The Bankscope dataset is a popular source of bank balance sheet informations among banking economists, which covers the last 20 years for more than 30,000 worldwide banks. This technical paper intends to provide the critical issues one has to keep in mind as well as the basic arrangements which have to be undertaken if one intends to use this dataset. To that extent, we propose some straightforward ways to deal with data comparability, consolidation, duplication of assets or mergers, and provide Stata codes to deal with it.
{"title":"Bankscope Dataset: Getting Started","authors":"Thibaut Duprey, Mathias Lé","doi":"10.2139/ssrn.2191449","DOIUrl":"https://doi.org/10.2139/ssrn.2191449","url":null,"abstract":"The Bankscope dataset is a popular source of bank balance sheet informations among banking economists, which covers the last 20 years for more than 30,000 worldwide banks. This technical paper intends to provide the critical issues one has to keep in mind as well as the basic arrangements which have to be undertaken if one intends to use this dataset. To that extent, we propose some straightforward ways to deal with data comparability, consolidation, duplication of assets or mergers, and provide Stata codes to deal with it.","PeriodicalId":414983,"journal":{"name":"IRPN: Innovation & Finance (Topic)","volume":"13 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-11-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127730505","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We show the statistical properties of the most important cryptocurrencies, of which Bitcoin is the most prominent example. We characterize their exchange rates versus the US Dollar by fitting parametric distributions to them. It is shown that returns are clearly non-normal, with standard heavy-tailed distributions giving good descriptions of the data. The results are important for investment and risk management purposes.
{"title":"The Statistics of Bitcoin and Cryptocurrencies","authors":"Joerg Osterrieder","doi":"10.2139/ssrn.2872158","DOIUrl":"https://doi.org/10.2139/ssrn.2872158","url":null,"abstract":"We show the statistical properties of the most important cryptocurrencies, of which Bitcoin is the most prominent example. We characterize their exchange rates versus the US Dollar by fitting parametric distributions to them. It is shown that returns are clearly non-normal, with standard heavy-tailed distributions giving good descriptions of the data. The results are important for investment and risk management purposes.","PeriodicalId":414983,"journal":{"name":"IRPN: Innovation & Finance (Topic)","volume":"2 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-10-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125276242","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Credit Card industry which has recovered from the aftershocks of global meltdown in new economy has changed drastically. As the industry slowly recovered consumer preferences also changed. Consumer which preferred low interest rates and charges now focus on having mutually beneficial relationship with the credit card issuers. Reward programs have emerged as an important tool for a long term association between the cardholders and card issuers in the new economy. Rather than having multiple cards as before, cardholders have now consolidated their spending into a single card which offer them valuable rewards. Card issuers have further customized the reward program to suit the different needs of customers and create more value. Thus it is very important to study customer preferences for credit card reward programs in this ever changing new economy. The purpose of this research paper is to determine important factors for credit card reward program and to explore credit card usage behavior. Variables are adopted from a study conducted by O’Brien and Jones (1995). Five factors Cash value, Redemption Choice, Aspirational Value, Relevance and Convenience have been identified. The sample was selected from the National Capital Region of Delhi because consumers have greater exposure to credit cards. This study based in India has relevance because of changing consumers’ preferences and usage behaviour in the new economy.
{"title":"Important Factors of Credit Card Reward Program- A Consumers' Perspective in New Economy","authors":"R. Banerji, Rahela Farooqi","doi":"10.2139/ssrn.3039327","DOIUrl":"https://doi.org/10.2139/ssrn.3039327","url":null,"abstract":"Credit Card industry which has recovered from the aftershocks of global meltdown in new economy has changed drastically. As the industry slowly recovered consumer preferences also changed. Consumer which preferred low interest rates and charges now focus on having mutually beneficial relationship with the credit card issuers. Reward programs have emerged as an important tool for a long term association between the cardholders and card issuers in the new economy. Rather than having multiple cards as before, cardholders have now consolidated their spending into a single card which offer them valuable rewards. Card issuers have further customized the reward program to suit the different needs of customers and create more value. Thus it is very important to study customer preferences for credit card reward programs in this ever changing new economy. The purpose of this research paper is to determine important factors for credit card reward program and to explore credit card usage behavior. Variables are adopted from a study conducted by O’Brien and Jones (1995). Five factors Cash value, Redemption Choice, Aspirational Value, Relevance and Convenience have been identified. The sample was selected from the National Capital Region of Delhi because consumers have greater exposure to credit cards. This study based in India has relevance because of changing consumers’ preferences and usage behaviour in the new economy.","PeriodicalId":414983,"journal":{"name":"IRPN: Innovation & Finance (Topic)","volume":"19 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-09-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115170441","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2016-09-01DOI: 10.1017/9781108304429.003
J. Landau
It is widely recognised that an excess of credit caused the financial crisis. In the future, one objective of macroprudential policy will be to regulate the financial cycle in order to prevent the disruptions associated with booms and busts. Tools have been available for a long time to regulate credit in specific sectors or categories, such as loan-to-value or loan-to-income ratios, as well as margin requirements. New instruments are now being developed at the aggregate level, first of all the countercyclical capital buffer. All share a common feature: they rely exclusively on the direct control of leverage. Full publication: Macroprudential Policy
{"title":"A Liquidity-Based Approach to Macroprudential Policy","authors":"J. Landau","doi":"10.1017/9781108304429.003","DOIUrl":"https://doi.org/10.1017/9781108304429.003","url":null,"abstract":"It is widely recognised that an excess of credit caused the financial crisis. In the future, one objective of macroprudential policy will be to regulate the financial cycle in order to prevent the disruptions associated with booms and busts. Tools have been available for a long time to regulate credit in specific sectors or categories, such as loan-to-value or loan-to-income ratios, as well as margin requirements. New instruments are now being developed at the aggregate level, first of all the countercyclical capital buffer. All share a common feature: they rely exclusively on the direct control of leverage. Full publication: Macroprudential Policy","PeriodicalId":414983,"journal":{"name":"IRPN: Innovation & Finance (Topic)","volume":"11 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131612129","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Dean S. Karlan, J. Kendall, R. Mann, R. Pande, T. Suri, Jonathan Zinman
A growing body of rigorous research shows that financial services innovations can have important positive impacts on wellbeing, but also that many do not. We first describe the latest evidence on what works in financial inclusion. Second, we summarize research on key financial market failures and on products and innovations that address specific mechanisms underlying them. We conclude by highlighting open areas for future work.
{"title":"Research and Impacts of Digital Financial Services","authors":"Dean S. Karlan, J. Kendall, R. Mann, R. Pande, T. Suri, Jonathan Zinman","doi":"10.2139/ssrn.2844388","DOIUrl":"https://doi.org/10.2139/ssrn.2844388","url":null,"abstract":"A growing body of rigorous research shows that financial services innovations can have important positive impacts on wellbeing, but also that many do not. We first describe the latest evidence on what works in financial inclusion. Second, we summarize research on key financial market failures and on products and innovations that address specific mechanisms underlying them. We conclude by highlighting open areas for future work.","PeriodicalId":414983,"journal":{"name":"IRPN: Innovation & Finance (Topic)","volume":"24 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125167076","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We propose a simple two-mode random network formation model aimed to mimic the properties of an entrepreneurial finance network, and calibrate it with data of a network of startups, and investors of the entrepreneurial finance setting in California. In the model some investors match startups at random, and some others find about investment opportunities by invitations from investors they are connected with. This model helps explains features of the observed network such as its degree distribution, average distance and diameter, and clustering.
{"title":"Random Network Formation in Entrepreneurial Finance: A Simple Model and Evidence","authors":"R. Pasquini, Virginia Sarria-Allende","doi":"10.2139/ssrn.2822357","DOIUrl":"https://doi.org/10.2139/ssrn.2822357","url":null,"abstract":"We propose a simple two-mode random network formation model aimed to mimic the properties of an entrepreneurial finance network, and calibrate it with data of a network of startups, and investors of the entrepreneurial finance setting in California. In the model some investors match startups at random, and some others find about investment opportunities by invitations from investors they are connected with. This model helps explains features of the observed network such as its degree distribution, average distance and diameter, and clustering.","PeriodicalId":414983,"journal":{"name":"IRPN: Innovation & Finance (Topic)","volume":"23 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-08-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123999382","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Kieran Garvey, B. Zhang, Luke Deer, R. Wardrop, Andrew R. Grant, S. Thorp, Tania Ziegler, Ying Kong, Xinwei Zheng, Eva Huang, John Burton, Hung‐Yi Chen, Alexis Lui
Online alternative finance is developing rapidly in the Asia-Pacific region. It is characterised by innovative financial instruments and channels that fall outside the traditional avenues of capital raising and financial intermediation. From reward-based crowdfunding to peer-to-peer consumer and business lending (i.e. marketplace lending), to invoice trading and equity-based crowdfunding, these online alternative finance activities are directly connecting lenders to consumer and small business borrowers, raising venture capital for start-ups, funding the creative industries and creating new ways for individuals and institutions to choose how and to whom money is distributed, lent and invested.
This benchmarking research is the first comprehensive study of the Asia-Pacific online alternative finance market. It has been conducted by an international research team from the Cambridge Centre for Alternative Finance at Cambridge Judge Business School, the Tsinghua University Graduate School at Shenzhen, the University of Sydney Business School, in partnership with KPMG and with the support of the ACCA and CME Group Foundation. Working with over 20 industry research partners, together we have systematically collected survey data from 503 leading alternative finance platforms operating in 17 Asia-Pacific countries and regions, out of which, 376 were from mainland China.
Our definition of online alternative finance focuses on the provision of finance to individuals and businesses through alternative channels via online marketplaces outside of the banking system. It excludes activities such as peer-to-peer insurance, online money market funds or third-party payments. The report captures an estimated 70% of the visible market, and estimates that the total Asia-Pacific online alternative finance market grew 323% year-on-year to reach $102.81 billion USD in 2015.
Market size & growth China is the world's largest online alternative finance market by transaction volume, registering $101.7 billion (or RMB 638.79 billion) in 2015. This constitutes almost 99% of the total volume in the Asia-Pacific region. In comparison, the total size of the UK online alternative finance market was $4.5 billion (or £3.2 billion) in 2015. The Chinese online alternative finance market grew from a relatively low base of $5.56 billion in 2013 to reach $24.30 billion in 2014 and then went on to reach $101.7 billion in 2015 - an average growth rate of 328% between 2013 and 2015. Marketplace/peer-to-peer consumer lending is the largest market segment in China with $52.44 billion lent, followed by marketplace/peer-to-peer business lending ($39.63 billion) and real estate lending ($5.51 billion). Online invoice trading reached $1.46 billion, equity-based crowdfunding recorded $948.26m and reward-based crowdfunding rose to $829.52m in 2015.
Excluding mainland China, the rest of the Asia-Pacific region recorded a volume of USD $1.12 billion in 2015 with
网络替代金融在亚太地区发展迅速。它的特点是创新的金融工具和渠道，不属于传统的融资和金融中介途径。从基于奖励的众筹到点对点消费者和企业贷款(即市场贷款)，再到发票交易和股权众筹，这些在线另类金融活动直接将贷款人与消费者和小企业借款人联系起来，为初创企业筹集风险资本，为创意产业提供资金，并为个人和机构创造了选择资金分配、贷款和投资方式和对象的新方式。这项基准研究是对亚太地区在线另类金融市场的首次全面研究。该研究由剑桥贾奇商学院剑桥另类金融中心、清华大学深圳研究生院、悉尼大学商学院的一个国际研究团队与毕马威(KPMG)合作开展，并得到了ACCA和芝加哥商品交易所集团基金会(CME Group Foundation)的支持。我们与20多家行业研究合作伙伴共同系统收集了来自17个亚太国家和地区的503家领先替代金融平台的调查数据，其中376家来自中国大陆。我们对在线替代金融的定义侧重于通过银行系统外的在线市场通过替代渠道向个人和企业提供融资。它不包括p2p保险、在线货币市场基金或第三方支付等活动。该报告估计占据了70%的可见市场，并估计2015年亚太地区在线替代金融市场总额同比增长323%，达到1028.1亿美元。市场规模&按交易量计算，中国是世界上最大的在线另类金融市场，2015年的交易额为1017亿美元(约合6387.9亿元人民币)。这几乎占亚太地区总量的99%。相比之下，2015年英国在线另类金融市场的总规模为45亿美元(或32亿英镑)。中国在线替代金融市场从2013年55.6亿美元的相对较低基数增长到2014年的243亿美元，然后在2015年达到1017亿美元，2013年至2015年的平均增长率为328%。市场/个人对个人消费贷款是中国最大的细分市场，贷款额为524.4亿美元，其次是市场/个人对个人商业贷款(396.3亿美元)和房地产贷款(55.1亿美元)。2015年，在线发票交易达到14.6亿美元，股权众筹达到9.4826亿美元，奖励众筹达到8.2952亿美元。除中国大陆外，亚太地区其他地区2015年的融资额为11.2亿美元，较2014年的2.7194亿美元同比增长313%。2015年，日本的在线另类金融市场累计收入为3.6023亿美元，其次是澳大利亚的3.4837亿美元、新西兰的2.6777亿美元、韩国的4118万美元、印度的3991万美元和新加坡的3976万美元。然而，在中国之外，新西兰的人均另类融资金额最高，为59.37美元，其次是澳大利亚(14.83美元)、新加坡(7.27美元)、日本(2.83美元)和香港(1.28美元)。2015年，中国人均另类金融市场规模为74.54美元。就中国以外的主要细分市场而言，市场/点对点商业贷款规模最大，达3.5551亿美元，其次是市场/点对点消费贷款(3.2622亿美元)、资产负债表商业贷款(1.2062亿美元)、发票交易(1.1695亿美元)、奖励众筹(8122万美元)和股权众筹(6413万美元)。
{"title":"Harnessing Potential: The Asia-Pacific Alternative Finance Benchmarking Report","authors":"Kieran Garvey, B. Zhang, Luke Deer, R. Wardrop, Andrew R. Grant, S. Thorp, Tania Ziegler, Ying Kong, Xinwei Zheng, Eva Huang, John Burton, Hung‐Yi Chen, Alexis Lui","doi":"10.2139/ssrn.3621310","DOIUrl":"https://doi.org/10.2139/ssrn.3621310","url":null,"abstract":"Online alternative finance is developing rapidly in the Asia-Pacific region. It is characterised by innovative financial instruments and channels that fall outside the traditional avenues of capital raising and financial intermediation. From reward-based crowdfunding to peer-to-peer consumer and business lending (i.e. marketplace lending), to invoice trading and equity-based crowdfunding, these online alternative finance activities are directly connecting lenders to consumer and small business borrowers, raising venture capital for start-ups, funding the creative industries and creating new ways for individuals and institutions to choose how and to whom money is distributed, lent and invested. <br><br>This benchmarking research is the first comprehensive study of the Asia-Pacific online alternative finance market. It has been conducted by an international research team from the Cambridge Centre for Alternative Finance at Cambridge Judge Business School, the Tsinghua University Graduate School at Shenzhen, the University of Sydney Business School, in partnership with KPMG and with the support of the ACCA and CME Group Foundation. Working with over 20 industry research partners, together we have systematically collected survey data from 503 leading alternative finance platforms operating in 17 Asia-Pacific countries and regions, out of which, 376 were from mainland China. <br><br>Our definition of online alternative finance focuses on the provision of finance to individuals and businesses through alternative channels via online marketplaces outside of the banking system. It excludes activities such as peer-to-peer insurance, online money market funds or third-party payments. The report captures an estimated 70% of the visible market, and estimates that the total Asia-Pacific online alternative finance market grew 323% year-on-year to reach $102.81 billion USD in 2015.<br><br>Market size & growth<br>China is the world's largest online alternative finance market by transaction volume, registering $101.7 billion (or RMB 638.79 billion) in 2015. This constitutes almost 99% of the total volume in the Asia-Pacific region. In comparison, the total size of the UK online alternative finance market was $4.5 billion (or £3.2 billion) in 2015. The Chinese online alternative finance market grew from a relatively low base of $5.56 billion in 2013 to reach $24.30 billion in 2014 and then went on to reach $101.7 billion in 2015 - an average growth rate of 328% between 2013 and 2015. Marketplace/peer-to-peer consumer lending is the largest market segment in China with $52.44 billion lent, followed by marketplace/peer-to-peer business lending ($39.63 billion) and real estate lending ($5.51 billion). Online invoice trading reached $1.46 billion, equity-based crowdfunding recorded $948.26m and reward-based crowdfunding rose to $829.52m in 2015.<br><br>Excluding mainland China, the rest of the Asia-Pacific region recorded a volume of USD $1.12 billion in 2015 with ","PeriodicalId":414983,"journal":{"name":"IRPN: Innovation & Finance (Topic)","volume":"7 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-03-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124892461","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Though seen primarily as lenders, depository banks face their own financing challenges arising from their role as intermediaries, their compliance with prudential regulation, the short-term stresses on their financial resources, and their changing position in a credit market populated with nonbank competitors. At the same time, these banks enjoy unique support from the central bank and government authorities, which stand by with stabilizing liquidity to supplement market funds. Drawing primarily on the banking system in the United States, this book offers an innovative framework that integrates a depository bank’s liquidity and its capital adequacy into a unified notion of funding, one that reveals how the 2007-2008 crisis unfolded, why central banks succeeded in resolving the crisis, and how the conceptual legacy of the crisis and its resolution led to lasting changes in bank funding regulation, including new objective requirements about a bank’s liquidity. To provide a comparative context, the book also examines the funding models of nonbank intermediaries like dealer banks and insurers.
{"title":"Bank Funding, Liquidity, and Capital Adequacy: A Law and Finance Approach","authors":"Joseba Gabilondo","doi":"10.2139/SSRN.2741298","DOIUrl":"https://doi.org/10.2139/SSRN.2741298","url":null,"abstract":"Though seen primarily as lenders, depository banks face their own financing challenges arising from their role as intermediaries, their compliance with prudential regulation, the short-term stresses on their financial resources, and their changing position in a credit market populated with nonbank competitors. At the same time, these banks enjoy unique support from the central bank and government authorities, which stand by with stabilizing liquidity to supplement market funds. Drawing primarily on the banking system in the United States, this book offers an innovative framework that integrates a depository bank’s liquidity and its capital adequacy into a unified notion of funding, one that reveals how the 2007-2008 crisis unfolded, why central banks succeeded in resolving the crisis, and how the conceptual legacy of the crisis and its resolution led to lasting changes in bank funding regulation, including new objective requirements about a bank’s liquidity. To provide a comparative context, the book also examines the funding models of nonbank intermediaries like dealer banks and insurers.","PeriodicalId":414983,"journal":{"name":"IRPN: Innovation & Finance (Topic)","volume":"22 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-03-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133753911","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Back to 2008, Nakamoto combined the distributed ledger technology with cryptography and gave origin to what is now known as blockchain technology. The blockchain technology allows for a trustworthy record of transactions among anonymous without the need of a neutral central authority. The blockchain contains all the transaction history and each transaction is tamper-proof, publicly auditable (traceable) and no-reversible. The first application of the blockchain technology is Bitcoin: a digital currency that combines together the characteristics of money with those of a payment system. This dual nature is explained by the fact that Bitcoin is money expressed as a string of bits sent as a message in a fully decentralized network composed of millions of users with computers and devices connected among each other. In this chapter we analyze the dual nature of Bitcoin both as payment system and money.
{"title":"The Dual Nature of Bitcoin as Payment Network and Money","authors":"Paolo Tasca","doi":"10.2139/ssrn.2805003","DOIUrl":"https://doi.org/10.2139/ssrn.2805003","url":null,"abstract":"Back to 2008, Nakamoto combined the distributed ledger technology with cryptography and gave origin to what is now known as blockchain technology. The blockchain technology allows for a trustworthy record of transactions among anonymous without the need of a neutral central authority. The blockchain contains all the transaction history and each transaction is tamper-proof, publicly auditable (traceable) and no-reversible. The first application of the blockchain technology is Bitcoin: a digital currency that combines together the characteristics of money with those of a payment system. This dual nature is explained by the fact that Bitcoin is money expressed as a string of bits sent as a message in a fully decentralized network composed of millions of users with computers and devices connected among each other. In this chapter we analyze the dual nature of Bitcoin both as payment system and money.","PeriodicalId":414983,"journal":{"name":"IRPN: Innovation & Finance (Topic)","volume":"27 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-02-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122908016","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper investigates one aspect of the herd behavior in financial markets: the cognitive mutual interaction among professional agents. Professional agents are in continuous contact and exchange information and interpretations in order to develop their expectations. We hypothesized that this exchange is very widespread and could grow in crisis situations. Data demonstrate the correctness of our hypothesis. In the second part of the paper we study a mathematical model of agents’ network in order to better comprehend the dynamics of market beliefs. The linear difference equation model shows how, under certain conditions, the expectations of financial agents can converge to a unique belief, in spite of initial differences.
{"title":"The Psychological Backstage of the Herd Behavior in the Financial Markets and the Dynamics of the ‘Cognitive Tâtonnement’ to Market Beliefs","authors":"L. Ferrari, F. Magri","doi":"10.2139/ssrn.2687085","DOIUrl":"https://doi.org/10.2139/ssrn.2687085","url":null,"abstract":"This paper investigates one aspect of the herd behavior in financial markets: the cognitive mutual interaction among professional agents. Professional agents are in continuous contact and exchange information and interpretations in order to develop their expectations. We hypothesized that this exchange is very widespread and could grow in crisis situations. Data demonstrate the correctness of our hypothesis. In the second part of the paper we study a mathematical model of agents’ network in order to better comprehend the dynamics of market beliefs. The linear difference equation model shows how, under certain conditions, the expectations of financial agents can converge to a unique belief, in spite of initial differences.","PeriodicalId":414983,"journal":{"name":"IRPN: Innovation & Finance (Topic)","volume":"15 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-11-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126456490","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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