this paper are covered by U.S. Patent 5,893,069

Forecasting is important in many aspects of our lives. As individuals, we try to predict success in our marriages,

We present evidence from questionnaire studies of mutual fund investors about recollections of past fund performance. We find that investor memories exhibit a positive bias, consistent with current psychological models. We find that the degree of bias is conditional upon previous investor choice, a phenomenon related to the well known theory of cognitive dissonance.

One hundred and thirty-nine principles are used to summarize knowledge about forecasting. They cover formulating a problem, obtaining information about it, selecting and applying methods, evaluating methods, and using forecasts. Each principle is described along with its purpose, the conditions under which it is relevant, and the strength and sources of evidence. A checklist of principles is provided to assist in auditing the forecasting process. An audit can help one to find ways to improve the forecasting process and to avoid legal liability for poor forecasting. When managers receive forecasts, they often cannot judge their quality. Instead of focusing on the forecasts, however, they can decide whether the forecasting process was reasonable for the situation. By examining forecasting processes and improving them, managers may increase accuracy and reduce costs. One can examine the forecasting processes by systematically judging it against the 139 forecasting principles presented. These principles, organized into 16 categories, cover formulating problems, obtaining information, implementing methods, evaluating methods, and using forecasts. Why do you need 139 principles? You will not need all of them in any one situation. Nearly all of the principles are conditional on the characteristics of the situation. It would be misleading to write a book on “The Five Principles Used by

This paper considers whether a particular agent-based stockmarket model is of use in addressing the specific practical issue of how share prices respond to the sale of a large volume of shares. The paper also considers the problems faced in calibrating the model to stock returns found in real markets

Several papers have identified the hazards associated with event-induced variance, yet event studies continue to ignore the problem. This study demonstrates that the most commonly used abnormal return detection methods reject the null hypothesis of zero abnormal returns too often. This causes researchers to conclude the detection of abnormal performance when none is present. Two easy to employ alternative methods are proposed that are relatively unaffected by event-induced variance.

∗ Canada Research Chair Holder (Econometrics). Centre interuniversitaire de recherche en analyse des organisations (CIRANO), Centre interuniversitaire de recherche en économie quantitative (CIREQ), and Département de sciences

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Implicit Laboratory Association (ImpLab) is a registered association aimed to foster research and facilitate debate on issues related to implicit cognition. The second annual Workshop of ImpLab was held in June 2007 at Budapest. Cognitive researchers, psychologists, physicists, entrepreneurs, economics and financial experts examined The Role of Intuition in Decision-making and Economics. Participants of the workshop discussed the latest scientific findings of how human intuitive, non-conscious processes could improve business decisions.

The business media play an active role in influencing stock prices. Statistically significant excess returns at the time of the publication of stock recommendations have been documented many times. Frequently these abnormal gains begin to accumulate long before the publication date. In most cases they reach their highs on the day the recommendations are disseminated to the public. With few exceptions a price reversal sets in shortly thereafter: Excess returns in recommended stocks are at least partially given up.