Utility, Rationality and Beyond – From Behavioral Finance To Informational Finance

By Sukanto Bhattacharya

Book Id: WPLBN0002097084
Format Type: PDF eBook:
File Size: 0.4 MB
Reproduction Date: 9/1/2011

Title:	Utility, Rationality and Beyond – From Behavioral Finance To Informational Finance
Author:	Sukanto Bhattacharya
Volume:
Language:	English
Subject:	Non Fiction, Mathematics, Finances
Collections:	Authors Community, Mathematics
Historic Publication Date:
Publisher:	Hexis, Phoenix


Citation APA MLA Chicago Bhattacharya, B. S. (n.d.). Utility, Rationality and Beyond – From Behavioral Finance To Informational Finance. Retrieved from https://www.gutenberg.cc/

Description
This work covers a substantial mosaic of related concepts in utility theory as applied to financial decision-making. It reviews some of the classical notions of Benthamite utility and the normative utility paradigm offered by the von Neumann-Morgenstern expected utility theory; exploring its major pitfalls before moving into what is postulated as an entropic notion of utility. Extrinsic utility is proposed as a cardinally measurable quantity; measurable in terms of the expected information content of a set of alternative choices. The entropic notion of utility is subsequently used to model the financial behavior of individual investors based on their governing risk-return preferences involving financial structured products manufactured out of complex, multi-asset options. Evolutionary superiority of the Black-Scholes function in dynamic hedging scenarios is computationally demonstrated using a haploid genetic algorithm model programmed in Borland C. The work explores, both theoretically and computationally, the psycho-cognitive factors governing the financial behavior of individual investors both in the presence as well as absence of downside risk and postulates the concepts of resolvable and irresolvable risk. A formal theorem of consistent preference is proposed and proved. The work also analyzes the utility of an endogenous capital guarantee built within a financial structured product. The aspect of investor empowerment is discussed in terms of how financial behavior of an investor may be transformed if he or she is allowed a choice of one or more assets that may gain entry into the financial structured product. Finally there is a concluding section wherein the different facets are placed in their proper perspective and a number of interesting future research directions are also proposed.

Related Titles Capitalistic Musings (by Sam Vaknin) Cyclopedia of Economics (by Sam Vaknin) Fixing Global Finance (by Kavaljit Singh) Research On Smarandache Problems in Numb... (by Zhang Wenpeg) Research On Smarandache Problems in Numb... (by Edited: Zhang Wenpeg) Smarandache Semigroups (by W. B. Vasantha Kandasamy) Algebra-Romanian (by Florentin Smarandache) Algebra-Russian (by Florentin Smarandache) Smarandache Sequences, Stereograms and S... (by Charles Ashbacher) Collection of Problems on Smarandache No... (by Charles Ashbacher) Pluckings from the Tree of Smarandache S... (by Charles Ashbacher) An Introduction To the Smarandache Funct... (by Charles Ashbacher)

Additional Books Algebra-Russian (by Florentin Smarandache) Fuzzy Cognitive Maps and Neutrosophic Co... (by W. B. Vasantha Kandasamy) Smarandache Sequences, Stereograms and S... (by Charles Ashbacher) The Power of Our Words (by Liz Mcgrath) The Future of the Internet : And How to ... (by Jonathan Zittrain) Family and More : Enemies or Friends? (by Helena Harper) The Marketing of Ideas and Social Issues (by Seymour Fine) The Public Domain : Enclosing the Common... (by James Boyle) Breathe Smart : The Secret to Happiness,... (by Aaron Hoopes) French Natural Remedies & Recipes From B... (by Christiane Guise) The Giant Mushroom (by Janaki Sooriyarachchi) Secret of the Sands (by Aren, Rai and E., Tavius)
Sukanto Bhattacharya Utility, Rationality and Beyond – From B... (by Sukanto Bhattacharya)
Non Fiction, Mathematics, Finances Debt Conslolidation Sample Letters For F... (by Jason Holmes and Peter Samuels) Utility, Rationality and Beyond – From B... (by Sukanto Bhattacharya) Smarandache Sequences, Stereograms and S... (by Charles Ashbacher) Collection of Problems on Smarandache No... (by Charles Ashbacher) An Introduction To the Smarandache Funct... (by Charles Ashbacher) On Some of Smarandache'S Problems (by Krassimir T. Atanassov) Begin the Adventure : How to Break the L... (by Florentin Smarandache) Applications of Bimatrices To Some Fuzzy... (by Florentin Smarandache) Dincolo Si Dincoace De Paradoxism (by Florentin Smarandache) Generalisations Et Generalites (by Florentin Smarandache)