Market regulation – behavioral approach

Modeling Instrumental Conditioning - The Behavioral Regulation Approach

Basically, instrumental conditioning is learning through consequences: Behavior that produces positive results (high “instrumental response”) is reinforced, and that which produces negative effects (low “instrumental response”) is weakened. Instrumental conditioning plays a major role in learning, but the content of such learning might be desired (e.g. correct cause-effect association) or undes...

A Behavioral Approach to a Strategic Market Game

In this paper we interlink a dynamic programming, a game theory and a behavioral simulation approach to the same problem of economic exchange. We argue that the success of mathematical economics and game theory in the study of the stationary state of a population of microeconomic decision makers has helped to create an unreasonable faith that many economists have placed in models of ”rational b...

Mergers and market valuation: real options approach

This paper investigates the connection between market valuation anda type of the merger (stock, cash) using real options setup. I solveexplicitly for the timing and terms of cash mergers in two deferent settingsto demonstrate that cash mergers generally occur at low marketvaluations, whereas stock mergers that may be observed at both low andhigh valuations; the result holds with some dierences ...

Financial Market Regulation

Stock Market Fraud Detection, A Probabilistic Approach

In order to have a fair market condition, it is crucial that regulators continuously monitor the stock market for possible fraud and market manipulation. There are many types of fraudulent activities defined in this context. In our paper we will be focusing on "front running". According to Association of Certified Fraud Examiners, front running is a form of insider information and thus is very ...