The finding of reversals in weekly returns has been attributed to a combination of microstructure issues and overreaction to information. I provide new evidence eliminating overreaction as a source of reversal. I show that well-known weekly contrarian profits are followed by a long run of momentum profits. In fact, these profits are strong enough to produce a significant momentum effect over the full year following portfolio formation. Thus, the market does not appear to view extreme weekly returns as excessive, as implied by an overreaction story. To the contrary, this return continuation is consistent with underreaction to the news driving extreme weekly returns. This is supported by cross-sectional tests in which I find this week's news is positively related to next week's returns. The evidence presented here is consistent with growing evidence that underreaction to firm-specific information is a pervasive feature of price formation. Therefore, if any short-run contrarian profits can be realized, they are better viewed as compensation for providing liquidity than as a reward for arbitrage.

The finding of reversals in weekly returns has been attributed to a combination of microstructure issues and overreaction to information. I provide new evidence eliminating overreaction as a source of reversal. I show that well-known weekly contrarian profits are followed by a long run of momentum profits. In fact, these profits are strong enough to produce a significant momentum effect over the full year following portfolio formation. Thus, the market does not appear to view extreme weekly returns as excessive, as implied by an overreaction story. To the contrary, this return continuation is consistent with underreaction to the news driving extreme weekly returns. This is supported by cross-sectional tests in which I find this week's news is positively related to next week's returns. The evidence presented here is consistent with growing evidence that underreaction to firm-specific information is a pervasive feature of price formation. Therefore, if any short-run contrarian profits can be realized, they are better viewed as compensation for providing liquidity than as a reward for arbitrage.

Thesis (Ph. D.)--University of Washington, 2001. / Vita. Includes bibliographical references (p. 84-94).

The attraction effect reveals that people do not compare alternatives independently of one another. Instead, they make comparisons, such that preferences between two alternatives can be reversed by adding or removing otherwise irrelevant alternatives. This behaviour is particularly difficult for rational models of decision making to explain since such models require the independent evaluation of alternatives. As such these models describe preference reversal behaviour as irrational. This thesis examines what rational decision making should look like once a person's cognitive bounds have been taken into account. The key finding is that contextual preference reversals like the attraction effect, far from being irrational, actually result from people making better decisions than they would if they assessed alternatives independently of one another. The research was grouped into three objectives concerning the attraction effect and the rationality of human cognition. The first of these was to identify under what conditions people exhibit the attraction effect, and what consequences the behaviour has for the outcomes they experience. Two experiments revealed that the effect is only exhibited in choice sets where alternatives are approximately equal in value and therefore hard to tell apart. This finding also means that the potential negative consequences of exhibiting the attraction effect are very small, because it only occurs when alternatives are similar in value. The second objective was to develop a computationally rational model of the attraction effect. Computational rationality is an approach that identifies what the optimal behaviour is given the constraints imposed by cognition, and the environment. Our model reveals why people exhibit the attraction effect. With the assumption that people cannot calculate expected value perfectly accurately, the model shows that in choices between prospects, the attraction effect actually results in decisions with a higher expected value. This is because noisy expected value estimates can be improved by taking into account the contextual information provided by the other alternatives in a choice set. The final objective was to provide evidence for our model, and the computational rationality approach, by making a novel prediction. We conducted an experiment to test the model's prediction that the attraction effect should be much reduced in the loss domain. We replicated existing attraction effect studies and extended them to the loss domain. The results replicated previous results in the gain domain and simultaneously revealed the novel finding that people did not exhibit the effect in the loss domain. People exhibit the attraction effect as a result of making the best decision possible given the cognitive resources they have. Understanding decision making as computationally rational can provide deep insights into existing phenomena. The method allows us to ascertain the causal link between cognitive mechanisms, a person's goal, and their decision making.

<p> A research project is presented to assess the capabilities of Square Hollow Structural Sections for seismic design. This assessment is based mainly on the energy dissipation and ductility measures. An attempt is made to establish a preliminary guideline of the maximum slenderness ratio that qualify the aforementioned sections for conservative seismic design. </p> <p> An experimental programme on seven different sections was performed to evaluate the loss in flexural capacity due to inelastic cyclic loads, and to construct the load-deflection and moment-curvature hysteresis loops. </p> <p> A comparison is made between the flange slenderness requirements of both HSS and wide flange rot led sections capable of resisting the same level of inelastic strain reversals for the same number of cycles. </p> / Thesis / Master of Engineering (MEngr)

The majority of the research conducted on consumer choice phenomena focuses on how choices are made and the processes that lead up to those choices. While these are essential aspects within the breadth of choice knowledge that exists today, little research has been conducted on the options that are rejected during this process. Thus, the overarching goal of this dissertation is gain an understanding of consumer choice processes and outcomes through the lens of a nearly chosen alternative. Specifically, this dissertation investigates how the decision process can cause a close second option to be rejected when the chosen option is found to be unavailable.As a means of achieving these goals, I first demonstrate the phenomenon that consumers do not always select a close second option when the first choice option is unavailable, contrary to the prediction of economic rationality. Next, I propose that the decision process itself, specifically the use of a tie-breaking attribute to differentiate between close options, triggers a choice outcome that does not include the original second choice option, but rather an alternative that possesses this tie-breaking attribute. Finally, I examine the implications that the preference reversal phenomenon described above has for retailers and manufacturers.My original interest in this phenomenon stems from anecdotal evidence provided by a variety of informants. Although this evidence helped me to recognize the prevalence of rejected second choice options, experimental design is used to investigate this phenomenon and the boundary conditions that confine this effect. Consequently, my dissertation consists of 6 experiments. Experiment 1 and a pilot study establish the effect and investigate the theoretical process that account for my findings. Experiments 2 through 4 rule out alternative explanations and add support towards the existence and prevalence of the effect. Finally, Experiments 5 and 6 explore the impact of these results for improving the performance of marketing managers. It is my belief that incorporating the dynamic effects of the second-most preferred option may ultimately lead to more accurate and sophisticated prediction of buyer choices, more effective retailing and personal selling strategies, and more profitable management of product line portfolios.

The study examined the relationship between reversals and several factors in 141 Grade 2 mainstream learners from average classes in Department of Education schools. The sample consisted of 77 female learners and 64 male learners. 55 of the 141 learners were older than 8 years and 131 of the 141 learners were right-handed.The study made use of correlational research where two or more variables are compared by measuring differences and looking for a relationship. Incorrect letter formation, gender and reversals in reading showed a statically significant difference between the group who had reversals compared to the group that did not have reversals in the class program that was used to identify learners with reversals. Furthermore the data collected only on the learners with reversals showed a mean scaled that was below average for position in space, figure ground and visual closure as well as for the motor-reduced quotient of the Developmental Test of Visual Perception -2. This group also displayed a high percentage of learners with difficulty with directionality as well as with crossing their midline. The results of the study were limited by the research design, as well as the lack of standardized tests available to test some aspects. Difficulty in gaining permission from parents to include learners in the study was also experienced which limited the final sample size. Further studies focussing on the treatment of the factors that showed a statistically significant relationship with reversals was recommended as well as placing more emphasis correct letter formation when teaching handwriting and publishing the results of this study in a journal accessible to educators and therapists was recommended. Copyright / Dissertation (MOccTher)--University of Pretoria, 2009. / Occupational Therapy / unrestricted

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[pt] O objetivo desta dissertação é analisar como fatores políticos e institucionais afetam a probabilidade de ocorrência de uma parada brusca de financiamento externo e quais os custos deste evento em termos de bem- estar para o país. Utilizando uma ampla base de dados em painel, o presente trabalho deixa claro que sudden stops geram, além de custos econômicos, elevados custos ao bem-estar nacional. O resultado é robusto frente a outras especificações dinâmicas e indica que uma parada brusca custa ao país 1.25 pontos percentuais de consumo/PIB no ano do evento. Dado o expressivo impacto sobre o bem-estar social, busca-se analisar que fatores aumentam ou diminuem a probabilidade de ocorrência de uma parada brusca nos países. Conclui-se então que variáveis políticas são relevantes para determinar a probabilidade de ocorrência do evento, desde que sejam incluídas neste grupo variáveis que meçam a extensão do poder executivo e da democracia nacional. Variáveis que regulam o processo de transição e a extensão do poder executivo demonstraram ter impactos altamente significantes sobre a probabilidade de ocorrência de uma parada brusca, tanto em termos estatísticos quanto em termos de impacto absoluto. / [en] The main objectives of this dissertation are to analyze how political and institutional factors affect the likelihood of a sudden stop of external financing and to measure the costs of this event in terms of national welfare. After analyzing a wide panel database, we conclude that a sudden stop generates, besides economic effects, high costs to national welfare. The result is robust to other dynamic specifications and is estimated as a fall of 1.25 percentage points of consumption/GDP in the year of the event. This work also makes clear that political variables are relevant to determine the likelihood of a sudden stop since we include variables that measure the extent of executive power and national democracy. Variables that regulate the transitional process and extent of Executive`s power showed high significant statistical and absolute impacts on the probability of an event.

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