This document outlines the details of Phase One of a two-phase mixed-use development project that will include 527 total units, 45,000 square feet of retail space, and a 100kw solar array with a total construction cost of $141 million. Phase One will consist of 338 residential units averaging 895 square feet across 325,000 rentable square feet and 933 parking stalls in 3-4 story wood structures over a two-level concrete parking garage. Responsibilities for the project include value engineering, construction document management and coordination, full coordination of all disciplines, construction administration and quality control, specification and product selection, and LEED Retrofit supervision and coordination.
This document contains a collection of quotes and musings on various business-related topics such as excellence, innovation, value creation, and customer focus. Some of the key ideas discussed include the importance of bias for action over extensive planning, experimenting fearlessly, rewarding failures, and reimagining businesses to focus on experiences and dreams rather than just goods and services.
The document summarizes key points from a presentation by Tom Peters on excellence and lessons from past financial crises. It discusses factors that contributed to the 2008 financial crisis such as excessive risk-taking, greed, overreliance on quantitative models, increasing complexity, unstable perceptions of value, poor lending practices, deregulation gone too far, and failure to learn from history. It emphasizes the importance of basics like serving customers well and focusing on people over quantitative analysis.
Here are payoff matrices for some of the game theory scenarios:
Student helping partner:
Partner studies Partner doesn't study
Student helps Partner gets A, Student gets B Partner gets F, Student gets C
Student doesn't help Partner gets C, Student gets D Partner gets F, Student gets D
A's owner moving team:
Oakland builds stadium Oakland doesn't build stadium
Owner moves team Loss of fans and money, profit of $500m Profit of $1b
Owner stays Loss of $200m, fans stay Loss of $500m
Coke advertising:
Coke advertises Coke doesn't advertise
Pepsi advertises Profit of $1b each Profit of
The document discusses concepts related to creating exceptional customer experiences and dramatically differentiating businesses. It emphasizes pursuing excellence and originality rather than imitation. Various strategies are proposed for smaller companies to outperform larger rivals, including focusing on design, experiences, emotional connections, innovation and niche markets. Examples of highly successful companies are provided that exemplify these principles.
The document discusses using options to overcome the limits of technical analysis. It summarizes candlestick patterns and their statistical performance based on millions of daily equity candles. Specific candlestick patterns that perform well as bullish or bearish reversals are highlighted. The document also debunks some common candlestick myths and promotes developing a systematic options trading approach based on evidence-based technical analysis.
Jason Zweig - Your Money and Your Brain_200620133033.pdfSumni Uchiha
This document provides an introduction and overview of the book "Your Money and Your Brain" by Jason Zweig. The book examines how the new field of neuroeconomics can help explain irrational behaviors common in investing, such as buying high and selling low. Neuroeconomics studies investing behaviors through the lens of neuroscience, economics, and psychology. Examples are given of experienced investors who failed to follow their own advice and theories when managing their own money due to emotional factors. The book aims to help investors better understand the emotional side of decision making and optimize their investing by learning about how the brain works in this context.
This document outlines the details of Phase One of a two-phase mixed-use development project that will include 527 total units, 45,000 square feet of retail space, and a 100kw solar array with a total construction cost of $141 million. Phase One will consist of 338 residential units averaging 895 square feet across 325,000 rentable square feet and 933 parking stalls in 3-4 story wood structures over a two-level concrete parking garage. Responsibilities for the project include value engineering, construction document management and coordination, full coordination of all disciplines, construction administration and quality control, specification and product selection, and LEED Retrofit supervision and coordination.
This document contains a collection of quotes and musings on various business-related topics such as excellence, innovation, value creation, and customer focus. Some of the key ideas discussed include the importance of bias for action over extensive planning, experimenting fearlessly, rewarding failures, and reimagining businesses to focus on experiences and dreams rather than just goods and services.
The document summarizes key points from a presentation by Tom Peters on excellence and lessons from past financial crises. It discusses factors that contributed to the 2008 financial crisis such as excessive risk-taking, greed, overreliance on quantitative models, increasing complexity, unstable perceptions of value, poor lending practices, deregulation gone too far, and failure to learn from history. It emphasizes the importance of basics like serving customers well and focusing on people over quantitative analysis.
Here are payoff matrices for some of the game theory scenarios:
Student helping partner:
Partner studies Partner doesn't study
Student helps Partner gets A, Student gets B Partner gets F, Student gets C
Student doesn't help Partner gets C, Student gets D Partner gets F, Student gets D
A's owner moving team:
Oakland builds stadium Oakland doesn't build stadium
Owner moves team Loss of fans and money, profit of $500m Profit of $1b
Owner stays Loss of $200m, fans stay Loss of $500m
Coke advertising:
Coke advertises Coke doesn't advertise
Pepsi advertises Profit of $1b each Profit of
The document discusses concepts related to creating exceptional customer experiences and dramatically differentiating businesses. It emphasizes pursuing excellence and originality rather than imitation. Various strategies are proposed for smaller companies to outperform larger rivals, including focusing on design, experiences, emotional connections, innovation and niche markets. Examples of highly successful companies are provided that exemplify these principles.
The document discusses using options to overcome the limits of technical analysis. It summarizes candlestick patterns and their statistical performance based on millions of daily equity candles. Specific candlestick patterns that perform well as bullish or bearish reversals are highlighted. The document also debunks some common candlestick myths and promotes developing a systematic options trading approach based on evidence-based technical analysis.
Jason Zweig - Your Money and Your Brain_200620133033.pdfSumni Uchiha
This document provides an introduction and overview of the book "Your Money and Your Brain" by Jason Zweig. The book examines how the new field of neuroeconomics can help explain irrational behaviors common in investing, such as buying high and selling low. Neuroeconomics studies investing behaviors through the lens of neuroscience, economics, and psychology. Examples are given of experienced investors who failed to follow their own advice and theories when managing their own money due to emotional factors. The book aims to help investors better understand the emotional side of decision making and optimize their investing by learning about how the brain works in this context.
The document discusses overconfidence and how it led to the collapse of Long-Term Capital Management (LTCM), a large hedge fund, in 1998 due to excessive leverage and risk taking, highlighting how two Nobel prize-winning economists who helped run LTCM made poor decisions despite their intellectual achievements. It also examines other examples of how overconfidence can negatively impact judgment and decision making.
Udn vision studio_t_hu_presentation_2015 (final)Thomas Hu
Thomas Hu discusses investing in your career by maximizing exposure to favorable events. He argues a career of investing is not just about money maximization, but also intellectual curiosity and being agents of change for the greater good. Hu emphasizes the importance of seeing the big picture, identifying pattern anomalies, selecting industries wisely, paying attention to deal structure, and having a sense of history. He notes that sometimes we don't know what we don't know and cites Michael Jordan in accepting failure and keeping trying. Hu concludes by discussing how financial technology can provide tools for the greater good by facilitating the goals of individuals, companies, and societies.
This document provides an overview of business ethics and ethical decision-making. It discusses:
1) Whether human nature is inherently good or evil is still debated, and influences perspectives on business ethics.
2) Ethics exist on a matrix with law, where law sets minimum standards but ethics should aim higher.
3) Major theories in business ethics are reviewed to provide managers with accountable approaches to make ethical decisions.
4) The ideal worlds envisioned by various thinkers, like utopias and peach gardens, aim to build societies without evils like harm, oppression or corruption.
This document discusses 401(k) retirement plans and whether they have fallen short. It provides context on the origins of 401(k) plans and how they have become the most common retirement vehicle in the US. However, 401(k)s are fundamentally different than pensions in that they offer more flexibility but also put more responsibility on individuals for funding, investing, and managing their retirement savings. Some argue 401(k)s have fallen short because many Americans do not have enough savings and lack the financial expertise to manage their retirement funds successfully. The document examines some of the misunderstandings around 401(k)s and debates whether they or the individuals using them are truly at fault for any perceived shortcomings.
Checkout Dividend Stocks Research for free Articles! Http://www.dividendstocksresearch.com/dividend-newsletter
Want to find one of the Dividend Aristocrats on sale? Here’s where to look for a great source of safe income.
The document provides 10 steps for marketing during an economic downturn. It advises analyzing business performance, delighting customers through experiential marketing, refining target audiences, investing in growth areas, focusing messaging on value, negotiating media rates, optimizing websites and social media, considering mobile marketing, and embracing social media which will play a vital future role. The overall message is to adapt marketing strategies to changing consumer behaviors and economic conditions during a recession.
The upshot of marketing during a downturnjrandall24
This document provides 10 steps for marketing in an economic downturn. The steps include analyzing business performance, focusing on customer delight, refining target audiences, investing in growth areas, ensuring the marketing message aligns with economic realities, differentiating from competitors, optimizing pricing, negotiating media rates, adopting new media like social media, and embracing social media for the future. The overall message is that marketing must speak to customer anxieties and priorities during a recession to survive and thrive.
This document contains excerpts and quotes on a variety of topics related to business excellence and leadership. It discusses the importance of execution, accountability, decentralization, talent, purpose, passion and enthusiasm in leadership. It also emphasizes seeking out discomfort and diversity of experience, as well as focusing on customers, women, and lifelong learning.
Bet sizing tells provide important information about a player's range of possible hands. There are certain classic bet sizing tells, such as a small bet on the flop from a player who called a raise, indicating a weaker made hand or draw. Experienced players can exploit imbalances in an opponent's betting ranges created when they use multiple bet sizes in a situation. Learning to identify bet sizing tells allows players to narrow down their opponents' possible hand ranges.
This document provides an overview of behavioral finance and how psychological factors can influence investor decisions and market prices. It discusses several cognitive biases and psychological phenomena that can lead investors to make irrational decisions, such as prospect theory, framing effects, loss aversion, overconfidence, and misperceptions of randomness. While some degree of irrationality is to be expected, for markets to be inefficient it requires that many investors make irrational decisions collectively and that arbitrage opportunities cannot correct the situation. The document uses various examples and studies to illustrate how these behavioral tendencies can manifest in investment choices and outcomes.
The document discusses the current economic cycle and signs that the economy may be slowing down after nearly a decade of growth. It notes that while economic numbers have been strong, interest rates have risen several times in recent years and indicators like the CAPE ratio suggest the market may be overvalued. Rather than trying to time the market, the document recommends investors hedge risks by taking advantage of tax laws to protect assets and reduce downside if a market correction occurs.
Tom Peters at Quinnipiac & Miller Agency (Long)bizgurus
This document contains a summary of notes from a presentation on excellence and building successful organizations. It discusses several key principles:
1. Thriving in change by being responsive and innovative. Decentralizing operations and empowering autonomy and entrepreneurship.
2. Focusing on continuous improvement, execution, accountability and moving up the value chain from goods to experiences to dreams.
3. Challenging the status quo and embracing diversity, risk-taking, and learning from failures. Small companies can outperform giants by being dramatically different and building emotional connections.
Most of economics can be summarized in four words: "People Respond to incentives." The document discusses several examples that demonstrate how incentives can lead to unintended and sometimes harmful consequences. It discusses how industries like tobacco, fast food, pharmaceuticals, and investment banking have exploited incentives to push products and services that are not always in the best interests of consumers. It emphasizes the importance of being aware of incentive structures and their potential to cause bias. Financial independence is presented as a way to avoid being unduly influenced by other parties' incentives.
This document discusses risk management strategies for forest rangers. It begins by outlining the tension between quantitative and subjective approaches to decision making under uncertainty. It then provides examples of risk concepts from different cultures and perspectives. The rest of the document discusses predictive tools and strategies used in risk management, including value at risk, probabilities, uncertainty, and prediction markets. It cautions that accurately predicting low probability events is very difficult.
This document is a collection of quotes and passages from Tom Peters discussing various topics related to excellence and innovation. It touches on themes like embracing failure, decentralization, execution, accountability, solving problems for customers, and tapping into opportunities like the women's market. Short snippets and ideas are presented without much additional context or connection between sections.
The document discusses the results of a study on the effects of exercise on memory and thinking abilities in older adults. The study found that regular exercise can help reduce the decline in thinking abilities that often occurs with age. Older adults who exercised regularly performed better on cognitive tests and brain scans showed they had greater activity in important areas for memory and learning compared to less active peers.
surface area of a cylinder [∂ Campbell's soup can]Chris Waggoner
The document discusses the product rule of calculus and how it can be used to find the surface area and volume of a cylinder. Specifically, it notes that the product rule works with derivatives and boundaries, and can be applied to find the surface area formula which includes the top and bottom circles as well as the curved side of a cylinder, also known as the "paper towel roll" side.
The document discusses overconfidence and how it led to the collapse of Long-Term Capital Management (LTCM), a large hedge fund, in 1998 due to excessive leverage and risk taking, highlighting how two Nobel prize-winning economists who helped run LTCM made poor decisions despite their intellectual achievements. It also examines other examples of how overconfidence can negatively impact judgment and decision making.
Udn vision studio_t_hu_presentation_2015 (final)Thomas Hu
Thomas Hu discusses investing in your career by maximizing exposure to favorable events. He argues a career of investing is not just about money maximization, but also intellectual curiosity and being agents of change for the greater good. Hu emphasizes the importance of seeing the big picture, identifying pattern anomalies, selecting industries wisely, paying attention to deal structure, and having a sense of history. He notes that sometimes we don't know what we don't know and cites Michael Jordan in accepting failure and keeping trying. Hu concludes by discussing how financial technology can provide tools for the greater good by facilitating the goals of individuals, companies, and societies.
This document provides an overview of business ethics and ethical decision-making. It discusses:
1) Whether human nature is inherently good or evil is still debated, and influences perspectives on business ethics.
2) Ethics exist on a matrix with law, where law sets minimum standards but ethics should aim higher.
3) Major theories in business ethics are reviewed to provide managers with accountable approaches to make ethical decisions.
4) The ideal worlds envisioned by various thinkers, like utopias and peach gardens, aim to build societies without evils like harm, oppression or corruption.
This document discusses 401(k) retirement plans and whether they have fallen short. It provides context on the origins of 401(k) plans and how they have become the most common retirement vehicle in the US. However, 401(k)s are fundamentally different than pensions in that they offer more flexibility but also put more responsibility on individuals for funding, investing, and managing their retirement savings. Some argue 401(k)s have fallen short because many Americans do not have enough savings and lack the financial expertise to manage their retirement funds successfully. The document examines some of the misunderstandings around 401(k)s and debates whether they or the individuals using them are truly at fault for any perceived shortcomings.
Checkout Dividend Stocks Research for free Articles! Http://www.dividendstocksresearch.com/dividend-newsletter
Want to find one of the Dividend Aristocrats on sale? Here’s where to look for a great source of safe income.
The document provides 10 steps for marketing during an economic downturn. It advises analyzing business performance, delighting customers through experiential marketing, refining target audiences, investing in growth areas, focusing messaging on value, negotiating media rates, optimizing websites and social media, considering mobile marketing, and embracing social media which will play a vital future role. The overall message is to adapt marketing strategies to changing consumer behaviors and economic conditions during a recession.
The upshot of marketing during a downturnjrandall24
This document provides 10 steps for marketing in an economic downturn. The steps include analyzing business performance, focusing on customer delight, refining target audiences, investing in growth areas, ensuring the marketing message aligns with economic realities, differentiating from competitors, optimizing pricing, negotiating media rates, adopting new media like social media, and embracing social media for the future. The overall message is that marketing must speak to customer anxieties and priorities during a recession to survive and thrive.
This document contains excerpts and quotes on a variety of topics related to business excellence and leadership. It discusses the importance of execution, accountability, decentralization, talent, purpose, passion and enthusiasm in leadership. It also emphasizes seeking out discomfort and diversity of experience, as well as focusing on customers, women, and lifelong learning.
Bet sizing tells provide important information about a player's range of possible hands. There are certain classic bet sizing tells, such as a small bet on the flop from a player who called a raise, indicating a weaker made hand or draw. Experienced players can exploit imbalances in an opponent's betting ranges created when they use multiple bet sizes in a situation. Learning to identify bet sizing tells allows players to narrow down their opponents' possible hand ranges.
This document provides an overview of behavioral finance and how psychological factors can influence investor decisions and market prices. It discusses several cognitive biases and psychological phenomena that can lead investors to make irrational decisions, such as prospect theory, framing effects, loss aversion, overconfidence, and misperceptions of randomness. While some degree of irrationality is to be expected, for markets to be inefficient it requires that many investors make irrational decisions collectively and that arbitrage opportunities cannot correct the situation. The document uses various examples and studies to illustrate how these behavioral tendencies can manifest in investment choices and outcomes.
The document discusses the current economic cycle and signs that the economy may be slowing down after nearly a decade of growth. It notes that while economic numbers have been strong, interest rates have risen several times in recent years and indicators like the CAPE ratio suggest the market may be overvalued. Rather than trying to time the market, the document recommends investors hedge risks by taking advantage of tax laws to protect assets and reduce downside if a market correction occurs.
Tom Peters at Quinnipiac & Miller Agency (Long)bizgurus
This document contains a summary of notes from a presentation on excellence and building successful organizations. It discusses several key principles:
1. Thriving in change by being responsive and innovative. Decentralizing operations and empowering autonomy and entrepreneurship.
2. Focusing on continuous improvement, execution, accountability and moving up the value chain from goods to experiences to dreams.
3. Challenging the status quo and embracing diversity, risk-taking, and learning from failures. Small companies can outperform giants by being dramatically different and building emotional connections.
Most of economics can be summarized in four words: "People Respond to incentives." The document discusses several examples that demonstrate how incentives can lead to unintended and sometimes harmful consequences. It discusses how industries like tobacco, fast food, pharmaceuticals, and investment banking have exploited incentives to push products and services that are not always in the best interests of consumers. It emphasizes the importance of being aware of incentive structures and their potential to cause bias. Financial independence is presented as a way to avoid being unduly influenced by other parties' incentives.
This document discusses risk management strategies for forest rangers. It begins by outlining the tension between quantitative and subjective approaches to decision making under uncertainty. It then provides examples of risk concepts from different cultures and perspectives. The rest of the document discusses predictive tools and strategies used in risk management, including value at risk, probabilities, uncertainty, and prediction markets. It cautions that accurately predicting low probability events is very difficult.
This document is a collection of quotes and passages from Tom Peters discussing various topics related to excellence and innovation. It touches on themes like embracing failure, decentralization, execution, accountability, solving problems for customers, and tapping into opportunities like the women's market. Short snippets and ideas are presented without much additional context or connection between sections.
The document discusses the results of a study on the effects of exercise on memory and thinking abilities in older adults. The study found that regular exercise can help reduce the decline in thinking abilities that often occurs with age. Older adults who exercised regularly performed better on cognitive tests and brain scans showed they had greater activity in important areas for memory and learning compared to less active peers.
surface area of a cylinder [∂ Campbell's soup can]Chris Waggoner
The document discusses the product rule of calculus and how it can be used to find the surface area and volume of a cylinder. Specifically, it notes that the product rule works with derivatives and boundaries, and can be applied to find the surface area formula which includes the top and bottom circles as well as the curved side of a cylinder, also known as the "paper towel roll" side.
The document contains symbols and characters arranged on the page without clear meaning or organization. It does not convey any discernible information that can be summarized in 3 sentences or less.
This document contains some numbers and pictures related to economics in the United States and world history. It references a website that lists books on economic topics. The document discusses information about the U.S. economy as well as worldwide economic and historical figures and images.
Are you learning all you can from the data you collect?
Understand your customers and your costs better by finding out what your numbers are really saying to you.
1. Implications
Economic theory informs:
• anti-trust law
• contracts law
• Federal Reserve policy
• business decisions
• financial markets (traders, arbitrageurs)
2. Traditional Theory
• Utility
• Expected Utility
• Maximization
• Calculate how to do this
• Rationality
• An approximation, a metaphor, or an
ideology?
4. Some Departures from
Homo Economicus
• Reciprocity
• Calculational Capacity
• Heuristics
• Absolute Value vs Relative Value
• Probability
5. Some Departures from
Homo Economicus
• Reciprocity
• Calculational Capacity
• Heuristics
• Absolute Value vs Relative Value
• Probability
6. Probability
• Reasonable guess: if people who know exactly what’s
coming maximize utility, maybe people who can guess
what’s coming maximize expected utility.
• People have a very good inborn heuristic for
averaging. They can do it in a blink.
• Plus the mathematics of probability are already worked out
(Boltzmann, Kolmogorov), so economists can hypothesize about
behavior without having to invent new mathematical tools.
7. Expected Utility
• Say an agent is choosing what to do in the face of
uncertainty.
• Option X might result in one thing, or it might do
something else.
• Same for Options Y and Z.
• Example: Messrs. X,Y, and Z are guys you could date.
• Of course there are a variety of possible outcomes associated with
each of these choices, but let’s just reduce it to: {break up after 1
month, break up after 1 year, break up after 10 years, die together}
8. Probability
• That turned out to be insufficient to describe
people’s behavior.
• (After all, people do play the lottery and buy
insurance, which on average is a losing proposition.)
• The next guess was that people care about variance
as well as mean.
• (Chalkboard: pictures of distributions.)
9. Risk Attitudes
Since this person’s utility is
proportional to wealth, they
weigh the fiftieth dollar the
same as the millionth dollar.
For this person, having only a
few dollars will be extremely
painful: they can’t risk it!
11. Uncertainty Aversion
• Say there are two classes you are considering enrolling in. You
want to know how good the teacher is, so you go to a website
that rates teachers.
1. One of the teachers, you cannot find any information about.
2. The other teacher, the reviews are half positive, half negative.
• Most people would prefer the second teacher because they
have more information, hence less uncertainty.
• However, both situations would be represented probabilistically
as uniformly random, i.e. completely random.
• That means risk aversion does not suffice to describe
preferences.
12. Ellsberg Paradox
Suppose you have an urn containing 30 red balls and 60 other balls that are either blue or black.
You don't know how many black or blue balls there are, just that the total number of black balls plus
the total number of blue balls equals 60. You are now given a choice between two gambles:
Gamble A You receive $100 if you draw a red ball
Gamble B You receive $100 if you draw a black ball
A B
Also you are given the choice between these two gambles (different draw, same urn):
Gamble C You receive $100 if you draw a red or blue ball
Gamble D You receive $100 if you draw a black or blue ball C D
According to expected utility theory, you should prefer Gamble A to Gamble B if, and only if, you
believe that drawing a red ball is more likely than drawing a black ball. Similarly you should prefer
Gamble C to Gamble D if, and only if, you believe that drawing a red or yellow ball is more likely
If drawing a red ball is more likely than
than drawing a black or blue ball.
drawing a black ball, then drawing a red or blue ball is also
more likely than drawing a black or blue ball.
13. Allais Paradox
1A 1B 2A 2B
Both gambles give the same outcome 89% of the time, so in expected utility,
these equal outcomes should not affect the desirability of the gamble. If the 89%
‘common consequence’ is disregarded, both gambles offer the same choice; a 10%
chance of getting $5 million and 1% chance of getting nothing as against an 11%
chance of getting $1 million.
14. Some Departures from
Homo Economicus
• Reciprocity
• Calculational Capacity
• Heuristics
• Absolute Value vs Relative Value
• Probability
15. Absolute Wealth
• A friend of mine works twelve hours a week at a $6/hour job.
= $3600/year
• That’s not a lot, right?
source: globalrichlist.com
16. from
Myths of Rich & Poor: Why We're Better Off than We Think
by W. Michael Cox and Richard Alm, New York: Basic Books, 248 pages, $25.00
• A half gallon of milk cost the average worker 10 minutes of labor in 1970, 8.7 minutes in 1980,
and only 7 minutes in the latest year for which data are available.
• A gallon of gasoline cost 11 minutes in 1950 but is now less than half that. But these are nothing
compared to some price drops.
• A scratchy-sounding three-minute phone coast-to-coast phone call cost an incredible 90 hours of
work back in 1910. Today, it's less than two minutes of work time.
• A hundred kilowatt hours of electricity in 1900 cost a shocking 107 hours of worker time in 1900, a
bit over an hour by 1960, and less than 45 minutes today.
• quot;A typical American at the turn of the century spent $76 out of every $100 on food, clothing, and
shelter. By the 1990s, this portion had fallen to $37 of every $100.”
17. from
Myths of Rich & Poor: Why We're Better Off than We Think
by W. Michael Cox and Richard Alm, New York: Basic Books, 248 pages, $25.00
Economist’s point: See, we’re doing better.
Psychologist’s point: So why don’t we appreciate it?
18. So why do people making $90,000 a year
still feel poor? (“I’m just an accountant.”)
• Comparison to peers (rank) (mate choice)
• Hedonic treadmill
• Don’t accurately predict what will make
them happy, so they spend on things that
don’t actually make them better off.
• Happiness log(income)
19. Prospect Theory
• Reference point, not absolute
• Gains are valued, less than losses are hated
• Small probabilities overweighted;
large probabilities underweighted
20. Implications
• GDP growth less important than stability, jobs
• Low, steady inflation rather than stable prices
• Precautionary principle
• “Downside risk” rather than standard deviation in
investments
• “Libertarian paternalism” (Thaler’s)
• Better theoretical basis for government regulation
• Buy more “experience goods,” fewer durables
21. Efficient Markets?
WSJ.com - As Two Economists Debate Markets, The Tide Shifts Page 1 of 5
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Mr. Thaler Takes On Mr . Fama
By JON E. HILSENRATH
Staff Reporter of THE WALL STREET JOURNAL
October 18, 2004 ; Page A I
For forty years, economist Eugene Fama argued that financial markets were highly efficient i n
reflecting the underlying value of stocks . His long-time intellectual nemesis, Richard Thaler, a
member of the quot;behavioristquot; school of economic thought, contended that markets can veer off
course when individuals make stupid decisions .
In May, 116 eminent economists and business executives gathered at the University of Chicago
Graduate School of Business for a conference in Mr . Fama's honor . There, Mr. Fama surprised
some in the audience . A paper he presented, co-authored with a colleague, made the case tha t
poorly informed investors could theoretically lead the market astray. Stock prices, the paper said ,
could become quot;somewhat irrational . quot;
Coming from the 65-year-old Mr . Fama, the intellectual father of the theory
known as the quot;efficient-market hypothesis,quot; it struck some as an unexpecte d
concession. For years, efficient market theories were dominant, but her e
was a suggestion that the behaviorists' ideas had become mainstream .
e