We introduce the notion of a stone age equilibrium to study societies in which property rights are absent, bilateral exchange is either coercive or voluntary, and relative strength governs power relations in coercive exchange. We stress the importance of free disposal of goods which allows for...

The most important financial source for behavioral economics is the Russell Sage Foundation (RSF). The most prominent behavioral economists among the RSF’s twenty-six member Behavioral Economics Roundtable (BER) are Kahneman, Tversky, Thaler, Camerer, Loewenstein, Rabin, and Laibson. The...

We introduce the notion of a stone age equilibrium to study societies in which property rights are absent, bilateral exchange is either coercive or voluntary, and relative strength governs power relations in coercive exchange. We stress the importance of free disposal of goods which allows for...

The most important financial source for behavioral economics is the Russell Sage Foundation (RSF). The most prominent behavioral economists among the RSF’s twenty-six member Behavioral Economics Roundtable (BER) are Kahneman, Tversky, Thaler, Camerer, Loewenstein, Rabin, and Laibson. The...

This paper considers financial, operational, solvency, and performance ratios, in order to detect when there were balance sheets’ variations related to the 1994 Mexican currency crisis. Quarterly results for 88 non-financial Mexican companies that survived the crisis are used, and tests for...

Actual portfolios contain fewer stocks than are implied by standard financial analysis that balances the costs of diversification against the benefits in terms of the standard deviation of the returns. Suppose a safety first investor cares about downside risk and recognizes the heavytail feature...

Risk managers use portfolios to diversify away the unpriced risk of individual securities. In this article we compare the benefits of portfolio diversification for downside risk in case returns are normally distributed with the case of fat-tailed distributed returns. The downside risk of a...

This paper considers financial, operational, solvency, and performance ratios, in order to detect when there were balance sheets’ variations related to the 1994 Mexican currency crisis. Quarterly results for 88 non-financial Mexican companies that survived the crisis are used, and tests for...

Actual portfolios contain fewer stocks than are implied by standard financial analysis that balances the costs of diversification against the benefits in terms of the standard deviation of the returns. Suppose a safety first investor cares about downside risk and recognizes the heavy

Risk managers use portfolios to diversify away the unpriced risk of individual securities. In this article we compare the benefits of portfolio diversification for downside risk in case returns are normally distributed with the case of fat-tailed distributed returns. The downside risk of a...