A. B. Atkinson
- Published in print:
- 2008
- Published Online:
- September 2008
- ISBN:
- 9780199532438
- eISBN:
- 9780191714559
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199532438.003.0013
- Subject:
- Economics and Finance, Development, Growth, and Environmental, International
The note describes a simple version of the pay norm model, where the assumptions are chosen to bring out the essence of the argument, rather than to allow for the full richness of strategic ...
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The note describes a simple version of the pay norm model, where the assumptions are chosen to bring out the essence of the argument, rather than to allow for the full richness of strategic behaviour. It is essentially a behavioural model.Less
The note describes a simple version of the pay norm model, where the assumptions are chosen to bring out the essence of the argument, rather than to allow for the full richness of strategic behaviour. It is essentially a behavioural model.
Roman Frydman and Michael D. Goldberg
- Published in print:
- 2013
- Published Online:
- October 2017
- ISBN:
- 9780691155234
- eISBN:
- 9781400846450
- Item type:
- chapter
- Publisher:
- Princeton University Press
- DOI:
- 10.23943/princeton/9780691155234.003.0005
- Subject:
- Economics and Finance, Macro- and Monetary Economics
This chapter examines the imperfect knowledge imperative in modern macroeconomics and finance theory. It argues that the Rational Expectations Hypothesis (REH) has nothing to do with how even ...
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This chapter examines the imperfect knowledge imperative in modern macroeconomics and finance theory. It argues that the Rational Expectations Hypothesis (REH) has nothing to do with how even minimally reasonable profit-seeking individuals forecast the future in real-world markets. It attributes REH's insurmountable epistemological difficulties and widespread empirical problems to a single, overarching premise that underpins contemporary macroeconomics and finance theory: nonroutine change is unimportant for understanding outcomes. It also suggests that contemporary behavioral finance models rest on the same core premise as their REH-based counterparts. Finally, it introduces an alternative approach to modeling individual behavior and aggregate outcomes: Imperfect Knowledge Economics, which opens macroeconomics and finance models to nonroutine change and the imperfect knowledge that it engenders.Less
This chapter examines the imperfect knowledge imperative in modern macroeconomics and finance theory. It argues that the Rational Expectations Hypothesis (REH) has nothing to do with how even minimally reasonable profit-seeking individuals forecast the future in real-world markets. It attributes REH's insurmountable epistemological difficulties and widespread empirical problems to a single, overarching premise that underpins contemporary macroeconomics and finance theory: nonroutine change is unimportant for understanding outcomes. It also suggests that contemporary behavioral finance models rest on the same core premise as their REH-based counterparts. Finally, it introduces an alternative approach to modeling individual behavior and aggregate outcomes: Imperfect Knowledge Economics, which opens macroeconomics and finance models to nonroutine change and the imperfect knowledge that it engenders.
David F. Hendry
- Published in print:
- 1995
- Published Online:
- November 2003
- ISBN:
- 9780198283164
- eISBN:
- 9780191596384
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0198283164.003.0006
- Subject:
- Economics and Finance, Econometrics
Regression, linear least‐squares approximation, contingent plan, and behavioural model are distinguished as four interpretations that ‘look alike’ yet have different properties. Models of ...
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Regression, linear least‐squares approximation, contingent plan, and behavioural model are distinguished as four interpretations that ‘look alike’ yet have different properties. Models of expectations formation are analysed including rational, consistent, unbiased, and economically rational expectations, the last highlighting the instrumental role of expectations in achieving plans.Less
Regression, linear least‐squares approximation, contingent plan, and behavioural model are distinguished as four interpretations that ‘look alike’ yet have different properties. Models of expectations formation are analysed including rational, consistent, unbiased, and economically rational expectations, the last highlighting the instrumental role of expectations in achieving plans.
David M. Kreps
- Published in print:
- 1990
- Published Online:
- November 2003
- ISBN:
- 9780198283812
- eISBN:
- 9780191596568
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0198283814.003.0006
- Subject:
- Economics and Finance, Microeconomics
Argues that many of the weaknesses of game theory arise from weaknesses in how economists model individual (dynamic) behaviour: with hyper‐rational and forward‐looking, farsighted individuals. ...
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Argues that many of the weaknesses of game theory arise from weaknesses in how economists model individual (dynamic) behaviour: with hyper‐rational and forward‐looking, farsighted individuals. Progress is likely to be made by re‐examining our models of behaviour, incorporating bounds to individual rationality and modelling individuals who are more retrospective, learning adaptively from the past.Less
Argues that many of the weaknesses of game theory arise from weaknesses in how economists model individual (dynamic) behaviour: with hyper‐rational and forward‐looking, farsighted individuals. Progress is likely to be made by re‐examining our models of behaviour, incorporating bounds to individual rationality and modelling individuals who are more retrospective, learning adaptively from the past.
Larry E. Beutler, John F. Clarkin, and Bruce Bongar
- Published in print:
- 2000
- Published Online:
- March 2012
- ISBN:
- 9780195105308
- eISBN:
- 9780199848522
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780195105308.003.0013
- Subject:
- Psychology, Clinical Psychology
The variety of mental health treatments must be understood, at least partially, as a reflection of evolving sets of values and assumptions, ...
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The variety of mental health treatments must be understood, at least partially, as a reflection of evolving sets of values and assumptions, sharing certain common theoretical roots along with some distinctive perspectives. Each new treatment development introduces new assumptions about what causes change, and these assumptions, in turn, contribute to the evolution of a society's philosophy about the nature of the people who live within the society itself. Biological models, psychodynamic models, and behavioral models of change all reflect different assumptions about depression, and all come from slightly different branches on the evolutionary tree of knowledge. Each has been built on models that went before, but the evolution of each was accepted only because it occurred within a nurturing culture or subculture and at a time when those views were ecologically compatible with the particular social groups who gave them recognition. In developing and presenting our basic and optimal treatment guidelines, we elected to abandon reliance on techniques and procedures that derive from specific theories of psychopathology.Less
The variety of mental health treatments must be understood, at least partially, as a reflection of evolving sets of values and assumptions, sharing certain common theoretical roots along with some distinctive perspectives. Each new treatment development introduces new assumptions about what causes change, and these assumptions, in turn, contribute to the evolution of a society's philosophy about the nature of the people who live within the society itself. Biological models, psychodynamic models, and behavioral models of change all reflect different assumptions about depression, and all come from slightly different branches on the evolutionary tree of knowledge. Each has been built on models that went before, but the evolution of each was accepted only because it occurred within a nurturing culture or subculture and at a time when those views were ecologically compatible with the particular social groups who gave them recognition. In developing and presenting our basic and optimal treatment guidelines, we elected to abandon reliance on techniques and procedures that derive from specific theories of psychopathology.
Orfeo Fioretos
- Published in print:
- 2011
- Published Online:
- August 2016
- ISBN:
- 9780801449697
- eISBN:
- 9780801460715
- Item type:
- chapter
- Publisher:
- Cornell University Press
- DOI:
- 10.7591/cornell/9780801449697.003.0003
- Subject:
- Political Science, Political Economy
This chapter analyzes the hypotheses of three models of firm behavior. It looks at what form business coalitions take and identifies how, under conditions of economic openness, the interaction of ...
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This chapter analyzes the hypotheses of three models of firm behavior. It looks at what form business coalitions take and identifies how, under conditions of economic openness, the interaction of various national and multilateral designs affects the credibility of firms' commitments to the governments' institutional designs. The method of analysis examines how variations in internal parameters—such as the economic system in which a firm is embedded and the degree to which it relies on specific social contracts—interact with changes in external parameters like market integration and different forms of multilateralism. The chapter considers changes in external parameters sequentially in order to identify the cumulative effects that different levels of market integration and forms of multilateralism have for firms' preference orders.Less
This chapter analyzes the hypotheses of three models of firm behavior. It looks at what form business coalitions take and identifies how, under conditions of economic openness, the interaction of various national and multilateral designs affects the credibility of firms' commitments to the governments' institutional designs. The method of analysis examines how variations in internal parameters—such as the economic system in which a firm is embedded and the degree to which it relies on specific social contracts—interact with changes in external parameters like market integration and different forms of multilateralism. The chapter considers changes in external parameters sequentially in order to identify the cumulative effects that different levels of market integration and forms of multilateralism have for firms' preference orders.
Bar-Gill Oren
- Published in print:
- 2012
- Published Online:
- September 2012
- ISBN:
- 9780199663361
- eISBN:
- 9780191751660
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199663361.003.0002
- Subject:
- Law, Company and Commercial Law
This chapter develops a general approach for analyzing consumer markets and, more specifically, consumer contracts. A behavioural-economics model was used to explain how consumer psychology interacts ...
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This chapter develops a general approach for analyzing consumer markets and, more specifically, consumer contracts. A behavioural-economics model was used to explain how consumer psychology interacts with market forces to influence the design of consumer contracts. The resulting behavioural market failure entails potentially significant welfare costs, which market solutions can reduce but not eliminate. Optimally designed disclosure mandates, while not a panacea, can enhance efficiency and help consumers.Less
This chapter develops a general approach for analyzing consumer markets and, more specifically, consumer contracts. A behavioural-economics model was used to explain how consumer psychology interacts with market forces to influence the design of consumer contracts. The resulting behavioural market failure entails potentially significant welfare costs, which market solutions can reduce but not eliminate. Optimally designed disclosure mandates, while not a panacea, can enhance efficiency and help consumers.
Alan Peacock and Ilde Rizzo
- Published in print:
- 2008
- Published Online:
- May 2008
- ISBN:
- 9780199213177
- eISBN:
- 9780191707124
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199213177.003.0005
- Subject:
- Economics and Finance, Public and Welfare
Economics tries not only to describe how enterprises and public institutions are run but also to explain why they act in particular ways. This is a necessary condition for being able to predict ...
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Economics tries not only to describe how enterprises and public institutions are run but also to explain why they act in particular ways. This is a necessary condition for being able to predict whether their behaviour conforms with the expectations of those who fund them. It is rarely satisfactory to generalize about behaviour from results of questionnaires to those ‘under the microscope’, which is particularly true in the case of museums and galleries (MGs) where directors have to be left with so much discretion in defining where the ‘public interest’ lies. This chapter's starting point, following Bruno Frey, is to look at the ‘outcome’ of their behaviour as controllers of stocks of historical artefacts. A striking, observed difference between commercial enterprises and MGs is that the former's ‘success’ depends on keeping stocks at a minimum and generating revenue from its sale, whereas the latter judge theirs in terms of the acquisition and retention of artefacts and not their disposal. Whether the MGs thereby act ‘in the public interest’ in doing so, is a controversial matter.Less
Economics tries not only to describe how enterprises and public institutions are run but also to explain why they act in particular ways. This is a necessary condition for being able to predict whether their behaviour conforms with the expectations of those who fund them. It is rarely satisfactory to generalize about behaviour from results of questionnaires to those ‘under the microscope’, which is particularly true in the case of museums and galleries (MGs) where directors have to be left with so much discretion in defining where the ‘public interest’ lies. This chapter's starting point, following Bruno Frey, is to look at the ‘outcome’ of their behaviour as controllers of stocks of historical artefacts. A striking, observed difference between commercial enterprises and MGs is that the former's ‘success’ depends on keeping stocks at a minimum and generating revenue from its sale, whereas the latter judge theirs in terms of the acquisition and retention of artefacts and not their disposal. Whether the MGs thereby act ‘in the public interest’ in doing so, is a controversial matter.
Shane N. Phillipson and Bick-har Lam
- Published in print:
- 2011
- Published Online:
- January 2012
- ISBN:
- 9789888083428
- eISBN:
- 9789882209848
- Item type:
- book
- Publisher:
- Hong Kong University Press
- DOI:
- 10.5790/hongkong/9789888083428.001.0001
- Subject:
- Linguistics, Sociolinguistics / Anthropological Linguistics
This book provides a starting point for understanding the contexts of learning and teaching in the Chinese classroom. Drawing upon recent research in Hong Kong, Taiwan, Singapore and China, this book ...
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This book provides a starting point for understanding the contexts of learning and teaching in the Chinese classroom. Drawing upon recent research in Hong Kong, Taiwan, Singapore and China, this book aims to bridge the gap between traditional texts on educational psychology and the unique nature of the Chinese learner and their teacher. It draws on recent research to illustrate the application of these theories, thereby helping teachers and students in teacher education programmes understand the variability in student achievement.Less
This book provides a starting point for understanding the contexts of learning and teaching in the Chinese classroom. Drawing upon recent research in Hong Kong, Taiwan, Singapore and China, this book aims to bridge the gap between traditional texts on educational psychology and the unique nature of the Chinese learner and their teacher. It draws on recent research to illustrate the application of these theories, thereby helping teachers and students in teacher education programmes understand the variability in student achievement.
Paul M. Vaaler and Gerry McNamara
- Published in print:
- 2012
- Published Online:
- January 2013
- ISBN:
- 9780199873722
- eISBN:
- 9780199980000
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199873722.003.0005
- Subject:
- Law, Company and Commercial Law
This chapter presents empirical and theoretical evidence that lending decisions are fundamentally and systematically flawed. The first part summarizes a decade of individual and joint research on ...
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This chapter presents empirical and theoretical evidence that lending decisions are fundamentally and systematically flawed. The first part summarizes a decade of individual and joint research on credit risk and lending based on behavioral and political models rather than “objective” economic models alone. It shows individual, organizational, and broader competitive, even institutional, factors consistent with behavioral and political explanations of risk and decision making can significantly and substantially distort credit assessment in a variety of contexts. The second part presents current research combining insights from both behavioral and political models of risk and decision making in an international context. It develops and tests an integrated theoretical framework for understanding how two forms of rivalry shape risk assessments by firms active in developing countries (DCs). One form of rivalry relates to DC electoral politics and their impact on firms making sovereign government credit assessments. The other relates to firm rivalry for market share in rating DC sovereign bond issuances. It is proposed that both matter for assessing the creditworthiness of DC sovereigns during election years. The chapter concludes with a summary of key findings and their implications for research, policy, and practice related to prudential credit assessment.Less
This chapter presents empirical and theoretical evidence that lending decisions are fundamentally and systematically flawed. The first part summarizes a decade of individual and joint research on credit risk and lending based on behavioral and political models rather than “objective” economic models alone. It shows individual, organizational, and broader competitive, even institutional, factors consistent with behavioral and political explanations of risk and decision making can significantly and substantially distort credit assessment in a variety of contexts. The second part presents current research combining insights from both behavioral and political models of risk and decision making in an international context. It develops and tests an integrated theoretical framework for understanding how two forms of rivalry shape risk assessments by firms active in developing countries (DCs). One form of rivalry relates to DC electoral politics and their impact on firms making sovereign government credit assessments. The other relates to firm rivalry for market share in rating DC sovereign bond issuances. It is proposed that both matter for assessing the creditworthiness of DC sovereigns during election years. The chapter concludes with a summary of key findings and their implications for research, policy, and practice related to prudential credit assessment.
