13 Sep 2009
First, those models assume that rewards depend only on absolute performance, but in the real world, payoffs are often tightly linked to relative performance. […]
A second problematic assumption of standard economic models is that people are properly attentive to all relevant costs and benefits, even those that are uncertain, or that occur in the distant future. In fact, most people focus on penalties and rewards that are both immediate and certain. Delayed or uncertain payoffs often get short shrift.
—
I will be bringing this up in Corporate Finance on Monday.
Maybe …
Human Error Factor = # of Twitter Positive or Negative Mood Search Results * (Market Volume/1,000,000,000) / (Fox News Buzzword Count * MSNBC Buzzword Count)^ (Percent Chance of Daily Precipitation/100)
Economic View - Greenspan Assumed Too Much for the Invisible Hand - NYTimes.com
