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In 802/1400-803/1401 Tamerlane occupied Damascus. European merchants abandoned Syria and the news of this event was soon circulating around the main European trading centres, spreading panic by disrupting the functioning of markets and upsetting the prices of spices. By what means was this news spread and what were its consequences for Mediterranean trade as a whole? [fr] En 802/1400-803/1401, Tamerlan occupa Damas. Les marchands européens partirent de la Syrie et la nouvelle de cet événement ne tarda pas à circuler dans les principaux centres commerciaux européens semant la panique en perturbant le fonctionnement des marchés et bouleversant les prix des épices. Par quels moyens cette nouvelle fut-elle diffusée et quelles furent ses séquelles sur l’ensemble du commerce méditerranéen?

We study the information sensitivity of government debt denominated in domestic versus foreign currency: the former is subject to inflation risk and the latter to default. Default only affects sophisticated bond traders, whereas inflation concerns a larger and less informed group. Within a two- period Bayesian trading game, differential information manifests itself in the secondary market, and we display conditions under which debt prices are more resilient to bad news even in the primary market, where only sophisticated players operate. Our results can explain debt prices across countries following the 2008 financial crisis, and also provide a theory of “original sin.” Financial support from the ADEMU (H2020, No. 649396) project and from the ESRC Centre for Macroeconomics is gratefully acknowledged.

Research interest in the reaction of consumption to expected inflation has increased sharply in recent years due to efforts by central banks to kick-start demand through higher inflation expectations. We contribute to this literature by analyzing whether various components of households’ balance sheets determine how consumption reacts to expected inflation. Many channels are conceivable:an increase in inflation expectations can raise consumption through direct increases in expected real wealth, e.g. for households with nominal financial liabilities. By affecting the real interest rate, expected inflation can interact with wealth if only those households can adapt their consumption to current real interest rates that are not budget constrained or sufficiently liquid to shift funds between consumption and savings. We use household-level information on balance sheets, vehicle expenditures and inflation expectations from the Dutch Central Bank’s Household Survey. We find evidence for a relation between a household’s expected inflation and the probability to have positive expenditureson durables. This effect is stronger for households with low net worth. We find no evidence of such effects on the amount of durable expenditures.

The transition from general schooling to vocational training or to the labour market marks a crucial threshold in the life course of young adults. It has been well documented that successful school-to-work transitions are influenced by (regional) labour-market conditions. However, what has been rather neglected is that before actual transitions take place, adolescents need to make plans and evaluate their wishes and choices against the background of existing constraints. (Regional) labour-market conditions are a part of such constraints. This paper complements previous research by focusing on the impact of the regional labour market on students’ educational and occupational aspirations before school-to-work transitions take place. Regionalised administrative data on unemployment is linked with survey data from the Starting Cohort 4 of the German National Educational Panel Study (NEPS-SC4). Results indicate that a relatively higher level of regional unemployment is associated with aspirations for higher-status occupations. Their status aspiration push students towards continuing general school to obtain higher general qualifications. The effects vary with the attended secondary school track and with parents’ educational aspirations for their children.

The transition from general schooling to vocational training or to the labour market marks a crucial threshold in the life course of young adults. It has been well documented that successful school-to-work transitions are influenced by (regional) labour-market conditions. However, what has been rather neglected is that before actual transitions take place, adolescents need to make plans and evaluate their wishes and choices against the background of existing constraints. (Regional) labour-market conditions are a part of such constraints. This paper complements previous research by focusing on the impact of the regional labour market on students’ educational and occupational aspirations before school-to-work transitions take place. Regionalised administrative data on unemployment is linked with survey data from the Starting Cohort 4 of the German National Educational Panel Study (NEPS-SC4). Results indicate that a relatively higher level of regional unemployment is associated with aspirations for higher-status occupations. Their status aspiration push students towards continuing general school to obtain higher general qualifications. The effects vary with the attended secondary school track and with parents’ educational aspirations for their children.

A key policy argument in favor of emissions markets (relative to command-and-control types of regulation) is their ability to aggregate dispersed information and generate price signals to guide firms' trading and abatement decisions. We investigate this argument in a multi-period model where firms receive noisy private signals about their current period emissions and privately observe their previous period emissions before this information is made public to the rest of the market. Firms respond to information by trading and abating emissions. We show that there exists a rational expectations equilibrium that fully aggregates firms' private information, justifying the policy argument in favor of emissions markets, in the absence of other frictions. We also derive predictions about how prices should be reacting to new private or public information and show that the possibility of abatement dampens the impact of shocks on prices. Finally, we show that the information aggregation result breaks down if firms' abatement costs are also private information., info:eu-repo/semantics/published

Traditional groups meetings are an inefficient and ineffective method for making forecasts and decisions. We compare two structured alternatives to traditional meetings: the Delphi technique and prediction markets. Delphi is relatively simple and cheap to implement and has been adopted for diverse applications in business and government since its origins in the 1950s. It can be used for nearly any forecasting, estimation, or decision making problem not barred by complexity or ignorance. While prediction markets were used more than a century ago, their popularity waned until more recent times. As a consequence there is less evidence on their validity. Prediction markets need many participants. They need clear outcomes in order to determine participants’ pay-offs. Even so, relating their knowledge to market prices is not intuitive to everyone and constructing contracts that will provide a useful forecast may not be possible for some problems. It is difficult to maintain confidentiality with markets and they are vulnerable to manipulation. Delphi is designed to reveal panelists’ knowledge and opinions via their forecasts and the reasoning they provide. This format allows testing of knowledge and learning by panelists as they refine their forecasts. Such a process does not happen explicitly in prediction markets and may not happen at all. The reasoning provided as an output of the Delphi process is likely to be reassuring to forecast users who are uncomfortable with the “black box” nature of prediction markets. We consider that, half a century after its original development, Delphi is greatly under-utilized.

We propose a micro-founded equilibrium model to examine the interactions between the physical and the derivative markets of a commodity. This model provides a unifying framework for the hedging pressure and storage theories. The model shows a variety of behaviors at equilibrium that can be used to analyze price relations for any commodity. Further, through a comparative statics analysis, we precisely identify the losers and winners in the financialization of the commodity markets. Therefore, this paper clarifies the political economy of regulatory issues, like speculators’ influence on prices.

Why do employees help more or less their colleagues? Why do they feel misunderstood and not supported by their superiors or peers? Why is employees’ professional development not necessarily improved after multisource feedback? Could all of these organizational outcomes be influenced by people’s metaperception, a phenomenon largely ignored in the field of organizational behavior? The literature about Organizational Citizenship Behavior (OCB), Workplace Relationship (WR), Perceived Organizational Support (POS) and Multisource Feedback (MSF) seems to carry a black box. It may concern the motivational aspects of OCB, the conceptualization of POS or even the mechanisms behind MSF’s shortfalls. This paper highlights several gaps in the field of Organizational Behavior and then, addresses this gap through the lens of metaperception. This paper aims to provide convincing evidence that metaperception is the missing link to improve our understanding of OCB, WR, POS and MSF. We conclude on clear directions for future research investigating how metaperception could intervene in these three outcomes., info:eu-repo/semantics/published

People may or not know the impression they convey to others (meta-accuracy). However, little research has addressed to what extent meta-accuracy affects social outcomes such as hireability (recruiter’s intention to hire). Three studies were conducted to test whether people who knew the impression they conveyed are the ones who are more likely to get hired. Results of polynomial regression and responses surface analyses showed that meta-accuracy was related to hireability, whether meta-accuracy concerns skills during an interview (Study 1, N = 49, and Study 2, N = 127) or traits and skills on a résumé (Study 3, N = 135). The pattern of results takes three forms. First, the lack of meta-accuracy, as the simple gap between metaperception and other’s perception, reduces hireability. Second, hireability is higher when meta- and other’s perception are favorable rather than unfavorable, while staying in agreement. Third, hireability is higher for applicants underestimating the extent to which a recruiter would perceive favorably their traits and/or skills than for overestimators. These results suggest that the best chance to get hired does not rely only on good impressions but also on knowing, or at least on underestimating, the impressions made upon others., info:eu-repo/semantics/published

The efficiency of financial markets and their potential to produce bubbles are central topics in academic and professional debates. Yet, surprisingly little is known about the contribution of financial professionals to price efficiency. To close this gap, we run 86 experimental markets with 294 professionals and 384 students. We report that professional markets with bubble-drivers - capital inflows or high initial capital supply - are susceptible to bubbles, but they are significantly more efficient than student markets. In a survey with 245 professionals and students we show that cognitive skills and risk attitudes do not explain subject pool differences in bubble formation.

At the 2015 UN Conference on Climate Change in Paris France, 195 nations reached a decision to commit to decrease the severe effects of climate change on the planet. As we embark what some call the Anthropocene Era, we bare witness to how civilization has impacted the Earth’s ecosystem, diminishing its resources and threatening its biodiversity. With this shift in our ecosystem, a new pedagogical model for a graduate architecture studio responded to the Anthropocene through a technologically sublime intervention: The Living Archive, a new architectural type capturing the magnitude of Earth’s inevitable transformation. This archive is conceived as the anti-thesis to sustainability and optimization that consumes much of our built world. The ‘living archive’ program is not meant to be a stable, secure vessel but uses technological invention to bracket what is being invaded by human existence. Through the invention of an ‘archiving machine’, the studio used technological speculation to question what nature can or will become. The aim was to use ‘living archive’ as a physical commentary or critique on our current relationship to the environment. The paper describes three projects that speculate on the inevitable future of various biomes. Through environmental analysis, technological research, and formal aspirations, each project embodies a potential reality and potential future of the Anthropocene., UPLanD - Journal of Urban Planning, Landscape & environmental Design, GREEN 2.0

Information frictions play a central role in the formation of household inflation expectations, but there is no consensus about their origins. We address this question with novel evidence from survey experiments. We document two main findings. First, individuals in low inflation contexts have significantly weaker priors about the inflation rate. This finding suggests that rational inattention may be an important source of information frictions. Second, cognitive limitations also appear to be a source of information frictions: Even when information about inflation statistics is available, individuals still place a significant weight on inaccurate sources of information, such as their memories of the price changes of the supermarket products they purchase. We discuss the implications of these findings for macroeconomic models and policymaking., Facultad de Ciencias Económicas, Centro de Estudios Distributivos, Laborales y Sociales

L’objet de cet article est d’identifier le rôle des fondamentaux, des phénomènes de type « tachesolaire » et de la contagion pure au sens de Masson (1999) à travers une étude empirique de ladynamique des anticipations des investisseurs. À cet effet, nous estimons un modèle àchangement de régimes de Markov dans la lignée des travaux effectués par Jeanne et Masson(2000), dans lequel nous endogénéisons les probabilités de transition entre les états del’économie de manière à pouvoir à la fois identifier et expliquer un effet de contagion. L’un desprincipaux apports de notre modélisation appliquée au cas de la crise de change coréenne de1997-1998, est qu’elle révèle une imbrication du rôle des fondamentaux du pays et d’unecontagion issue d’une rupture auto-réalisatrice dans les « croyances du marché »., This paper aims at identifying the role of fundamentals, sunspots and pure contagion Masson(1999) in the recent currency crises. In order to analyze the dynamics of devaluation expectations,we estimate a Markov-switching model in line with Jeanne and Masson (2000), in which we useendogenous probabilities of transition between the states from the economy so as to be able toidentify and explain a possible effect of contagion. One of the main contributions of our approachapplied to the Korean’s crisis case is that it shows a deep combination of the role of the country’sfundamentals and a self-fulfilling contagion resulting from a sudden change in the "beliefs of themarket"., info:eu-repo/semantics/published

Recent theories of expectation-based reference-dependent preferences offer a structured approach of the formation of reference points, yet do not incorporate important context-specific characteristics. One implicit assumption is that individuals form their reference point as expectations by correctly predicting the probabilistic environment they are facing. In an experimental setup, we demonstrate that a simple change in the framing of a decision problem alters the reference point formation by evoking a different moment of first focus. Apart from providing evidence on the limitations of current theories of expectation-based reference dependence, this paper further offers a theoretical extension that overcomes these limitations and allows reference points to be contingent on contextual effects., info:eu-repo/semantics/published

Using two surveys, we study how respondents process visual cues to identify the political orientation (left- vs. right-wing) of members of the French National Assembly (referred to as “deputies”), based on official photographs only, to test the type of heuristic that they use. We first confirm that respondents outperform random guesses. Second, we find that their categorizations correlate with observable characteristics (gender, tie color, jewelry) and subjective assessments of deputies’ personality traits (attractiveness, competence, trustworthiness). Third, the objective visual cues that respondents use are consistent with the actual characteristics of left- and right-wing deputies, and respondents mistakenly react to subjective personality traits that differ little across the two groups of deputies. Fourth, left- and right-wing respondents use the same cues in the same way, attractiveness being the only exception. Fifth, the magnitude of the marginal impact of a characteristic on the probability of a respondent categorizing a photograph as left- or right-wing increases strictly with the representativeness of that characteristic. Finally, we find evidence that some characteristics correlate with categorization errors. Findings 1, 2, 4, and the finding that respondents use cues in the correct way are consistent with both Bayesian behavior and the representativeness heuristic. Findings 5, 6, and the finding that respondents react to subjective cues that do not differ across groups are at odds with Bayesian inference but consistent with the representativeness heuristic suggested by Kahneman and Tversky (1972) and recently modelled by Gennaioli and Shleifer (2010), and Bordalo et al. (forthcoming)., info:eu-repo/semantics/published

Financial disclosure documents provide investors with product details to facilitate informed investment decisions. We investigate whether the appearance – the visual frame – of disclosure documents impacts risk and return expectations and investment behavior. In our experiment, subjects decide about investments into real-life mutual funds. We nd that subjects expect a smaller return variance, invest more and gather less correct information if visual distractors are present in the visual frame. Results are in line with the distracted attention mechanism and suggest that disclosure policies should take the visual frame into account.

Hedge fondovi uvijek pobuđuju različita pitanja koja nalaze svoje porijeklo upravo u činjenici da manja imovina fondova naspram imovine banaka ne znači nužno i manje utjecaja na tržište. Naime spretno i eksplicirao korištenje izvanbilančnih instrumenata od strane fondova, daje im veći utjecaj na tržište nego to veličina njihove imovine može sugerirati. Što je možda još važnije, promjena pozicija na tržištu uzrokuje promjene cijena što je sasvim karakteristično upravo za tu vrstu fondova, a izaziva rasprave o špekulacijama i potiče različite analize i istraživanja financijskog tržišta., Hedge fonds are always provoking various questions that arise from the fact that hedge fonds can do business with less assets than banks but still have larger influence on the markets. Skilful and explicit use of off-balance-sheet instruments gives them much larger influence on the market that their assets can suggest. Change of positions on the market that causes changes in prices is the main characteristic for this kind of fonds and this causes debates about all kinds of speculations and various analysis of the financial market.

In this paper we present a mechanism to elicit and aggregate dispersed information. Our mechanism relies on the aggregation of intervals elicited using an interval scoring rule. We test our mechanism by eliciting beliefs about the termination times of a stochastic process in an experimental setting. We conduct two treatments, one with high and one with low volatility.Increasing the underlying volatility affects the location of the interval, yet it does not significantly affect its length. Consequently, individuals perform significantly better in the low volatility treatment than in the high volatility treatment. Next, we construct distributions by aggregating intervals across different individuals. Our results reveal that the predictive quality of the aggregated intervals as measured by the Hellinger distance to the true distribution increases by more than 30 when increasing the aggregation level from two to eight individuals. This shows that aggregating individual intervals may be an attractive solution when market mechanisms are infeasible.

Art is often used as an investment vehicle. Given the importance of market efficiency in finance, we use a large auction-based index to test whether the art market is weakly efficient. Evidence reveals that returns on artworks exhibit high positive auto-correlation. We attribute this result to price truncation resulting from unobservable reserve prices in auctions. We conclude that the art market is not efficient, mainly because price formation is opaque to outsiders who lack information on unsold artworks., info:eu-repo/semantics/published

We explore a New Keynesian Model with diverse beliefs and study the aggregation problems in the log-linearized economy. We show the solution of these problems depend upon the belief structure. Agents' beliefs are described by individual state variables and satisfy three Rationality Axioms, leading to the emergence of an aggregate state variable named “mean market state of belief.” In equilibrium, endogenous variables are functions of mean market belief and this state variable is the tool used to solve the aggregation problems. Diverse beliefs alter the problem faced by a central bank since the source of fluctuations is not only exogenous shocks but also market expectations. Due to diverse beliefs the effects of policy instruments are not monotonic and the trade-off between inflation and output volatilities is complex. Also, monetary policy can counter the effects of market belief by aggressive anti-inflation policy but at the cost of increased volatility of financial markets and individual consumption.

We study the presence of long term investors using different return forecasting strategies and switching them based on their past performance generates the price trends observed in financial markets. In the empirical section, we assume that investors choose how to allocate their portfoilios among four major stock indices: Dow Jones, FTSE, Nikkei and Hand Seng. The exercise shows that a decrease in the proportion of fundamentalists is related to movements in prices that are subsequentialy reverted. In this paper, we bridge the literatures on intertemporal asset allocation and on heterogeneous beliefs. The interaction between two switching types of agents, e.g. fundamentalists and chartists, is responsible for endogenously generating the observed price trends., info:eu-repo/semantics/published

Bachelor work Analysis of the collapses of stock markets is aimed at dismantling the phenomena when a sudden drop in the stock markets , so called crash or collapse occur. The theoretical part deals with the definition of a stock market collapse and continues with an explanation of the creation and causes of the collapse by means of using the theory of speculative bubbles. Speculative bubble theory focuses on investor psychology and behaviour of investors' public. Clarification of speculative bubbles in this work is described by crowd psychology of Gustav Le Bon and the theory of noisy trading. As a direct contradiction to the existence of speculative bubbles the theory of efficient markets is mentioned here. The subject of the analytical part of the work is to study the stock market for the specific purpose of analyzing the particular collapses of stock markets, their causes, circumstances and consequences.

Why are some people more optimistic about their life than others? Literature on locus of control suggests that optimism is associated with the belief that one's life outcomes are controlled by internal factors, such as ability, instead of external factors, such as powerful others or chance. Furthermore, some authors suggest that internal control beliefs interact with self-efficacy beliefs regarding their effects on outcome expectancies and thus optimism. We argue that it is not only self-efficacy that interacts, but efficacy beliefs about external factors, too. We further hypothesize that the effect of perceiving internal rather than external control on dispositional optimism depends on the difference between efficacy beliefs regarding internal and external factors. Since people can influence other people to be helpful, i.e., take proxy control, but are unlikely to influence chance, we extend this internal-versus-external view and suggest that the difference between perceived control by others and perceived control by chance affect dispositional optimism. In fact, we hypothesize that the effect of perceiving that it is other people who are in control, rather than chance, depends on the difference between efficacy beliefs regarding others and chance. A first empirical survey-based test produces substantial support for our theory. This is the first time control-efficacy interaction effects are shown for dispositional variables and for the three-dimensional construct of locus of control. We replicate a gender effect on correlations of dispositional optimism with self-reported risk taking and observe a gender effect for one of our new hypotheses.

This paper only goal is to study what is, in some finite ortholattices, the number of conjectures, refutations, consequences, hypotheses and speculations.

Ce papier est consacré à l’étude de l’impact des spams boursiers à travers l’analyse des variations de volumes. Nous utilisons la méthodologie des études d’événement sur un ensemble de cent dix entreprises du penny stock (entreprises de petite taille sur le marché américain) sur la période allant de Février 2006 à Octobre 2008. Les résultats obtenus montrent des variations positives et significatives des volumes tout au long la fenêtre d’événement. L’envoi des messages a ranimé l’activité sur le marché de penny stock témoignant ainsi que le business des spams boursiers est un commerce florissant. / This paper is dedicated to study the impact of the stock spams through the analysis of the variations of volumes. We use the methodology of the event studies on a sample of hundred ten firms of penny stock (firms with small size in the American market). Data cover the period of February 2006 to October 2008. The results show positive and significant changes in volumes during the event window. The sending of messages resuscitated activity in the penny stock market indicating, thus, that the stock spam business is a flourishing trade., info:eu-repo/semantics/published

In this paper the relatively new technique of neural nets is integrated in a traditional model of portfolio choice. On the basis of Arrow’s State Preference Model the investment decision depends on the expectation building process which consists of two components. The individual information processing and the mutual influence upon one another. Therefore, each agent is represented by a single net but all individuals are connected with each other. On both levels the magnitude of impact for the final portfolio choice is reflected by the connection weights of the net. The aim of the heterogeneous agents is to learn the market structure in order to make forecasts of probable yield. By comparing the expected and the actual price the individuals adjust the weights according to the backpropagation algorithm. The simulation studies show, that the agents adapt to each other generating a decline in the total market error. Market entries can disturb this structure and induce erroneous forecasts of the remaining market participants. On the microeconomic level it can be seen that similar characters can profit from each other if some of them get a dominant market position.

The assumption of given and known preferences and possibilities so common in economic theory stands in contradiction with the kind of unsystematic changes that characterize many experimental and real situations. Consequently, the theory misspecifies rational choice and generates many puzzles relating to marginal analysis, sunk costs, judgments of fairness, the endowment effect, etc. We model rational cognition and learning in `seemingly riskless' choices and judgments. Preferences and possibilities are given in a stochastic sense and based on revisable expectations. The theory predicts experimental preference reversals and passes a sharp econometric test on the status quo bias drawn from a field study.