This paper analyzes the investment decisions of insured banks under fixed-rate deposit insurance. The model takes into account the charter value and allows banks to dynamically revise their asset portfolios. Trade-offs exist between preserving the charter and exploiting deposit insurance. The optimal bank portfolio problem is solved analytically for a constant charter value. In any audit period...

This paper, adopting the recursive multiple-priors utility, studies the optimal consumption and portfolio choice in a Merton-style model with anticipation when there is a difference between ambiguity and risk. The fundamental issue is what the effects of ambiguity and anticipation on the investor’s behavior are. In the case of a logarithmic felicity function, the paper also shows that no hedgin...

Let MPT (v, 2) denote a maximum packing of triples of order v and index 2. An MPT (v, 2) is called simple if it contains no repeated triples. It is proved in this paper that for v > 2 and any even 2, the necessary and sufficient condition for the embedding of a simple MPT(v,2) in a simple MPT(u,).) is u >/2v + 1.

Weighted utility models attempt to account for risk preferences in terms of an expectation-like equation applied to the subjective evaluation of probabilities and outcomes, while Portfolio theory assumes that risk preference is a function of expected value and perceived risk. A pair of empirical predictions which contrasts Portfolio theory with all weighted utility models is derived and tested....

In the Kaizo articles, written between 1922 and 1924, Husserl drew on the intercultural relationship between Europe and non-Europe. The viewpoints he held in these articles do not deviate much from that in the Vienna lecture 1935, which is later included in Crisis. It is in the latter that Husserl delineates systematically what he thinks of the idea of Europe and what makes Europe different fro...

We propose an abstract framework to analyse the rationality of change operators deened in a syntactical way. More precisely we propose \syntactical" postulates of rationality stemming from AGM ones. Then we introduce ve change operators based on forward chaining. Finally we apply our abstract framework to analyse the rationality of our operators.

A growing body of studies suggests that neurological and mental abnormalities foster conformity to norms of rationality that are widely endorsed in economics and psychology, whereas normality stands in the way of rationality thus defined. Here, we outline the main findings of these studies, discuss their implications for experimental design, and consider how 'sane' some benchmarks of rationalit...

Modern technology is succeeding in delivering more information to people at ever faster rates. Under traditional views of rational decision making where individuals should evaluate and combine all available evidence, more information will yield better decisions. But our minds are designed to work in environments where information is often costly and difficult to obtain, leading us to use simple...

Issues related to educational choices have recently become topical because of the growing incapacity of people to predict and construct satisfying life paths since childhood. The present paper opens with a brief review of the social representation of the topic; continues outlining a profile of the social actors facing educational choice in post-modern times, highlighting how uncertainty, revers...

I discuss the rhetorical dimensions of bounded rationality in two different, yet related, contexts, namely in the practice of organizational economists and in Herbert Simon’s key attempts to persuade economists to take bounded rationality seriously, his Ely lecture and his Nobel Prize lecture. I discuss various reasons why Simon failed to convince his contemporaries, among other things, the abs...