Posts Tagged ‘behavioral economics’

Titanic vs. Lusitania: How People Behave in a Disaster

Titanic vs. Lusitania: How People Behave in a Disaster

disasters - TIME By Jeffrey Kluger, courtesy of TIME 

It’s hard to remember your manners when you think you’re about to die. The human species may have developed an elaborate social and behavioral code, but we drop it fast when we’re scared enough — as any stampeding mob reveals.

That primal push-pull is at work during wars, natural disasters and any other time our hides are on the line. It was perhaps never more poignantly played out than during the two greatest maritime disasters in history: the sinking of the Titanic and the Lusitania. A team of behavioral economists from Switzerland and Australia have published a new paper in theProceedings of the National Academy of Sciences (PNAS) that takes an imaginative new look at who survived and who perished aboard the two ships, and what the demographics of death say about how well social norms hold up in a crisis. 

The Lusitania and the Titanic are often thought of as sister vessels; they in fact belonged to two separate owners, but the error is understandable. Both ships were huge: the Titanic was carrying 2,207 passengers and crew on the night it went down; the Lusitania had 1,949. The mortality figures were even closer, with a 68.7% death rate aboard the Titanic and 67.3% for the Lusitania. What’s more, the ships sank just three years apart — the Titanic was claimed by an iceberg on April 14, 1912, and the Lusitania by a German U-Boat on May 7, 1915. But on the decks and in the passageways and all the other places where people fought for their lives, the vessels’ respective ends played out very differently.

To study those differences, the authors of the PNAS paper — Bruno Frey of the University of Zurich and David Savage and Benno Torgler of Queensland University — combed through Titanic and Lusitania data to gather the age, gender and ticket class for every passenger aboard, as well as the number of family members traveling with them. They also noted who survived and who didn’t.

With this information in hand, they separated out one key group: all third-class passengers age 35 or older who were traveling with no children. The researchers figured that these were the people who faced the greatest likelihood of death because they were old enough, unfit enough and deep enough below the decks to have a hard time making it to a lifeboat.…
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Bacteria, Boids and Market Instability

Here’s some weekend reading in advance. Consider throwing away economic models based on the misconception that people behave rationally and start anew with the premise that we are like mindless bacteria. – Ilene

Bacteria, Boids and Market Instability

bacterial behaviorCourtesy of Tim at  The Psy-Fi Blog

The Gaps Between People

Old-time economics saw investors as rational individuals, all behaving autonomously in a logical fashion, rather like Mr. Spock umbilically attached to Deep Thought. Today not even economists really believe that this is how people actually operate, but figuring out something better is a not insignificant task. Psychologists, however, have long known that what happens in the gaps between people is as important as what happens in the gaps between their ears – so is there something going on in the interactions between investors, which causes market instability?

One possible answer comes from the study of bacteria. Just as we might have suspected all along, stockmarket investor behaviour can be modelled by examining the way a bunch of brainless, single celled and barely animate creatures interested only in food and reproduction disport themselves on a Petri plate. Sometimes analogies are just too sweet.

Investing Earthquakes

The critical thing about any economic model is that it arrives at results that look like what we actually see in markets. Mostly the jargon fixated commentators who dominate the media are happy to talk in terms of business cycles when, in reality, the only cycles seen in most investing circles are the ones used by the boys and girls delivering lunchboxes. What we actually get, if we look at stockmarkets and stock prices, is something that looks like the readout we see from a seismograph when an earthquake occurs.

If we start by making a few assumptions about what investors actually do in real life – like, for instance, that they don’t behave rationally and that they tend to copy successful behaviour from people they’re closely connected to – we can rapidly create a model that produces outputs that look very different from those generated by models of people who behave independently and rationally. In fact the output of these models looks a lot like the readout we see from a seismograph when an earthquake occurs.

So it seems that the interactions between investors and how these interactions affect their willingness or otherwise to invest is the critical thing in these models.…
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Phil's Favorites

Coronavirus outbreak: WHO's decision to not declare a global public health emergency explained

 

Coronavirus outbreak: WHO's decision to not declare a global public health emergency explained

Masks are selling out in Singapore amid concerns about the Wuhan virus. Ng Sor Luan/EPA

Courtesy of Tom Solomon, University of Liverpool

The World Health Organization’s decision to not declare the novel coronavirus outbreak in China a public health emergency of international concern, or PHEIC, will surprise many. The number of reported cases and deaths is doubling every co...



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Zero Hedge

JPMorgan: Please Buy This Dip

Courtesy of ZeroHedge View original post here.

After JPMorgan clocked in its most profitable year in history in 2019 largely on the back of the Fed's QE4 which - as we remind readers again - was triggered by JPMorgan itself, which sparked a repo market crisis after yanking money market and repo liquidity forcing the Fed to first launch repos and then T-Bill purchases, the bank is not only convinced that the good times will continue to roll after the most powerful market meltup in history in the past 4 months, but that the current melt down on the back of fears over a global viral pandemic, is overdone and will end soon, presenting its clients with another delightful opportunity to BTFD. ...



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Insider Scoop

10 Medical Instruments & Supplies Stocks Moving In Monday's Session

Courtesy of Benzinga

Gainers

Antares Pharma, Inc. (NASDAQ:ATRS) stock surged 3.4% to $4.12 during Monday's regular session.

Losers

NeuroMetrix, Inc. (NASDAQ:NURO) stock decreased by 29.0% to $3.37 during Monday's regular session.

Akers Biosciences, Inc. (NASDAQ:AKER) stock declined 7.8% to $2.95.

Staar Surgical, Inc. (NASDAQ:STAA) shares declined 4....



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Chart School

Top Patterns for Retail Investors

Courtesy of Read the Ticker

Retail investors are last in line for market leading research, no matter, the retail investor can profit from these secret sauce patterns..

Well not so secret now, the main point is you do not have to climb Mount Everest to be called a mountain climber, there are many other hills to climb to make your mark. Just like stocks.

You do not have to battle with the high frequency traders to win in the markets, there are long and slow methods to do just as well.  

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Some charts from the video


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The Technical Traders

The Wuhan Wipeout - Could It Happen?

Courtesy of Technical Traders

News is traveling fast about the Corona Virus that originated in Wuhan, China. Two new confirmed cases in the US, one in Europe and hundreds in China. As we learn more about thispotential pandemic outbreak, we are learning that China did very little to contain this problem from the start. Now, quarantining two cities and trying to control the potential
outbreak, may become a futile effort.

In most of Asia, the Chinese New Year is already in full swing.  Hong Kong, China, Singapore, Malaysia, India and a host of other countries are already starting to celebrate the 7 to 10 day long New Year.  Millions of people have already traveled hundreds of thousands of miles to visit family...



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Kimble Charting Solutions

Bad News For Crude Oil Should Come From This Pattern, Says Joe Friday

Courtesy of Chris Kimble

It’s a good idea for investors to be aware of key indicators and inter-market relationships.

Perhaps it’s watching the US Dollar as an indicator for precious metals or emerging markets. Or watching interest rates for the economy. Experience, history, and relationships matter. And it’s good to simply add these to our tool-kit.

Today, we look at another relationship that has signaled numerous stock market tops and bottoms over the years, and especially the past several months, Crude Oil.

When crude oil tops or bottoms, it seems that ...



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Biotech

Snakes could be the original source of the new coronavirus outbreak in China

Reminder: We are available to chat with Members, comments are found below each post.

 

Snakes could be the original source of the new coronavirus outbreak in China

Chinese cobra (Naja atra) with hood spread. Briston/Wikimedia, CC BY-SA

Haitao Guo, University of Pittsburgh; Guangxiang “George” Luo, Univers...



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Members' Corner

The War on All Fact People

 

David Brin shares an excerpt from his new book on the relentless war against democracy and how we can fight back. You can also read the first, second and final chapters of Polemical Judo at David's blog Contrary Brin.

The War on All Fact People 

Excerpted from David Brin's new book, the beginning of chapter 5, Polemical Judo: Memes...



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Lee's Free Thinking

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

 

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

Courtesy of  

The repo market problem isn’t the problem. It’s a sideshow, a diversion, and a joke. It’s a symptom of the problem.

Today, I got a note from Liquidity Trader subscriber David, a professional investor, and it got me to thinking. Here’s what David wrote:

Lee,

The ‘experts’ I hear from keep saying that once 300B more in reserves have ...



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Digital Currencies

Cryptos Have Surged Since Soleimani Death, Bitcoin Tops $8,000

Courtesy of ZeroHedge View original post here.

Bitcoin is up over 15% since the assassination of Iran General Soleimani...

Source: Bloomberg

...topping $8,000 for the first time since before Thanksgiving...

Source: Bloomberg

Testing its key 100-day moving-average for the first time since October...

...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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