infonet-economy

An optimal balance between efficient exploitation of available resources and creative exploration of alternatives is critical for adaptation and survival. Previous studies associated these behavioral drives with, respectively, the dopaminergic mesocorticolimbic system and frontopolar-intraparietal networks. We study the activation of these systems in two age and gender-matched groups...

In capitalist societies it is the role of the state to establish the preconditions that promote societal well-being through proper functioning markets.
On the other hand enterprises have a right to provide goods and services in return for private profit. This sharp contrast between government and corporate responsibilities is created by a theoretical idealized first-best world...

This paper utilizes means of game theory and option pricing to compute a bankruptcy triggering asset value. Combination of these two fields of economic study serves to separating the given problem into valuation of the payoffs, where we use option pricing and the analysis of strategic interactions between parties of a contract which could be designed and solved with the use of game...

We generalize the Kou (2002) double exponential jump-diusion model in two directions. First, we independently displace the two tails of the jump size distribution away from the origin. Second, we allow for each of the displaced tails to follow a gamma distribution with an integer-valued shape parameter. Both extensions introduce additional exibility in the tails of the corresponding...

Regulators dedicate much attention to a financial institution’s option to default, i.e. the option that distressed financial institutions have to transfer losses to their creditors. It is generally recognized that the existence of this option provides intermediaries with a powerful incentive to keep firm capital close to the minimal requirement. We argue, however, that...

We compare default rates on conventional and Islamic loans using a comprehensive monthly dataset from Pakistan that follows more than 150,000 loans over the period 2006:04 to 2008:12. We find robust evidence that the default rate on Islamic loans is less than half the default rate on conventional loans. Islamic loans are less likely to default during Ramadan and in big cities if the...