The concept of non-arbitrage plays an essential role in finance theory. Under certain regularity conditions, the Fundamental Theorem of Asset Pricing states that, in non-arbitrage markets, prices of financial instruments are martingale processes. In this theoretical framework, the analysis of the statistical distributions of financial assets can assist in understanding how participants behave in the markets, and may or may not engender arbitrage conditions. Assuming an underlying Variance Gamma statistical model, this study aims to test, using the (...) FBST - Full Bayesian Significance Test, if there is a relevant price difference between essentially the same financial asset traded at two distinct locations. Specifically, we investigate and compare the behavior of call options on the BOVESPA Index traded at (a) the Equities Segment and (b) the Derivatives Segment of BM&FBovespa. Our results seem to point out significant statistical differences. To what extent this evidence is actually the expression of perennial arbitrage opportunities is still an open question. (shrink)

Who/what can be had at an ontological discount? By grasping the “anitrelationality” and “dismediation” of social relations by capital’s system of accounts, we discern not only the epistemicide and the expropriation of the cognitive-linguistic by capital, we shed new light on racial abstraction and gender abstraction. We grasp in “the coloniality of race and gender” the logistics of abstraction that at once code the social factory and give rise to what I have called the derivative condition—a condition in which the (...) multiple forms of being, when dissolved in and as executable information, are functionalized as contingent claims on the value-form by means of “the world computer.” When we say that semiotic processes are metapragmatically put under economic and informatic pressure, we are also saying that the datafication expresses more than a simple analogy to the commodity form by assigning numbers to qualities. Rather, datafication appears as the preeminent mechanism for the commodification of sociality, and thus also encodes access to social currency. Femicide and the ritual violence of parastate cartels of “gore capitalism” can be seen as alternative means of issuing derivative (soft) currencies by imposing extrajudicial if equally violent systems of account. (shrink)

This study uses an artificial intelligence (AI) model to identify arbitrage opportunities in the retail marketplace. Specifically, we develop an AI model to predict the optimal purchasing point based on the price movement of products in the market. Our model is trained on a large dataset collected from an online marketplace in the United States. Our model is enhanced by incorporating user-generated content (UGC), which is empirically proven to be significantly informative. Overall, the AI model attains more than 90% (...) precision rate, while the recall rate is higher than 80% in an out-of-sample test. In addition, we conduct a field experiment to verify the external validity of the AI model in a real-life setting. Our model identifies 293 arbitrage opportunities during a one-year field experiment and generates a profit of $7.06 per arbitrage opportunity. The result demonstrates that AI performs exceptionally well in identifying arbitrage opportunities in retail markets with tangible economic values. Our results also yield important implications regarding the role of AI in the society, both from the consumer and firm perspectives. (shrink)

Philosophical writing on probability theory includes a great many articles discussing relationships between rational behavior and an agent’s susceptibility to betting contexts where an overall loss is mathematically inevitable. What the dutch book theorem establishes is that this kind of susceptibility is a consequence of having betting ratios that are in violation of the Kolmogorov probability axioms. In this article it is noted that a general result to rule out arbitrage can be shown to yield the dutch book theorem (...) as a special case. A formal framework is set forth to handle marketplace transactions involving contractual arrangements; and, within that framework, necessary and sufficient conditions are given for ruling out arbitrage. It is then shown that these conditions entail that pricing functions associated with particular kinds of betting contracts must turn out to be probability functions. (shrink)

Philosophical writing on probability theory includes a great many articles discussing relationships between rational behavior and an agent’s susceptibility to betting contexts where an overall loss is mathematically inevitable. What the dutch book theorem establishes is that this kind of susceptibility is a consequence of having betting ratios that are in violation of the Kolmogorov probability axioms. In this article it is noted that a general result to rule out arbitrage can be shown to yield the dutch book theorem (...) as a special case. A formal framework is set forth to handle marketplace transactions involving contractual arrangements; and, within that framework, necessary and sufficient conditions are given for ruling out arbitrage. It is then shown that these conditions entail that pricing functions associated with particular kinds of betting contracts must turn out to be probability functions. (shrink)

Pt. I. Zeno and the metaphysics of quantity. Zeno's paradox of measure -- Tractarian nominalism -- Logical atoms and combinatorial possibility -- Strict coherence, sigma coherence, and the metaphysics of quantity -- pt. II. Coherent degrees of belief. Higher-order degrees of belief -- A mistake in dynamic coherence arguments? -- Dynamic coherence and probability kinematics -- Updating, supposing, and MAXENT -- The structure of radical probabilism -- Diachronic coherence and radical probabilism -- pt. III. Induction. Carnapian inductive logic for Markov (...) chains -- Carnapian inductive logic and Bayesian statistics -- Bayesian projectability. (shrink)

de Bruin et al. (The Stanford Encyclopedia of Philosophy, Stanford University, Stanford, 2018) write that it is a philosophically interesting question “whether there is such a thing as an 'intrinsic' value of financial assets” noting that the calculation of any intrinsic price will depend, in part, on subjective elements. McCauley suggest that there are at least five different notions of the ‘true value’ of an asset in finance theory, and argues, consistent with de Bruin et al. that in many cases (...) the calculation of such values “makes impossible information demands on our knowledge of future dividends and returns”. This paper explores some of the subjective elements involved in calculating the intrinsic value of an asset, and their implications for the Law of One Price. The Law of One Price states that investors should not pay different prices for the same investment. Consequently, the existence, and persistence, of arbitrage opportunities is often attributed to investor irrationality. However, if subjectivity is involved in the calculation of intrinsic value then two investors can, rationally, disagree about the value of a security. This implies that arbitrage opportunities may not always be instances of irrationality, or genuine mispricing, but reflect different investors perceptions of the security. In economics, value is taken to be subjective, and Postigo describes how goods have value because of the role they play in the satisfaction of our needs. By applying this to finance, this paper will argue that a security can play a number of roles in a portfolio, depending on an investor's strategy. Given these different roles, different investors will be working with different data in their assessment of intrinsic value. In order to establish that an arbitrage opportunity exists it is therefore necessary to understand what information is relevant to pricing the investment in different locations, or markets. It may, in fact, be the case that the same security can trade at different prices because different investors do not see it as the ‘same thing’ at all. This analysis can also be used to throw doubt on the emphasis that fundamental analysis receives in discussions of rationality. (shrink)

L’objet de l’article est de discuter de méthodes d’observation et d’interprétation des arbitrages résidentiels de salariés face à la flexibilité de leur emploi. Après avoir montré les limites de l’investigation quantitative sur cette question, la réflexion s’appuiera sur les résultats d’une enquête qualitative auprès de salariés confrontés, en 2000, à la fermeture de leur usine et à sa délocalisation à 200 km de leur domicile. Dans ce type de situations, ce n’est pas la seule mobilité résidentielle suscitée par l’emploi qu’il (...) s’agit d’étudier mais bien les arbitrages entre, à la fois, mobilité et non-mobilité. Cette posture rend ainsi possible l’identification du caractère multidimensionnel de ces choix : les logiques professionnelles n’expliquent pas tout, les logiques familiales et résidentielles jouent un rôle important dans le refus de déménager ou l’aménagement d’un système de double résidence. Cette approche permet d’appréhender en quoi ces décisions reproduisent, voire aggravent les inégalités sociales, tout en incluant les possibilités de stratégies résidentielles et spatiales.Based on the results from a qualitative enquiry of employees faced with the closure of their industrial plant, in 2000, and its further relocation 200 km away, this paper provides an approach to residential choices in a context of professional uncertainty and economic constraints. In this type of situations, it is not only residential mobility which is at stake but also the choice between mobility and non-mobility. This method also enables the analysis of the multidimensional characteristic of these choices : professional considerations alone do not explain everything, family life and residential considerations play a role in choosing « residential anchoring » or dual residence. This approach shows how the choices made reproduce or even worsen social unequalities, whilst including spatial and residential strategies. (shrink)

de Bruin et al. The Stanford encyclopedia of philosophy, Stanford University, Stanford, 2018) write that it is a philosophically interesting question “whether there is such a thing as an “intrinsic” value of financial assets” noting that the calculation of any intrinsic price will depend, in part, on subjective elements. McCauley suggest that there are at least five different notions of the ‘true value’ of an asset in finance theory, and argues, consistent with de Bruin et al. that in many cases (...) the calculation of such values “makes impossible information demands on our knowledge of future dividends and returns”. This paper explores some of the subjective elements involved in calculating the intrinsic value of an asset, and their implications for the Law of One Price. The Law of One Price states that investors should not pay different prices for the same investment. Consequently, the existence, and persistence, of arbitrage opportunities is often attributed to investor irrationality. However, if subjectivity is involved in the calculation of intrinsic value then two investors can, rationally, disagree about the value of a security. This implies that arbitrage opportunities may not always be instances of irrationality, or genuine mispricing, but reflect different investor’s perceptions of the security. In economics, value is taken to be subjective, and Postigo describes how goods have value because of the role they play in the satisfaction of our needs. By applying this to finance, this paper will argue that a security can play a number of roles in a portfolio, depending on an investors’ strategy. Given these different roles, different investors will be working with different data in their assessment of intrinsic value. In order to establish that an arbitrage opportunity exists it is therefore necessary to understand what information is relevant to pricing the investment in different locations, or markets. It may, in fact, be the case that the same security can trade at different prices because different investors do not see it as the ‘same thing’ at all. This analysis can also be used to throw doubt on the emphasis that fundamental analysis receives in discussions of rationality. (shrink)

Une première approche voudrait réunir la justice prédictive et le droit international de l’investissement sous la même bannière, cette matière visant à apporter un cadre juridique stable à l’investisseur étranger face au comportement possiblement imprévisible de l’État d’accueil de l’investissement. Or, le processus d’ open data des décisions arbitrales, au sens large, est loin d’être achevé alors que subsiste la confidentialité des délibérés, ce qui tronque inévitablement l’échantillon de données exploité par les outils de justice prédictive. En outre, l’arbitrage (...) relatif aux investissements étrangers est un contentieux complexe caractérisé par une immense multiplicité de faits et de règles de droit applicables, rendant ainsi les combinaisons de données déclinables à l’infini et, conséquemment, les pronostics plus instables. Ces constats successifs ne nous dispenseront pas, toutefois, d’émettre quelques recommandations au cas où notre propre pronostic sur la justice prédictive et l’arbitrage international relatif aux investissements étrangers serait, dans les années à venir, déjoué. (shrink)

Le droit de l arbitrage, plus encore que le droit international privé, se prête à une réflexion de philosophie du droit.

This paper is about a support information management system for a wind power producer having an energy storage system and participating in a day-ahead electricity market. Energy storage can play not only a leading role in mitigation of the effect of uncertainty faced by a WP producer, but also allow for conversion of wind energy into electric energy to be stored and then released at favourable hours. This storage provides capability for arbitrage, allowing an increase on profit of a (...) WP producer, but must be supported by a convenient problem formulation. The formulation proposed for the support information management system is based on an approach of stochasticity written as a mixed integer linear programming problem. WP and market prices are considered as stochastic processes represented by a set of scenarios. The charging/discharging of the ESS are considered dependent on scenarios of market prices and on scenarios of WP. The effectiveness of the proposed formulation is tested by comparison of case studies using data from the Iberian Electricity Market. The comparison is in favour of the proposed consideration of stochasticity. (shrink)

Dans le cadre des négociations commerciales internationales, les politiques en faveur de la diversité culturelle désignent un objectif qui consiste à limiter l'uniformisation censée résulter du fonctionnement du marché et du libre-échange. Depuis quelques années, le véritable débat ne porte plus sur l'objectif lui-même qui semble faire l'objet d'un consensus, mais sur les moyens d'y parvenir. Notre propos dans cet article est justement de revenir sur cet objectif en montrant sa complexité et son caractère multidimensionnel. Au-delà du discours incantatoire à (...) portée très générale sur ses bienfaits supposés, les décideurs publics doivent donc effectuer des arbitrages, classiquement en termes de coûts/bénéfices, de manière plus complexe entre les différentes dimensions de la diversité. Mener une politique en faveur de la diversité culturelle suppose donc de faire des choix parmi ces multiples aspects et d'assumer les coûts induits. (shrink)

Les conflits sont consubstantiels à l’homme. Pour les régler, recourir à la justice plutôt qu’à la force permet la vie en société. Cependant, la justice étatique, rendue dans de nombreux pays par des juges non indépendants du pouvoir exécutif, est parfois erratique ou partiale, rarement réparatrice et souvent chère et lente. Comme alternative, existent des modes dits alternatifs comprenant les modes amiables (non juridictionnels) et l’arbitrage (mode quasi-juridictionnel), qui peuvent être utilisés séparément, successivement ou en parallèle. Y recourir en (...) dépassant certaines réticences permet d’éviter bien des défauts de la justice étatique, en particulier en raison de l’acceptation par les parties de la solution amiable trouvée. Ces modes alternatifs sont pratiqués le plus souvent par des avocats et ont de plus en plus la faveur des politiques publiques, tant en France qu’à l’étranger. (shrink)

Economic sociologists have developed and applied theories and concepts in close connection with broadly economic phenomena, including, recently, embeddedness and actor network theory. Key to these theories is understandings of action given uncertainty in which actors develop calculative capabilities, and an emphasis on markets with boundaries and interstices as essential properties. This article reflects upon the connections between Parsons' and Smelser's economic sociology and that of contemporary authors including Granovetter, Callon and White. As a strange other to economics and to (...) sociology, economic sociology can develop research questions in considering arbitrage generally, rather than only restricted to financial markets. (shrink)

Under certain conditions private information can be a source of trade. Arbitrage for instance can occur as a result of the existence of private information. In this paper we want to explicitly model information. To do so we define an ‘information function’. This information function is a mathematical object, also known as a so called ‘wave function’. We use the definition of wave function as it is used in quantum mechanics and we attempt to show the usefulness of this (...) wave function in an economic context. We attempt to answer the following questions. How does the information function relate to private information? How can we use the information function to define the ‘quantity’ of information? How can we use the information function in arbitrage-based option pricing? How can the information function be used in the formulation of a so called Universal Brownian motion? (shrink)

Herméneutique en contexte, le droit initie des techniques d’interprétation. Plus encore, il pense la justice au risque de l’interprétation. Parmi les grandes disciplines exégétiques, à côté de la littérature, de l'exégèse biblique et de l'historiographie, le droit occupe ainsi une place singulière. Discipline exégétique, il sait la nécessité de l’interprétation et le danger de la mésinterprétation en raison du caractère équivoque d’un énoncé ou d’un contexte engageant faux-sens ou contre-sens. Ici le travail d’interprétation s’arrêterait une fois l’énoncé ou la situation (...) clarifiés. In claris cessat interpretatio. Mais, le droit travaille à interpréter les signes (preuve ou témoignage) de la conflictualité inhérente au corps social sur un fond tragique. L’interprétation juridique se déploie, sur le fond de la violence sociale du mal commis, lestée d’un lourd coefficient existentiel. Une hantise habite le droit à laquelle il réplique : l’obligation, au nom de la possible exécution de la justice, de rajouter de la peine à la peine ; la violence de l’erreur judiciaire. En droit, le tragique de l’interprétation est sous-tendu par une « pathétique de la souffrance » : le différend, le litige, le délit, la sanction, la peine. Ici l’interprétation, en plus d’être une technique, s’impose également comme une pratique : l’arbitrage par un tiers. Arbitre, pour se prémunir de l’arbitraire, le droit ne doit-il pas expliciter le statut des signes sur lesquels s’appuyer pour juger et dire le droit ? N’est-ce pas là que s’ouvre la carrière de l’interprétation ? (shrink)

Pour un arbitrage entre la théorie cognitive de l’esprit et la phénoménologie de l’intersubjectivité la technologie simule une situation de croisement perceptif dans un espace virtuel, où la reconnaissance par un agent de la présence d’un autre repose uniquement sur l’interaction comportementale. À la justification de Merleau-Ponty et Varela quant au caractère non représentationnel ni inférentiel de la reconnaissance d’autrui, en dissociant celle-ci d’avec une détermination spatiale, on ajoutera un analogon technologique de l’expérience du « visage » comme halo (...) de présence non objectivable, d’après Levinas. (shrink)

The efficient markets hypothesis has been the central proposition in finance for nearly thirty years. It states that securities prices in financial markets must equal fundamental values, either because all investors are rational or because arbitrage eliminates pricing anomalies. This book describes an alternative approach to the study of financial markets: behavioral finance. This approach starts with an observation that the assumptions of investor rationality and perfect arbitrage are overwhelmingly contradicted by both psychological and institutional evidence. In actual (...) financial markets, less than fully rational investors trade against arbitrageurs whose resources are limited by risk aversion, short horizons, and agency problems. The book presents and empirically evaluates models of such inefficient markets. Behavioral finance models both explain the available financial data better than does the efficient markets hypothesis and generate new empirical predictions. These models can account for such anomalies as the superior performance of value stocks, the closed end fund puzzle, the high returns on stocks included in market indices, the persistence of stock price bubbles, and even the collapse of several well-known hedge funds in 1998. By summarizing and expanding the research in behavioral finance, the book builds a new theoretical and empirical foundation for the economic analysis of real-world markets. (shrink)

I re-examine Coherence Arguments (Dutch Book Arguments, No Arbitrage Arguments) for diachronic constraints on Bayesian reasoning. I suggest to replace the usual game–theoretic coherence condition with a new decision–theoretic condition ('Diachronic Sure Thing Principle'). The new condition meets a large part of the standard objections against the Coherence Argument and frees it, in particular, from a commitment to additive utilities. It also facilitates the proof of the Converse Dutch Book Theorem. I first apply the improved Coherence Argument to van (...) Fraassen's (1984) Reflection principle. I then point out the failure of a Coherence Argument that is intended to support Conditionalization as a naive, universal, update rule. I also point out that Reflection is incompatible with the universal use of Conditionalization thus interpreted. The Coherence Argument therefore defeats the naive view on Bayesian learning that it was originally designed to justify. (shrink)

The efficient markets hypothesis has been the central proposition in finance for nearly thirty years. It states that securities prices in financial markets must equal fundamental values, either because all investors are rational or because arbitrage eliminates pricing anomalies. This book describes an alternative approach to the study of financial markets: behavioral finance. This approach starts with an observation that the assumptions of investor rationality and perfect arbitrage are overwhelmingly contradicted by both psychological and institutional evidence. In actual (...) financial markets, less than fully rational investors trade against arbitrageurs whose resources are limited by risk aversion, short horizons, and agency problems. The book presents and empirically evaluates models of such inefficient markets. Behavioral finance models both explain the available financial data better than does the efficient markets hypothesis and generate new empirical predictions. These models can account for such anomalies as the superior performance of value stocks, the closed end fund puzzle, the high returns on stocks included in market indices, the persistence of stock price bubbles, and even the collapse of several well-known hedge funds in 1998. By summarizing and expanding the research in behavioral finance, the book builds a new theoretical and empirical foundation for the economic analysis of real-world markets. (shrink)

Dramatic changes or revolutions in a field of science are often made by outsiders or 'trespassers,' who are not limited by the established, 'expert' approaches. Each essay in this diverse collection shows the fruits of intellectual trespassing and poaching among fields such as economics, Kantian ethics, Platonic philosophy, category theory, double-entry accounting, arbitrage, algebraic logic, series-parallel duality, and financial arithmetic.

L'inscription inédite d'Ambracie, qui est ici publiée, fait connaître le règlement frontalier entre les deux cités qui est intervenu après la destruction de l'Épire par Paul-Émile en 167 avant J.-C. Elle comprend le texte d'arbitrage entre Ambraciotes et Charadrites, puis les dispositions pratiques prises pour le bornage et le texte du serment. Elle permet de résoudre bien des problèmes de géographie historique : le fleuve Aphas est le Louros, Horraon — Horreum chez Tite-Live — est localisé dans le beau (...) site archéologique voisin d'Ammotopos, Charadros à Palaia Philippias. La délimitation frontalière peut être reconstituée et fait penser à celles qu'Ambracie tente de régler, à la même époque, avec ses voisins Athamanes et Acarnaniens. Le document permet d'identifier le grand temple archaïque dégagé à Arta comme étant celui d'Apollon Sôter et souligne les relations étroites entretenues avec l'Élide et la Thessalie ; il renseigne sur les institutions des deux cités et complète le calendrier épirote. (shrink)

Chez les enseignants-chercheurs, la faible proportion des temps-cadres institutionnels, la grande diversité des types d’activités et la porosité des frontières entre travail et hors travail imprègnent leurs pratiques professionnelles d’une grande labilité, d’une forte individualisation et de formes d’autonomie dans la construction de leur emploi du temps. Cette fluidité des temps dans l’organisation de leur travail s’accompagne pourtant chez les EC de toute une rhétorique du débordement et de la pression temporelle. Ce « je suis débordé » est mis ici (...) en relation avec le nécessaire travail de co-construction de leurs articulations temporelles. Dans ce travail invisible de configuration et d’arbitrage entre activités, l’article repère quatre foyers de tensions potentielles. Le premier réside dans l’intrication d'activités professionnelles et/ou non professionnelles de natures et de temporalités multiples. Le deuxième se situe dans la discontinuité d’activités, en contradiction avec des projections personnelles harmonisatrices. Le troisième concerne l’imbrication d’échelles de temporalités multiples et parfois concurrentes. Un dernier foyer de tensions est ouvert par les évolutions des logiques institutionnelles qui génèrent un décalage entre des représentations personnelles du métier d'EC et la progression d'injonctions de productivité, de rentabilité et d'immédiateté. L’article s’attarde ensuite sur les tactiques mobilisées par les EC pour tenter d’au moins prévenir l’actualisation de ces tensions en pressions temporelles : redécoupage des frontières entre activités, mise en place de divers micro-rituels de stabilisation du flux temporel, travail de recatégorisation des activités, temporisation, détournement ou cantonnement des temps contraints.Enfin l'article revient sur quelques enjeux ou prolongements possibles de l'idée que le rapport aux temps des EC peut être considéré moins comme un temps-cadre que comme un temps-activité. (shrink)

L’émergence des marchés en Europe de l’Est, en Asie et celle du cyber-espace ne se fait pas avec la rapidité que beaucoup d’observateurs voudraient. La lenteur de ce développement provient de l’environnement institutionnel : les systèmes législatifs ne soutiennent pas les droits de propriété privée et ne font pas plus respecter les contrats. Ainsi, beaucoup soutiennent que les Etats doivent intensifier leurs efforts pour établir un droit commercial. En réalité, il faut réclamer un désengagement de l’Etat dans le droit commercial. (...) Tout au long de l’histoire, le recours efficace de l’activité commerciale est toujours provenu d’un système polycentrique de droit coutumier avec des querelles résolues par le biais de cours de commerce ou d’arbitrage eux-mêmes appuyés par des sanctions d’ostracisme imposées de façon privée, et il en est de même pour le droit commercial international aujourd’hui. Nous proposons une description des institutions et des processus du droit commercial international, suivie de discutions sur la nécessité d’un droit polycentrique et des caractéristiques du droit coutumier. Finalement, nous expliquons pourquoi nous devrions compter sur un système de droit coutumier polycentrique sans Etat pour l’émergence récente des marchés.The emergence of markets in Eastern Europe, Asia, and cyberspace is no occurring as rapidly as many observers would like. Slow development is a function of the institutional environment: legal systems do not support private property rights or enforce contracts. Thus, many contend that states must step up their efforts to establish commercial law. In reality, less state involvement in commercial law is called for. Throughout history effective recourse for commercial activity has been produced through a polycentric system of customary law with disputes resolved through merchant courts or arbitration backed by privately imposed ostracism sanctions, and the same is true for international commercial law today. A description of the institutions and processes of international commercial law is provided, followed by discussions of the desirability of polycentric law and the characteristics of customary law. Finally, an explanation is provided for why a stateless system of polycentric customary law should be relied upon in modern emerging markets. (shrink)

This book provides the missing theoretical link between Sraffa's Production of Commodities by Means of Commodities and Debreu's Theory of Value. Its thesis is that both classical and neoclassical value theory operate through arbitrage and speculation in the financial markets. Key among those markets is the bourse or stock market. Once a stock market is incorporated into general-equilibrium theory, the classical analysis of value and the neoclassical theory of price can be seen to possess the same mathematical structure. Thus (...) the theory of arbitrage pricing in financial markets is capable of bringing together the two great rival schools of economic thought. (shrink)

AbstractForeign direct investment (FDI) in offshore financial centers (OFCs) is gaining increased attention in business ethics research. Much of this research tends to focus on OFCs as locations where firms can avoid taxes, considering such behavior as unethical. Yet, there is dearth of studies on capital round-tripping by emerging market firms, which is an integral part of this phenomenon. Such round-tripping involves firms sending capital into OFCs only to invest it back in the home country under the guise of “foreign” (...) investment. Presently there is little discussion of the ethical implications of such round-trip FDI activities. In this paper, we conceptualize round-tripping as institutional arbitrage and look at the determinants and ethical implications of such investments into OFCs. Exploring Russian round-tripping we note that firms tend to invest more funds in OFCs that offer a combination of tax and secrecy, or secrecy and property rights protection arbitrage opportunities. In either case firms exploit the opportunities provided by institutional differences between the OFC and Russia while investing back into Russia. Our results tend to indicate that equating OFC investment to tax avoidance and thus deeming it as unethical behavior is too narrow an explanation in the case of emerging economy round-tripping. This is because such investments are often motivated by the unethical behavior of home country stakeholders and may in fact provide benefits to society. (shrink)

The degree of incoherence, when previsions are not made in accordance with a probability measure, is measured by either of two rates at which an incoherent bookie can be made a sure loser. Each bet is considered as an investment from the points of view of both the bookie and a gambler who takes the bet. From each viewpoint, we define an amount invested (or escrowed) for each bet, and the sure loss of incoherent previsions is divided by the escrow (...) to determine the rate of incoherence. Potential applications include the treatment of arbitrage opportunities in financial markets and the degree of incoherence of classical statistical procedures. We illustrate the latter with the example of hypothesis testing at a fixed size. (shrink)

ABSTRACT Why did the popping of the housing bubble bring the financial system—rather than just the housing sector of the economy—to its knees? The answer lies in two methods by which banks had evaded regulatory capital requirements. First, they had temporarily placed assets—such as securitized mortgages—in off‐balance‐sheet entities, so that they did not have to hold significant capital buffers against them. Second, the capital regulations also allowed banks to reduce the amount of capital they held against assets that remained on (...) their balance sheets—if those assets took the form of AAA‐rated tranches of securitized mortgages. Thus, by repackaging mortgages into mortgage‐backed securities, whether held on or off their balance sheets, banks reduced the amount of capital required against their loans, increasing their ability to make loans many‐fold. The principal effect of this regulatory arbitrage, however, was to concentrate the risk of mortgage defaults in the banks and render them insolvent when the housing bubble popped. (shrink)

Les deux ouvrages conjoints de 1960 et 1962, Mathématiques et métaphysique chez Descartes et La Philosophie de l’algèbre, marquent dans l’oeuvre de Vuillemin un tournant qui peut éclairer le sens philosophique de la classification des systèmes. Nous présentons successivement la contribution de ces ouvrages à la définition de la méthode dite génétique en philosophie, le nouvel arbitrage « structural » attendu entre les deux histoires des sciences et de la philosophie, le rodage de l’idée de classe de systèmes entre (...) annonce et rejet de l’« intuitionnisme » ultérieur. (shrink)

Résumé Si l’espoir est une revendication impossible, alors nous exigeons l’impossible. Mais la vérité, c’est qu’il n’y a effectivement pas ici de revendications qui puissent être soumises à un arbitrage quelconque, parce que nous ne sommes pas réunis simplement pour exiger la justice économique et l’égalité sociale. Nous composons une communauté de corps ralliés dans les rues et dans les parcs.

Cet article examine, du point de vue de la socio-économie, comment consommateurs et producteurs s'y prennent pour gérer leurs « embarras du choix » respectifs (diversité de l'offre et de la concurrence d'un côté, difficulté à choisir entre produits similaires de l'autre). En reprenant la métaphore de l'âne de Buridan, qui hésite entre deux quantité de nourriture identiques, l'auteur montre d'une part que le problème du consommateur consiste souvent à convertir l'idée générale qu'il se fait du produit en choix de (...) telle ou telle de ses occurrences particulières, et d'autre part que la gestion moderne vise précisément à « équiper » la décision du consommateur pour le sortir de l'embarras du choix entre produits similaires. Nos choix de consommation individuels apparaissent ainsi comme le fruit d'un arbitrage récurrent, complexe et difficilement prévisible entre notre désir d'effectuer des choix libres et/ou pertinents (s'en remettre à soi-même), et notre souci de ne pas consacrer un temps et un effort excessifs à la sélection des produits (accepter les dispositifs du prêt-à-choisir). (shrink)

Dans cet article sont commentées trois tentatives de résolution de la Belle au bois dormant, la célèbre énigme d'auto-localisation qui engendre un paradoxe probabiliste troublant : l'arbitrage fréquentiste propose une lecture ontologique des probabilités lorsque l'approche bayésienne atteint une limite ; l'analogie avec le Monty Hall s'efforce de penser de nouvelles règles de révision doxastique communes aux deux problèmes ; enfin, la leçon des compagnons encourage le partage et l'harmonisation d'estimations probabilistes entre agents rationnels. Chacun des trois arguments est (...) rappelé brièvement, puis certaines parties sont examinées plus attentivement, critiquées ou au contraire appuyées par des idées neuves, telles que la variante des Quatre Belles. (shrink)

Adam Elga has argued that holders of imprecise credences fall prey to missed arbitrages, so that rational credences should be sharp. A decision rule proposed by Rohan Sud, Forward Looking, enables imprecise Bayesians to sidestep missed arbitrages and other ``bad books'' in isolated fixed-evidence binary betting sequences such as those of Elga. We show that Forward Looking imprecise Bayesians are committed to a bad book of bets when faced with a particular 3-bet variable-evidence binary betting sequence.

Cet article étudie les temporalités de l’action publique à travers le cas de la production des plannings dans les administrations publiques françaises. Les plannings sont considérés comme des instruments constituants des organisations au sein desquelles ils sont élaborés. En s’appuyant sur l’analyse de deux terrains complémentaires – une enquête sur la formation des attachés d’administration dans les Instituts régionaux d’administration et une enquête sur la prise en charge des chômeurs par le Pôle emploi – l’étude rappelle que les plannings produits (...) par l’encadrement intermédiaire sont l’occasion de la mise en adéquation des hommes et des choses dans le temps. Le planning apparaît en cela comme un dispositif de microplanification d’État, révélateur des injonctions réformatrices descendantes et notamment de leur composante gestionnaire. Les concepteurs de plannings sont mis en position de mettre en forme, par leurs arbitrages, les orientations de l’action publique. En retour, ces outils sont l’objet de pressions ascendantes, de la part des agents, qui conduisent à donner à l’outil un caractère diplomatique, ou tout au moins négocié. (shrink)

Essential Microeconomics is designed to help students deepen their understanding of the core theory of microeconomics. Unlike other texts, this book focuses on the most important ideas and does not attempt to be encyclopedic. Two-thirds of the textbook focuses on price theory. As well as taking a new look at standard equilibrium theory, there is extensive examination of equilibrium under uncertainty, the capital asset pricing model, and arbitrage pricing theory. Choice over time is given extensive coverage and includes a (...) basic introduction to control theory. The final third of the book, on game theory, provides a comprehensive introduction to models with asymmetric information. Topics such as auctions, signaling and mechanism design are made accessible to students who have a basic rather than a deep understanding of mathematics. Examples and diagrams are used to illustrate issues as well as formal derivations. (shrink)

Money markets are at the heart of financialized capitalism, as those markets that provide the funding liquidity needed for credit creation and leveraged trading. How have these markets evolved, grown, and become critical for larger financial flows? To answer this question, I distinguish an early period of financial globalization marked by regulatory arbitrage, offshoring, deregulation, and informal trading practices from a period of regime-consolidation marked by formal institutionalization. Concentrating on repo markets as the key funding sources for market-based banking, (...) I demonstrate that new institutional arrangements for these markets were initiated by private sector associations, but supported and authorized by public authorities. Bond trader groups codified new contractual arrangements and these were validated via reforms of bankruptcy codes and changes in central banks’ policy frameworks in the United States and European Union. Through these modifications and re-articulations in institutional conditions, transactions and large exposures on money markets became routine affairs—for shadow banking actors like money market funds as well as for commercial banks. The article concludes by discussing the continuity of regime-consolidation efforts after the transatlantic financial crisis and hypothesizes that they reveal “neo-patrimonial” features. (shrink)

Israel Kirzner cautions us that, because commodity price arbitrage as such does not operate outside commodity markets, the logic of Pareto-improving entrepreneurship does not provide a “copybook example” for explaining the evolution of social institutions in general. He characterizes Menger’s theory of the emergence of money as non-entrepreneurial; by implication, while it assures us that some monetary standard will emerge, it does not assure us that a superior monetary standard will spontaneously emerge. I argue that entrepreneurial opportunities for private (...) gain do in fact drive the Mengerian evolution from barter to money, and systematically promote the emergence of superior monetary standards, though not necessarily the best conceivable standards. In choosing among potential exchange media to accept and offer, a pre-monetary trader has a private incentive to choose commodities that have whatever properties other traders prefer in their exchange media.Israel Kirzner nous met en garde sur le fait que parce que l’arbitrage des prix des marchandises en soi n’opère pas hors des marchés des produits, la logique de l’amélioration de l’esprit d’entreprise ne procure pas un “exemple classique” pour expliquer l’évolution des institutions sociales en général. Il caractérise la théorie mengerienne de l’émergence de la monnaie comme étant non entrepreneuriale; l’implication en est que si cette théorie nous assure qu’un certain étalon monétaire va émerger, elle ne peut affirmer avec certitude que cet étalon monétaire spontané sera supérieur.L’article suggère que des opportunités entrepreneuriales de gains privés orientent en effet l’évoluti- on décrite par Menger d’une situation de troc vers une économie monétaire et promeuvent systéma- tiquement l’émergence d’étalons monétaires supérieurs, bien que pas nécessairement les meilleurs étalons concevables. En choisissant parmi les intermédiaires d’échange potentiels lequel accepter ou offrir, un négociant d’avant l’ère monétaire a une insitation privée à choisir les marchandises dotées de propriétés que les autres négociants préfèrent dans le cadre de leurs échanges. (shrink)

This essay examines three potential arguments against high-frequency trading and offers a qualified critique of the practice. In concrete terms, it examines a variant of high-frequency trading that is all about speed—low-latency trading—in light of moral issues surrounding arbitrage, information asymmetries, and systemic risk. The essay focuses on low-latency trading and the role of speed because it also aims to show that the commonly made assumption that speed in financial markets is morally neutral is wrong. For instance, speed is (...) a necessary condition for low-latency trading’s potential to cause harm in “flash crashes.” On the other hand, it also plays a crucial role in a Lockean defense against low-latency trading being wasteful developed in this essay. Finally, this essay discusses the implications of these findings for related high-frequency trading techniques like futures arbitrage or latency arbitrage—as well as for an argument as to why quote stuffing is wrong. Overall, the qualifications offered in this essay act as a counterbalance to overblown claims about trading at high speeds being wrong. (shrink)