Globalization and Environmental Effects on our planet Essay

Globalization and the Environmental Effects on our Planet We live on a very fortunate planet that allows the human race to not only survive on it, but also to thrive in its consistent temperatures, natural resources, and prosperous ecosystem. But the effects of globalization, pollution, global warming and other environmental problems threaten our survival as a species in this ecosystem. Many believe that through technology, commerce, and travel globalization will lead us to economic prosperity, while conservationists and scientists are working hard to preserve the priceless resources that our earth has to offer us. The widespread changes that are brought about due to globalization have a lasting impact on our environment and threaten our survival. These global changes make understanding our world both challenging and a necessary task if our future depends understanding these concepts in all their various forms. Our ecosystems are altered by the financial decisions we make today and the energy we use, the pollutions we create will affect our lives for our children and our children’s children, if we don’t destroy ourselves by then. Globalization is a very real phenomenon and a concept hat most people do not fully come to grasp in order to understand the ramifications of it. Globalization does not Just affect our societies economically, but also politically and socially as well. The media does an extensive Job at portraying the ideologies and opinions of globalization through politicians and activist groups, but does not accurately portray the arguments or the ever expanding inequality gap between the rich and poor and the lack of evidence to demonstrate the achievement of the â€Å"trickle down† effect. Globalization is most commonly defined as , â€Å"the increasing nterconnectedness of people and places through converging processes of economic, political, and cultural change† (Rowntree, Lewis, Price, & Wyckoff, 2003). This means that once-distant regions and cultures are now linked together through commerce, travel, and communications causing an economic reorganization of our world’s systems. Early forms of globalization have been seen since the early years of our societies, including the first era of globalization before World War I seemed to shrink our global finance capitalism system. The inventions of the steamship, telegrams, and ventually the telephone are all examples of the increase of globalization in our earlier societies that have had a huge impact on our political, cultural, and economic systems. But this â€Å"new era of globalization,† as mentioned by Thomas Friedman, is not only different in degree than the previous era of globalization, but is also driven differently and is increasing at a pace never witnessed before (Friedman, 2000). Since the Industrial Revolution, many may argue that contemporary globalization is the most fundamental reorganization of the socioeconomic structure, but few agree on whether the benefits actually outweigh the costs. In previous eras, inventions such as the railroad, steamships, and automobiles increased globalization and the falling transportation costs allowed people to get to more places cheaper and faster than ever betore. Now, the talling costs ot telecommunications allow todays era ot globalization to link the world together even tighter than before. Microchips, the internet, satellites, and cellphones allow societies and cultures of greater distances to connect quickly and cheaply in order to conduct business, form relationships, and transfer information from one geographic location to another. Travel has become aster and more cost effective, communications with other countries have become easier, and people are able to offer and exchange services globally. This is why Friedman defines globalization as, â€Å"The inexorable integration of markets, nation- states and technologies to a degree never witnessed before- in a way that is enabling individuals, corporations and nation-states to reach around the world farther, faster, deeper and cheaper than ever before, and in a way that is enabling the world to reach into individuals, corporations and nation-states farther, faster, deeper, cheaper than ever before. (Friedman, 2000, p. 9) Not everyone has profited from economic globalization, nor have the benefits been felt equally in certain world regions. The multitude of economic changes due to increases in communication, travel, and financial decisions have triggered fundamental cultural changes to many populations, which have threatened local cultural diversity. Globalization, especially in its economic form, is one of the most contentious issues today. Economic globalization is often applauded by those who believe that economic efficiency will result in a rising prosperity for the entire world, ut in actuality it will only largely benefit those who are already prosperous, increasing the gap between the rich and poor, all while reducing cultural and ecological diversity around the world. Globalization is not a natural process, instead it promotes free market and export oriented economies at the expense and exploitation of localized activities and resources. The inequality between the rich and poor from this â€Å"trickle down† effect is actually increasing the percentage of poor people in most world regions. To put this into perspective, 20 percent of the world’s richest people onsume 86 percent of the world’s resources; equally the wealthiest countries have grown much richer (Rowntree, Lewis, Price, & Wyckoff, 2003). While the richer seem to be getting richer, the poor grow more and more impoverished, with the least amount of consumption of these global resources. The poorest 80 percent use only about 14 percent of global resources, with the poorest 10 percent seeing their income decline in the past couple decades (Rowntree, Lewis, Price, & Wyckoff, 2003). Economic globalization is an unavoidable phenomenon that holds both promises and drawbacks. At certain levels, we can use globalization to reduce some economic inequalities and protect the natural environment. In order to make globalization work for our future generations and our planet, there needs to be a kind of openness in education and social cohesion that stresses the need for strong, efficient governments that can create networks of environmental and human rights groups with government policies. With these interrelations between the 2 extremes of pro- globalization and anti-globalization wings, we can create the opportunity for profit and growth through complementary institutions, such as the government and social ssurance. Although these economic activities seem to be the driving force behind globalization, the consequences attect every aspect ot lite and land in our day and age. Our ecosystem is affected due to the demand for natural resources as global commodities and our planet’s physical environment is at risk. As Rowntree, et al. points out, â€Å"our local ecosystems are altered by financial decisions made thousands of miles away†¦ these activities have profound and detrimental implications for the world’s climates, oceans, and forests† (Rowntree, Lewis, Price, & Wyckoff, 2003). Unfortunately for our global environment, the pace of destruction has worsened and our reaction to the climate crisis is much too weak if we plan on inhabiting this planet for the next 50, 60, 70+ years. Our earth is a beautiful and magnificent place for life to form and grow, but our time on this planet is not going to last much longer if we do not do something about our environmental impact on the planet’s natural resources. In a biological sense, our environment is defined as, â€Å"the complex of climatic, biotic, and social factors that acts upon an organism and determines its orm and survival† (Class lecture,week 6). Nature is our basis of well being and the biodiversity has delcined glabally 30 percetn between 1970 and 2008. As A1 gore discusses in his book An Inconvient Truth, Many people still rely on our planet as if it is big enough to sustain our habits forever. Some still assume that the earth is so big that we could never use up all its resources. Due to globalization and population growth, we are influencing many parts of our earths environments, especially the most vulnerable, the atmosphere (Gore, 2006). Humans see themselves as apart from ature, instead of as a part of nature. How we live, what we consume, all impacts our environment. The earth’s atmosphere is so thin that we are actually capable of changing its composition by the massive amount of carbon dioxide we have pumped into it. High income countries, much like the U. S. , have a footprint 5 times greater that that of low income coutnries, thus leading to the loss of biodiverstiy and impacting the ecosystem. (WWF Global, 2012). The world is undergoing major changes, glacier are melting, species are on the verge of extinction, sea levels are rising, and temperatures are heating up. Global warming is a direct result of humans living in disharomony with the planet and its natural resources. We are beginning to live in a more and more human created environment causing carbon dioxide levels to increase because of the burnign of fossil fuels. The problem that we are faced with now is that every living system in our biosphere is delcining and we are a part of nature that can not afford to lose these valuable resources. As the temperature increases all over the world, we are putting ourselves and our fellow species at risk of extinction. This begins to affect our storm systems, because the armer the oceans get the stronger the storms get. These consequences are all due to the basic understanding our earth’s atmosphere, and the most important agents, the green house gases. Due to huge quantities of human caused carbon dioxde, we are thickening this this atmopheric layer, causing the gases to trap the sun’s radiation inside and causing the planet to â€Å"heat up. (Gore, 2006). Just a suttle increase of a few degress can have a dangerous effect on our plantes ecological system. Areas around the world are experiencing undesirable amounts of rain in short periods of time, while others are facing immeasurable droughts. This shift in temperature not only causes glaciers to melt and oceans to rise, but it also disrupts migration patters, how or where certain plants grow, and the species that depend on those climates. Our ever growing demand on resources is putting an immense burden on biodiversity. The continued provsion of ecosytem resources, our furture security, our health and well being are all in Jeapordy due to the current rate of consupmtion of non-renewable resources. According to the living planet report, as of 2012 the Earth would need 1. 5 years to produce and replenish the natural resources hat we have consumed in only a single year (WWF Global, 2012). And this number has only increased since the last report. The technology and the consumption of resources in the Unites States alone contributes to 30. 3 percent to global wamring. That is more that South America, Canada, Africa, the Middle East, Australia , Japan, and Aoutheast Asia combined (Gore, 2006). It is no doubt that the U. S. is the biggest contributor to not only globalization, but also to the poor environmental quality of this planet. We have rightfully earned our name as the biggest polluter in the world, but it may not be too late. The first step in reducing our global footprint is by accepting and understanding the consequences our actions have on our planet’s environment and that there are ways we can reverse some of the negative impacts we have had on our planet. We can no longer turn a blind eye to the effects we cause on our ecostyems. A1 gore proposes many solutions to how we as individuals can help this climate crisis. Considering that this problem is a vast and complicated, we can each do our part to help reduce our carbon footprint and together we can make a difference. Sacing energy at home by using energy efficient light bulbs, turning off ights when we do not need them, and heating and cooling our house efficiently are just a few ways we can help out individually. In the communtiy, not driving so much, taking public transportation, reducing emissiones from our cars, and being conscious of our daily consumptions are all ways we can reduce pollution in our air. And most importantly consuming less, reusing water bottles, bags, buying things that last, buying local, and modifying your diet are all important changes that we can make to ensure our health for ourselves and for future generations. Globalization and our nvironmental impact are very important factors that we must always consider if we plan on existing in this environment with other species. We are fortunate to live on a planet that can sustain life and allow it to thrive, but if we are not careful, we will use up any and all resources that Earth provides. Our consumption and the effects it has on the environment is detrimental to our survival and the survival of our ecosystems. These global changes make understanding our world both challenging and a necessary task if our future depends understanding these concepts in all their arious forms.

Multi Fiber Agreement Is The Most Impacted Agreement Signed Economics Essay

Drumhead Multi-fiber Agreement is the most wedged understanding signed on Textile and Clothing Industry. Before the MFA, industries in major importing states were extremely impacted due to the unregulated imports. Since the execution of MFA universe trade on T & A ; C was subjected to quotas. These quotas were negotiated bilaterally and regulated by the MFA. It was chiefly based on the rule of ‘non-discrimination ‘ . Members were agreed to merchandise on selected measures in importing garment merchandises from the developing states. After several treatments, started from Uruguay in 1986 to Geneva in 1994, members of the MFA came to an understanding to get rid of 20 old ages old MFA, in a 10 twelvemonth consecutive procedure. Agreement on Textile and Clothing was granted. ATC was consisted with four phases of taking procedure of MFA ( WTO 2010 ) . Fabrics and vesture, was 16 % comparing with Hong Kong ‘s exports value and rated as 2nd taking fabrication industry. After the abolishing, fabric and vesture industry have to confront the challenges and new chances. In short term state ‘s economic system loosed 3 % of market portion ( 9 % -6 % ) of the international market. The economic system went to downswing and loosed chance in spread outing their exports to developed states. Fabric and vesture manufacturers were non in a place to vie with the international market due to the low capacity of fabrication and export of Textile and vesture merchandises. But some single exporters have achieved competitory advantages by diminishing their costs by take downing labor costs and lay-off the extra workers. Country ‘s supply concatenation direction has besides changed due to the abolishment of ATC. Major providers have to take control in their supplies and they shift their extra production to other industries in order to a void cost from none bring forthing. Sing the chances, ATC abolishing, enabled both importers and providers to offer best merchandises and services. This is anticipated to lowest managerial costs and 40 % of the clip and attempt was used up on antecedently allotments of orders to a high figure of beginnings. It was able to reduced cost per unit and shifts the benefits to their makers every bit good as more chance made to spread out non merely in their part but in other parts. Hence, state ‘s garments industries already established. In the long-term, makers more tended towards sophisticated and high value-added processs, while beef uping relationships with foreign garments purchasers. This was helped them to re-capture their market portion while high competition rose from China. However most of the benefits of the quota riddance went to the consumers in USA and EU. Because the monetary value of one piece of fabric became lower through gap to the competitions and premium by quota riddance addition by the concluding consumers ( Hong Kong ‘s Trade Development Council 2005 ) . The export based garment industry in Nepal was succeeded between old ages 1991-2000. . The United States absorbed more than 80 % of Nepal ‘s entire ready made garments exports before the ATC quota phase-out. The industry was managed to keep 25 % of entire exports yearly. In 2002 it was recognized as the highest foreign currency earner to the state ( US $ 160 million ) . In 2004 ready-made garments were ranked among top two export merchandises. The peak clip of the industry, can be identified as the period of 1994-1995 and reached to a record of 49 % part to the state ‘s entire exports. The industry consisted of 1,067 registered workss every bit good as more unofficial operations. In 1999/2000, employed workers were estimated as 50,000. But after the riddance of ATC, in 2006 it was supplying direct employment for merely 4,450 workers and about 45 % of the employees were adult females. But, harmonizing to 2001 figures, it is about 27 % . The abolishment of ATC was a decease knell to the industry. Export net incomes declined by an one-year rate of 14.2 % ( 2000-2007 ) , and decreased to 21.2 % ( 2005-2007 ) . Export from the USA market and net incomes declined by 18.5 % and 28.4 % severally, during the two periods. The industry was happening hard to vie in the USA market. Companies which were based on the imports of natural stuffs, tended to purchase largely from India and China. This was increased in costs compared with other rival garment bring forthing states. When the Government of the USA imposed quotas on garments imports from developing states, Nepal was an attractive state for Indian exporters who wished to put in garment production to run into their quota lacks and produce garments merchandises to the United States market. In 2004, proportion of the ready-made garments exports comparing to the entire national exports were 17.8 % and 6.7 % in 2007. In 2004, the portion of garment exports to the USA was 13.4 % , but decreased to about 4 % in 200 7. Gradual abolishment of the universe quota government in T & A ; C resulted in backdown of investing by Indian investors who were already invested in garments industry in Nepal and exploited the quotas provided chiefly by the USA to Nepal. Garment industry had experienced a rapid growing from the mid-1980s chiefly, because of their quota installations given by the first universe states such as the United States and Europe. But, the industry was confronting high competition in the universe market in garment industry. When the phasing-out of quotas started from 2005, exports have been already down from 2000/01 except a export recoil in 2002/03. The portion of ready-made garments exports to entire exports decreased from 28.1 % in 1999/2000 to 6.7 % in 2006/07. Hence, domestic entire exports growing was severely declined -1.4 % in 2006/07 from 39.7 % in 1999/2000. Industry ‘s part of the entire national exports to gross domestic merchandise ( GDP ) was 13.6 % before riddance, bu t 1999/2000, it was declined up to 8.2 % in twelvemonth 2006/07 ( Belbase et al. 2009 ) . Indian fabric industry is consisted with ready-made garments, cotton, silk, woollen fabrics and handcrafts. In 1985 the policies were changed and a separate policy statement was started to development for fabric industry. Domestic fabric policy was province in 2001 ( Impact of WTO on Textile Industry in India ) . The 2nd biggest fabrics manufaturer and cotton consumer in the Earth is India. China holds the first topographic point. India is the universe ‘s 3rd largest manufacturer of cotton after China and the USA † ( Impact of WTO on Textile Industry in India ) . It was represented as the starting point for an automatic liberalisation procedure, when former MFA quotas were carried over into the ATC on 1 January 1995. The first phase of the Agreement and the new growing rate was applied yearly in the undermentioned manner when the former MFA growing rates applicable to each of these quotas were increased ( Appendix 6 ) ( Impact of WTO on Textile Industry in India ) . There are some commissariats and committednesss that have to be undertaken in all countries of the Urguary Round since this relate to fabrics dressing. Therefore all members are required â€Å" shall take actions as they may be necessary â€Å" to stay by the subjects of WTO in order to accomplish improved market entree to avoid favoritism against fabrics and vesture imports and to guarantee the application of just and just trading conditions. ( Impact of WTO on Textile Industry in India ) . The elaminating the MFA understanding was impacted to the industry in many ways. When the ATC progressing towards elemination, there were some support by political relations on the many-sided trading system. Decrease on duties besides take topographic point in India for the industry. India belives that the elemination is positive impact on the industrial development in long-run. There are the efficiency additions from extinguishing extremely falsifying quotas that have lead to an inefficient planet ary allotment of fabric and vesture production. There is the loss of quota rents on the portion of ATC exporters. The Agreement on Textiles and vesture was terminated in December 2004. Bilateral quotas removed and all fabrics and vesture merchandises were to the full integrated into WTO regulations. Full application of WTO regulations to international trade in fabrics and vesture was a really positive and long-awaited development for the industries and 1000000s of consumers who will profit from a more unfastened, non-discriminatory and crystalline trading environment in this sector ( Impact of WTO on Textile Industry in India ) . Appendixs Appendix 1: ( Nordas 2004 ) Appendix 2: ( Nordas 2004 ) Appendix 3: ( UNCTAD2008 ) Appendix 4: ( UNCTAD2008 ) Appendix 5: ( Mlachila 2004 ) Appendix 6: ( Impact of WTO on Textile Industry in India ) Phases Year Change Phase 1 1st January 1995 Growth rate increased by a factor of 16 % yearly. Phase 2 1st January 1998 Growth rate increased by a factor of 25 % Phase 3 1st January 2002 Growth rate increased by a factor of 27 % yearly.

Audit for Ethical Professional Board- Free Samples to Students

APES deals with Code of ethics with professional accountants 1.Ernie Dengate have sold his accounting practice which consists of bookkeeping ,taxation and auditing. With the permissio he released all the working papers. But for others he was unable to take the permission. Jago took over all the working papers who bought the practice. An Existing Auditor   is bound by confidentiality. Whether that Associate is permitted or required to deliberate the businesses of a client with a future accountant will be contingent on the nature of the appointment and on: (a) Whether the client‘s authorization is taken ; or (b) The legal or ethical supplies relating to such communications and revelation, which may differ by authority. Thus he cannot transfer all working papers without permissions. (Accounting professional& Ethical professional Board , 2017). He will be liable under 210 Section.   2.Fred Nark an accountant provides services of tax and management advisoory services and also at the same time does audit for the same clients. Any auditr who is providing consultancy services or any type of services cannot audit for the same. It is simple the maker cannot be the checker. The auditor is liable of professional misconduct .Thus he will liable under Section 290. Accounting professional& Ethical professional Board (2017).AASB 110 [online] Available at: https://www.apesb.org.au/uploads/standards/apesb_standards/standard1.pdf [Accessed   9 th April. 2017].[1] amount of the effecamot in future periods is not disclosed because estimating it is impracticable, an entity shall disclose that fact if the amount of the effect in future periods is not disclosed because estimating it is impracticable, an entity shall disclose that fact mount of the effect in future periods is not disclosed because estimating it is impracticable, an entity shall disclose that fact However, to the extent that a change in an accounting estimate gives rise to changes in assets and liabilities However, to the extent that a change in an accounting estimate gives rise to changes in assets and liabilities ever, to the extent that a change in an accounting estimate gives rise to changes in assets and liabilities

Rhetorical analysis Essay Example | Topics and Well Written Essays - 1000 words - 8

Rhetorical analysis - Essay Example He has an alcohol abuse problem that becomes a source of rift between him and his employers. Osborne is not able to do his best at the job owing to his drinking issues. Eventually Osborne Cox is fired by the CIA owing to his drinking problem that fills him with much angst, rage and disappointment. Osborne decides to get even with the CIA by drafting his memoirs narrating his experiences with the CIA that eventually he ends up losing, giving way to much personal black mailing and harassment. The movie Burn after Reading revolves around the theme that one should avoid writing one’s personal information and secrets anywhere to avoid eventual data theft which may result in unwarranted and harmful implications (Doom 45). Had Osborne not written his personal experiences on the ill fated CD, not only it would have saved him much trouble, but would have also not led to much chagrin and tragedies. Once Osborne gets fired from the CIA, his paediatrician wife sees in it a chance to end her dysfunctional marriage with Osborne and to continue with her adulterous affair with Harry. In Osborne’s professional problems she sees an opportunity to seek a divorce from him so that she could carry on with the affair she is having with Harry. The sad thing is that Osborne has saved much prolonged diatribe against his ex employer that is the CIA on his computer hard drive. Desirous of seeking a divorce from Osborne, his wife Katie Cox on the advice of his divorce lawyers decides to save all the data residing on Osborne’s computer hard drive on to a CD. Unluckily she also ends up saving the professional details regarding the CIA that Osborne had saved on his computer onto the very same CD. This lets loose a chain of events that give way to much harassment and loss. The diskette onto which Katie has copied many of his personal files from the memoir falls into the hands of two un scrupulous gym employees, Linda and Chad, who try to sell it. Linda wants some money for an elective

The descriptions still do not have enough information about the Essay

The descriptions still do not have enough information about the pictures. Please describe the pictures by starting at the left side of the picutre an - Essay Example The color used on the walls of the room is dull; this illustrates the unhappy environment inside the room. The woman is starring down outside the window; this illustrates that the room is upstairs, and the woman is observing an event or person(s). The event may be a sad one, according to facial expression. The person being observed may be a loved one who has just left the house (Friel 34). The second image shows a joyful and exciting event. It can be safely assumed that the picture represents a nuclear family on holiday. The family has a father, mother and three children. The children comprise one boy and two girls; this illustrated by their mode of dressing. The holiday destination is a beach because of blue waves illustrating the sea, the brown color showing the sand, and the background showing a mountain or hill range. The destination seems secure and private. This is because other people are not indicated in the picture. Luxurious hotels usually offer private beach tourism package. The nuclear family illustrated in the picture is not dressed for the holiday occasion. The man is in formal clothing, and the woman and daughters in dresses. Beach events require beachwear and swimming costumes. The image also illustrates love in the family. The man and the woman are looking and smiling at each other; likewise the son and the daughter are also looking at each other. The looks and the smiles illustrate love between family members (Friel

Life in the Colonial Convent. in Latin America Research Paper

Life in the Colonial Convent. in Latin America - Research Paper Example Conquering nations placed value on convents. Monastic life gained respect and power in the society. Distinction of ethnicity, honour, and gender between the nuns increased with the passage of time. Many individuals were being used as slaves and servants in the convents. Convents generated financial resources by getting money from wealthy families; this defined numerous classes of people as per their financial standings (Bethell 56). Factors like demography, spatial variations and economy caused differences in women’s lives. Spanish women were given almost all the rights and protection during the colonial period in Latin America. Education and protection for women was ensured at the convents but other races and classes suffered as there were no rights and convent for them in Latin America (Skidmore & Smith 71). Latin America was male dominated colonial world and women were not allowed to take part in any activity without the permission of male. Male member of the family was onl y allowed to take all decision in day-to-day social life. Race and class distinction was firmly enforced and people were dealt accordingly. Women used two types of veils for differentiating leaders from servants. Nuns wearing black veils were from wealthy families and brought all the precious items with them. ... Mestizo women were only employed as servants. These practises at the convents enacted social barriers in the human life in the colonies (Edwards 128). Convents were initially established only in the main cities of Latin America. Walls were built to separate the convents from the cities. That is why convent used to give a deserted look. Keeping of slaves and servants in convents was as normal as in rest of the world. there are numerous examples in Latin America and people also say that between two convents in Cuzco , more than 500 living out of which 50% were nuns (Bethell 61). Influential families lived in separate homes within the convent and kept orphan girls as servants along with other servants. Dona Juana de Maldonado constructed good house for herself. She used dozen of black maids in construction of accommodation in the convent. Juana also spoke about gender double standards in her poems (Skidmore & Smith 75). Convents in Latin America used multiple sources to generate revenue s. Nuns took oath of obedience and poverty to their superiors. Wealthy families residing in convents could not manage to give a luxurious life to their daughters because a huge amount of money was paid to church and convent. Nuns were considered â€Å"brides of Christ† so all nuns were expected to give their dowry to church. Quantity of dowry presented to church, dictated the amount of luxurious lives that nuns can live. 6000 pesos was entry fee in the convent in Lima. For a luxurious living, convent used to charge double amount (Edwards 132). Demography, spatial variations and economy caused differences in women’s lives in colonial Latin America. Islamic way of social life was fully followed by the Iberian women during the colonial age in old and the new world.

Managing people Article Example | Topics and Well Written Essays - 2000 words

Managing people - Article Example To determine a team's effectiveness, it is necessary to take a look at a variety of factors as well. These include the type of organization, type of employee (volunteer or compensated), the objectives of the stakeholders and the personalities that are involved at all levels. Evaluating the team's effectiveness at XYZ Newspapers, Inc., it is possible to identify several key management theories at work even as the team represents several positive and some negative aspects of effective team operation. XYZ Newspapers is a small newspaper chain specializing in small town, local news coverage. As a result, teams are primarily independent of each other, only finding it necessary to coordinate efforts on sporadic larger advertising campaigns or weekly print operations. Occasionally, it becomes necessary for one team member from one office to assist in another office when another team member is ill or on holiday or when several significant events are occurring in one town, such as a heavy sports weekend. Although most team members are compensated to some degree, some are compensated on a contributor basis while others are considered actual employees, paid at a part-time or full-time rate. Because of the unique service these newspapers provide, they are also often considered to be community service to some extent although they are for profit businesses. Frequently, because of budgeting concerns, members of the communities in which the papers operate are recruited to provide voluntary se rvices as well. Team Organization Each team is similar to the others in that they are comprised of typically two 'news' writers, one 'sports' writer, one photographer, two advertising sales representatives and one copy setter. In this particular team, one of the 'news' writers is also the newspaper's editor while the other serves as community representative. This enables the team to work along a loose universal management approach in that many of the job functions are decided based upon the individual's specific position within the team with a built in chain of command that flows from the copy setter at the bottom of the rank to the editor at the top. However, the hierarchy among the other workers becomes somewhat blurred as each works to complete their assignments for the week. Work is divided by job description within this team. For example, while the editor and the community representative are both classified as 'news' writers, the editor is primarily responsible for covering any business or civil news occurring in the town that week, such as city meetings or regional legislation. The community representative, on the other hand, is often most responsible for ensuring news involving various community groups, outstanding individuals or major community events is covered. The copy setter typically works primarily for these two writers as news releases, calendars and police and fire reports come across her desk first. The sports writer typically has no other responsibility than ensuring all sports events are covered, yet must also ensure adequate coverage is given to all sports and pages

An interview with a small animal expert Essay Example | Topics and Well Written Essays - 750 words

An interview with a small animal expert - Essay Example The nature of the dog makes its most attractive among Americans and to many people around the world. Dogs are extremely loyal and affectionate. They also look affectionate and cute that endears them to most people. They are also safe and relatively easy to maintain. Psychologically, they also tend to fill some void among humans that makes them attractive to us. For example, many experts would advise for us to get a dog if we feel lonely and to some extent, dogs can make us feel a little less lonely. Yes dogs are very helpful in a family. First is that people in your house will have an automatic playmate. Do you also know that dogs are effective security guards and are extremely protective of their masters? They also bring laughter and joy in the family and to other people. Are brings a sense of affection and responsibility to children growing up. They teach children responsibility on how to take care of something which first begins with a dog. In fact, there are some schools where children are asked to have a dog for them to be taught responsibility. Dogs as cute and affectionate they may be are not for all people. Most people may love them but there are some people who finds them annoying and always â€Å"bother† them. Untrained dogs tend to have some â€Å"bothersome† trait as well such as destroying your things in the house or just plainly noisy. Most dogs becomes obedient when they are treated and fed well. But again, if the dog proves difficult, there are always obedient schools or people who could train dogs. Probably you mean rabies where people contracted it when bitten by dogs. Yes rabies and dangerous and could kill people in a very disturbing way. This however can easily be remedied by having the dog injected with an anti-rabies solution to neutralize its rabies. Dogs also don’t normally bit people especially their masters and that is even if they are hurt. But of course dogs are animals who

Nurses Dealing with Cases of Women who are Victims of Domestic Coursework

Nurses Dealing with Cases of Women who are Victims of Domestic Violence - Coursework Example as a nurse, one is expected to uphold utmost professionalism. He or she is expected to follow the ethical standards as prescribed under the Nurses and Midwifery Council code of professional ethics. A registered nurse must respect the patient as an individual, obtain consent before giving treatment, uphold the confidentiality of information, maintain professional knowledge and competence, be always trustworthy and must act with the end goal of identifying and minimizing risk on the patient (NMC 2002). On the other hand, the nurse has a legal obligation towards his or her patient. According to the case of Donoghue v. Stevenson (1932)1, where there is an established proximity of relationship between two people where the duty of care exists, the person who owes the duty of care towards another but failed to fulfill such duty, that person shall be liable for the breach such duty of care. According to the case of Bolam v Friern Hospital Management Committee (1957)2, where the healthcare pr ofession failed to perform acts which are expected of his or her profession, he or she shall be deemed in breach of such duty of care. In the more recent case of Bolitho v City & Hackney Health Authority (1997)3, the Court ruled that the delivery of the duties and responsibilities of the healthcare professional should be able to stand of up to logical analysis, where the action should be examined in the context where it would be the right thing to do on such a given circumstance. Accordingly, there are four elements that must be satisfied before a suit can be successfully brought against a nurse or a healthcare professional, namely, the existence of the duty of care, the failure to perform such duty, that damage resulted from the failure of the health professional to perform the duty and that such damage which resulted from the negligent act is foreseeable and is a direct consequence from such negligent act (Horwitz, B. 1998). In the case of Barnett v. Kensington and Chelsea Hospita l Management Committee (1969)4, the liability of the healthcare professional is established where the damaged that the patient could suffer due to the negligence is foreseeable and is the direct result of the breach of a duty of care.

Euthyphro & Classics of Philosophy Essay Example for Free

Euthyphro Classics of Philosophy Essay In its simplest term, the divine command theory holds that given that god exists; an act is good only because God commands it. In other words, anything that is not approved of by God cannot be considered to be good. A major problem associated with this view is raised in Euthyphro. The Euthyphro argues that the gods command things because they are good rather than that they are good because they command it. Seen from another angle, the goodness of things precedes Gods command. However, considering the polytheistic nature of the society that Socrates and Euthyphro lived in, the conception that what is good is only good because gods command it may be challenged by holing that the gods may have differences in opinion especially with regard to issues of morality. As such, what may be dear to one god may not necessarily be dear to another. As such, one action may be both pious and impious. The divine command theorists hold that the source of all moral value is the will of God (Hall et al). Whatever is willed by God is morally good or obligatory and whatever he forbids is morally evil. With this regard, murder, theft and adultery are morally wrong because, and only because they are forbidden by God. On the other hand, justice and mercy are morally good only because they are approved by God. The majority of divine command theorists hold that there is no intrinsic Good. Whatever is done and willed by God is good and whatever opposes the will of God is bad. As such, the good has its foundation and existence solely in Gods will. Indeed, it can be conceived that God can alter his mind and command murder. This is especially seen in the scriptures when he commanded Abraham to kill his son. He can also forbid acts of clemency. Simply by an act of will, God can change virtue into vice and vice into virtue. The divine command theory is first broached as a philosophical theory in Euthyphro. Euthyphro and Socrates are attempting to define holiness with Euthyphro proposing a definition that holiness is whatever is loved by the gods. According to Socrates, this definition is ambiguous in the sense that it does not offer any clear comprehension of whether something is holy simply because it is loved by the gods or whether its loved by the gods because it is already holy. By making a generalization from the case of holiness, it can be said that either something is morally good or right because God commands it to be so or that God commands it because it is morally good or right to begin with (Pojman, 2002). In other words, either moral value depends on the will of god or the will of god depends on moral value. In Euthyphro, the two options are dramatically presented. That is, either the source of value depends on the divine will or elsewhere. Both Socrates and Euthyphro agree that it lies elsewhere and therefore reject the divine command theory. They however do not explain where it rests. Platos view is right considering his god-independent Form of the Good. However, the argument in Euthyphro can be hardly applied to the Christian God. Platos argument, as taken by Leibniz and other philosophers may be seen in the following context; that â€Å"honoring ones parents is good because God has commanded it† implies the counterfactual that if God commanded other things, those other things would be good. God, by the theory, could have commanded those other things considering how powerful He is. According to the divine command theory, therefore, if God had commanded that one should dishonor his parents, then dishonoring parents would be obligatory instead of forbidden (Wilkens, 1995). This is however absurd. The divine command theory is thus committed to counterfactuals about what would have been good that are patently false. The implication is that, even though God commanded the good, this is only so because it is good and not that it is good because He commanded it. The dilemma in the question of whether what is holy is holy because the gods approve of it, or approve of it because it is holy can only be clearer if the polytheistic assumptions are eliminated and the term â€Å"holy† is replaced with â€Å"right†. If the question is restructured, it will appear as follows: does God command us to do what is right because it is right or something is right because God commands it? The question presents two possibilities. First, God’s commands can be conceived of to be right-indicating or pointing towards rightness. Second, it can be conceived of to be right-making or creating rightness. This question is whether God is viewed as a Supreme Court justice or a legislator. The justice comprehends the statutes and can therefore suggest what should be done for one to stay within the boundaries of the law. However, the law itself is independent of the justice. The legislator on the other hand does not just interpret but also creates law. Until the lawmaker legislates, the law is not in existence. The question thus is; which gives a better conception of God? Voluntarists see God as a legislator since they emphasize on His freedom, will and sovereignty. As such, God is not bounded to the dictates of some standard that He did not create. Instead, right is right because God legislates it. The declaration of God that particular actions are good is right making. This view of God as a legislator evades restricting His freedom and power. However, this may create another problem. If God is so radically free and powerful, could he create a world in which torture is good? If His saying so makes it right and there are no limitations on God, could he decide that rape is virtuous? Affirming this option is frightening since there is a natural inclination to believe that a command that we ought to rape would be morally repugnant, even if it emanated from God (Ross Stratton-Lake 2002). However, there is need to notice its implication. It assumes a standard of goodness that is independent of God. Otherwise we would not have at our disposal anything by which to measure the commands of God. With this regard, a conclusion can be derived that the gods approve of holy (right or goodness) because it is holy (right or good). Holiness is an objective feature of the world and as such, the moral order is just as a fundamental nature of the universe as the spatial or numeric structure of the universe. Our moral attitudes do not make actions good or right. Rather, they are responses to rightness or goodness. What makes our belief that something is good is the property or objective characteristic of being good that it possess. If one defines holiness as meaning what is approved by the gods, one is putting forward a naturalistic definition. If one however defines it as such that it ought to be desired, one is putting forward a non-naturalistic definition. However, both the definitions show that what is good is intrinsic as opposed to what the divine command theorists attempt to postulate. Holiness, goodness or rightness refer to a property or a quality of something and thus, this quality or property cannot be decided by the goods but rather exist independently of the will of the gods. However, there comes a challenge when they refer to a relational property rather than the intrinsic property of the things of which it is predicated. This is the major challenge not only to the divine command theorists but also to Euthyphro. References Plato, Euthyphro Pojman, L. (2002). Classics of Philosophy. Oxford University Press Ross, W. Stratton-Lake, P. (2002). The Right and the Good. Oxford University Press Wilkens, S. (1995). Beyond bumper sticker ethics: an introduction to theories of right wrong. InterVarsity Press

Behavioural Finance Theory Dissertation

Behavioural Finance Theory Dissertation A survey of behavioral finance 1. Introduction: The Modern investment theory and its application is predicated on the Efficient Markets Hypothesis (EMH), the assumption that markets fully and instantaneously integrate all available information into market prices. Underlying this comprehensive idea is the assumption that the market participants are perfectly rational, and always act in self-interest, making optimal decisions. These assumptions have been challenged. It is difficult to tip over the Neo classical convention that has yielded such insights as portfolio optimization, the Capital Asset Pricing Model, the Arbitrage Pricing Theory, the Cox Ingersoll-Ross theory of the term structure of interest rates, and the Black-Scholes/Merton option pricing model, all of which are predicated on the EMH (Efficient Market Hypothesis) in one way or another. At few points the EMH criticizes the existing literature of behavioral finance, which shows the difference of opinion on psychology economics. The field of psychology has its roots in empirical observation, controlled experimentation, and clinical applications. According to psychology, behavior is the main entity of study, and only after controlled experimental dimensions do psychologists attempt to make inferences about the origins of such behavior. On the contrary, economists typically derive behavior axiomatically from simple principles such as expected utility maximization, making it easier for us to predict economic behavior that are routinely refuted empirically The biggest threats to Modern Portfolio theory is the theory of Behavioral Finance. It is an analysis of why investors make irrational decisions with respect to their money, normal distribution of expected returns generally appears to be invalid and also that the investors support upside risks rather than downside risks. The theory of Behavioral finance is opposite to the traditional theory of Finance which deals with human emotions, sentiments, conditions, biases on collective as well as individual basis. Behavior finance theory is helpful in explaining the past practices of investors and also to determine the future of investors. Behavioral finance is a concept of finance which deals with finances incorporating findings from psychology sociology. It is reviewed that behavioral finance is generally based on individual behavior or on the implication for financial market outcomes. There are many models explaining behavioral finance that explains investors behavior or market irregularities where the rational models fail to provide adequate information. We do not expect such a research to provide a method to make lots of money from the inefficient financial market very fast. Behavioral finance has basically emerged from the theories of psychology, sociology and anthropology the implications of these theories appear to be significant for the efficient market hypothesis, that is based on the positive notion that people behave rationally, maximize their utility and are able to prices observation, a number of anomalies (irregularities) have appeared, which in turn suggest that in the efficient market the principle of rational behavior is not always correct. So, the idea of analyzing other model of human behavior has came up. Further (Gervais, 2001) explained the concept where he says that People like to relate to the stock market as a person having different moods, it can be bad-tempered or high-spirited, it overreacts one day and behaves very normally the other day. As we know that human behavior is unpredictable and it behaves differently in different situations. Lately many researchers have suggested the idea that psychological analysis of investors may be very helpful in understanding the financial markets better. To do so it is important to understand the behavioral finance presenting the concept that The traditional theory has overestimated the rationality of investors , their biases in decisions casting a cumulative impact on asset prices. To many researchers the study of behavior in finance appeared to be a revolution. As it transforms peoples mentality and perception about the markets and factors that influence the markets. â€Å"The paradigm is shifting. People are continuing to walk across th e border from the traditional to the behavioral camp†. (Gervais, 2001, P.2). On the contrary some people believe that may be its too early call it a revolution. Eugene Fama( Gervais, 2001) argued that Behavioral finance has not really shown impacts on the world prices, and the models contradict each other on different point of times. Giving very less account to the behaviorist explanations of trends and the irregularities †anomaly† (any occurrence or object that is strange, unusual, or unique) Also argued that in order to locate the patterns the data mining techniques are much helpful.. Other researchers have also criticized the idea that the behavioral finance models tend to replace the traditional models of market functions. The weaknesses in this area, explained by him (Gervais, 2001) are that generally overreaction and under reaction are the major causes of the market behavior. Where People take the behavior that seems to be easy for the particular study regardless of the fact that whether these biases are either primary factor of economic forces or not. Secondly, Lack of trained and expert people. The field does not have enough trained professionals both in the psychology or finance fields and therefore as a result the models presented is being put up together are improvised. David Hirshleifer (Gervais, 2001) focuses on the individual behavior impacting asset prices and explaining that the field of behavioral finance is currently in its developmental stage, in its way of development it is facing a lot of disagreement which itself is a productive one. Hirshleifer points out that if we apply the conceptual models of behavioral finance to the corporate finance, it can majorly pay off. If the money managers are incorrectly rational, that means that they are probably not evaluating their investment strategies correctly. They might take wrong decisions in their capital structure decisions. It has been found that quite a few people foresee behavioral finance displacing the age old Efficient Markets theory. On the contrary the underlying assumption that the investors and the managers are completely rational makes insightful sense to many people. 2. Traditional Finance Empirical Evidence: Traditional theory assumes that agents are rational the law of one price holds that is a perfect scenario. Where the law of One price states that securities with the same pay off have same price, but in real world this law is violated when people purchase securities in one market for immediate resale in another, in search of higher profits because of price differentials known as Arbitrageurs. And the agents rationality explains the behavior of investor Professional Individual which is generally inconsistent with the rationality or the future predictions. If a market achieves a perfect scenario where agents are rational law of one price holds then the market is efficient. With the availability of amount of information, the form of market changes. It is unlikely that market prices contain all private information. The presence of noise traders (traders, trading randomly not based on information). Researches show that stock returns are typically unpredictable based on past returns wh ere as future returns are predictable to some extent. Few examples from the past literature explains the problem of irrationality which occurs because of naive diversification, behavior influenced by framing, the tendency of investors of committing systematic errors while evaluating public information.(Glaser et al, 2003) Recent studies suggest that peoples` attitude towards the riskiness of a stock in future the individual interpretation may explain the higher level trading volume, which itself is a vast topic for insight. A problem of perception exist in the investors that Stocks have a higher risk adjusted returns than bonds. Another issue with the investors is that these investors either care about the whole stock portfolio or just about the value of each single security in their portfolio and thus ignore the correlations. The concept of ownership society has been promoted in the recent years where people can take better care of their own lives and be better citizen too if they are both owner of financial assets and homeowners. As a researcher suggested that in order to improve the lives of less advantaged in our society is to teach them how to be capitalist, In order to put the ownership society in its right perspective, behavioral finance is needed to be understood. The ownership society seems very attractive when people appear to make profits from their investments. Behavioral finance also is very helpful in understanding justifying government involvement in the investing decisions of individuals. The failure of millions of people to save properly for their future is also a core problem of behavioral finance. (Shiller, 2006) According to (Glaser et al, 2003) there are two approaches towards Behavioral Finance, where both tend to have same goals. The goals tend to explain observed prices, Market trading Volume Last but not the least is the individual behavior better than traditional finance models. Belief Based Model: Psychology (Individual Behavior) Incorporates into Model Market prices Transaction Volume. It includes findings such as Overconfidence, Biased Self- Attrition, and Conservatism Representativeness. Preference Based Model: Rational Friction or from psychology Find explanations, Market detects irregularities individual behavior. It incorporates Prospect Theory, House money effect other forms of mental accounting. Behavioral Finance and Rational debate: The article by (Heaton and Rosenberg,2004) highlights the debate between the rational and behavioral model over testability and predictive success. And we find that neither of them actually offers either of these measures of success. The rational approach uses a particular type of rationalization methodology; which goes on to form the basis of behavior finance predictions. A closer look into the rational finance model goes on to show that it employs ex post rationalizations of observed price behaviors. This allows them greater flexibility when offering explanations for economic anomalies. On the other hand the behavior paradigm criticizes rationalizations as having no concrete role in predicting prices accurately, that utility functions, information sets and transaction costs cannot be `rationalized. Ironically they also reject the rational finances explanatory power which plays an essential role in the limits of arbitrage, which actually makes behavioral finance possible. Milton Friedmans theory lays the basis of positive economics. His methodology focuses on how to make a particular prediction; it is irrelevant whether a particular assumption is rational or irrational. According to this methodology, the rational finance model relies on a limited assumption space since all assumptions that are supposedly not rational have been eliminated. This is one of the major reasons behind the little success in rational finance predictions. Despite the minimal results, adherents of this model have criticized the behavioral model as lacking quantifiable predictions that are based on mathematical models. Rational finance has targeted a more important aspect in the structure of the economy, i.e. Investor uncertainty, which further cause financial anomalies. In explaining these assertions, the behavioural emphasises the importance of taking limits in arbitrage. Friedmans methodological approach falls into the category `instrumentalism, which basically states that theories are tools for predictions and used to draw inferences. Whether an assumption is realistic or rational is of no value to an instrumentalist. By narrowing what may or may not be possible, one will inevitably eliminate certain strategies or behaviors which might in fact go on to maximize utility or profits based on their uniqueness. An assumption could be irrational even in the long run, but it is continuously revised and refined to make it into something useful. In opposition to this, many individuals have gone on to say that behaviouralists are not bound by any constraints thus making their explanations systematically irrational. Rubinstein (2001) described how when everyone fails to explain a particular anomaly, suddenly a behavioral aspect to it will come up, because that can be based on completely abstract irrational assumptions. To support rationality, Rubinstein came up with two arguments. Firstly he went on to say that an irrational strategy that is profitable, will only attract copy cat firms or traders into the market. This is supported when a closer look is given towards limits to arbitrage. Secondly through the process of evolution, irrational decisions will eventually be eliminated in the long run. The major achievements characterized of the rational finance paradigm consist of the following: the principle of no arbitrage; market efficiency, the net present value decision rule, derivatives valuation techniques; Markowitzs (1952) mean-variance framework; event studies; multifactor models such as the APT, ICAPM, and the Consumption- CAPM. Despite the number of top achievements that supporters of the rational model claim, the paradigm fails to answer some of the most basic financial economic questions such as `What is the cost of capital for this firm? or `What is its optimal capital structure?; simply because of their self imposed constraints. So far this makes it seem like rational finance and behavioral finance are mutually exclusive. Contrary to this, they are actually interdependent, and overlap in several areas. Take for instance the concept of mispricing when there is no arbitrage. Behavior finance on the other hand suggests that this may not be the case; irrational assumptions in the market will still lead to mispricing. Further even though certain arbitrageurs may be able to identify irrationality induced mispricing, because of the imperfect market information, they are unable to convince investors of its existence. Over here, the rational model is accepting the existence of anomalies which are affected both through the factors of risk and chance; therefore coinciding with the perspective of behavioral finance. Two instances are clear examples of how rationalization is an important limit of arbitrage: i) the build-up and blow-up of the internet bubble; and ii) the superiority of value equity strategies. If we focus on the latter, we are able to see behavioral finance literature that highlights the superiority of such strategies in the ability of analysts to extrapolate results for investors. This is possible when rationalization is taken as a limit to arbitrage. Similarly these strategies may also limit arbitrage against mispricing, through the great risk associated with stocks. In explaining most anomalies it is essential that analysts first conclude whether pricing is rational or not. To prove their hypothesis that irrationality-induced mispricing exists, behaviouralists may find it easier if they accepted the role of rationalization in limits of arbitrage. Slow information diffusion and short-sales constraints are other factors that explain mispricing. However these factors alone cannot form the basis of a strong and concrete explanation that will clarify pricing across firms and also across time. Those supporting the rational paradigm attack behavioral finance adherents in that their predictions for the financial market have been made on irrational assumptions; that are not supported by concrete mathematical or scientific models. In their view the lack of concrete discipline in the methodology adopted in behavior finance leads to the lack of testing in their forecasts. On the other hand the rational model is criticized for its lack of success in financial predictions. The behaviouralists claim that this limitation exists because the supporters of rational finance dismiss aspects of the economic market simply because it may not fall into explainable rational behavior. Both perspectives claim to align themselves with respect to the goals of `testability and `predictions, while at the same time continue to offer evidence against the other model. In reality however, rather than being exclusively mutual both paradigms assist one another in making their predictions. A persons tendency to make errors is known as cognitive bias. These errors are based on the cognitive factors that include statistical judgments, social attribution and memory being common to all the humans in the world. (Crowell, 1994, p. 1) Cognitive bias is the tendency of intelligent, well-informed people to consistently do the wrong thing. The reason behind this cognitive bias is that the Human brain is made for interpersonal relationships and not for processing statistics. The paper discusses facility of forecasts. Generally it is said that the world is divided into two groups: People forecasting positively and people forecasting negatively. These forecasts exaggerate the reliability of their forecasts and trace it to the illusion of validity which exists even when the illusionary character is recognized. (Fisher and Statman, 2000) discussed five cognitive bias, underlying the illusion of validity that are Overconfidence, Confirmation, Representativeness, Anchoring, and Hindsig ht (Shiller, 2002) discusses, that irrational behavior may disappear with more learning and a much more structured situation. As the past research proves it that may of cognitive biases in human judgment value uncertainty will change, they may be convinced if given proper instructions, on the part-experience of irrational behavior. The three most common themes of behavioral finance are as follows: Heuristics, Framing Market Inefficiencies. People when decide on the basis of the rules of thumb regardless of rationalizing suffer from Heuristics. Some forms of Heuristics are: Prospect theory, Loss Aversion, Status quo Bias, Gamblers Fallacy, Self-serving bias and lastly Money illusion. Framing is basically the problem of decision making where the decision is based on the point where there is difference in how the case is presented to the decision maker. Cognitive framing Mental accounting Anchoring are the common forms of Framing 3. Market in efficiencies: As we found out that observed market outcomes are totally opposite to the rational expectations and the efficient market hypothesis. Mis pricing, irrational decision making and return anomalies are the examples of it. These terms have been described as specific market anomaly from a behavioral point of view. Anomaly (economic behavior) Disposition effect Endowment effect Inequity aversion Intertemporal consumption Present-biased preferences Momentum investing Greed and fear Herd behavior Anomalies (market prices and returns) Efficiency wage hypothesis Limits to arbitrage Dividend puzzle Equity premium puzzle Behavioral Economic Models are restricted to a certain observed market anomaly and it adjusts the neo classical models by explaining the phenomenon of Heuristics and framing to the decision makers. It is usually said that economics get along with in the neo classical framework, with just one restriction of the assumption of rationality. Loix et. Al in their paper Orientation towards Finances explains the individual financial management behavior, people dealing with their financial means. They have analyzed the Non-specific Financial behavior as already we see extensive research on the specific finance behavior such as saving, Taxation, Gambling, amassing debt. But they had given a lot of importance to stock market, investors and households. The analysis of general public`s behavior was done, where an ordinary man is not sure and simply act according to the guesses over their money related issues. It was also found that people interested in economic and financial matters are much more active in collecting specific information than general public, stating that financial behavior of household is an important relevant topic that needs to be discussed in much more details. Household financial management is similar to the financial management. The construct of orientation towards finances was developed where the individual ORTO FIN focuses on competencies (interest and skills). Having stronger money attitude is an indication of stronger orientation towards finances and much more effective competencies. Therefore we expect some relevance and similarity between corporate and household management behavior as both require organizing, forecasting, planning and control. (Loix et. Al, 2005) analyzed general publics behavior in basically dividing them into two groups, Financial Information Personal financial planning. Also explaining some practical and theoretical gaps in the area of psychology of money usage, they concluded that ORTOFIN (Orientation towards finance) indicates the involvement of individuals in managing their finances. Proving out the point that active interest in financial information and an urge to plan expenses are two main factors. A stronger ORTFIN indicates: Greater use of debit accounts, Higher savings account, Wide variety of investments, Greater awareness of ones financial Intimate knowledge of the details of Ones savings/deposit accounts obsessed by money, Higher achievement and power in monetary terms, Further age is also inversely proportional. Shiller in 2006, in his article talked about the co-evolution of neo-classical and behavior finance. In 1937 when A. Samuelsson one of the great economists wrote about people maximizing the present value of utility subject to a present vale budget constraint. Another judgment he realized was time being consistent human behavior where if at any time t 0 Where people reconsidered the problem of maximization from that date forward, they would not change their decision where as in real life it is totally opposite for example people sometimes try to control themselves by binding their future decision as from history we find out that that some of man make irrevocable trust in the taking out of life insurance as a compulsory savings measure. (shiller, 2006, p.) Considering personal saving rate, saving and down for no reason has emerged as a weakness of human self control. People seem to be vulnerable to complacency from time to time about providing for their own future. The distinction between neoclassical and behavioral finance have therefore been exaggerated. Both of them are not completely different from each other. Behavioral finance is more elastic willing to learn from other sciences and less concerned about the elegance of models whereby explaining human behavior. 4. Investing and cognitive bias: Money Managers and Money management is a very popular phenomenon. The performance in the stock market is measured at the daily basis and not to wait for a highly subjective annual review of ones performance by ones superior. Market grades you on a daily basis. The smarter one is, the more confident one becomes of ones ability to succeed, clients support them by trusting them that eventually helps their careers. But the truth is that few money managers put in sufficient amount of time and effort to figure out what works and develop a set of investment principles to guide their investment decisions (Browne, 2000). Further Browne discussed the importance of asset allocation and risk aversion, in order to understand why we do what we do regardless of whether it is rational or not. General public opts for money Managers to deal with their finances and these managers are categorized in three ways: Value Managers, Growth Managers and Market Neutral Managers. The vast majority of money manag ers are categorized as either value managers or growth managers although a third category, market neutral managers, is gaining popularity these days and may soon rival the so-called strategies of value and growth. Some investment management firms even are being cautious by offering all styles of investments. What too few money managers do is analyze the fundamental financial characteristics of portfolios that produce long-term market beating results, and develop a set of investment principles that are based on those findings. Difference of opinion on the definition of Value is the problem. The reasons for this are two-fold, one being the practical reality of managing large sums of money, and the other related to behavior. As the assets under management of an advisor grow, the universe of potential stocks shrinks. Analyzing that why individual and professional investors do not change their behavior even when they face empirical evidence, that suggests that their decisions are less th an optimal. An answer to this question is said to be that being a contrarian may simply be too risky for the average individual or professional. If a person is wrong on the collective basis, where everyone else also had made a mistake, the consequences professionally and for ones own self-esteem are far less than if a person is wrong alone. The herd instinct allows for the comfort of safety in numbers. The other reason is that individuals try to behave the same way and do not tend to change courses of action if they are happy. If the results are not too painful individuals can be happy with sub-optimal results. Moreover, individuals who tend to be unhappy make changes often and eventually end up being just as unhappy in their new circumstances. According to the traditional view of Investment management, fundamental forces drive markets, however many other investment firms considers to be active and working out based on their experienced Judgment. It is also believed that Judgmental overrides of Value Fundamental forces of markets can be lethal as well as a cause of Financial Disappointment. From the history it has been found that people Override at the wrong times and in most cases would be better off sticking to their investment disciplines (Crowell, 1994) and the reason to this behavior is the Cognitive bias. According to many researchers, stocks of small companies with low price/book ratios provide excess returns. Therefore, given a choice among small cheap stocks large high priced stocks, prominent investors (financial analysts, senior company executives and company directors) will certainly prefer the small cheap ones. But the fact is opposite to this situation where these prominent investors would opt for large high priced ones and so suffer from cognitive bias and further regret. According to a survey in 1992/1993, a research was carried out that included senior executives directors where they were suppose to rank companies in the similar industry ba sed on eight factors. Quality of Management, Quality of products services, Innovativeness, Long term Investment value, Financial soundness, Ability to attract, develop and keep talented people, Responsibility to the community and environment, Wise Use of Corporate assets. (Crowell, 1994). The assumptions that we made were that that Long term investment value should be negatively correlated with size since small stocks provide superior returns. Long term Investment value should have a negative correlation with Price/book since low Price/Book stocks provide superior returns. (Crowell, 1994). Whereas the results of the survey were contrary that stated that Long Term Investment had a positive correlation with the size and also that the Long term investment value had a positive correlation with the Price/Book stocks. According to Shefrin and statman, prominent investors overestimate the probability that a good company is a good stock, relying on the representative heuristics, concluding that superior companies make superior stocks. Aversion to Regret: aversion to regret is different from aversion to risk; Regret is acute when the individual must take responsibility for the final outcome. Aversion to regret leads to a preference for stocks of good companies. The choice of t he stocks of bad companies involves more personal responsibility and higher probability of regret. Therefore, we find there are two major Cognitive errors: We have a double cognitive error: good company always makes good stock (representativeness), and involves less responsibility(Less aversion to regret. (Crowell, 1994,p.3) The Anti Cognitive bias actions would be admitting to your owned stocks, admitting earlier investment mistakes. Further Taking the responsibility for the actions to improve their performance in the future. The reasons for all the available disciplines, tools, and quantitative techniques is to deal with the Cognitive bias error, where the quantitative investment techniques enables the investment managers to overcome cognitive bias, follow sound investment, and eventually be successful contrarian investor(one who rejects the majority opinion, as in economic matters). Behavioral finance also is very helpful in understanding justifying government involvement in the investing decisions of individuals. The failure of millions of people to save properly for their future is also a core problem of behavioral finance. With the help of two very important examples Shiller explains how Government involvement can influence financial investments of individuals. In April 2005 Tony Blair stated a program when all new born babies were given a birthday present of 250 to 500. The present were to choose among a number of investment alternatives to invest until child comes of age. This is an effect done in order to make the parents feel connected with investments and modern economy. Another example: as it is said that people should be heavily active in stock market when they are young and so generally should reduce the activity with age. According to the conventional rule people should have 100 Age = % age of investment. In 2005 president bush also portfolio announced one such plan for personal account life cycle fund which would be among the option that works will be offered to invest their personal account. It was A centerpiece of the presidents proposal bur a major point to be noticed was the default option. An important aspect of behavioral finance is the human attention is capricious focuses heavily that same times on financial calculations and are subject to distraction and dissipation of default option is central. All this brings us a question that what should an intertemporal optimizer do to manage his portfolio over the lifetime. According to Samuelson someone who wished to maximize the expected value of his intertemporal utility function by managing the allocation of the portfolio between a high yielding asset and less yielding asset would not actually change the allocation through time. Neoclassic finance appears highly relevant to such a discussion in that it offers the appropriate theor etical framework for considering what people ought to do with the portfolio if not what they actually do. Behavioral is beginning to play an important role in public policy such as in social security reforms. 5. Agents Rationality: Global culture Social Contagion: The selective attention exhibited by a human mind is the concept of culture. Every nation, tribe or asocial group has a social cognition reinforced by conversation ritual and symbols, rituals and supposition of a particular nation has a subtle but far reliability affect on human behavior. Some researchers found that the unique customs of people basically appears as a logical outcome of a belief system of a nation group of people. The Cultural factors were one of the major influences on rational or irrational behavior. We find many factors that are same across countries , e.g fashion, music, movies, youthful rebelliou Behavioural Finance Theory Dissertation Behavioural Finance Theory Dissertation A survey of behavioral finance 1. Introduction: The Modern investment theory and its application is predicated on the Efficient Markets Hypothesis (EMH), the assumption that markets fully and instantaneously integrate all available information into market prices. Underlying this comprehensive idea is the assumption that the market participants are perfectly rational, and always act in self-interest, making optimal decisions. These assumptions have been challenged. It is difficult to tip over the Neo classical convention that has yielded such insights as portfolio optimization, the Capital Asset Pricing Model, the Arbitrage Pricing Theory, the Cox Ingersoll-Ross theory of the term structure of interest rates, and the Black-Scholes/Merton option pricing model, all of which are predicated on the EMH (Efficient Market Hypothesis) in one way or another. At few points the EMH criticizes the existing literature of behavioral finance, which shows the difference of opinion on psychology economics. The field of psychology has its roots in empirical observation, controlled experimentation, and clinical applications. According to psychology, behavior is the main entity of study, and only after controlled experimental dimensions do psychologists attempt to make inferences about the origins of such behavior. On the contrary, economists typically derive behavior axiomatically from simple principles such as expected utility maximization, making it easier for us to predict economic behavior that are routinely refuted empirically The biggest threats to Modern Portfolio theory is the theory of Behavioral Finance. It is an analysis of why investors make irrational decisions with respect to their money, normal distribution of expected returns generally appears to be invalid and also that the investors support upside risks rather than downside risks. The theory of Behavioral finance is opposite to the traditional theory of Finance which deals with human emotions, sentiments, conditions, biases on collective as well as individual basis. Behavior finance theory is helpful in explaining the past practices of investors and also to determine the future of investors. Behavioral finance is a concept of finance which deals with finances incorporating findings from psychology sociology. It is reviewed that behavioral finance is generally based on individual behavior or on the implication for financial market outcomes. There are many models explaining behavioral finance that explains investors behavior or market irregularities where the rational models fail to provide adequate information. We do not expect such a research to provide a method to make lots of money from the inefficient financial market very fast. Behavioral finance has basically emerged from the theories of psychology, sociology and anthropology the implications of these theories appear to be significant for the efficient market hypothesis, that is based on the positive notion that people behave rationally, maximize their utility and are able to prices observation, a number of anomalies (irregularities) have appeared, which in turn suggest that in the efficient market the principle of rational behavior is not always correct. So, the idea of analyzing other model of human behavior has came up. Further (Gervais, 2001) explained the concept where he says that People like to relate to the stock market as a person having different moods, it can be bad-tempered or high-spirited, it overreacts one day and behaves very normally the other day. As we know that human behavior is unpredictable and it behaves differently in different situations. Lately many researchers have suggested the idea that psychological analysis of investors may be very helpful in understanding the financial markets better. To do so it is important to understand the behavioral finance presenting the concept that The traditional theory has overestimated the rationality of investors , their biases in decisions casting a cumulative impact on asset prices. To many researchers the study of behavior in finance appeared to be a revolution. As it transforms peoples mentality and perception about the markets and factors that influence the markets. â€Å"The paradigm is shifting. People are continuing to walk across th e border from the traditional to the behavioral camp†. (Gervais, 2001, P.2). On the contrary some people believe that may be its too early call it a revolution. Eugene Fama( Gervais, 2001) argued that Behavioral finance has not really shown impacts on the world prices, and the models contradict each other on different point of times. Giving very less account to the behaviorist explanations of trends and the irregularities †anomaly† (any occurrence or object that is strange, unusual, or unique) Also argued that in order to locate the patterns the data mining techniques are much helpful.. Other researchers have also criticized the idea that the behavioral finance models tend to replace the traditional models of market functions. The weaknesses in this area, explained by him (Gervais, 2001) are that generally overreaction and under reaction are the major causes of the market behavior. Where People take the behavior that seems to be easy for the particular study regardless of the fact that whether these biases are either primary factor of economic forces or not. Secondly, Lack of trained and expert people. The field does not have enough trained professionals both in the psychology or finance fields and therefore as a result the models presented is being put up together are improvised. David Hirshleifer (Gervais, 2001) focuses on the individual behavior impacting asset prices and explaining that the field of behavioral finance is currently in its developmental stage, in its way of development it is facing a lot of disagreement which itself is a productive one. Hirshleifer points out that if we apply the conceptual models of behavioral finance to the corporate finance, it can majorly pay off. If the money managers are incorrectly rational, that means that they are probably not evaluating their investment strategies correctly. They might take wrong decisions in their capital structure decisions. It has been found that quite a few people foresee behavioral finance displacing the age old Efficient Markets theory. On the contrary the underlying assumption that the investors and the managers are completely rational makes insightful sense to many people. 2. Traditional Finance Empirical Evidence: Traditional theory assumes that agents are rational the law of one price holds that is a perfect scenario. Where the law of One price states that securities with the same pay off have same price, but in real world this law is violated when people purchase securities in one market for immediate resale in another, in search of higher profits because of price differentials known as Arbitrageurs. And the agents rationality explains the behavior of investor Professional Individual which is generally inconsistent with the rationality or the future predictions. If a market achieves a perfect scenario where agents are rational law of one price holds then the market is efficient. With the availability of amount of information, the form of market changes. It is unlikely that market prices contain all private information. The presence of noise traders (traders, trading randomly not based on information). Researches show that stock returns are typically unpredictable based on past returns wh ere as future returns are predictable to some extent. Few examples from the past literature explains the problem of irrationality which occurs because of naive diversification, behavior influenced by framing, the tendency of investors of committing systematic errors while evaluating public information.(Glaser et al, 2003) Recent studies suggest that peoples` attitude towards the riskiness of a stock in future the individual interpretation may explain the higher level trading volume, which itself is a vast topic for insight. A problem of perception exist in the investors that Stocks have a higher risk adjusted returns than bonds. Another issue with the investors is that these investors either care about the whole stock portfolio or just about the value of each single security in their portfolio and thus ignore the correlations. The concept of ownership society has been promoted in the recent years where people can take better care of their own lives and be better citizen too if they are both owner of financial assets and homeowners. As a researcher suggested that in order to improve the lives of less advantaged in our society is to teach them how to be capitalist, In order to put the ownership society in its right perspective, behavioral finance is needed to be understood. The ownership society seems very attractive when people appear to make profits from their investments. Behavioral finance also is very helpful in understanding justifying government involvement in the investing decisions of individuals. The failure of millions of people to save properly for their future is also a core problem of behavioral finance. (Shiller, 2006) According to (Glaser et al, 2003) there are two approaches towards Behavioral Finance, where both tend to have same goals. The goals tend to explain observed prices, Market trading Volume Last but not the least is the individual behavior better than traditional finance models. Belief Based Model: Psychology (Individual Behavior) Incorporates into Model Market prices Transaction Volume. It includes findings such as Overconfidence, Biased Self- Attrition, and Conservatism Representativeness. Preference Based Model: Rational Friction or from psychology Find explanations, Market detects irregularities individual behavior. It incorporates Prospect Theory, House money effect other forms of mental accounting. Behavioral Finance and Rational debate: The article by (Heaton and Rosenberg,2004) highlights the debate between the rational and behavioral model over testability and predictive success. And we find that neither of them actually offers either of these measures of success. The rational approach uses a particular type of rationalization methodology; which goes on to form the basis of behavior finance predictions. A closer look into the rational finance model goes on to show that it employs ex post rationalizations of observed price behaviors. This allows them greater flexibility when offering explanations for economic anomalies. On the other hand the behavior paradigm criticizes rationalizations as having no concrete role in predicting prices accurately, that utility functions, information sets and transaction costs cannot be `rationalized. Ironically they also reject the rational finances explanatory power which plays an essential role in the limits of arbitrage, which actually makes behavioral finance possible. Milton Friedmans theory lays the basis of positive economics. His methodology focuses on how to make a particular prediction; it is irrelevant whether a particular assumption is rational or irrational. According to this methodology, the rational finance model relies on a limited assumption space since all assumptions that are supposedly not rational have been eliminated. This is one of the major reasons behind the little success in rational finance predictions. Despite the minimal results, adherents of this model have criticized the behavioral model as lacking quantifiable predictions that are based on mathematical models. Rational finance has targeted a more important aspect in the structure of the economy, i.e. Investor uncertainty, which further cause financial anomalies. In explaining these assertions, the behavioural emphasises the importance of taking limits in arbitrage. Friedmans methodological approach falls into the category `instrumentalism, which basically states that theories are tools for predictions and used to draw inferences. Whether an assumption is realistic or rational is of no value to an instrumentalist. By narrowing what may or may not be possible, one will inevitably eliminate certain strategies or behaviors which might in fact go on to maximize utility or profits based on their uniqueness. An assumption could be irrational even in the long run, but it is continuously revised and refined to make it into something useful. In opposition to this, many individuals have gone on to say that behaviouralists are not bound by any constraints thus making their explanations systematically irrational. Rubinstein (2001) described how when everyone fails to explain a particular anomaly, suddenly a behavioral aspect to it will come up, because that can be based on completely abstract irrational assumptions. To support rationality, Rubinstein came up with two arguments. Firstly he went on to say that an irrational strategy that is profitable, will only attract copy cat firms or traders into the market. This is supported when a closer look is given towards limits to arbitrage. Secondly through the process of evolution, irrational decisions will eventually be eliminated in the long run. The major achievements characterized of the rational finance paradigm consist of the following: the principle of no arbitrage; market efficiency, the net present value decision rule, derivatives valuation techniques; Markowitzs (1952) mean-variance framework; event studies; multifactor models such as the APT, ICAPM, and the Consumption- CAPM. Despite the number of top achievements that supporters of the rational model claim, the paradigm fails to answer some of the most basic financial economic questions such as `What is the cost of capital for this firm? or `What is its optimal capital structure?; simply because of their self imposed constraints. So far this makes it seem like rational finance and behavioral finance are mutually exclusive. Contrary to this, they are actually interdependent, and overlap in several areas. Take for instance the concept of mispricing when there is no arbitrage. Behavior finance on the other hand suggests that this may not be the case; irrational assumptions in the market will still lead to mispricing. Further even though certain arbitrageurs may be able to identify irrationality induced mispricing, because of the imperfect market information, they are unable to convince investors of its existence. Over here, the rational model is accepting the existence of anomalies which are affected both through the factors of risk and chance; therefore coinciding with the perspective of behavioral finance. Two instances are clear examples of how rationalization is an important limit of arbitrage: i) the build-up and blow-up of the internet bubble; and ii) the superiority of value equity strategies. If we focus on the latter, we are able to see behavioral finance literature that highlights the superiority of such strategies in the ability of analysts to extrapolate results for investors. This is possible when rationalization is taken as a limit to arbitrage. Similarly these strategies may also limit arbitrage against mispricing, through the great risk associated with stocks. In explaining most anomalies it is essential that analysts first conclude whether pricing is rational or not. To prove their hypothesis that irrationality-induced mispricing exists, behaviouralists may find it easier if they accepted the role of rationalization in limits of arbitrage. Slow information diffusion and short-sales constraints are other factors that explain mispricing. However these factors alone cannot form the basis of a strong and concrete explanation that will clarify pricing across firms and also across time. Those supporting the rational paradigm attack behavioral finance adherents in that their predictions for the financial market have been made on irrational assumptions; that are not supported by concrete mathematical or scientific models. In their view the lack of concrete discipline in the methodology adopted in behavior finance leads to the lack of testing in their forecasts. On the other hand the rational model is criticized for its lack of success in financial predictions. The behaviouralists claim that this limitation exists because the supporters of rational finance dismiss aspects of the economic market simply because it may not fall into explainable rational behavior. Both perspectives claim to align themselves with respect to the goals of `testability and `predictions, while at the same time continue to offer evidence against the other model. In reality however, rather than being exclusively mutual both paradigms assist one another in making their predictions. A persons tendency to make errors is known as cognitive bias. These errors are based on the cognitive factors that include statistical judgments, social attribution and memory being common to all the humans in the world. (Crowell, 1994, p. 1) Cognitive bias is the tendency of intelligent, well-informed people to consistently do the wrong thing. The reason behind this cognitive bias is that the Human brain is made for interpersonal relationships and not for processing statistics. The paper discusses facility of forecasts. Generally it is said that the world is divided into two groups: People forecasting positively and people forecasting negatively. These forecasts exaggerate the reliability of their forecasts and trace it to the illusion of validity which exists even when the illusionary character is recognized. (Fisher and Statman, 2000) discussed five cognitive bias, underlying the illusion of validity that are Overconfidence, Confirmation, Representativeness, Anchoring, and Hindsig ht (Shiller, 2002) discusses, that irrational behavior may disappear with more learning and a much more structured situation. As the past research proves it that may of cognitive biases in human judgment value uncertainty will change, they may be convinced if given proper instructions, on the part-experience of irrational behavior. The three most common themes of behavioral finance are as follows: Heuristics, Framing Market Inefficiencies. People when decide on the basis of the rules of thumb regardless of rationalizing suffer from Heuristics. Some forms of Heuristics are: Prospect theory, Loss Aversion, Status quo Bias, Gamblers Fallacy, Self-serving bias and lastly Money illusion. Framing is basically the problem of decision making where the decision is based on the point where there is difference in how the case is presented to the decision maker. Cognitive framing Mental accounting Anchoring are the common forms of Framing 3. Market in efficiencies: As we found out that observed market outcomes are totally opposite to the rational expectations and the efficient market hypothesis. Mis pricing, irrational decision making and return anomalies are the examples of it. These terms have been described as specific market anomaly from a behavioral point of view. Anomaly (economic behavior) Disposition effect Endowment effect Inequity aversion Intertemporal consumption Present-biased preferences Momentum investing Greed and fear Herd behavior Anomalies (market prices and returns) Efficiency wage hypothesis Limits to arbitrage Dividend puzzle Equity premium puzzle Behavioral Economic Models are restricted to a certain observed market anomaly and it adjusts the neo classical models by explaining the phenomenon of Heuristics and framing to the decision makers. It is usually said that economics get along with in the neo classical framework, with just one restriction of the assumption of rationality. Loix et. Al in their paper Orientation towards Finances explains the individual financial management behavior, people dealing with their financial means. They have analyzed the Non-specific Financial behavior as already we see extensive research on the specific finance behavior such as saving, Taxation, Gambling, amassing debt. But they had given a lot of importance to stock market, investors and households. The analysis of general public`s behavior was done, where an ordinary man is not sure and simply act according to the guesses over their money related issues. It was also found that people interested in economic and financial matters are much more active in collecting specific information than general public, stating that financial behavior of household is an important relevant topic that needs to be discussed in much more details. Household financial management is similar to the financial management. The construct of orientation towards finances was developed where the individual ORTO FIN focuses on competencies (interest and skills). Having stronger money attitude is an indication of stronger orientation towards finances and much more effective competencies. Therefore we expect some relevance and similarity between corporate and household management behavior as both require organizing, forecasting, planning and control. (Loix et. Al, 2005) analyzed general publics behavior in basically dividing them into two groups, Financial Information Personal financial planning. Also explaining some practical and theoretical gaps in the area of psychology of money usage, they concluded that ORTOFIN (Orientation towards finance) indicates the involvement of individuals in managing their finances. Proving out the point that active interest in financial information and an urge to plan expenses are two main factors. A stronger ORTFIN indicates: Greater use of debit accounts, Higher savings account, Wide variety of investments, Greater awareness of ones financial Intimate knowledge of the details of Ones savings/deposit accounts obsessed by money, Higher achievement and power in monetary terms, Further age is also inversely proportional. Shiller in 2006, in his article talked about the co-evolution of neo-classical and behavior finance. In 1937 when A. Samuelsson one of the great economists wrote about people maximizing the present value of utility subject to a present vale budget constraint. Another judgment he realized was time being consistent human behavior where if at any time t 0 Where people reconsidered the problem of maximization from that date forward, they would not change their decision where as in real life it is totally opposite for example people sometimes try to control themselves by binding their future decision as from history we find out that that some of man make irrevocable trust in the taking out of life insurance as a compulsory savings measure. (shiller, 2006, p.) Considering personal saving rate, saving and down for no reason has emerged as a weakness of human self control. People seem to be vulnerable to complacency from time to time about providing for their own future. The distinction between neoclassical and behavioral finance have therefore been exaggerated. Both of them are not completely different from each other. Behavioral finance is more elastic willing to learn from other sciences and less concerned about the elegance of models whereby explaining human behavior. 4. Investing and cognitive bias: Money Managers and Money management is a very popular phenomenon. The performance in the stock market is measured at the daily basis and not to wait for a highly subjective annual review of ones performance by ones superior. Market grades you on a daily basis. The smarter one is, the more confident one becomes of ones ability to succeed, clients support them by trusting them that eventually helps their careers. But the truth is that few money managers put in sufficient amount of time and effort to figure out what works and develop a set of investment principles to guide their investment decisions (Browne, 2000). Further Browne discussed the importance of asset allocation and risk aversion, in order to understand why we do what we do regardless of whether it is rational or not. General public opts for money Managers to deal with their finances and these managers are categorized in three ways: Value Managers, Growth Managers and Market Neutral Managers. The vast majority of money manag ers are categorized as either value managers or growth managers although a third category, market neutral managers, is gaining popularity these days and may soon rival the so-called strategies of value and growth. Some investment management firms even are being cautious by offering all styles of investments. What too few money managers do is analyze the fundamental financial characteristics of portfolios that produce long-term market beating results, and develop a set of investment principles that are based on those findings. Difference of opinion on the definition of Value is the problem. The reasons for this are two-fold, one being the practical reality of managing large sums of money, and the other related to behavior. As the assets under management of an advisor grow, the universe of potential stocks shrinks. Analyzing that why individual and professional investors do not change their behavior even when they face empirical evidence, that suggests that their decisions are less th an optimal. An answer to this question is said to be that being a contrarian may simply be too risky for the average individual or professional. If a person is wrong on the collective basis, where everyone else also had made a mistake, the consequences professionally and for ones own self-esteem are far less than if a person is wrong alone. The herd instinct allows for the comfort of safety in numbers. The other reason is that individuals try to behave the same way and do not tend to change courses of action if they are happy. If the results are not too painful individuals can be happy with sub-optimal results. Moreover, individuals who tend to be unhappy make changes often and eventually end up being just as unhappy in their new circumstances. According to the traditional view of Investment management, fundamental forces drive markets, however many other investment firms considers to be active and working out based on their experienced Judgment. It is also believed that Judgmental overrides of Value Fundamental forces of markets can be lethal as well as a cause of Financial Disappointment. From the history it has been found that people Override at the wrong times and in most cases would be better off sticking to their investment disciplines (Crowell, 1994) and the reason to this behavior is the Cognitive bias. According to many researchers, stocks of small companies with low price/book ratios provide excess returns. Therefore, given a choice among small cheap stocks large high priced stocks, prominent investors (financial analysts, senior company executives and company directors) will certainly prefer the small cheap ones. But the fact is opposite to this situation where these prominent investors would opt for large high priced ones and so suffer from cognitive bias and further regret. According to a survey in 1992/1993, a research was carried out that included senior executives directors where they were suppose to rank companies in the similar industry ba sed on eight factors. Quality of Management, Quality of products services, Innovativeness, Long term Investment value, Financial soundness, Ability to attract, develop and keep talented people, Responsibility to the community and environment, Wise Use of Corporate assets. (Crowell, 1994). The assumptions that we made were that that Long term investment value should be negatively correlated with size since small stocks provide superior returns. Long term Investment value should have a negative correlation with Price/book since low Price/Book stocks provide superior returns. (Crowell, 1994). Whereas the results of the survey were contrary that stated that Long Term Investment had a positive correlation with the size and also that the Long term investment value had a positive correlation with the Price/Book stocks. According to Shefrin and statman, prominent investors overestimate the probability that a good company is a good stock, relying on the representative heuristics, concluding that superior companies make superior stocks. Aversion to Regret: aversion to regret is different from aversion to risk; Regret is acute when the individual must take responsibility for the final outcome. Aversion to regret leads to a preference for stocks of good companies. The choice of t he stocks of bad companies involves more personal responsibility and higher probability of regret. Therefore, we find there are two major Cognitive errors: We have a double cognitive error: good company always makes good stock (representativeness), and involves less responsibility(Less aversion to regret. (Crowell, 1994,p.3) The Anti Cognitive bias actions would be admitting to your owned stocks, admitting earlier investment mistakes. Further Taking the responsibility for the actions to improve their performance in the future. The reasons for all the available disciplines, tools, and quantitative techniques is to deal with the Cognitive bias error, where the quantitative investment techniques enables the investment managers to overcome cognitive bias, follow sound investment, and eventually be successful contrarian investor(one who rejects the majority opinion, as in economic matters). Behavioral finance also is very helpful in understanding justifying government involvement in the investing decisions of individuals. The failure of millions of people to save properly for their future is also a core problem of behavioral finance. With the help of two very important examples Shiller explains how Government involvement can influence financial investments of individuals. In April 2005 Tony Blair stated a program when all new born babies were given a birthday present of 250 to 500. The present were to choose among a number of investment alternatives to invest until child comes of age. This is an effect done in order to make the parents feel connected with investments and modern economy. Another example: as it is said that people should be heavily active in stock market when they are young and so generally should reduce the activity with age. According to the conventional rule people should have 100 Age = % age of investment. In 2005 president bush also portfolio announced one such plan for personal account life cycle fund which would be among the option that works will be offered to invest their personal account. It was A centerpiece of the presidents proposal bur a major point to be noticed was the default option. An important aspect of behavioral finance is the human attention is capricious focuses heavily that same times on financial calculations and are subject to distraction and dissipation of default option is central. All this brings us a question that what should an intertemporal optimizer do to manage his portfolio over the lifetime. According to Samuelson someone who wished to maximize the expected value of his intertemporal utility function by managing the allocation of the portfolio between a high yielding asset and less yielding asset would not actually change the allocation through time. Neoclassic finance appears highly relevant to such a discussion in that it offers the appropriate theor etical framework for considering what people ought to do with the portfolio if not what they actually do. Behavioral is beginning to play an important role in public policy such as in social security reforms. 5. Agents Rationality: Global culture Social Contagion: The selective attention exhibited by a human mind is the concept of culture. Every nation, tribe or asocial group has a social cognition reinforced by conversation ritual and symbols, rituals and supposition of a particular nation has a subtle but far reliability affect on human behavior. Some researchers found that the unique customs of people basically appears as a logical outcome of a belief system of a nation group of people. The Cultural factors were one of the major influences on rational or irrational behavior. We find many factors that are same across countries , e.g fashion, music, movies, youthful rebelliou