Price Bubbles sans Dividend Anchors: Evidence from Laboratory Stock Markets

We experimentally explore how investor decision horizons influence the formation of stock prices. We find that in long-horizon sessions, where investors collect dividends till maturity, prices converge to the fundamental levels derived from dividends through backward induction. In short-horizon sessions, where investors exit the market by receiving the price (not dividends), prices levels and paths become indeterminate and lose dividend anchors; investors tend to form their expectations of future prices by forward, not backward, induction. These laboratory results suggest that investors' short horizons and the consequent difficulty of backward induction are important contributors to the emergence of price bubbles.

Risky Curves: From Unobservable Utility to Observable Opportunity Sets

Most theories of risky choice postulate that a decision maker maximizes the expectation of a Bernoulli (or utility or similar) function. We tour 60 years of empirical search and conclude that no such functions have yet been found that are useful for out-of-sample prediction. Nor do we find practical applications of Bernoulli functions in major risk-based industries such as finance, insurance and gambling. We sketch an alternative approach to modeling risky choice that focuses on potentially observable opportunities rather than on unobservable Bernoulli functions.Expected utility, Risk aversion, St. Petersburg Paradox, Decisions under uncertainty, Option theory

Extensive Income and Value of the Firm: Who Gets What?

In the neoclassical model of the firm, value surplus of the firm is assumed to accrue to its owners. Contract model suggests a distribution of the surplus among various agents depending on the imperfections of the markets in which they transact with the firm. If the share of the surplus to an agent declines with the perfection of the market in which he transacts, shareholders should be expected to get only a small piece of the pie, violating the neoclassical assumption. The paper explores an extensive value concept and its measurement for firms. It also examines the implications of extensive value for what we do and do not know about the consequences of corporate mergers and acquisitions

Enforced Standards Versus Evolution by General Acceptance

Conventions as well as standards influence the practice of financial reporting. Financial reporting standards arise as legislated rules, enforced by the power of law. Conventions evolve over time through trial and practice, and are upheld by socioeconomic rewards and sanctions. Financial reporting in the second half of the twentieth century has been characterized by a preference for legislated standards, and a distinct lack of faith in its evolution as a body of social conventions. Evidence on whether this faith in standards over conventions is justified remains to be marshaled. We present data on privacy practices in e-commerce under the European Union's (EU's) formal regulatory regime prevailing in the United Kingdom (U.K.), and compare it to the data from a previous study of United States (U.S.) practices that evolved in the absence of government laws or enforcement.The codification by the EU law, and the enforcement by the U.K. government, improves neither the disclosure nor the practice of e-commerce privacy relative to the U.S.On the contrary, some evidence shows the unregulated practices in U.S. to be superior. Regulation in the U.K. also appears to stifle development of a market for web assurance services. Both U.S. and U.K. consumers continue to be vulnerable to a small number of e-commerce websites who spam their customers, ignoring the latter's expressed or implied preferences. We explore the implications of these results for understanding the merits of enforced standards and conventions in the domain of financial reporting.

Development and evaluation of polymeric implants of curcumin for enhanced chemopreventive activity.

Curcumin, a plant derived compound has shown significant potency against various chronic diseases like cancer in cell culture and animal studies. However, the introduction of this compound into clinical setting is limited by its poor oral bioavailability and thereby requires high doses for efficacy. We hypothesized that localized/systemic delivery of curcumin by polymeric implants can improve its efficacy by bypassing the oral route and by restricting majority of the drug at the tumor site. Therefore, we developed a polymeric implantable drug delivery system using poly (E-caprolactone) as the polymer and optimized it with respect to polymer molecular weight, drug load and formulation additives both under in vitro as well as under in vivo conditions so as to obtain a desired drug release profile. Drug release was found to be proportional to surface area and drug load for up to 10% concentration. The presence of water-soluble polymers like polyethylene glycol (PEG) at 35% w/w composition was also found to increase the drug release with in vivo release being 1.8-2 fold higher than in vitro release. Higher plasma and brain curcumin concentrations with almost similar levels in liver were observed by these implants but at 25-30 fold lower doses than dietary curcumin even after 3 months. Furthermore, these implants were found to provide a controlled/predictable release ranging from months to years. Analysis of biochemical parameters of liver and kidney function revealed non-toxicity of the implant formulation as well as of curcumin administered continuously into systemic circulation by these implants. Although a mild to moderate inflammatory reaction was observed at the local site of implantation, yet no toxic effect on health or physical well being of rats was observed. Moreover, systemically administered high doses of curcumin (by implants) were found to be more efficacious in modulation of cytochrome P450 enzymes like CYP1A1, CYP3A4 and CYP1B1 as well as in inhibiting Ermediated mammary tumorigenesis in ACI rats. These implants were found to reduce the tumor burden significantly by 35% and tumor multiplicity by 70% via favorable alteration of E2 metabolism suggestive of curcumin\u27s potent chemopreventive activity when delivered via implants as compared to diet

Three Minimal Market Institutions with Human and Algorithmic Agents: Theory and Experimental Evidence

We define and examine three minimal market games (sell-all, buy-sell, and double auction) in the laboratory relative to the predictions of theory. These closed exchange economies have some cash to facilitate transactions, and include feedback. The experiment reveals that (1) the competitive general equilibrium (CGE) and non-cooperative (NCE) models are reasonable anchors to locate most but not all the observed outcomes of the three market mechanisms; (2) outcomes tend to get closer to CGE predictions as the number of players increases; (3) prices and allocations in double auctions deviate persistently from CGE predictions; (4) the outcome paths across the three market mechanisms differ significantly and persistently; (5) importance of market structures for outcomes is reinforced by algorithmic trader simulations; and (6) none of the three markets dominates the others across six measures of performance. Inclusion of some mechanism differences into theory may enhance our understanding of important aspects of markets.Strategic market games, Laboratory experiments, Minimally intelligent agents, Adaptive learning agents, General equilibrium

Multimodal Biometric Authentication System: Challenges and Solutions

Biometric technologies are automated methods for measuring and analyzing biological data extracting a feature set from acquired data and comparing this set against to the templates set in the database Unimodal biometric system have variety of problems such as noisy data spool attacks etc Multimodal biometrics refers the combination of two or more biometric modalities in a single identification Most biometric verification systems are done based on knowledge base and token based identification these are prone to fraud Biometric authentication employs unique combinations ofmeasurable physical characteristics- fingerprint facial features iris of the eye voice print and so on- that cannot be readily imitated or forged by others This paper discuss the various scenarios that are possible in multi model biometric system the level of fusion that are plausible and the integration strategic that can be adopted to consolidate information Fusion methods include processing biometric madalitics sequential until an acceptable match is obtaine

Financing of Public Goods through Taxation in a General Equilibrium Economy: Theory and Experimental Evidence

We compare general equilibrium economies in which building and maintenance of a depreciating public facility is financed either by anonymous voluntary contributions or by taxing agents on their income from private production. Agents start with an endowment of private goods and money, while the government starts with an endowment of public good and money. All private goods produced are tendered for sale in exchange for money in a sell-all market mechanism. Agents' proceeds from sale are taxed, and they individually allocate their private goods between current consumption and investment in production for the following period. The optimal levels of supply of the public good, and tax rate to sustain it over time, are defined and calculated for infinite and finite horizons. These equilibrium theoretical predications are compared to the outcomes of laboratory economies when (1) the starting public facility is either at or below the optimal level; and (2) the tax rate is either exogenously set at the optimal level, or at the median of rates proposed by individual agents. We find that the experimental economies sustain public goods at about 70-90 percent of the infinite horizon but considerably more than the finite horizon optimum. Payoffs (efficiency) is at 90 percent of the infinite horizon equilibrium level even when the rate of taxation is determined by voting. Starting conditions play only a minor role for outcomes of the economies, as efficiency and the stock of public good adjusts to about the same level irrespective of the starting level. These results contrast with rapid decline in provision of public goods under anonymous voluntary contributions, and point to the possibility that the social institution of government enforced taxation may have evolved to address the problem of under-production of public goods through anonymous voluntary contributions.Public goods, Experimental gaming, Voting, taxation, Evolution of institutions