infonet-economy

This paper constructs a novel equilibrium in the chopstick auction of Szentes and Rosenthal (Games and Economic Behavior, 2003a, 2003b). In contrast to the existing solution, the identified equilibrium strategy allows a simple and intuitive characterization. Moreover, its best-response set has the same Hausdorff dimension as its support, which may be seen as a robustness property.…

We show that the logit-response dynamics converges to a subset of (strict) Nash equilibria for any weakly acyclic, N-player normal form game. The result holds independently of whether revision opportunities arise as in asynchronous learning or in other ways, as long as the dynamics is regular. Our analysis generalizes and organizes recent convergence results in the literature.…

Obesity and weight gain are severe complications of mental illness, especially schizophrenia. They result from changes in lifestyle and nutrition, side effects of medication and other, less well-understood factors. Recent studies suggest that obesity and weight gain are linked to psychopathology. Specifically, severe psychopathology is associated with greater weight dysregulation,…

Based on the literature on the relationship between culture, emotion, and loss aversion, we derive that culture can influence the degree of loss aversion. To test our hypotheses, we conduct a standardized survey in 53 countries worldwide that includes the questions from the Hofstede survey on cultural dimensions as well as lottery questions on loss aversion. The results show that…

We analyze American put options in a hyper-exponential jump-diffusion model. Our contribution is threefold. Firstly, by following a maturity randomization approach, we solve the partial integro-differential equation and obtain a tight lower bound for the American option price. Secondly, our method allows us to disentangle the contributions of jump and diffusion for the American early…

Are Islamic banks inherently more stable than conventional banks? We address this question by applying a survival analysis based on the Cox proportional hazard model to a comprehensive sample of 421 banks in 20 Middle and Far Eastern countries from 1995 to 2010. By comparing the failure risk for both bank types, we find that Islamic banks have a significantly lower risk of failure…

Aversive emotions are likely to be a key source of irrational human decision-making but still little is known about the underlying neural circuitry. Here, we show that aversive emotions distort trust decisions and cause significant changes in the associated neural circuitry. They reduce trust and suppress trust-specific activity in left temporoparietal junction (TPJ). In addition,…

Adaptation facilitates neural representation of a wide range of diverse inputs, including reward values. Adaptive value coding typically relies on contextual information either obtained from the environment or retrieved from and maintained in memory. However, it is unknown whether having to retrieve and maintain context information modulates the brain’s capacity for value adaptation…