasks, including a proportional reasoning task, “which is more?” and “which is #?” whole number comparison tasks, and symbolic and nonsymbolic numerical line-estimation tasks. The results indicate that though younger children’s performance on each of the whole number comparison and number line estimation tasks were significantly positively correlated, performance on each was negatively correlated with performance on the proportional reasoning task. By contrast, older children’s performance on the proportional, whole number comparison, and number line estimation tasks were all positively correlated. These findings support the proposal that better counting abilities early in development interfere with early proportional reasoning capacities, though the two are positively related later in development

Taking Students to the Museum: Interview with Warren D. Allmon, Judy Diamond, and Martin Weiss

Three museum professionals with extensive expertise in informal science education about evolution— Warren D. Allmon, Judy Diamond, and Martin Weiss—are interviewed about the interaction of teachers and natural history museums and science centers in improving the effectiveness of evolution education

A study of ignition phenomena of bulk metals by radiant heating

Early research on combustion of metals was motivated by the knowledge of the large heat release and corresponding high temperatures associated with metal-oxygen reactions. The advent of space flight brought about an increased interest in the ignition and combustion of metallic particles as additives in solid rocket propellants. More recently, attention has been given to the flammability properties of bulk, structural metals due to the number of accidental explosions of metal components in high-pressure oxygen systems. The following work represents a preliminary study that is part of a broader research effort aimed at providing further insight into the phenomena of bulk metal combustion by looking at the effects of gravity on the ignition behavior of metals. The scope of this preliminary experimental study includes the use of a non-coherent, continuous radiation ignition source, the measurement of temperature profiles of a variety of metals and a qualitative observation of the ignition phenomena at normal gravity. The specific objectives of the investigation include: (1) a feasibility study of the use of a continuous radiation source for metal ignition; (2) testing and characterization of the ignition behavior of a variety of metals; and (3) building a preliminary experimental database on ignition of metals under normal gravity conditions

Learning about Risk and Return: A Simple Model of Bubbles and Crashes

This paper demonstrates that an asset pricing model with least-squares learning can lead to bubbles and crashes as endogenous responses to the fundamentals driving asset prices. When agents are risk-averse they need to make forecasts of the conditional variance of a stock’s return. Recursive updating of both the conditional variance and the expected return implies several mechanisms through which learning impacts stock prices. Extended periods of excess volatility, bubbles and crashes arise with a frequency that depends on the extent to which past data is discounted. A central role is played by changes over time in agents’ estimates of risk

Statistical Connections Between the Properties of Type Ia Supernovae and the B--V Colors of Their Parent Galaxies, and the Value of H0_0

Statistical connections between the properties of Type Ia supernovae (SNe Ia) and the B--V colors of their parent galaxies are established. Compared to SNe Ia in blue galaxies [B-V\la0.75], SNe Ia in redder galaxies have (1) a wider dispersion in the blueshifts of their Si II $\lambda$6355 absorption features, ten days after maximum light; (2) more rapidly declining light curves; and (3) lower luminosities. Even when the spectroscopically peculiar, very subluminous SNe Ia such as SN 1991bg are disregarded, SNe Ia in red galaxies are less luminous than those in blue galaxies by about 0.3 magnitudes. When SNe Ia that are thought to have been significantly extinguished by dust in their parent galaxies are disregarded, those in blue galaxies have observational absolute--magnitude dispersions of only $\sigma_{obs}(M_B)$=0.20 and $\sigma_{obs}(M_V)$=0.17, which implies that their intrinsic absolute--magnitude dispersions are very small. We use six SNe Ia whose absolute magnitudes have been calibrated by means of Cepheids, which also indicate that the intrinsic absolute--magnitude dispersions of SNe Ia in blue galaxies are very small, to calibrate SNe Ia in blue galaxies and obtain $\rm H_0=57\pm4\ km\ s^{-1}\ Mpc^{-1}$. This value is in excellent agreement with that obtained by Saha et al. (1995b), in spite of the fact that they do not take into account any dependence of SN Ia absolute magnitude on the nature of the parent galaxy. Some implications of the statistical connections between SNe Ia and the colors of their parent galaxies, for identifying the progenitor binary systems of SNe Ia and for using high--redshift SNe Ia to measure q$_0$, are briefly discussed.Comment: LaTeX file, AASTeX4 style, 2 Tables and 4 Figures included separately. Postscript file available from http://www.nhn.uoknor.edu/~baron