We live in a ‘zero-risk society', characterized by a culture that is obsessed with controlling and removing any possible risks. Obviously, one of the fundamental objectives of any civilization is to improve the safety and security of its citizens. However, we should not let the cozy comfort...

We present a careful analysis of possible issues of the application of the self-excited Hawkes process to high-frequency financial data and carefully analyze a set of effects that lead to significant biases in the estimation of the "criticality index'' n that quantifies the degree of endogeneity...

Krugman (1991)'s target zone model has become the reference of a large part of this literature. Despite its simplicity and elegance, empirical evidence has been lacking. Deriving from Krugman's model analytical expressions for the conditional volatility and density distribution close to the...

Altruistic punishment - the punishment of norm violators at one's own cost without material benefit - is frequently observed in experimental economics, field studies and in people's everyday life. The existence of this ostensibly irrational behavior is often linked to other-regarding preferences...

We review the “social bubble” hypothesis, which holds that strong social interactions between enthusiastic supporters of new ventures weave a network of reinforcing feedbacks that lead to a widespread endorsement and extraordinary commitment by those involved in the projects, beyond what...

Chapter Summary: We consider the recent financial crisis as an overlapping sequence of interdependent financial bubbles followed by their collapse. Governments and regulatory agencies have made it a prime goal to moderate future crises. Many attempts at financial, economic and social engineering...