Notes

Preface

1. Johns Manville, www.johnsmanville.com.

Chapter 1 Introduction

1. Personal communication. See Chapter 7.

2. Leading Wall St. Firms Asset Allocation Recommendations (for 2004). Dow Jones Newswires, December 31, 2003.

3. Investment Company Institute, www.ici.org, 2004 fact book, 88.

4. Federal Reserve Survey of Consumer Finances, www.federalreserve.gov.

5. Berkow, R., The Merck Manual of Medical Information: Home Edition (New York: Pocket, 1999), 1303.

6. U.S. Food and Drug Administration. Aspirin for Reducing Your Risk of Heart Attack and Stroke: know the facts. www.fda.gov.

Chapter 2 Crazy People

1. Those interested in more detail can see: Glimcher, P. W., Decisions, Uncertainty, and The Brain: The Science of Neuroeconomics (Cambridge, Mass: MIT Press, 2003).

2. Medawar, P.B., An Unsolved Problem of Biology (London: H.K. Lewis, 1952), 3.

3. Harig, B., Woods Uncomfortable with His Game, ESPN.com, April 26, 2004.

4. Tversky, A. and D. Kahneman, Extensional versus Intuition Reasoning: Conjunction Fallacy in Probability Judgment, Psychological Review, 90 (1983): 293-315.

5. Burrough, B. and J. Helyar, Barbarians at the Gate (New York: Harpercollins, 1990).

6. Burnham, T. and J. Phelan, Mean Genes (Cambridge: Perseus, 2000), 83-104.

7. Tversky, A. and D. Kahneman, Evidential Impact of Base Rates, Judgment under

Uncertainty: Heuristics and Biases, D. Kahneman, P. Slovic, and A. Tversky, eds. (Cambridge: Cambridge University Press, 1982), 154.

8. Svenson, O., Are We All Less Risky and More Skillful Than Our Fellow Drivers? Acta Psychologica 47 (1981): 143-148.

9. Ross, M. and F. Sicoly, Egocentric Biases and Availability and Attribution, Journal of Personality and Social Psychology 37 (1979): 322-336.

10. Peters, T.J., In Search of Excellence (New York: Harper & Row, 1982), 56.

11. Lichtenstein, S., B. Fischhoff, et al., Calibration of Probabilities, Judgment under Uncertainty: Heuristics and Biases, D. Kahneman, P. Slovic, and A. Tversky, eds. (Cambridge: Cambridge University Press, 1982), 306-334.

12. Roth, G. and M. Wulliman, eds., Brain Evolution and Cognition (New York: Wiley, 2001), chapters 16 and 17.

13. Minsky, M.L., The Society of Mind (New York: Simon and Schuster, 1986).

14. Lech, R.B., Broken Soldiers (Urbana: University of Illinois Press, 2000).

15. Cialdini, R.B., Influence: The Psychology of Persuasion, rev. ed. (New York: Quill/William Morrow, 1993).

16. Gazzaniga, M., The Minds Past (Berkeley: University of California Press, 1998).

17. McGurk, H. and J. MacDonald, Hearing Lips and Seeing Voices, Nature 264 (1976): 746-748.

18. Harlow, J.M., Recovery from the Passage of an Iron Bar through the Head (Boston: David Clapp & Son, 1869).

19. Thaler, R.H., The Winners Curse: Paradoxes and Anomalies of Economic Life (Princeton, NJ: Princeton University Press, 1992); Gilovich, T., D. Griffin, et al., eds., Heuristics and Biases: The Psychology of Intuitive Judgment. (Cambridge: Cambridge University Press, 2002).

20. Schwager, J., Market Wizards: Interviews with Top Traders (New York: Prentice Hall Press, 1989), 117-140.

21. Guth, W., R. Schmittberger, et al., An Experimental Analysis of Ultimatum Bargaining, Journal of Economic Behavior and Organization 3, no. 4, (1982): 367-388.

22. Roth, A.E., Bargaining Experiments, Handbook of Experimental Economics, J.H. Kagel and A.E. Roth, eds. (Princeton, NJ: Princeton University Press, 1995). Roth, A.E., V. Prasnikar, et al., Bargaining and Market Behavior in Jerusalem, Ljubljana, Pittsburgh, and Tokyo: An Experimental Study, American Economic Review 81, no. 5, (1991): 1068-1095.

23. Hoffman, E., K. McCabe, et al., On Expectations and the Monetary Stakes in Ultimatum Games, International Journal of Game Theory 25 (1996): 289-301.

24. Cameron, L., Raising the Stakes in the Ultimatum Game: Experimental Evidence from Indonesia, Economic Inquiry 37, no. 1, (1999): 47-59.

25. Henrich, J., R. Boyd, et al., In Search of Homo economicus: Behavioral Experiments in 15 Small-Scale Societies, American Economic Review 91, no. 2, (2001): 73-78.

26. Sanfey, A.G., J.K. Rilling, et al., The Neural Basis of Economic Decision-Making in the Ultimatum Game, Science 300 (2003): 1755-1758.

27. Burnham, T.C., Pride, Status and Hormones: Rejectors in an Ultimatum Game Have High Levels of Testosterone manuscript, 2004.

28. Kahneman, D. and A. Tversky, Choices, Values, and Frames, American Psychologist 39, no. 4, (1984): 341-50.

29. Leeson, N. with E. Whitley, Rogue Trader: How I Brought down Barings Bank and Shook the Financial World (Boston: Little Brown, 2000).

30. Skinner, B.F., Superstition in the Pigeon, Journal of Experimental Psychology 38 (1947): 168-172.

31. Tversky, A. and D. Kahneman, Judgment Under Uncertainty: Heuristics and Biases, Science 185 (1974): 1124-1131.

32. Laibson, D., Golden Eggs and Hyperbolic Discounting, The Quarterly Journal of Economics 112, no. 2, (1997): 443-477.

Chapter 3 Crazy World

1. Smith, V.L., An Experimental Study of Competitive Market Behavior, The Journal of Political Economy 70 (1962): 111-137.

2. Bachelier, L., Theorie de la Speculation (Paris: Gauthier-Villars, 1900).

3. Bernstein, P., Capital Ideas: The Improbable Origins of Modern Wall Street (New York: Free Press, 1992).

4. Malkiel, B., A Random Walk Down Wall Street (New York: Norton, 1973).

5. Siegel, J.J., Stocks for the Long Run, 2nd ed. (New York: McGraw-Hill, 1998).

6. MacKay, C., Memoirs of Extraordinary Popular Delusions (London: R. Bentley, 1841).

7. Shiller, R., Irrational Exuberance (Princeton, NJ: Princeton University Press, 2000).

8. Shiller, R., Investor Behavior in the 1987 Stock Market Crash: Survey Evidence, Cowles Foundation Discussion Papers (#853), 1987.

9. Siegel, J., The Stock Market Crash of 1987: A Macro-Finance Perspective, Rodney L. White Center for Financial Research Working Papers (#24-88), 1988.

10. Smith, V.L., G.L. Suchanek, et al., Bubbles, Crashes and Endogenous Expectations in Experimental Spot Asset Markets, Econometrica 56 (1988): 1119-1151.

11. Investment Company Institute, www.ici.org, 2004 fact book, 88.

12. The Death of Equities: Why the Age of Equities May Be Over, Business Week (August 13, 1979).

13. Investment Company Institute, www.ici.org, 2004 fact book, 88.