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FIRN Virtual Seminar Series - Professor Peter Bossaerts

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Working with the large FIRN member institutions we have developed a virtual seminar series where all FIRN members can participate. The seminars will be via zoom and will be about an hour long, comprising presentation followed by moderated Q&A.

In collaboration with the University of Melbourne, FIRN invites you to a virtual seminar presented by Professor Peter Bossaerts.

Title: Asset Pricing In a World of Imperfect Foresight

Abstract: We consider a canonical asset pricing model, where agents with quadratic preferences are allowed to re-trade a limited set of securities over multiple periods, after which these securities expire, and agents consume their liquidation values. A key assumption in this model is that agents have perfect foresight: for all future contingencies, they correctly foresee the corresponding equilibrium prices. We show that, under myopia, prices generically are as if agents had perfect foresight. Yet their choices are wrong, because of neglected re-trading opportunities. In an experiment, we find both prices and choices to be consistent with myopia.

Peter Bossaerts is Redmond Barry Distinguished Professor and Professor of Experimental Finance and Decision Neuroscience at the University of Melbourne. He pioneered the use of controlled experimentation (with human participants) in the study of financial markets. He also pioneered the use of decision and game theory in cognitive neuroscience, thereby helping establish the novel fields of neuroeconomics and decision neuroscience. Recently, he has started to use computer science to study human and market behavior under complexity. He graduated with a PhD from UCLA, and spent most of his career at the California Institute of Technology (Caltech). He also worked at Carnegie Mellon University and EPFL (ETH-Lausanne), among others. He is Fellow of the Econometric Society, the Academy of the Social Sciences in Australia, and the Society for The Advancement of Economic Theory. All FIRN members are welcome to this event.

Please register your interest and you will be sent an email at the beginning of that week with a copy of the paper and the Zoom code.

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