Research has consistently found that implied volatility is a conditionally biased predictor of realized volatility across asset markets. This paper evaluates explanations for this bias in the market for options on foreign exchange futures. No solution considered—including a model of priced volatility risk—explains the conditional bias found in implied volatility. Further, while implied volatili...

Significant difference between response to real and hypothetical valuation questions is often referred to as hypothetical bias. Some economists have had success with using “cheap talk” (which entails reading a script that explicitly highlights the hypothetical bias problem before participants make any decisions) as a means of generating unbiased responses in a referendum format. In this article...

Reforms and Productivity Dynamics in Chinese State-Owned Enterprises Institutional change has taken place gradually since 1978 for State-Owned Enterprises (SOEs) in the Industrial Sector of China. In this paper we estimate the effect of deep reform (the right to hire and fire labour, buy and sell capital and operate on international markets) on the productivity dynamics of enterprises. Using a ...

We investigate why discretization is effective in naive-Bayes learning. We prove a theorem that identifies particular conditions under which discretization will result in naiveBayes classifiers delivering the same probability estimates as would be obtained if the correct probability density functions were employed. We discuss the factors that might affect naive-Bayes classification error under ...

Consonants have been proposed to carry more of the weight of lexical processing than vowels. This consonant bias has consistently been found in adults and has been proposed to facilitate early language acquisition. We explore the origins of this bias over the course of development and in infants learning different languages. Although the consonant bias was originally thought to be present at bi...

Using a sample of 22,389 US firm-year observations over the period from 1991 to 2012, we find that high CSR firms pay more dividends than low CSR firms. This is consistent with our expectation that socially responsible firms may use the dividend policy to manage the agency problems related to overinvestment in CSR. The analysis of individual components of CSR provides strong support for this ma...

In this paper, we develop and estimate models of the determinants of firms’ demand for directors’ and officers’ liability insurance. We add to and validate the existing empirical literature by testing hypotheses regarding the relationship between D&O insurance purchase and firm size, governance characteristics and business risk. Our data set allows us to test both purchase decisions and limits ...