Financial crises, asymmetric information and argumentation

Estrada, Fernando (2011): Financial crises, asymmetric information and argumentation.

Abstract

This paper aims to explore the relevance of the Asymmetric Information and the Theory of Argumentation TA in the complex area of financial crises. Specifically, we investigated the scope of the phenomenon of persuasion in advertising. It examines advertisements in publications notable economic movement in Colombia. The financial communication is important to distinguish how to run the models of behavior based on beliefs of agents. Consequently, investors' beliefs can also change systematically with changes in market prices

• Item Type: MPRA Paper
• Language: English
• Keywords: G01, G1, G14, D8, D81, M3,, G11, D82, D84, D1, D85
• Subjects: G - Financial Economics > G1 - General Financial Markets > G14 - Information and Market Efficiency ; Event Studies ; Insider Trading; D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D84 - Expectations ; Speculations; D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D81 - Criteria for Decision-Making under Risk and Uncertainty; M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M3 - Marketing and Advertising > M37 - Advertising; D - Microeconomics > D8 - Information, Knowledge, and Uncertainty; D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D85 - Network Formation and Analysis: Theory; G - Financial Economics > G0 - General; G - Financial Economics > G0 - General > G01 - Financial Crises

References

1. Akerlof, George, 1970. The Market for Lemons. Quarterly Journal of Economics, 84: 488-500.

2. Barberis, Nicholas, Andrei Shleifer, and Robert Vishny, 1998, “A Model of Investor Sentiment”, Journal of Financial Economics: 307-343.

3. Bondarenko, Dung, Kowalski, 1997, Toni, An abstract, argumentation-theoretic approach to default reasoning. Artificial Intelligence 93: 63 – 101.

4. Chevalier, Judith, Glenn Ellison, 1997. Risk Taking by Mutual Funds as a Response to Incentives. Journal of Political Economy, 105: 1167-1200.

5. Dascal, M, 1976. Language and money: a simile and its use in the 17th century philosophy of Language. Studia Leibnitiana 8: 187-218, 1976. [Reprinted in M. Leone (ed.), 2003, Semiotica del Denaro, Special Issue of Carte Semiotiche, Journal of the Italian Association of Semiotic Studies, 5: 65-94].

6. DeLong, J. Bradford, Andrei Shleifer, Lawrence Summers, and Robert Waldmann, 1990, “Positive Feedback Investment Strategies and Destabilizing Rational Speculation,” Journal of Finance 45: 375-395.

7. Estrada, Fernando, 2005, “Dialéctica de la argumentación económica”, Revista Economía Institucional, vol. 7 n. 12: 113 – 135.

8. Estrada, Fernando, 2008, “Esquemas de argumentación en economía”, Revista OPERA: 149 – 174. 9. Estrada, Fernando, 2007, “Herbert Simon y la economía organizacional”, Revista Cuadernos de Economía, 46: 169 – 199.

10. Gilovich, Thomas, “Seeking the Past in the Future: The Effect of Associations to Familiar Events on Judgments and Decisions,” Journal of Personality and Social Psychology 40, (1981): 797-808.

11. Glaeser, Edward, 2005, “The Political Economy of Hatred,” Quarterly Journal of Economics, 120, 45-86.

12. Graber, Doris, 1984, Processing the News: How People Tame the Information Tide, New York: Longman Press.

13. Grossman, Sanford, and Oliver Hart, 1984, “Disclosure Laws and Takeover Bids,” Journal of Finance 35: 323-334.

14. Jain, Prem and Johanna Shuang Wu, 2000, “Truth in Mutual Fund Advertising: Evidence on Future Performance and Fund Flows,” Journal of Finance 55: 937-958.

15. Kahneman, Daniel, and Amos Tversky, 1982, Judgment Under Uncertainty: Heuristics and Biases, New York: Cambridge University Press.

16. Klayman, Josh, 1995), “Varieties of Confirmation Bias,” in Jerome Busemeyer, Reid Hastie, and Douglas Medin, eds. Decision Making from a Cognitive Perspective: The Psychology of Learning and Motivation, San Diego, CA: Academic Press.

17. Laibson, David, 2001. “A Cue-Theory of Consumption,” Quarterly Journal of Economics 116: 81-120.

18. Lord, Charles, Lee Ross, and Mark Lepper, 1979. “Biased Assimilation and Attitude Polarization: The Effect of Theories on Subsequently Considered Evidence,” Journal of Personality and Social Psychology 37: 2098-2109.

19. Mullainathan, Sendhil and Andrei Shleifer, 2005. “The Market for News,” American Economic Review 95: 1031-1053.

20. Perelman, Ch.1989. El Imperio Retórico, Bogotá, Norma.

21. Rabin, Matthew, and Joel Schrag, 1999, “First Impressions Matter: A Model of Confirmatory Bias,” Quarterly Journal of Economics 114: 37-82.

22. Shapiro, Jesse, 2005, “Fooling Some of the People Some of the Time: Advertising and Limited Memory,” Mimeo, Harvard University.

23. Sirri, Erik, and Peter Tufano, 1998, “Costly Search and Mutual Fund Flows,” Journal of Finance 53: 1589-1622.

24. Stigler, George, 1961, “The Economics of Information”, Journal of Political Economy, 69: 213- 225.

25. Stigler, George, 1987, The Theory of Price, 4th ed., New York: MacMillan Publishing.

26. Taleb, Nassim Nicholas, 2007, The Black Swan, Random House, Nueva York, [Traducción española, El Cisne Negro, El impacto de lo altamente improbable, 2008, Paidós].

27. Tversky, Amos, and Daniel Kahneman, 1973, “Availability: A Heuristic for Judging Frequency and Probability,” Cognitive Psychology 5: 207-232.

28. Tullock, Gordon, 1967, Toward Mathematics of Politics, Ann Arbor: University of Michigan Press.