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The rational addiction model is often used for empirical analysis of the demand for addictive goods. We propose an extension of the model to include two goods, cigarettes and Swedish moist snuff, locally known as snus. Demand equations are estimated using aggregated annual time series data (in first differences) for the period 1964–1997. The findings from(More)
The effects of interpersonal interactions on individual's agreements result in a social aggregation process which is reflected in the formation of collective states, as for instance, groups of individuals with a similar opinion about a given issue. This field, which has been a longstanding concern of sociologists and psychologists, has been extended into an(More)
The purpose of this paper is to implement theoretically, the observation that the relative importance of fundamental versus technical analysis in the foreign exchange market depends on the time horizon in currency trade. For shorter time horizons, more weight is placed on technical analysis, while more weight is placed on fundamental analysis for longer(More)
Experimental studies in the area of Psychology and Behavioral Economics have suggested that people change their search pattern in response to positive and negative events. Using Internet search data provided by Google, we investigated the relationship between stock-specific events and related Google searches. We studied daily data from 13 stocks from the(More)
We focus on the influence of external sources of information upon financial markets. In particular, we develop a stochastic agent-based market model characterized by a certain herding behavior as well as allowing traders to be influenced by an external dynamic signal of information. This signal can be interpreted as a time-varying advertising, public(More)
This paper studies P2P lending and the factors explaining loan default. This is an important issue because in P2P lending individual investors bear the credit risk, instead of financial institutions, which are experts in dealing with this risk. P2P lenders suffer a severe problem of information asymmetry, because they are at a disadvantage facing the(More)
The purpose of this paper is to suggest a procedure to empirically test the Porter hypothesis. This hypothesis argues that environmental regulation not only increases environmental quality, but also brings the polluting producers information that makes them more resource efficient, as well as able to develop new technologies. Specifically, the hypothesis(More)
It is well known that cigarette smoking and the use of other addictive goods is harmful to health. Still, some people smoke cigarettes and drink alcohol in their daily lives. The consumption of addictive goods seems, therefore, to be the antithesis of rational behavior. In this article, however, it is demonstrated that a rational individual, in the sense(More)
The aim of this paper is to illustrate how the stability of a stochastic dynamic system is measured using the Lyapunov exponents. Specifically, we use a feedforward neural network to estimate these exponents as well as asymptotic results for this estimator to test for unstable (chaotic) dynamics. The data set used is spot electricity prices from the Nordic(More)