We study the influence of systematic probability misestimation on complexfinancial investment decisions on the context of structured financialproducts. Structured products have in recent years become more and morecomplex. We study the question whether this complexity might be a...

Evolutionary nance studies the dynamic interaction of investment strategies in nancialmarkets. This market interaction generates a stochastic wealth dynamics on aheterogenous population of traders through the uctuation of asset prices and theirrandom payos. Asset prices are endogenously...

We explore the pricing of variance risk by decomposing stocks' total variance into systematicand idiosyncratic return variances. While systematic variance risk exhibits a negative priceof risk, common shocks to the variances of idiosyncratic returns carry a large positive riskpremium. This...

In this article, we study the effect of liquidity risk on the performanceof various hedge fund portfolio strategies. The portfolio strategies in eachhedge fund style are formed by incorporating predictability in: (i) managerialskills, (ii) fund risk loadings, and (iii) benchmark returns. As...

Some people are motivated by the non-selfish, non-strategic, and non-consequentialist “sacredvalue” of Truth. We conduct the first experiment directly assessing this phenomenon. We findthat people differ substantially in their truthfulness, with a large minority powerfully inclined...