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    It is now well established empirically that financial price changes are distributed according to a power law, with cubic exponent. This is a fascinating regularity, as it holds for various classes of securities, on various markets, and on various time scales. The universality of this law suggests that there must be some basic, general and stable mechanism behind it. The standard (neoclassical) paradigm implies no such mechanism. Agent-based models of financial markets, on the other hand, exhibit realistic price changes, but they involve relatively complicated, and often mathematically intractable, mechanisms. This paper identifies a simple principle behind the power law: the feedback intrinsic to the very idea of speculation, namely buying when one expects a price rise (and selling when one expects a price fall). By this feedback, price changes follow a random coefficient autoregressive process, and therefore they have a power law by Kesten theorem.

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    This paper intends to present the opportunities emerging for the national economy, out of the financial crisis. In particular the management of those, which arise from the commercial real estate owned property sector, defined by the author as crisis heritage management. On one hand, as real estate property prices are subject of wide fluctuations, the longer possession of such assets can seriously impact the financial condition of the already shattered financial institutions, but on the on other - with the help of professional and proactive management, and the right kind of attitude by all the stakeholders, the heritage left out of the financial collapse, can not only help stabilize the system - bringing liquidity into it, but can also support its healthy corporate governance in the long-term. The properties themselves (business buildings, warehouses, retail-and-office spaces), being an object of optimization of maintenance costs, re-engineering, intensive marketing, as a result of the crisis, can serve as a solid base for number of new and profitable business and investment opportunities, described in the article, as a proof of the healing effect of the financial crisis and the second chance it gives.

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    Expected utility theory (EUT) is widely used in economic theory. However, its subjective probability formulation, first elaborated by Savage, is linked to Ellsberg-like paradoxes and ambiguity aversion. This has led various scholars to work out non-Bayesian extensions of EUT which cope with its paradoxes and incorporate attitudes toward ambiguity. A variant of the Ellsberg paradox, recently proposed by Mark Machina and confirmed experimentally, challenges existing non-Bayesian models of decision-making under uncertainty. Relying on a decade of research which has successfully applied the formalism of quantum theory to model cognitive entities and fallacies of human reasoning, we put forward a non-Bayesian extension of EUT in which subjective probabilities are represented by quantum probabilities, while the preference relation between acts depends on the state of the situation that is the object of the decision. We show that the benefits of using the quantum theoretical framework enables the modeling of the Ellsberg and Machina paradoxes, as the representation of ambiguity and behavioral attitudes toward it. The theoretical framework presented here is a first step toward the development of a `state-dependent non-Bayesian extension of EUT' and it has potential applications in economic modeling.

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    A new model framework called Realized Conditional Autoregressive Expectile (Realized-CARE) is proposed, through incorporating a measurement equation into the conventional CARE model, in a manner analogous to the Realized-GARCH model. Competing realized measures (e.g. Realized Variance and Realized Range) are employed as the dependent variable in the measurement equation and to drive expectile dynamics. The measurement equation here models the contemporaneous dependence between the realized measure and the latent conditional expectile. We also propose employing the quantile loss function as the target criterion, instead of the conventional violation rate, during the expectile level grid search. For the proposed model, the usual search procedure and asymmetric least squares (ALS) optimization to estimate the expectile level and CARE parameters proves challenging and often fails to convergence. We incorporate a fast random walk Metropolis stochastic search method, combined with a more targeted grid search procedure, to allow reasonably fast and improved accuracy in estimation of this level and the associated model parameters. Given the convergence issue, Bayesian adaptive Markov Chain Monte Carlo methods are proposed for estimation, whilst their properties are assessed and compared with ALS via a simulation study. In a real forecasting study applied to 7 market indices and 2 individual asset returns, compared to the original CARE, the parametric GARCH and Realized-GARCH models, one-day-ahead Value-at-Risk and Expected Shortfall forecasting results favor the proposed Realized-CARE model, especially when incorporating the Realized Range and the sub-sampled Realized Range as the realized measure in the model.

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    This paper investigates the impact of dark pools on price discovery (the efficiency of prices on stock exchanges to aggregate information). Assets are traded in either an exchange or a dark pool, with the dark pool offering better prices but lower execution rates. Informed traders receive noisy and heterogeneous signals about an asset's fundamental. We find that informed traders use dark pools to mitigate their information risk and there is a sorting effect: in equilibrium, traders with strong signals trade in exchanges, traders with moderate signals trade in dark pools, and traders with weak signals do not trade. As a result, dark pools have an amplification effect on price discovery. That is, when information precision is high (information risk is low), the majority of informed traders trade in the exchange hence adding a dark pool enhances price discovery, whereas when information precision is low (information risk is high), the majority of the informed traders trade in the dark pool hence adding a dark pool impairs price discovery. The paper reconciles the conflicting empirical evidence and produces novel empirical predictions. The paper also provides regulatory suggestions with dark pools on current equity markets and in emerging markets.

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    Measures of wealth and production have been found to scale superlinearly with the population of a city. Therefore, it makes economic sense for humans to congregate together in dense settlements. A recent model of population dynamics showed that population growth can become superexponential due to the superlinear scaling of production with population in a city. Here, we generalize this population dynamics model and demonstrate the existence of multiple stable equilibrium points, showing how population growth can be stymied by a poor economic environment. This occurs when the goods and services produced by the city become less profitable due to a lack of diversification in the city's economy. Then, relying on critical slowing down signals related to the stability of an equilibrium point, we present an algorithm for engineering regime shifts such that a city at a stable equilibrium point may continue to grow again. The generality of the model and the algorithm used here implies that the model and algorithm need not be restricted to urban systems; they are easily applicable to other types of systems where the assumptions used are valid.

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    We study adaptive learning in a typical p-player game. The payoffs of the games are randomly generated and then held fixed. The strategies of the players evolve through time as the players learn. The trajectories in the strategy space display a range of qualitatively different behaviors, with attractors that include unique fixed points, multiple fixed points, limit cycles and chaos. In the limit where the game is complicated, in the sense that the players can take many possible actions, we use a generating-functional approach to establish the parameter range in which learning dynamics converge to a stable fixed point. The size of this region goes to zero as the number of players goes to infinity, suggesting that complex non-equilibrium behavior, exemplified by chaos, may be the norm for complicated games with many players.

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    Is your firm poised for long-term success and viability? Do you even know what that looks like for your firm?read more...

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    Is your firm poised for long-term success and viability? Do you even know what that looks like for your firm?read more...

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    The AICPA Audit Committee Toolkit: Private Companies helps audit committees of private companies at all levels discover best practices for managing and incorporating their role within the organization. This toolkit takes the guesswork out of effectively establishing and managing an audit committee by furnishing you with dozens of useful tools and the most common forms for effective audit committee operation, as well as tools specially tailored forread more...

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    The 2014 edition of this popular product will help audit committees of public companies achieve best practices for managing and incorporating their role in the organization.read more...

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    As a result of its Clarity Project, the Auditing Standards Board (ASB) has issued Statement on Auditing Standards (SAS) No. 128, Using the Work of Internal Auditors, to supersede SAS No. 65, The Auditor's Consideration of the Internal Audit Function in an Audit of Financial Statements (AICPA, Professional Standards, AU sec. 322 and AU-C sec. 610), and amend:read more...

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    Fully updated for the OMB Uniform Guidance for federal awards.read more...

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    AICPA Audit Guides are developed and updated to provide guidance and tools for practitioners as they perform audit engagements.read more...

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    Considered the industry standard resource, this guide provides practical guidance, essential information and hands-on advice on the many aspects of accounting and authoritative auditing for employee benefit plans.read more...

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    Advertising by Design is the most comprehensive, up-to-date guide to concept generation and design for advertising. Step-by-step instructions and expert discussion guide you through the fundamentals, as you develop the deeper understanding that connects the dots and sparks your creativity. Interviews with leading creative directors provide a glimpse into the real-world idea generationread more...

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    The Enduring Advisory Firm is a book for the forward-thinking financial advisor. Financial advisement is traditionally a hands-on field, so few in the industry feel threatened by the shifting social and technological landscape. In this book, Mark Tibergien—routinely named one of the most influential people in the financial services world—and Kim Dellarocca make a compelling caseread more...

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    The notion of culturally relevant leadership learning builds upon the ideas of developing leader identity and leadership capacity of diverse students.Focusing on four areas of leadership learning: education, training, development, and engagement, this volume presents a model of culturally relevant leadership learning in order to develop all student leaders. It proposes infusing the leadership development process with an understanding of how systemicread more...

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    The Empowered Manager uncovers a roadmap to creating a more accountable culture in today's fragmented and virtual world. Bestselling author Peter Block is a true visionary: author of the classicread more...

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    Our parents often told us to work hard to make a positive first impression. They reminded us that first impressions matter a great deal, and that it's hard to recover from a bad start with someone. Well, it turns out that our parents were more right than we could have ever imagined. Let's take a look at some fascinating new research from Cornell Professor Vivian Zayas and her co-authors, Gul Gunaydin and Emre Selcuk.   Their study is titled, "Impressions Based on a Portrait Predict, 1-Month Later, Impressions Following a Live Interaction.” They asked 55 research subjects to examine photographs of a woman with whom they were not acquainted previously.    The scholars asked the individuals to record their impressions of the woman in the photograph.  The researchers asked if the subjects would like to be friends with the woman.  In addition, the research subjects rated the woman on personality attributes such as emotional stability, conscientiousness, extroversion, and openness to new experiences.   In some photos, the woman smiled. In others, she presented a neutral expression on her face.  Between one and six months later, these research subjects met the woman in person.   Only four people remembered seeing the woman in the photographs.  They were excluded from the study's subsequent analysis.   What about the other 51 research subjects?   Their initial impressions from those photographs shaped their impressions of the woman months later in the face-to-face interaction. Zayas told the Cornell Chronicle, "What is remarkable is that despite differences in impressions, participants were interacting with the same person, but came away with drastically different impressions of her even after a 20-minute face-to-face interaction."  

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