According to the recognition heuristic, people infer that an object they recognize has a higher value on a criterion of interest than an object they do not recognize. This model has been analyzed mathematically and conditions for the less-is-more effect -- where recognizing fewer objects...

In this note, we study a winning strategy in the two envelope game. We assume the player only has partial information of the game. In particular, if the players knows the mean and variance of certain distribution, we show a winning strategy that assures a minimum average gain

Motivated by a real-life situation, we put forward a model and then derive an optimal strategy that maximizes the expected real-estate selling price when one of the only two remaining buyers has already made an offer but the other one is yet to make. Since the seller is not sure whether the...

A large fraction of bank's assets and debts in developing countries are usually denominated in foreign currencies (e.g. US dollars, euros). Therefore, fluctuations of the exchange rate is likely to affect their financial wealth. The equity-asset ratio is a usual measure of bank's financial...

In this note, we answer an open problem proposed in Baucells and Sarin (2010, p. 293) to find the optimal consumption sequence when habit formation dominates satiation in an intertemporal choice framework. We find that if consumers do not abstain from consuming goods then, for certain types of...

In this paper, we establish upper bounds of Cantelli's inequality type that improve upon previous results, including those derived from Cantelli's and Hoeffding's inequalities. We present two practical applications to demonstrate the usefulness of our findings. The first application improves the...

Motivated by a real-life situation, we put forward a model and then derive an optimal strategy that maximizes the expected real-estate selling price when one of the only two remaining buyers has already made an offer but the other one is yet to make. Since the seller is not sure whether the...