The University of Buckingham Press Journals
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Self-resolving Information Markets: An Experimental Case Study
No full textOn traditional information markets (TIMs), rewards are tied to the occurrence (or non-occurrence) of events external to the market, such as some particular candidate winning an election. For that reason, they can only be used when it is possible to wait for some external event to resolve the market. In cases involving long time-horizons or counterfactual events, this is not an option. Hence, the need for a self-resolving information market (SRIM), resolved with reference to factors internal to the market itself. In the present paper, we first offer some theoretical reasons for thinking that, since the only thing that can be expected to be salient to all participants on a SRIM is the content of the question bet on, a convention will arise of taking that question at face value, and betting accordingly, in which case trading behaviour on SRIMs can be expected to be identical to that on TIMs. This is the ‘face value’ hypothesis. If this hypothesis holds, SRIMs have the potential of incorporating the accuracy of TIMs while shedding their limitations in relation to long-term predictions and the evaluation of counterfactuals. We then report on a laboratory experiment that demonstrates that trading behaviour can indeed come out highly similar across SRIMs and TIMs. As such, the study can be thought of as an experimental case study on SRIMs. Finally, we discuss some limitations of the study, and also points towards fruitful areas of future research in light of our results
IS THERE A FRIDAY EFFECT IN FINANCIAL MARKETS?
No full textThis paper tests for the presence of the Friday effect in various financial markets (stock markets, FOREX, and commodity markets) by using a number of statistical techniques (average analysis, parametric tests such as Student's t-test and ANOVA analysis, non-parametric ones such as the Kruskal-Wallis test, regression analysis with dummy variables). The evidence suggests that stock markets are immune to Friday effects, whilst in the FOREX Fridays exhibit higher volatility, and in the Gold market returns are higher on this day of the week. Using a trading robot approach we show that the latter anomaly can be exploited to make abnormal profits.
Assumption of Responsibility by Public Authorities
Get PDFSince the House of Lords’ decision in the Gorringe case, there can be no reason for imposing a duty of care in negligence on a public authority that would not also count as a reason for imposing a duty of care on a private person. In this context assumption of responsibility, as the primary concept used to explain the imposition of a duty of care in novel situations, acquires great importance. This article explores whether the concept’s application to public authorities produces satisfactory results and, finding that it does not, concludes that this underlines the folly of insisting that public authorities must be treated in the same way as private persons
CORRUPTION AND MISUSE OF PUBLIC OFFICE
Get PDFCORRUPTION AND MISUSE OF PUBLIC OFFICEColin Nicholls QC, Tim Daniel, Alan Bacarese, James Maton and Professor John Hatchard, (3rd edn, OUP 2017) lxxviii and 934
Evidencing the Forecasting Performance of Predication Markets: An Empirical Comparative Study
Get PDFAccurately forecasting uncertain outcomes to inform planning processes and aid decision making is a perennial organisational challenge, and the focus of a substantial body of research in management science, information systems and related disciplines. Academic research suggests that prediction markets may be of significant benefit to organisations in meeting this challenge. However most of the empirical studies assessing prediction market performance are laboratory based and suffer from limits to their generalizability. Recent literature has called for research which analyses the performance of prediction markets in ecologically valid settings in order to evidence their effectiveness to potential organisational users. This paper answers these calls by designing a prediction market to forecast an uncertain real world event. The study then compares the forecasting performance of the prediction market with a number of more traditional forecasting approaches regularly used by organisations. The study is contextually situated in a low information heterogeneity problem space, where relevant information is freely available. The results suggest that in this context prediction markets outperform the other forecasting methods studied
Forecasting 2016 US Presidential Elections Using Factor Analysis and Regression Model
No full textThe paper categorizes factors responsible for forecasting the outcome of U.S. presidential election 2016 using factor analysis, which groups the various economic and non-economic parameters based on the correlation among them. The major economic factor significant in 2016 US presidential election is the growth of the economy, and the ‘anti-incumbency factor that signifies how long the incumbent party has been controlling the White House is found to be an important non-economic factor likely to play a dominant role in the election. The dependent variables considered are the vote shares of the nominees of the incumbent and the non-incumbent majority party candidates. The forecast is calculated by running a regression of the significant factors, obtained through factor analysis technique, on the incumbent party vote share as well as on the non-incumbent party vote share. The proposed models forecast the vote share of Democrat candidate Mrs. Hillary Clinton to be 45.59% with a standard error of ±2.32% and that of Republican candidate Mr. Donald Trump to be 39.51% with a standard error of ±3.87%. Hence, the models built in the paper signal a comfortable margin of victory for the Presidential nominee of the incumbent party, Hillary Clinton.The study re-establishes the notion that the non-economic factors have a greater influence on the outcomes of election as compared to the economic factors, as some of the important economic factors such as inflation and unemployment rate failed to establish their significance.
UNDUE INFLUENCE: TOWARDS A UNIFYING CONCEPT OF UNCONSCIONABLITY?
Get PDFThe article argues for an assimilation of the related doctrines of undue influence and unconscionable dealings under one common umbrella of unconscionability. The interrelationship between unconscionable bargains and undue influence under English law is considered in some detail, as well as developments in other Commonwealth jurisdictions, notably, in Canada, Australia and New Zealand. After examining the views of several academic commentators, the conclusion is that such an assimilation would do much to rationalise and simplify current English law. If, however, the English courts are reluctant to undertake what is perceived to be essentially a function of Parliament in developing the law, serious thought should be given to rationalising this area of law by means of legislative intervention
Integrating prediction markets into the due process of international accounting standard setting: A possible path to achieving legitimate accounting standards?
No full textThe authors present the idea of integrating prediction markets into the IASB’s due process of accounting standards development in order to assure the legitimacy of IFRS. They refer to the constitutional economics concept of hypothetical consent and further substantiate literature claims that the legitimacy of any regulation with a lack of governmental control should be linked to adequate processes of rule development. The authors argue that standard-setting procedures which integrate market solutions into the search process for legitimate standards outperform pure discourse solutions that dominate contemporary accounting regulation. The prediction market approach is of particular interest because it addresses the identified major legitimacy concerns regarding the IASB’s current due process. Compared to other market solutions, prediction markets could be integrated relatively easily into the current institutional setting of global accounting regulation. The authors therefore suggest a basic design of a due process for the IASB that utilises a prediction market. The main contributions of the article are as follows: (1) it expands literature on the legitimacy of global standard setting in accounting; (2) it offers a new market approach to international accounting regulation and (3) it generally furthers the theoretical foundation for proposing prediction markets for regulatory purposes. The authors finally provide arguments as to how a prediction market approach could (re-)align standard setting and academic accounting research
Stock Price Jumps and News Sentiment: A Case of Investor Overreaction
No full textThe research paper develops an understanding on how news based sentiment capture investor behaviour reflected in price jumps in stock markets. It compares the impact on two models of stock price jumps; the non-parametric model proposed by BNS and the wavelet based method. The study is also a perspective on the semi strong form of market efficiencyUsing the high frequency data from the stock and options market along with the actual high frequency news data from Bloomberg, the two alternative methodologies of jumps have been tested. In addition, options trades have been simulated to see whether profits can be earned from the news sentiment captured by jumps.Methodologically, jumps based on wavelets were found to be better related with the news sentiment compared to the BNS method. Also, the news sentiment based jumps were found to present opportunities in the simulated trades that could be exploited for earning profits suggesting that investors overreact.The paper uses an innovative method for computation of the news based sentiment. To the best of our knowledge, the paper is the first to evaluate jumps and news sentiment using the actual news data. A perspective on the semi strong form of market efficiency is presented, that too by departing from the event study based models.
ONE FUNERAL AT A TIME! Why we hold on to old ideas
Get PDFThis article discusses how easily we lock ourselves into established theories, which are often promoted within our formal education. They can blind us to new developments, influencing our professional practice and progress by narrowing thinking. Chomsky’s theory of Universal Grammar is an example, since this paradigm has dominated teaching and learning for over 50 years. It has led to a focus on the form of language, rather than its content and use, restricting learning approaches and contributing to lower standards of UK Education when compared with other countries. The Organisation for Economic Cooperation & Development (2016 & 17) attributes limited value for language as a reason for the UK being near the bottom of the global league. Language development is presented within physical, mental, emotional and social aspects of communication. Competence across areas opens the mind to empathy, new experiences, continuous learning, humour, teamwork and cultural awareness. These elements together distinguish us from robots and are vital for our futures, as improved interaction of people is required for new job possibilities since machine technology is taking over routine work.