Abstract
On Wall Street, there are bulls and bears among professional investors. On Main Street, ordinary people are sometimes overly optimistic about their future and at other times excessively pessimistic. Bulls and bears on Wall Street often have starkly different views about the markets even though the available information is not so different among them. People on Main Street often switch from optimism to pessimism and vice versa quite easily even though there may not be noticeable change in their conditions.
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Notes
- 1.
See Remarks by Chairman Alan Greenspan at the Annual Dinner and Francis Boyer Lecture of the American Enterprise Institute for Public Research, Washington, D.C., December 5, 1996.
- 2.
See Sect. 3.8.1 for the definition of the compound lottery act.
- 3.
Each of the following axioms corresponds to each of Axioms S1–S5 in Sect. 3.9.1. For explicit statements of these axioms, the readers are referred there. However, note that we state the axioms in terms of a weak order here, instead of a preference order as used earlier. This does not cause any essential difference in the following exposition. For this, see Sect. 3.2.
- 4.
- 5.
This assumption is not essential in what follows and can be dispensed with easily.
- 6.
By assuming this, we avoid a subtle argument that would be necessary when the infimum is not achieved. Our idea can be conveyed neatly under this simplifying assumption.
- 7.
See the previous footnote.
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Nishimura, K.G., Ozaki, H. (2017). A Simple Characterization of Pessimism and Optimism: \(\varvec{\varepsilon }\)-Contamination Versus \(\varvec{\varepsilon }\)-Exuberance. In: Economics of Pessimism and Optimism. Springer, Tokyo. https://doi.org/10.1007/978-4-431-55903-0_12
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