Economics has evolved into a highly technical academic discipline. Considerable weight is placed on the ability of academic economists to be familiar and skilled in the use of mathematical and statistical techniques. This is how academic economists tend to be judged by their peers. As a...

Rapid globalization has increased the need and opportunity for interactions between people from different cultural backgrounds. Experience is often considered the best teacher and experiences with cross-cultural interactions represent important opportunities to learn to deal with differences....

How do memory limitations affect economic behavior? I develop a model of memory grounded in psychology and biology research to investigate this question. Using this model, I study the case where people apply Bayes rule to the history they recall as if it were the true history. The resulting...

Recent evidence from research in risky choice shows that decisions from experience differ significantly from decisions from description, particularly when problems include a small-probability event and when samples from experience are small. Little is known, however, about the cognitive...

Predicting default risk is important for firms and banks to operate successfully. There are many reasons to use nonlinear techniques for predicting bankruptcy from financial ratios. Here we propose the so-called Support Vector Machine (SVM) to predict the default risk of German firms. Our...