Different to other scientific disciplines traditional economic theory has remained remarkably silent about procedural aspects of strategic interactions. Much to the contrast, among psychologists there is by now a broad consensus that not only expected outcomes shape human behavior, but also...

Prices of tradables can only be expressed relative to each other at any instant of time. This fundamental fact should therefore also hold for contingent claims, i.e. tradable instruments, whose prices depend on the prices of other tradables. We show that this property induces a local scaling...

It is a persistent finding in psychology and experimental economics that people's behavior is not only shaped by outcomes but also by decision-making procedures. In this paper we develop a general framework capable of modelling these procedural concerns. Within the context of psychological games...

This article is the second one in a series on the use of scaling invariance in finance. In the first paper, we introduced a new formalism for the pricing of derivative securities, which focusses on tradable objects only, and which completely avoids the use of martingale techniques. In this...

This paper defines the concept of simple strategy and introduces three kinds of simple strategies: wealth-invariant, scale-invariant and "wealthier-accept more". For three commonly used utility function families: CARA, CRRA and DARA equivalent characterizations are obtained in terms of the...

Properties of low-variability periods in the time series are analysed. The theoretical approach is used to show the relationship between the multi-scaling of low-variability periods and multi-affinity of the time series. It is shown that this technically simple method is capable of revealing...

We present a thermodynamic formulation for scale-invariant systems based on the minimization with constraints of the Fisher information measure. In such a way a clear analogy between these systems’ thermal properties and those of gases and fluids is seen to emerge in a natural fashion. We...

Randomized controlled trials (RCT) have become a dominant empirical tool in applied economics. The internal validity of RCTs crucially depends on the (implicit) assumption that the procedure assigning subjects to treatment and control groups has no effect on behavior. We show theoretically that...

Investigations into the patterns of schizophrenia reveal evidence of scaling properties in temporal behaviour. This is shown in the spectral properties of mid-range and long-range (up to two years) daily recordings from a sample of patients drawn at the therapeutic dwelling SOTERIA (Ambühl et...

Consumers are thought to be rational in their choices. But sometimes their choices comprise intransitivities. Current paper presents a mathematically supported experimental study of consumers' intransitive preferences concerning product attributes. We used a personalized experimental design...