Mullainathan et al [Quarterly Journal of Economics, May 2008] present a model of coarse thinking or analogy based thinking. The essential idea behind coarse thinking is that people put situations into categories and the values assigned to attributes in a given situation are affected by the...

This study visits the role of shareholder proposals in the governance of public corporations by studying withdrawn shareholder proposals. Among all shareholders, unions are the most likely to withdraw proposals. Furthermore, firms with a record of poor performance, lower insider ownership and...

An anchoring adjusted currency option pricing formula is developed in which the risk of the underlying currency is used as a starting point which gets adjusted upwards to arrive at the currency call risk. Anchoring bias implies that such adjustments are insufficient. The new formula converges to...

This Note endeavors to illustrate the relevance of the impact of the budget deficit upon the interest rate to the issue of crowding out. It is argued that empirical studies of the impact of deficits upon interest rates may be very useful in det­ermining whether (and how) crowding out occurs,...

This brief Note provides strong empirical evidence that federal govern­ment deficits can indeed have a positive and significant impact upon short­ term interest rates; the findings in this paper thereby establish another mechanism for the transmission of crowding out. This study differs from...

Here, we show that agents who are ex ante rational, if allowed to interact locally, may generate clustering of volatility. Hence, there is no need to reject the notion of rationality in agent based models.

This article proposes an overview of the usefulness of the regime switching approach for building various kinds of bond pricing models and of the roles played by the regimes in these models. Both default-free and defaultable bonds are considered. The regimes can be used to capture stochastic...

Mullainathan et al [Quarterly Journal of Economics, May 2008] present a formalization of the concept of coarse thinking in the context of a model of persuasion. The essential idea behind coarse thinking is that people put situations into categories and the values assigned to attributes in a...