The paper analyzes and quantifies the importance of sovereign risk in determining corporate default premia (yield spreads). It also investigates the extent to which the practice by rating agencies and banks of not rating companies higher than their sovereign ("country or sovereign ceiling") is...

One approach to oil markets is to treat oil as an asset, besides its role as a commodity. Speculative and nonspeculative activity by investors in the derivatives markets could be responsible for a sizable increase in oil prices. This paper recognizes both the consumption and investment aspects...

This paper introduces Karl Popper's approach to problem solving in the social sciences. These methods fundamentally represent the scientific method of the natural sciences. Popper's problem solving technique is outlined in six steps, including an introductory treatment of his solution to Hume's...

How can different individuals’ probability assignments to some events be aggregated into a collective probability assignment? Although there are several classic results on this problem, they all assume that the ‘agenda’of relevant events forms a -algebra, an overly demanding assumption for...

This paper focuses on the opposition between two contemporary research programs in economics: behavioral economics (BE) and experimental market economics (EME). Our claim is that the arguments of this opposition can be clarified through the lens of another opposition in the philosophy of...

Kinematics of stochastic mechanics is used to study diffusion problems at a more general level, without forcing a link to Newtonian mechanics. Stochastic velocities are taken from Nelson's kinematics to study nonlinear random systems. Random effects are systematically separated from the...

We present an information geometric characterization of Grover’s quantum search algorithm. First, we quantify the notion of quantum distinguishability between parametric density operators by means of the Wigner–Yanase quantum information metric. We then show that the quantum searching...

The subjectivist theory of probability specifies certain axioms of rationality which together lead to both a theory of probability and a theory of preference. The theory of probability is used throughout the sciences while the theory of preferences is used in economics. Results in quantum...

Using probabilistic approach, the transient dynamics of sparsely connected Hopfield neural networks is studied for arbitrary degree distributions. A recursive scheme is developed to determine the time evolution of overlap parameters. As illustrative examples, the explicit calculations of...

The diffusive kinetics in a symmetric double well with a high barrier fluctuating randomly in time is investigated by means of the corresponding Fokker–Planck equation. In the Smoluchowski limit explicit solutions for the equilibrium and the relaxation eigenfunctions are given. Moreover, the...