Posts

Showing posts with the label Wall Street

Decision Making as Output and Bounded Rationality

-
  The classical economics theories proceed on the assumption of rational agents. Rationality implies the economic agents undertake actions or exercise choices based on the cost-benefit analysis they undertake. The assumption further posits that there exists no information asymmetry and thus the agent is aware of all the costs and benefits associated with the choice he or she has exercised. The behavioral school contested the decision stating the decisions in practice are often irrational. Implied there is a continuous departure from rationality. Rationality in the views of the behavioral school is more an exception to the norm rather a rule. The past posts have discussed the limitations of this view by the behavioral school. Economics has often posited rationality in the context in which the choices are exercised rather than theoretical abstract view of rational action. Rational action in theory seems to be grounded in zero restraint situation yet in practice, there are numerous restra
Post a Comment
Read more

Gamestop Games!

-
  In the US, there is an interesting battle going on between a group of redittors and the Wall Street. It has to do obviously with booking profits in the market. In pursuit of research on this battle where a group of redifftors are bringing down the Wall Street hawkish hedge fund to their knees, there appeared an inquisitive thread on Twitter. The tweet and the thread is available here . It would be interesting to understand what is happening through a perusal of this thread and the explanation given.   Short selling is not unusual nor something new. It has existed for years in the market. It is about booking profits through the reverse. Even in the great financial crash of 2008, there were quite a few who made money by shorting them something captured in the book Big Short by Michael Lewis. Traditionally, the speculators in the market would buy shares at lower prices and seek to sell them at higher prices. Yet, there are speculators who opt for the reverse. They sell securities w
Post a Comment
Read more