Risk aversion and stock price sensitivity to dividends

Article Abstract:

An analysis of dividend effects on stock prices and risk aversion behavior of firms reveals that the dividend asset pricing model is a better tool for assessing stock price sensitivity. The study also reveals that the dividend pricing model's estimates for risk aversion coefficients are lower than consumption based models. Moreover, the study finally finds a quantifiable relationship between dividends and stock price volatility that other models tend to overestimate.

Economics, Research and Development in the Social Sciences and Humanities, Analysis, Prices and rates, Stocks, Dividends, Risk (Economics), Prices, Stock prices

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Violations of the reduction and independence axioms in Allais-type and common-ratio effect experiments

Article Abstract:

Recent studies have suggested that the expected utility theory is obsolete. An analysis of these studies reveal that the construction of the questions are largely responsible for the reported violations of the decision-making under uncertainty theory. Furthermore, in the context of Allais paradox and common ratio problems, the reduction axiom is found to have been violated in at least one-third of the experimental subjects.

Research, Decision-making, Models, Decision making, Risk assessment, Probabilities, Probability theory

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