This research utilizes the most recent research in psychology to analyze causes of financial cycles within the context of applied financial theory. Such cycles are shown to be consistent with both human nature and efficient markets, but they are also demonstrated to contribute to mispricing in...

This research adapts the Black-Scholes option pricing model that is widely used in practice to a world where investors only form sufficiently rational expectations (expectations that deviate from perfection without creating arbitrage opportunities). Within the no-arbitrage interval of market...