{"id":8965,"date":"2022-07-27T06:41:36","date_gmt":"2022-07-27T06:41:36","guid":{"rendered":"https:\/\/depocen.org\/publications\/volatility-under-bounded-rationality\/"},"modified":"2022-07-27T06:41:36","modified_gmt":"2022-07-27T06:41:36","slug":"volatility-under-bounded-rationality","status":"publish","type":"publications","link":"https:\/\/depocen.org\/en\/publications\/volatility-under-bounded-rationality\/","title":{"rendered":"Volatility under Bounded Rationality"},"content":{"rendered":"<p>The ARCH model shares with the related literature on risk and return one common thing: the<br \/>\nrational-expectation paradigm. In particularly, market prices should reflect investors&#8217; rational<br \/>\nforecasts, based on the best available information. When new information arrives, the market&#8217;s<br \/>\nexpectations change. Therefore, prices fluctuate. Thus, price volatility is due to information<br \/>\narrivals and hence, volatility can be forecast, based on the up-to-date information. However,<br \/>\nwhen the available information is too complex, the rational expectation may no longer hold.<br \/>\nBounded rationality should be added into our frame work to study risk and return, so that, we<br \/>\ncan gain a better understanding of market volatility.<\/p>\n","protected":false},"featured_media":0,"template":"","cate_publications":[],"author_publications":[1724,1725],"topic_publications":[],"class_list":["post-8965","publications","type-publications","status-publish","hentry","author_publications-nhat-le","author_publications-nhat-le-en"],"acf":[],"_links":{"self":[{"href":"https:\/\/depocen.org\/en\/wp-json\/wp\/v2\/publications\/8965","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/depocen.org\/en\/wp-json\/wp\/v2\/publications"}],"about":[{"href":"https:\/\/depocen.org\/en\/wp-json\/wp\/v2\/types\/publications"}],"wp:attachment":[{"href":"https:\/\/depocen.org\/en\/wp-json\/wp\/v2\/media?parent=8965"}],"wp:term":[{"taxonomy":"cate_publications","embeddable":true,"href":"https:\/\/depocen.org\/en\/wp-json\/wp\/v2\/cate_publications?post=8965"},{"taxonomy":"author_publications","embeddable":true,"href":"https:\/\/depocen.org\/en\/wp-json\/wp\/v2\/author_publications?post=8965"},{"taxonomy":"topic_publications","embeddable":true,"href":"https:\/\/depocen.org\/en\/wp-json\/wp\/v2\/topic_publications?post=8965"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}