Discover and read the best of Twitter Threads about #empirical

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Yesterday i ran a thought experiment on #Prospecttheory with some new clients to understand to what extent are they Risk- averse.

I handed them 2 choices

1. Choose to invest 1,00,000₹ in Bank Fixed deposits at a 6% ( Risk free rate) a probability of 98 %
Assuming a 0.98 Probability x 6000 ( 1 Lakh x 6%) = 5880

Or

2. Invest 1,00,000 in ITC and earn a dividend of average 4% yield + Capital gains of another 10%

100000 x 4 % ( Dividend ) = 4000
100000 x 10 % ( Capital gains) = 10000
Assuming a Probability of 40% of this playing out = 14000 x 0.40 = 5600

The expected value in the options came out exactly same (rounding +/ - )

So results were

Both chose to invest in a bank FD and not in ITC even when I explained the rationale of the thought process.
Read 5 tweets
Let us talk about the #FED #FOMC's 1st #MonetaryPolicy meeting of 2020. Specifically, let us talk about the puzzle that is a flatter #PhillipsCurve...
The #FederalOpenMarketCommittee (#FOMC) of the #FederalReserveBank (#FED) of the #US concluded its 1st meeting of 2020 on the 29th January 2020. As expected, the FED did not change rates but left the #KeyPolicyRate, the #FederalFundsRate (#FFR) in the 1.5%-1.75% range...
Indeed, if one considers the #FED #Dotplot of December 2019, the decision to keep rates unchanged would not come as a surprise. What I wanted to focus on today is some key passages in the statement, highlighted in yellow in the screenshot below...its all #PhillipsCurve...
Read 17 tweets
The capacity to compartmentalize may be an overlooked important psychological construct with positive implications for subjective #wellbeing #ThursdayThoughts
It may be related to the capacity for #play, one of the most under-appreciated activities to enhance subjective #happiness & adaptation.
Some cutting-edge, relevant #empirical evidence: 👀 #Psych

“The study is the first to examine how distinct types of leisure are associated with oxytocin release, researchers said.”

baylor.edu/mediacommunica…
Read 9 tweets

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