heuristic bias and conservatism bias. Previous studies found that the two cognitive biases cause investors to misreact to past … the short-term downside risk shock positively related to future stock returns and makes the long-term downside risk shock …

strong competition and moral hazard went hand in hand and that raises a flag that needs explanation. The paper argues that … absence of effective regulation. That explains why with deregulation market competition could culminate in excessive risk … taking with mounting social costs. Using simple game theory the paper gives a stylized account of what sustained the …