Updating Beliefs: Are economic agents inspired by rational action or according to ones hopes and fears?.

The purpose of this investigationwas to simulate a real life scenarioand explore the way economicagents update their beliefs. Do theyupdate according to what theyhope? Or do they update inspired byrational behavior?We mimicked the environment whicha recently high school graduate faceswhen entering college to see how astudent updates his beliefs in regardsto his classroom position. We examinedhow economic agents envisagethemselves through and through collegeand see if they update their beliefsabout a hypothesis A in the lightof new evidence B, or if they updatetheir beliefs subject to what theychoose they hope. In this sense weexplored the possibility of setting asidethe neoclassical assumption thatagents are anything more than hyperrational naïve optimizers acting on perfect (and in some cases, limited information)in order to turn back to anolder tradition in economic theory, thatis agents are recognizably human.

Price transmission dynamics between ADRs and their underlying foreign security: The case of Banco de Colombia S.A.- Bancolombia.

This paper analyzes the dynamics ofthe American Depositary Receipt (ADR) of a Colombian bank (Bancolombia) in relation to its pricing factors (underlying (preferred) shares price, exchange rate and the US market index). The aim is to test if there is a long-term relation among these variables that would imply predictability. One cointegrating relation is found allowing the use of a vector error correction model to examine the transmission of shocks to the underlying prices, the exchange rate, and the US market index. The main finding of this paper is that in the short run, the underlying share price seems to adjust after changes in the ADR price, pointing to the fact that the NYSE (trading market for the ADR) leads the Colombian market. However, in the long run, both, the underlying share price and the ADR price, adjust to changes in one another.

There exists circularity between WACC and value? Another solution.

Although we know there exists a simple approach to solve the circularity between value and the discount rate, known as the Adjusted Present Value proposed by Myers, 1974, it seems that practitioners still rely on the traditional Weighted Average Cost of Capital, WACC approach of weighting the cost of debt, Kd and the cost of equity, Ke and discounting the Free Cash Flow, FCF. We show how to solve circularity when calculating value with the free cash flow, FCF and the WACC. As a result of the solution we arrive at a known solution when we assume the discount rate of the tax equity: the capital cash flow, CCF discounted at Ku. When assuming Kd as the discount rate for the tax savings, we find an expression for calculating value that does not implies circularity. We do this for a single period and for N periods.

W-CDMA capacity analysis using GIS based planning tools and MATLAB simulation

The evolution of cellular systems towards third generation (3G) or IMT-2000 seems to have a tendency to use W-CDMA as the standard access method, as ETSI decisions have showed. However, there is a question about the improvements in capacity and the wellness of this access method. One of the aspects that worry developers and researchers planning the third generation is the extended use of the Internet and more and more bandwidth hungry applications. This work shows the performance of a W-CDMA system simulated in a PC using cover maps generated with DC-Cell, a GIS based planning tool developed by the Technical University of Valencia, Spain. The maps are exported to MATLAB and used in the model. The system used consists of several microcells in a downtown area. We analyse the interference from users in the same cell and in adjacent cells and the effect in the system, assuming perfect control for each cell. The traffic generated by the simulator is voice and data. This model allows us to work with coverage that is more accurate and is a good approach to analyse the multiple access interference (MAI) problem in microcellular systems with irregular coverage. Finally, we compare the results obtained, with the performance of a similar system using TDMA.

The Influence of Propagation Model and Sectorization over WCDMA Capacity

In this paper we use a dynamic model that we have developed for WCDMA capacity analysis using MATLAB and a GIS based planning tool, to estimate the capacity of a mobile system under different conditions like number of cells, propagation model, sectorization and handover margin.

Up-Link/Down-Link capacity Unbalance analysis in UMTS using a GIS based Planning Tool and MATLAB simulation

Capacity analysis using simulation is not a new thing in literature. Most of the development process of UMTS standardization have used simulation tools; however, we thing that the use of GIS planning tools and matrix manipulation capacity of MATLAB can show us different scenarios and make a more realistic analysis. Some work is been doing in COST 273 in order to have more realistic scenarios for UMTS planning. Our work initially was centered in uplink analysis, but we are now working in downlink analysis, specifically in two areas: capacity in number of users for RT and NRT services, and Node B power. In this work we will show results for up-link capacity and some results for downlink capacity and BS power consumption.

Estimating dynamic models with aggregate shocks and an application to mortgage default in Colombia

We estimate a dynamic model of mortgage default for a cohort of Colombian debtors between 1997 and 2004. We use the estimated model to study the effects on default of a class of policies that affected the evolution of mortgage balances in Colombia during the 1990's. We propose a framework for estimating dynamic behavioral models accounting for the presence of unobserved state variables that are correlated across individuals and across time periods. We extend the standard literature on the structural estimation of dynamic models by incorporating an unobserved common correlated shock that affects all individuals' static payoffs and the dynamic continuation payoffs associated with different decisions. Given a standard parametric specification the dynamic problem, we show that the aggregate shocks are identified from the variation in the observed aggregate behavior. The shocks and their transition are separately identified, provided there is enough cross-sectionavl ariation of the observeds tates.