We propose an evolutionary metaheuristic for approximating the preference-nondominated solutions of a decision maker in multiobjective combinatorial problems. The method starts out with some partial preference information provided by the decision maker, and utilizes an individualized fitness...

This paper investigates the order in which new information is first reflected in the market – through changes in spreads or through updated depths. We develop an error correction model of spreads and depths and estimate Gonzalo-Granger common factor components using two years of tick-by-tick...

Real options models have emerged as a compelling tool for understanding market entry decisions involving sunkness, or irreversibility. In contrast to neoclassical models of investment, real options models consider that uncertainty has a direct effect on the willingness to invest, and that the...

In this paper, we present the design and the results of an experiment in which subjects participate in a bidding game identical to the one seen on the television game show "The Price is Right". Four players make sequential guesses about the price of an item, and the player whose guess is closest...

For young technology firms, acquiring resources can often be costly die to the information asymmetry and uncertainty that exist surrounding the new technology. We contend that managers of technology companies use signals strategically as a potent tool for mobilizing necessary resources. We...

We compare trading costs in the transparent U.S. Treasury bond market with the less transparent U.S. corporate and municipal bond markets, based on newly available transaction data. We estimate that the mean bid-ask spread per $100 par value is 23 cents for municipal bonds, 21 cents for...

This paper describes the behavior of an experimental economy with the structure of the Ramsey-Cass-Koopmans model of optimal growth. In the model, the level of consumption and capital stock converge to an optimal steady state level, regardless of the level of initial endowment. The main question...

Managing knowledge inventories is the central issue posed by the knowledge-based view of the firm. Because of future opportunities to switch among technologies and idle or deploy technologies over time, managing knowledge inventories requires valuing flexibility. Real option theory presents...

Using an audit trail transaction data set compiled by the Commodity Futures Trading Commission (CFTC), we seek to ascertain directly the motives behind dual traders’ own account trading and whether or not they are informed traders. We estimate our system of equations on each of the 101 most...

Valuing real options is not an easy task. Their idiosyncratic nature eliminates the market discipline underlying financial option pricing formulas and allows individual risk preferences and biases to enter into option pricing. This study applies behavioral decision theory to option pricing. The...