Information aggregation and belief elicitation in experimental parimutuel betting markets

This paper studies the impact of belief elicitation on informational efficiency and individual behavior in experimental parimutuel betting markets. In one treatment, groups of eight participants, who possess a private signal about the eventual outcome, play a sequential betting game. The second treatment is identical, except that bettors are observed by eight other participants who submit incentivized beliefs about the winning probabilities of each outcome. In the third treatment, the same individuals make bets and assess the winning probabilities of the outcomes. Market probabilities more accurately reflect objective probabilities in the third than in the other two treatments. Submitting beliefs reduces the favorite-longshot bias and making bets improves the accuracy of elicited beliefs. A level-k framework provides some insights about why belief elicitation improves the capacity of betting markets to aggregate information. (C) 2012 Elsevier B.V. All rights reserved.

A new method for estimating liquidity risk: Insights from a liquidity-adjusted CAPM framework

This paper proposes a new non-parametric method for estimating model-free, time-varying liquidity betas which builds on realized covariance and volatility theory. Working under a liquidity-adjusted CAPM framework we provide evidence that liquidity risk is a factor priced in the Greek stock market, mainly arising from the covariation of individual liquidity with local market liquidity, however, the level of liquidity seems to be an irrelevant variable in asset pricing. Our findings provide support to the notion that liquidity shocks transmitted across securities can cause market-wide effects and can have important implications for portfolio diversification strategies. ©2012 Elsevier B.V. All rights reserved.

Medicalization, markets and consumers.

This paper examines the impact of changes in the medical marketplace on medicalization in U.S. society. Using four cases (Viagra, Paxil, human growth hormone and in vitro fertilization), we focus on two aspects of the changing medical marketplace: the role of direct-to-consumer advertising of prescription drugs and the emergence of private medical markets. We demonstrate how consumers and pharmaceutical corporations contribute to medicalization, with physicians, insurance coverage, and changes in regulatory practices playing facilitating roles. In some cases, insurers attempt to counteract medicalization by restricting access. We distinguish mediated and private medical markets, each characterized by differing relationships with corporations, insurers, consumers, and physicians. In the changing medical environment, with medical markets as intervening factors, corporations and insurers are becoming more significant determinants in the medicalization process.

Beyond Financialisation? Transformative Strategies for More Sustainable Financial Markets in the European Union

The global financial crisis has led many regulators and lawmakers to a rethinking about current versus optimum financial market structures and activities that include a variety and even radical ideas about delevaraging and downsizing finance. This paper focuses on the flaws and shortcomings of regulatory reforms of finance and on the necessity of and scope for more radical transformative strategies. With 'crisis economics' back, the most developed countries, including the EU member states, are still on the edge of disaster and confronted with systemic risk. Changes in financial regulation adopted in the aftermath of the financial meltdown have not been radical enough to transform the overall system of finance-driven capitalism towards a more sustainable system with a more embedded finance. The paper discusses financialisation in order to understand the development trends in finance over the past decades and examines various theories to describe the typical trends and patterns in financial regulation. By focusing on a limited number of regulatory reforms in the European Union, the limitations of current reforms and the need for additional transformative strategies necessary to overcome the finance-driven accumulation regime are explored. Finally, the regulatory space for such transformative strategies and for taming finance in times of crisis, austerity, and increased public protest potential is analysed.