Heterogeneity and option pricing

An economy with agents having constant yet heterogeneous degrees of relative risk aversion prices assets as though there were a single decreasing relative risk aversion pricing representative agent. The pricing kernel has fat tails and option prices do not conform to the Black-Scholes formula. Implied volatility exhibits a smile. Heterogeneous beliefs about distribution parameters also implies non-lognormal pricing kernels with fatter tails and over-pricing of out-of-the-money options. Heterogeneity as the source of non-stationary pricing fits Rubinstein’s (1994) interpretation of the over-pricing as an indication of crash-o-phobia. Rubinstein’s term suggests that those who hold out-of-the-money put options have relatively high risk aversion or relatively high subjective probability assessments of low market outcomes. The essence of this explanation is heterogeneity in investor attitudes towards risks and probability beliefs.

Pediatric Gastrointestinal Endoscopy: European Society of Pediatric Gastroenterology Hepatology and Nutrition (ESPGHAN) and European Society of Gastrointestinal Endoscopy (ESGE) Guidelines

ABSTRACT: This Guideline refers to infants, children and adolescents aged 0–18 years. The areas covered include: indications for diagnostic and therapeutic esophagogastroduodenoscopy and ileo-colonoscopy; endoscopy for foreign body ingestion; corrosive ingestion and stricture/stenosis endoscopic management; upper and lower gastrointestinal bleeding; endoscopic retrograde cholangio-pancreatography and endoscopic ultrasonography. Percutaneous endoscopic gastrostomy and endoscopy specific to inflammatory bowel disease (IBD) has been dealt with in other Guidelines [1–3] and are therefore not mentioned in this Guideline. Training and ongoing skill maintenance are to be dealt with in an imminent sister publication to this