Application to Modern Investment Theory to EMH

Application to Modern Investment Theory to EMH The modern investment theory and its application on the efficient markets hypothesis 1. Introduction The Modern investment theory and its application is predicated on the Efficient Markets Hypothesis (EMH), assumption that markets fully and instantaneously integrate all available information into market prices. Underlying this comprehensive idea is the assumption that 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, Capital Asset Pricing Model, Arbitrage Pricing Theory and Cox Ingersoll-Ross theory of the term structure of interest rates, all of which are predicated on the EMH[2] rather than downside risks[3]. The theory of behavioral finance is opposite to the traditional theory of Finance and deals with human emotions, sentiments, conditions, biases on collective as well as individual basis. Behavior finance theory is helpful in explaining past practices of investors and dete rmining the false performance of the investors. Behavioral finance is a concept of finance which deals with finances incorporating findings from psychology and sociology. It is reviewed that behavioral finance is generally based on individual behavior and financial market outcomes. There are many models explaining behavioral finance that explains investors behavior or market irregularities where rational models fail to provide adequate information. Investors do not expect such research to provide a method to make lots of money from inefficient financial markets quickly. According to Shiller (2001) Behavioral finance has basically emerged from the theories of psychology, sociology and anthropology where implications of these theories appear to be significant for efficient market hypothesis, that is based on the positive notion that people behave rationally, maximize their utility. It is found that in efficient market the principle of rational behavior is not always correct. Thus, the idea of analyzing other model of human behavior has come up. Gervais (2001) further explains the concept where he says that people like to relate to the stock market as a person having different moods, this person can be bad-tempered or high-spirited and can overreact one day or make amends the next. This person indicates human behavior which is unpredictable and behaves differently in different situations. Lately many researchers have suggested the idea that psychological analysis of investors may be very helpful in understanding financial markets better. To do so it is important to understand behavioral finance presenting the concept of traditional theory overestimating 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 markets and factors that influence the markets. The paradigm is shifting. People are continuing to walk across the border from the traditional to the behavioral camp. Gervais (2001, pp.2). On the contrary some people believe that may be its too early to call it a revolution. Gervais (2001) states that Fama in (1970) argued that behavioral finance has not really shown an impact on world prices, and that model contradict each other on different point of times. Giving very less account to behaviorist explanations of trends and the irregularities anomaly ( is any occurrence or object that is strange, unusual, or unique) also argued that in order to locate patterns the data mining techniques are much helpful. Other researchers have also criticized the idea that behavioral finance models tend to replace the traditional models of market functions. Some weaknesses in this area, explained by Gervais (2001)are that generally overreaction and under reaction are major causes of market behavior. In these cases People take the behavior that seems to be easy for a 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 psychology or finance fields and therefore as a result the models presented by researchers are improvised. Gervais (2001) also focused on individual behavior impacting asset prices and explained that this 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. He points out that if we apply the conceptual models of behavioral finance to the corporate finance, it can majorly pay off. If money managers are incorrectly rational, means 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 underlying assumption that investors and managers are completely rational makes insightful sense to many people. 2. Traditional Finance and Empirical Evidence Fung, (2006) claimed that Post Keynesian theory has criticized mainstream economic theory for using statistical methods to model the world in which histori ­cal market data cannot provide, In recent years, two different lines of research experimental economics and behavioral finance have pro ­duced results that are at odds with the predictions of mainstream finan ­cial theory. This paper argues that it is beneficial to the development of good financial theory for Post Keynesian economists to engage in an exchange of ideas with the practitioners of these two lines of research. The difference of opinion originated when experimental economics and behavioral finance understood the difference between agents rationality in theory and in real world. Both had a same point of view regarding Post Keynesian economists where both of them refused to assume Post Keynesian economists assumption of economic actors being always rational by maximizing expected utility. Instead of assuming ration al economic ac ­tors who always act consistently, they often tap into insights provided by psychology to try to explain economic behavior. The use of psychol ­ogy can be traced back to Keynes, and, in fact, some of the papers in experimental economics and behavioral finance take a remark of Keynes on the psychology of economic actors as an inspiration for designing empirical tests of economic behavior. Indeed, some of these papers rec ­ognize that we live in an uncertain world, and they examine the heuris ­tics, or rules of thumb, that economic actors develop to guide their behavior in face of uncertainty. When Keynes made his remark in 1936 (the original publication date of the General Theory), there was not yet an efficient market hypothesis. But in 1970 Fama published his pioneering paper on efficient markets. In it, he defined an efficient market as a market in which prices always fully reflect available information. Traditional theory assumes that agents are rational an d the law of one price holds that is a perfect scenario. Where the law of One price[5]. And agents rationality explains the behavior of investor Professional and Individual which is generally inconsistent with rationality or future predictions. If a market achieves a perfect scenario where agents are rational and law of one price holds then the market is efficient. With the availability of large amount of information, form of market changes. It is unlikely that market prices contain all private information. The presence of noise traders (traders, trading randomly and not based on information). Researches show that stock returns are typically unpredictable based on past returns where as future returns are predictable to some extent. According to Glaser et al. (2003) 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 ev aluating public information. Lately it has been found that investors` attitude towards the riskiness of a stock in future and 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 actions that stocks have a higher risk adjusted returns than bonds. Another issue with the investors is that these investors either care about a stock portfolio or just about the value of each single security in their portfolio and thus ignore correlations. The concept of ownership society[6] 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 Shiller (2006) suggested that in order to improve lives of less advantaged people in our society is to teach them how to be capitalist, In order to put ownership society in its right perspective, behavioral finance is needed to be und erstood. The concept of ownership society seems very attractive when people appear to make profits from their investments. Behavioral finance is also very helpful in understanding and justifying government involvement in investing decisions of individuals. The failure of millions of people to save properly for their future is also a core focus of behavioral finance. 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 and 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 and Transaction Volume. It includes findings such as Overconfidence, Biased Self- Attrition, and Conservatism and Representativeness. Preference Based Model: Rational Friction or from psychology Find explanations, Market detects irregularities and individual behavior. It incorporates Prospect Theory[7], House money effect and 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 it was found 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, t hat 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. Heaton Rosenberg (2004) presented Milton Friedmans theory that laid the basis of positive economics. His methodology focused 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 economy, i.e. Investor uncertainty, which further cause financial anomalies. In explaining these assertions, the behavioral approach emphasizes importance of taking limits in arbitrage. Further his methodological approach falls into the category `instru mentalism[8], 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 said that behaviouralists are not bound by any constraints thus making their explanations systematically irrational. Heaton Rosenberg (2004) further explains the concept of Rubinstein that 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, he came up with two arguments. Firstly he w ent 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, and 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 lik e 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 which 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 markets 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. Ray (2006) examines a new genre of behavioral markets prediction markets and their remarkable a bility to aggregate inside and expert information from around the world in order to accurately predict all types of economic and financial variables. To date it is said that the prediction markets are the most accurately efficient markets as they prove to show all three forms of market efficiency (weak, semi-strong, and strong), in contrast to regulated markets. Prediction markets are also said to be decision markets. It initially evolved in 1988 with the first online betting market the Iowa Electronic Market. These online markets have proven their predictions accurately since the time they came into being. To be precise these prediction markets are behavioral markets with powerful statistical components that are able to predict the most likely values of future financial variables, variances around such values, and their correlations with other future financial variables. Ray (2006) says that being unregulated, prediction markets are highly effective at flushing out and thereafter a ggregating relevant information including inside and expert information regarding a particular event, globally extracting such information from savvy bettors who are eager to profit from their inside and expert information. These sorts of prediction markets have become so popular that now a days major companies use such behavioral markets to accurately forecast sales, earnings, product success, and many other financial and economic variables. The foremost tool for these markets is the wisdom of crowd. In order to accurately predict financial and economical variables he presented few conditions as a prerequisite, which included mainly having a variety of opinions, with no herd behavior, should be able to use their knowledge according to the information available with them and last but not the least is the fact that prediction markets expectations are not self fulfilling prophecies. Prediction markets are a new genre of behavioral markets that continually reveal the thinking of confid ent insiders by suggesting them to profit from their inside and expert information. The subjective evidence with a few statistical evidences corroborates the impressive ability of these markets to predict financial events of all types. The phenomenon exists from ages and effectively proves its performance especially in worlds financial markets. The demonstrated accuracy of predictions in these markets can be of significant utility to traders, financial analysts, behavioral analysts, and many others intending to forecast and analyze financial data. 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. Cognitive bias is the tendency of intelligent, well-informed people to consistently do the wrong thing. Crowell (1994, pp. 1). The reason behind this cognitive bias is that the Human brain is made for interpersonal relationships and not for processing statistics. He discussed the frailty 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 Hindsight. Shiller (2002) discusses, that irrational behavior may disappear with more learning and a much more structured situation. History proves it that many of cognitive biases in human judgment value uncertainly 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 and 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[9], Self-serving bias and lastly Money illusion. Framing is basically a 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 and Anchoring are the common forms of Framing 3. Market Inefficiencies As observed, that market outcomes are totally opposite to rational expectations and efficient market hypothesis where mispricing, irrational decision making and return anomalies are examples of it. Fung (2006) introduced three forms of market efficiency earlier presented by Fama in 1970. In the weak form, the information set con ­tains only historical prices. In the semi strong form, information set contains all publicly available information. In the strong form, the infor ­mation contains not only all publicly available information but also insider information not available to the public. This definition of efficient mar ­kets is too general to be testable empirically. To make the model testable, he proposed a process of price formation known as the expected re ­turn or fair game efficient markets model. In this model, when investors form expectations of security prices, they fully utilize all the information that is fully reflected in those prices. It is called a fair game model, because using only the information that is fully reflected in security prices, no trading system can have expected profits or returns in excess of equi ­librium expected profits or returns. 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 (2005) 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 and amassing debt, and gave 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 and 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, (2006) in his article talked about the co-evolution of neo-classical and behavior finance that in 1937 when A. Samuelsson one of the great economists wrote about people m aximizing the present value of utility subject to a present value. Another judgment he realized was time being consistent human behavior where if at any time t, 0 4. Investing and Cognitive Bias Money Managers and Money management is a very popular phenomenon. The performance in a stock market is measured at daily basis and waiting for a highly subjective annual review of ones performance by ones superior. Market grades you on a daily basis. The smarter one is, 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 he 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 managers 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 other related to behavior. As the assets under management of an advisor grow, universe of potential stocks shrinks. Analyzing why individual and professional investors do not change their behavior even when they face empirical evidence, suggests that their decisions are less than optimal. An answer to this questio n 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 collective basis, where everyone else also had made a mistake, the consequences professionally and for ones own self-esteem are far less damaging than if a person is wrong alone. The herd instinct allows for comfort of safety in numbers. The other reason is that individuals try to behave 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 traditional view of investment management, fundamental forces drive markets, however many other investment firms are consider being active and basing their working on their experienced Judgment. It is also believed that Judgmental overrides value and fundamental forces of markets can be lethal as well as a cause of financial disappointment. Historically it has been found that people override at wrong times and in most cases would be better off sticking to their investment disciplines and the reason to this behavior is the cognitive bias. According to Crowell (1994) and many other researchers, stocks of small companies with low price/book ratios provide excess returns. Therefore, given a choice among small cheap stocks and large high priced stocks, prominent investors (financial analysts, senior company executives and company directors) will certainly prefer 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. The assumptions made by Crowell (1994, pp.2) were 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. Whereas the results Crowell`s survey were contrary stating that Long Term Investment had a positive correlation with size and with Price/Book stocks. Crowell further stated that 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. Discussing the concept of regrets, aversion to regret is different from aversion to risk; Regret is acute when an individual must take responsibility for the final outcome. Aversion to regret leads to a preference for stocks of good companies. The choice of the stocks of bad companies involves more personal responsibility and higher probability of regret. Therefore, two major Cognitive errors appear: We have a double cognitive error: good company always makes good stock (representativeness), and involves less responsibility(Less aversion to regret). (Crowell, 1994,pp.3) The Anti Cognitive bias actions would be admitting to your owned stocks, admitting earlier investment mistakes. Further, taking the responsibility for actions to improve their performance in future. The reasons for all the available discip Application to Modern Investment Theory to EMH Application to Modern Investment Theory to EMH The modern investment theory and its application on the efficient markets hypothesis 1. Introduction The Modern investment theory and its application is predicated on the Efficient Markets Hypothesis (EMH), assumption that markets fully and instantaneously integrate all available information into market prices. Underlying this comprehensive idea is the assumption that 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, Capital Asset Pricing Model, Arbitrage Pricing Theory and Cox Ingersoll-Ross theory of the term structure of interest rates, all of which are predicated on the EMH[2] rather than downside risks[3]. The theory of behavioral finance is opposite to the traditional theory of Finance and deals with human emotions, sentiments, conditions, biases on collective as well as individual basis. Behavior finance theory is helpful in explaining past practices of investors and dete rmining the false performance of the investors. Behavioral finance is a concept of finance which deals with finances incorporating findings from psychology and sociology. It is reviewed that behavioral finance is generally based on individual behavior and financial market outcomes. There are many models explaining behavioral finance that explains investors behavior or market irregularities where rational models fail to provide adequate information. Investors do not expect such research to provide a method to make lots of money from inefficient financial markets quickly. According to Shiller (2001) Behavioral finance has basically emerged from the theories of psychology, sociology and anthropology where implications of these theories appear to be significant for efficient market hypothesis, that is based on the positive notion that people behave rationally, maximize their utility. It is found that in efficient market the principle of rational behavior is not always correct. Thus, the idea of analyzing other model of human behavior has come up. Gervais (2001) further explains the concept where he says that people like to relate to the stock market as a person having different moods, this person can be bad-tempered or high-spirited and can overreact one day or make amends the next. This person indicates human behavior which is unpredictable and behaves differently in different situations. Lately many researchers have suggested the idea that psychological analysis of investors may be very helpful in understanding financial markets better. To do so it is important to understand behavioral finance presenting the concept of traditional theory overestimating 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 markets and factors that influence the markets. The paradigm is shifting. People are continuing to walk across the border from the traditional to the behavioral camp. Gervais (2001, pp.2). On the contrary some people believe that may be its too early to call it a revolution. Gervais (2001) states that Fama in (1970) argued that behavioral finance has not really shown an impact on world prices, and that model contradict each other on different point of times. Giving very less account to behaviorist explanations of trends and the irregularities anomaly ( is any occurrence or object that is strange, unusual, or unique) also argued that in order to locate patterns the data mining techniques are much helpful. Other researchers have also criticized the idea that behavioral finance models tend to replace the traditional models of market functions. Some weaknesses in this area, explained by Gervais (2001)are that generally overreaction and under reaction are major causes of market behavior. In these cases People take the behavior that seems to be easy for a 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 psychology or finance fields and therefore as a result the models presented by researchers are improvised. Gervais (2001) also focused on individual behavior impacting asset prices and explained that this 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. He points out that if we apply the conceptual models of behavioral finance to the corporate finance, it can majorly pay off. If money managers are incorrectly rational, means 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 underlying assumption that investors and managers are completely rational makes insightful sense to many people. 2. Traditional Finance and Empirical Evidence Fung, (2006) claimed that Post Keynesian theory has criticized mainstream economic theory for using statistical methods to model the world in which histori ­cal market data cannot provide, In recent years, two different lines of research experimental economics and behavioral finance have pro ­duced results that are at odds with the predictions of mainstream finan ­cial theory. This paper argues that it is beneficial to the development of good financial theory for Post Keynesian economists to engage in an exchange of ideas with the practitioners of these two lines of research. The difference of opinion originated when experimental economics and behavioral finance understood the difference between agents rationality in theory and in real world. Both had a same point of view regarding Post Keynesian economists where both of them refused to assume Post Keynesian economists assumption of economic actors being always rational by maximizing expected utility. Instead of assuming ration al economic ac ­tors who always act consistently, they often tap into insights provided by psychology to try to explain economic behavior. The use of psychol ­ogy can be traced back to Keynes, and, in fact, some of the papers in experimental economics and behavioral finance take a remark of Keynes on the psychology of economic actors as an inspiration for designing empirical tests of economic behavior. Indeed, some of these papers rec ­ognize that we live in an uncertain world, and they examine the heuris ­tics, or rules of thumb, that economic actors develop to guide their behavior in face of uncertainty. When Keynes made his remark in 1936 (the original publication date of the General Theory), there was not yet an efficient market hypothesis. But in 1970 Fama published his pioneering paper on efficient markets. In it, he defined an efficient market as a market in which prices always fully reflect available information. Traditional theory assumes that agents are rational an d the law of one price holds that is a perfect scenario. Where the law of One price[5]. And agents rationality explains the behavior of investor Professional and Individual which is generally inconsistent with rationality or future predictions. If a market achieves a perfect scenario where agents are rational and law of one price holds then the market is efficient. With the availability of large amount of information, form of market changes. It is unlikely that market prices contain all private information. The presence of noise traders (traders, trading randomly and not based on information). Researches show that stock returns are typically unpredictable based on past returns where as future returns are predictable to some extent. According to Glaser et al. (2003) 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 ev aluating public information. Lately it has been found that investors` attitude towards the riskiness of a stock in future and 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 actions that stocks have a higher risk adjusted returns than bonds. Another issue with the investors is that these investors either care about a stock portfolio or just about the value of each single security in their portfolio and thus ignore correlations. The concept of ownership society[6] 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 Shiller (2006) suggested that in order to improve lives of less advantaged people in our society is to teach them how to be capitalist, In order to put ownership society in its right perspective, behavioral finance is needed to be und erstood. The concept of ownership society seems very attractive when people appear to make profits from their investments. Behavioral finance is also very helpful in understanding and justifying government involvement in investing decisions of individuals. The failure of millions of people to save properly for their future is also a core focus of behavioral finance. 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 and 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 and Transaction Volume. It includes findings such as Overconfidence, Biased Self- Attrition, and Conservatism and Representativeness. Preference Based Model: Rational Friction or from psychology Find explanations, Market detects irregularities and individual behavior. It incorporates Prospect Theory[7], House money effect and 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 it was found 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, t hat 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. Heaton Rosenberg (2004) presented Milton Friedmans theory that laid the basis of positive economics. His methodology focused 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 economy, i.e. Investor uncertainty, which further cause financial anomalies. In explaining these assertions, the behavioral approach emphasizes importance of taking limits in arbitrage. Further his methodological approach falls into the category `instru mentalism[8], 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 said that behaviouralists are not bound by any constraints thus making their explanations systematically irrational. Heaton Rosenberg (2004) further explains the concept of Rubinstein that 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, he came up with two arguments. Firstly he w ent 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, and 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 lik e 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 which 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 markets 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. Ray (2006) examines a new genre of behavioral markets prediction markets and their remarkable a bility to aggregate inside and expert information from around the world in order to accurately predict all types of economic and financial variables. To date it is said that the prediction markets are the most accurately efficient markets as they prove to show all three forms of market efficiency (weak, semi-strong, and strong), in contrast to regulated markets. Prediction markets are also said to be decision markets. It initially evolved in 1988 with the first online betting market the Iowa Electronic Market. These online markets have proven their predictions accurately since the time they came into being. To be precise these prediction markets are behavioral markets with powerful statistical components that are able to predict the most likely values of future financial variables, variances around such values, and their correlations with other future financial variables. Ray (2006) says that being unregulated, prediction markets are highly effective at flushing out and thereafter a ggregating relevant information including inside and expert information regarding a particular event, globally extracting such information from savvy bettors who are eager to profit from their inside and expert information. These sorts of prediction markets have become so popular that now a days major companies use such behavioral markets to accurately forecast sales, earnings, product success, and many other financial and economic variables. The foremost tool for these markets is the wisdom of crowd. In order to accurately predict financial and economical variables he presented few conditions as a prerequisite, which included mainly having a variety of opinions, with no herd behavior, should be able to use their knowledge according to the information available with them and last but not the least is the fact that prediction markets expectations are not self fulfilling prophecies. Prediction markets are a new genre of behavioral markets that continually reveal the thinking of confid ent insiders by suggesting them to profit from their inside and expert information. The subjective evidence with a few statistical evidences corroborates the impressive ability of these markets to predict financial events of all types. The phenomenon exists from ages and effectively proves its performance especially in worlds financial markets. The demonstrated accuracy of predictions in these markets can be of significant utility to traders, financial analysts, behavioral analysts, and many others intending to forecast and analyze financial data. 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. Cognitive bias is the tendency of intelligent, well-informed people to consistently do the wrong thing. Crowell (1994, pp. 1). The reason behind this cognitive bias is that the Human brain is made for interpersonal relationships and not for processing statistics. He discussed the frailty 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 Hindsight. Shiller (2002) discusses, that irrational behavior may disappear with more learning and a much more structured situation. History proves it that many of cognitive biases in human judgment value uncertainly 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 and 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[9], Self-serving bias and lastly Money illusion. Framing is basically a 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 and Anchoring are the common forms of Framing 3. Market Inefficiencies As observed, that market outcomes are totally opposite to rational expectations and efficient market hypothesis where mispricing, irrational decision making and return anomalies are examples of it. Fung (2006) introduced three forms of market efficiency earlier presented by Fama in 1970. In the weak form, the information set con ­tains only historical prices. In the semi strong form, information set contains all publicly available information. In the strong form, the infor ­mation contains not only all publicly available information but also insider information not available to the public. This definition of efficient mar ­kets is too general to be testable empirically. To make the model testable, he proposed a process of price formation known as the expected re ­turn or fair game efficient markets model. In this model, when investors form expectations of security prices, they fully utilize all the information that is fully reflected in those prices. It is called a fair game model, because using only the information that is fully reflected in security prices, no trading system can have expected profits or returns in excess of equi ­librium expected profits or returns. 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 (2005) 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 and amassing debt, and gave 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 and 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, (2006) in his article talked about the co-evolution of neo-classical and behavior finance that in 1937 when A. Samuelsson one of the great economists wrote about people m aximizing the present value of utility subject to a present value. Another judgment he realized was time being consistent human behavior where if at any time t, 0 4. Investing and Cognitive Bias Money Managers and Money management is a very popular phenomenon. The performance in a stock market is measured at daily basis and waiting for a highly subjective annual review of ones performance by ones superior. Market grades you on a daily basis. The smarter one is, 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 he 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 managers 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 other related to behavior. As the assets under management of an advisor grow, universe of potential stocks shrinks. Analyzing why individual and professional investors do not change their behavior even when they face empirical evidence, suggests that their decisions are less than optimal. An answer to this questio n 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 collective basis, where everyone else also had made a mistake, the consequences professionally and for ones own self-esteem are far less damaging than if a person is wrong alone. The herd instinct allows for comfort of safety in numbers. The other reason is that individuals try to behave 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 traditional view of investment management, fundamental forces drive markets, however many other investment firms are consider being active and basing their working on their experienced Judgment. It is also believed that Judgmental overrides value and fundamental forces of markets can be lethal as well as a cause of financial disappointment. Historically it has been found that people override at wrong times and in most cases would be better off sticking to their investment disciplines and the reason to this behavior is the cognitive bias. According to Crowell (1994) and many other researchers, stocks of small companies with low price/book ratios provide excess returns. Therefore, given a choice among small cheap stocks and large high priced stocks, prominent investors (financial analysts, senior company executives and company directors) will certainly prefer 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. The assumptions made by Crowell (1994, pp.2) were 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. Whereas the results Crowell`s survey were contrary stating that Long Term Investment had a positive correlation with size and with Price/Book stocks. Crowell further stated that 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. Discussing the concept of regrets, aversion to regret is different from aversion to risk; Regret is acute when an individual must take responsibility for the final outcome. Aversion to regret leads to a preference for stocks of good companies. The choice of the stocks of bad companies involves more personal responsibility and higher probability of regret. Therefore, two major Cognitive errors appear: We have a double cognitive error: good company always makes good stock (representativeness), and involves less responsibility(Less aversion to regret). (Crowell, 1994,pp.3) The Anti Cognitive bias actions would be admitting to your owned stocks, admitting earlier investment mistakes. Further, taking the responsibility for actions to improve their performance in future. The reasons for all the available discip

Free Pride and Prejudice Essays: Characters Guilty of Pride and Prejudice :: Pride Prejudice Essays

Characters Guilty of Pride and Prejudice Pride and Prejudice by Jane Austen marvelously portrays the life of a middle-class country family in England during the early nineteenth century. The family, the Bennets, is presently engaged in finding suitable (rich) husbands for their five daughters. The main character, Elizabeth Bennet, is an intelligent, witty, and opinionated young woman. She has already rebuffed one would-be suitor because she felt he was unfit, and in this scene, she turns down another, Fitzwilliam Darcy, because she feels that he is arrogant and cruel. This scene portrays a lively exchange between the two, with Elizabeth accusing him of prejudice and Darcy charging her with being full of pride. The scene opens with Darcy entering the room where Elizabeth was reading. After inquiring about her health, he pauses for a few moments and then suddenly declares, "You must allow me to tell you how ardently I admire and love you" (Austen, 142) He then proceeds to tell her all the things that are wrong with her family and her own "inferiority" (142). Despite all this, he still loves her. Darcy seems sure she will accept, but Elizabeth's dislike of his pride and arrogance make it impossible for her to accede. They then proceed to enter into a heated argument and each volley cutting insults upon the other. Austen's wording during this exchange adds to the liveliness of this quarrel. Elizabeth first disparages his proposal by saying, "Why with so evident a design of offending and insulting me, you chose to tell me that you liked me against your will, against your reason, and even against your character" (143) Darcy's proposal was a far cry from romantic and it convinced Elizabeth that D arcy wants a wife inferior to him, something she would never stand for. She goes on to accuse him of being prejudiced against another by laying charge after charge upon him and concluding with, "You have done all this! and yet you can treat the mention of his misfortunes with contempt and ridicule" (144). He retorts, "These offenses might have been overlooked, had not your pride been hurt by my honest confessions of the scruples that had long prevented my forming any serious design" (144). She counters by saying, "You are mistaken, Mr. Darcy, if you suppose that the mode of your declaration affected me" (145). She goes on to say, "You could not have made me the offer of your hand in any possible way that would have tempted me to accept it" (145).

Housing Problem :: essays research papers

Many economists argue that market solutions are more efficient than government agencies in providing services even when it comes to â€Å"merit goods†. In the discussion of housing problem, I would disagree with the economist’s view. Housing is a very complicate issue that I believe it will work the best by the cooperation of market and government agencies. The Canadian government has worked for many years on the housing issue, but does not seem to have any adequate solutions to solve the problem. The housing market, unlike other industry, has a dominant feature of inelastic short-run supply. This characteristic of the housing market has made a great obstacle in coping with the problem. In fact, we may look at other countries’ experiences and learn how to deal with the problem effectively. Canadian government’s housing policy is based on the idea that everyone is entitled to decent and affordable housing. Housing is a necessity and everyone needs a place t o live. It is for this reason that government set its goal to ensure everyone is living in housing of adequate quality at a price they can afford. However, the government has turned into wrong definition of decency and affordability. Firstly, decency is subjective according to different cultures. I think that the Canadian government is setting a very high value on living environment, and such a high standard may cause more difficulties in solving the problem. Secondly, Canadian government has continuously reduced its standard in defining affordability. It was consider affordable if housing cost no more than 20% of your income. Nevertheless, the standard has been reduced to no more than 40% until recently. Such dramatic change of the figure has made the goal become ambiguous. Practically, the government has tried many methods in dealing with the housing problem. Housing code enforcement is a method that tries to regulate minimal conditions for rental housing. However, this method doe s not seem to work because it brings additional costs to the tenant. On the other hand, the government tries to help people become homeowner by benefits in kind, such as imposing tax exemption on first home down payment and low interest rate on mortgages. However, the method does not really aim at helping the poor. Moreover, the government tries to increase the supply of housing by building new shelters and buying existing apartments. Yet, none of these work efficiently. The reason that building new shelters does not work is because most of these new housing projects are expensive and time consuming.

Reversing Stroke and Spinal Cord Damage :: Biology Essays Research Papers

Reversing Stroke and Spinal Cord Damage Scientists are on the brink of doing the unthinkable-replenishing the brains of people who have suffered strokes or head injuries to make them whole again. If that is not astonishing enough, they think they may be able to reverse paralysis. The door is at last open to lifting the terrifying sentence these disorders still decree-loss of physical function, cognitive skills, memory, and personality. Until recently there was virtually nothing doctors could do for the 500,000 Americans who have strokes each year, the 500,000 to 750,000 who experience severe head injury, or the 10,000 people who are paralyzed after spinal cord damage (3). However, that is about to change. Researchers now think it may be possible to replace destroyed brain cells with new ones to give victims of stroke and brain injury a chance to relearn how to control their body, form new thinking processes, and regain emotions. After demolishing the long-standing myth that brain cells cannot regenerate or proliferate, scientists are developing ways to stimulate cells to do just that. Although stroke, head injury, and paralysis are three of the most devastating things that can happen to anyone, scientists have recently learned that the damage they cause is not preordained. It takes place over minutes, hours, and days, giving them a precious opportunity to develop treatments to halt much of the damage. Most of the n ew remedies are not yet available, but an explosion of research in the last five to ten years has convinced scientists that some of them will work (8). Guided by fabulous results in preventing permanent damage from stroke and other injuries to the central nervous system in rats and other animals, researchers around the world have launched scores of trials in humans (12). However, many promising new therapies are sitting on the shelf because of a lack of money and other resources necessary to conduct large, lengthy, and expensive studies to conclusively show that a new drug or treatment really works in people. The requirement for safety and efficacy can be frustrating, especially for badly needed treatments that are very promising, but such caution is necessary. One organization is trying to raise funds for a major study to test a pill for paralysis-4 amino pyridine (4 AP) -which has shown promising results in preliminary human trials (14). About half of the small number of people in the study, who had been paralyzed for four to fifteen years, regained some sensation and muscle function when they were given intravenous infusions of 4 AP. Reversing Stroke and Spinal Cord Damage :: Biology Essays Research Papers Reversing Stroke and Spinal Cord Damage Scientists are on the brink of doing the unthinkable-replenishing the brains of people who have suffered strokes or head injuries to make them whole again. If that is not astonishing enough, they think they may be able to reverse paralysis. The door is at last open to lifting the terrifying sentence these disorders still decree-loss of physical function, cognitive skills, memory, and personality. Until recently there was virtually nothing doctors could do for the 500,000 Americans who have strokes each year, the 500,000 to 750,000 who experience severe head injury, or the 10,000 people who are paralyzed after spinal cord damage (3). However, that is about to change. Researchers now think it may be possible to replace destroyed brain cells with new ones to give victims of stroke and brain injury a chance to relearn how to control their body, form new thinking processes, and regain emotions. After demolishing the long-standing myth that brain cells cannot regenerate or proliferate, scientists are developing ways to stimulate cells to do just that. Although stroke, head injury, and paralysis are three of the most devastating things that can happen to anyone, scientists have recently learned that the damage they cause is not preordained. It takes place over minutes, hours, and days, giving them a precious opportunity to develop treatments to halt much of the damage. Most of the n ew remedies are not yet available, but an explosion of research in the last five to ten years has convinced scientists that some of them will work (8). Guided by fabulous results in preventing permanent damage from stroke and other injuries to the central nervous system in rats and other animals, researchers around the world have launched scores of trials in humans (12). However, many promising new therapies are sitting on the shelf because of a lack of money and other resources necessary to conduct large, lengthy, and expensive studies to conclusively show that a new drug or treatment really works in people. The requirement for safety and efficacy can be frustrating, especially for badly needed treatments that are very promising, but such caution is necessary. One organization is trying to raise funds for a major study to test a pill for paralysis-4 amino pyridine (4 AP) -which has shown promising results in preliminary human trials (14). About half of the small number of people in the study, who had been paralyzed for four to fifteen years, regained some sensation and muscle function when they were given intravenous infusions of 4 AP.

Events Planning and Management Essay

What is an EventSpecial or spectacular occasions where people gather together for a purpose whether they be to celebrate, educate, promote or commemorate. They are not the usual and ordinary activities that one engages in as part of his daily life Who is an Event PlannerAn event planner is, quite simply someone who organizes events. He is the person behind the scenes who gets the job done and make sure everything is done and done flawlessly to ensure successful staging of the event. He must be well versed and trained on the communication and organization aspects and requirements of the job. Event planners usually get their start doing, supplying or providing services in one or two particular aspect of an special events such as catering, floral arranging, entertaining and talent agents eg before they decide to plan entire events. Or they may also have started planning and coordinating events for companies they were employed with before deciding to go into the business for themselves Since events may vary in size, scope and complexity, it may require an event planner to do any number of different task but all with the end result of achieving a successful event Categories of EventsSocial Events- more on a local level, attendees are usually related and/or know each other on a more personal level. Care and caution must be taken as the event planner may find himself in the storm of a family event , as emotions often run high on these special occasions. Make sure everyone knows their role and exactly what’s expected of them. List of common social events: weddings, reunions, housewarming/blessings/holiday parties and dinners/birthday parties/bar or bat mitzvahs/baby showers/anniversary parties/bridal showers/stag parties, et al. Corporate Events- the term â€Å"corporate† includes not only companies but also charities and nonprofit organizations. Charities and nonprofit organizations host gala fundraisers, receptions and athletic competitions, among other events, to expand their public support base and raise funds. Companies host trade shows, conventions, company outings, holiday parties and meetings for their employees, staff, board members and stock holders. Some types of corporate events: Annual shareholder meetings, board meetings, client appreciation events, company socials (such as holiday parties, intramurals and sports events, company outings), groundbreaking ceremonies, incentive travel, open houses, new product launch, press briefings, staff training, union events/meetings et al Industry Events – Industry events today are sophisticated affairs designed to inform, influence and form consensus on a specific issue or common topic. Industry specific events include: Conventions, association meetings, conferences, industry tradeshows, public exhibitions(bridal fairs, auto shows, home shows), symposiums et al Special Events – The term â€Å"special events† can describe a broad range of affairs which are big, national or local in scope such as major sporting events (palarong pambansa), major public events (EDSA Day celebration), major cultural and religious affairs ( Baguio mayflower festival, dinagyang, ati-atihan, sinulog festival), However special events may also be much smaller, specific and more private in scope. List of special events include the following: Award events, book launching, signing/author reading, CD release parties, charity fund raisers, children’s festival, ethnic celebrations, fashion shows, holiday special events, inauguration ball, music festival, parades, political forums or debates, restaurant openings, sporting event-car races, store grand openings STEPS IN EVENTS PLANNING 1. Client Consultation Whether you have your own event planning business or work full time planning events for one company you will work with clients. As a corporate events planner your internal clients will be other departments (HRD, Marketing, Operations etc). on the other hand if you are doing events planning independently you will be dealing with company representatives or in some cases the company officials themselves. In each case consultation will be of primary importance as these will determine the direction, objective and purpose and vision of the event. At the initial meeting do more listening than talking, pay careful attention to everything the client says, make notes or record the meeting(with clients permission), bring an assistant to make notes for you. When its your turn, ask the client to describe their vision for the event. Then from broad ideas, you will refine the vision as you move through the planning process. Questions such as those below will help the events planner to begin to visualize the event and serve as the foundation for all the work to come. Things to discus with the client: What kind of event do you want What do you hope to accomplish When is the event to be held Who are expected to attend What is the budget At the end of the consultation you should have a clear picture of what your client envisions for their event and be able to form a clear, concise â€Å"mission statement† or objective. Other things to discus: who will be involved in the planning process, who will be the key decision makers, and how information should flow during the planning stage. This is precisely to anticipate and eliminate possible roadblocks as you can before you reach them since as the events planner it is your responsibility to take charge of planning. After the initial meeting and while it is still fresh on the mind of both parties (planner and client) summarize the discussion in writing and send a copy to the client if possible on the same day or soon after. 2. Set Objectives The best and most successful events have a clear purpose or objective. Event planners can avail of the SMART method for setting strategic objectives: Specific- What is the specific result of you event Measurable- Outcome should be measurable accurately Attainable- Given the existing budget and resources and constraint, is the objective attainable Relevant- Do the people involved have the authority, the skill and the resources needed to meet the objective? Is the objective important to the organization or individual? Time- Based- Is there a start and end point to the objective? Setting smart objectives will not only make the planning easier but will help measure the success of the event and create a positive experience for all involved. 3. Choose a Date and a Location At this planning stage, preferred date should be decided upon. Client will often but not always come with a date in mind for the event. If they don’t, it will be your job to help pick a suitable date. But whether you do the setting of the date or not you need to consider the following before choosing the date or accepting the client. Things to consider when choosing a date: Consider your availability Consider other events in the area Consider the season and usual weather in the chosen location Consider your suppliers Consider other related events Consider other holidays Consider your time needs 4. Decide Who to Invite Your client needs to give you an idea of who they want to attend their event before you can begin to formulate a plan to attract the target audience or plan activities. The following data or information are required (depending on the type of event) How many people are to be invited Will spouses or children also attend Demographics of the target audience (eg. Gender, median age, ethnic background, income bracket) Common or shared interest What payback does the client expect Where are the attendees coming from (travel arrangement, customs and traditions) 5. Create Your Theme The most memorable events have a cohesive theme that runs through-out, from initial publicity to printed invitations to decor and right through to the entertainment and final applause. One of the biggest advantages of a strong theme is its usefulness in helping you make decisions throughout the event process. Once a theme has been decided on, print materials such as invitations, banners, place cards, brochures, advertising and websites can be designed. Where to get ideas for a great theme Brainstorm Events Industry Current Events and Trends Adding a Musical Touch 6. Set the Event Agenda After the date, guest list, the theme and setting of the smart objectives , its time to set the agenda for the event. Whether its a simple house blessing or a three day corporate event, its important to layout the entire schedule. Include adequate time for arrival, socializing, speeches, awards/games, food, etc. â€Å"Visualize† the event and run through the entire program from start to finish. Make notes of all you might need such as materials, services, special arrangements, eg. Create a list of vendors and suppliers to contact and task to be done. GETTING ORGANIZED As an event planner, you will need a variety of organizational tools that will help you keep track of all the many details involved in organizing the event and ensuring an orderly and systematic execution of plans aimed towards making the event successful 1. Establish an Event Committee Although it is a given that you will do all the planning and planning of the event yourself, in most cases, you will work with a group of people who are expected to make the event successful Choose a select group of key people to form an Events Committee Assign specific task to each committee member Regular committee meeting Document everything 2. Create a Timeline Schedule Base your timeline on factors such as The size of the event The location The time of year The number of people involved in the planning Develop an outline of specific tasks, deadlines and responsibilities 3. Adding Detail As you start developing your checklist, add as much detail as possible for each item. For example under the â€Å"Assigned tasks for day of event† list the specific task that needs to be assigned such driving to airport pick up, supervising set up, leading briefing sessions with speakers, seating, greeting, supervising set up of luncheon, etc. Once you have develop the checklist, assign target dates to each item, It is a good idea to work backwards from your event date 4. Critical Path ( Assignment of Task) A critical path lists each of the tasks that needs to be accomplished; who is responsible for it and the deadline by which it will be done. It is used as a guide map for the event to assist when delegating responsibilities and show whether you are on track. 5. Budgets Creating a budget is an important ingredient in a successful event. Once you have created a timeline schedule and critical path, you can come up with a list of estimated expenses such as venue rental, food, transportation, accommodations, audio-visual equipment, printed materials and gifts. Get price quotations from your suppliers to find out how much a particular item costs You will also need to include your own fee and corporate clients may want to include any staff time they spend on the event as an expense. When planning a budget, include your potential revenue to offset the cost. For example, is the event a fundraiser? Is it a conference or convention that should aim to cover its own expenses? Attendance fees, sales of related materials, donations, ticket sales and sponsorships can all be good ways to raise revenues. After the event you should compare actual expenses and revenues to your budgeted amounts. This will help you determine if your objectives were met and it may assist in budgeting for future events. PREPARATION TIME FOR VARIOUS EVENTS TIMELINE SCHEDULE EVENT TYPE Recommended Preparation Time Wedding 3-6 months Parties (birthdays/anniversaries/debut) 1-3 months Seminars/Meetings 1-3 months Conference / Convention ~ Domestic ~ International 6months – 1year 1-2years Organized Tours / Field Trips 1-3 months Concerts 6months and above Festivals 6month-1year Exhibitions / Expositions ~ Domestic ~ International 6months-1year 1-2years Sales Bazaar (â€Å"tiange†, night market) 6months Competition / Contests 6months-1year Sport Festivals 6months-1year SAMPLE TIME ALLOCATION (More Than A Year Pre-planning Activity) Activity Period Announcement date & location 52weeks before the event First press date 24-36weeks Publication 24th week Mailing of brochures 14-18th week Mailing of 2nd reminder 14th week Mailing of final reminder 8-12th week Mailing of final program 2-6 weeks Sample Budget Groundbreaking Ceremony Estimated Expenses Groundbreaking Site Tent 1,200. 00 Chairs600. 00 Banner600. 00 Podium Sign150. 00 Lights150. 00 Flowers600. 00 Shovels200. 00 Subtotal 3, 500. 00 Luncheon Expenses Lunch 12,000. 00 Rental of Civic Center 1,500. 00 Floral centerpieces600. 00 Gifts for dignitaries (6plaques) 2,000. 00 Gifts for guests (60 mini shovels) 1,600. 00 Information kit folders 1,500. 00 Printing of Fact Sheet 650. 00 Podium Sign 150. 00 Subtotal20, 000. 00 Other Expenses Services of Event Planner 10,000. 00 Long distance / Phone300. 00 Printing of Invitations 1,200. 00 Courier charges for invitations500. 00 Delivery of boxes to site500. 00 Photographer800. 00 Sound system 1,500. 00 Event Planner’s transportation600. 00 Rental of van/minibus 2,500. 00 News release 1,000. 00 Subtotal18,900 . 00 TOTAL ESTIMATED EXPENSES42, 400. 00 (taxes not included) Event Planning Budget Form EXPENSES Estimated Actual Site Venue or tent rental______________________ Tables and chairs______________________ Meals and beverages ______________________ Tableware rental______________________ Staging______________________ Audiovisual equipment______________________ Decorations______________________ Flowers______________________ Other: ____________________________________________ ____________________________________________ ____________________________________________ ____________________________________________ Program Musicians______________________ Speakers______________________ Celebrities______________________ Entertainers______________________ Gifts______________________ Award______________________ Activities (e. g. golf)______________________ Other: ____________________________________________ ____________________________________________ Event Planning Budget Form (continued) EXPENSES Estimated Actual Printing and Promotion Printing invitations______________________ Mailing invitations______________________ Banners and signs ______________________ Printing tickets______________________ Event programs______________________ Name tags______________________ Shipping materials to venue______________________ Advertising______________________ Distribution of news release______________________ Media kits______________________ Long distance telephone______________________ Other: ____________________________________________ ____________________________________________ ____________________________________________ ____________________________________________ Personnel Event Planner______________________ Staff salaries and benefits______________________ Registration______________________ Photographer______________________ Bartenders______________________ Security staff______________________ Set-up and tear down______________________ Other: ____________________________________________ ____________________________________________ ____________________________________________ ____________________________________________ ____________________________________________ Event Planning Budget Form (continued) EXPENSES Estimated Actual Travel Airline tickets______________________ Hotel rooms______________________ Ground transportation ______________________ Other: ____________________________________________ ____________________________________________ ____________________________________________ Other Expenses Registration fees______________________ Ticket sales______________________ Sponsorships______________________ Advertising in event program______________________ Other: ____________________________________________ ____________________________________________ ____________________________________________ REVENUE Estimated Actual Registration fees______________________ Ticket sales______________________ Donations______________________ Sponsorships______________________ Advertising in event program ______________________ Other: ____________________________________________ ____________________________________________ ____________________________________________ COSTING OF A BIRTHDAY EVENT Profile: No. of Persons: 50 Time: 7pm-12mn (5hours) Site: Function Rooms 3 – Globe Telecom Plaza AT COST 1. Venue a. Function room rate †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 2,300. 00 b. Electricity for 5hours†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. 500. 00 c. Parking for ingress and egress†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 100. 00 d. Move-in (refundable)†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. 1,500. 00 4,400. 00 2. Decor a. Balloons and Arrangement†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. 2,500. 00 (free 50balloons/arched shape/2tower) b. Flowers and Arrangement†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 1, 250. 00 (centerpiece for guests tables & buffet table)3,750. 00 3. Invitations & Giveaways a. Invitations (P25. 00 x 50)†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. 1,250. 00 b. Angels (70 pcs at P23. 00 each)†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. 1,610. 00 2,860. 00 4. Tables and Chairs a. Rent for 6rounds tables†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 270. 00 (for 8persons at 45. 00 each table) b. Rent of chairs (5. 00 x 50)†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. 250. 00 c. Rent of buffet table (100. 00 x 5)†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. 500. 00 d. Table Napkin (5. 00 x 50)†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. 250. 00 e. Chair cover with ribbon (15. 00 x 50) †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. 750. 00 2,020. 00 5. Audio Equipment a. Rental†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. 5,000. 00 5,000. 00 6. Food (2 appetizers/ 5 courses / 2desserts/ bottomless drinks-tea/ softdrinks) a. Cost Breakdown 250. 00 rate per person 25. 00 10% service fee 275. 00 x 50 persons†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 13,750. 00 13,750. 00 TOTAL 31,780. 00 YOUR COSTS CHECKLIST TYPE OF COST Details Examples FIXED COST Projection Screens, Video projectors, slide projector/OHP, video players(back-up player), preview monitor, LCD for Power point presentation, laser pointer, lectern monitors Sound Speakers, lectern microphones, tie-microphones, CD player, talkback system, mixer cabling, adaptors, music copyright or creation fees Speaker support Design, image production, print proofs, scriptwriting, speaker training, rehearsals Staging Design lecterns, backdrop, steps, dais, furnishings, graphics, carpeting, seating area, special construction, drop banners, room decorations, floor plan, revised lay-outs. Lighting Design, equipment hire, installation, crew, freight and transportation, rigging and de-rigging costs Crew/Staff Get-in crew, on-site crew, De-rigging crew, transportation per diems (allowance for sustenance) for each member, show caller, script assistant, live video crew, lighting director, sound technician, vision technician Fees and Insurance ‘Procedure’s fee, Project fee, contingency for administration cost, equipment insurance Invitations process Cost of advertising, posters, and follow-up activity, flyers, direct mail costs Function Rooms and Contracts VARIABLE COSTS Banqueting Food and Beverages Accommodation Types of accommodations and, inclusions Travel Types of transportations and inclusions Fees Porterage fees, gratuity fees, parking fees, service charges Decors/Giveaways Flowers, candles, souvenir items Insurance Surety bonds, cash bonds, personal accident insurance, travel insurance CONTIGENCY COSTS Contingency for direct costs Contingency for currency fluctuations Peso-dollar exchange rate TYPE OF COST DESCRIPTION LIKELY PERCENTAGE F I X E D C O S T S Production, staging & outside speakers Invitation process, marketing, design Venue Agency fees Signage Security, car parking set-up Cabaret, entertainment Registration costs Utilities (telephone, faxes, e-mail) We weather back-up 35% Production Costs could be as much as 25% of direct costs V A R I A B L E C O S T S Meals, breaks Beverages Accommodation Travel Delegate print Table/room gifts Porterage, car parking per person Late bar drinks Insurance, purchase tax Gratuity Fees 50% CONTINGENCY 10% to cover all contingencies for direct costs Allowance for currency movements (for abroad) 15% TOTAL BUDGET 100% 6. Crisis and Back Up Planning Disasters and crises can range from relatively small (the guest of honor’s plane is delayed due to bad weather) to huge and seemingly insurmountable, like the heavy rains and flooding that tropical storm Ondoy brought in Sept. 2009 . A good event planner will be able to think on his or her feet for the small stuff, and have a solid crisis plan in place for dealing with the biggies. You can’t possibly expect to plan for every type of crisis, but a little advance planning will go along way to ensure that you can handle whatever comes your way. a. Maintenance Emergencies If your event takes place in hotel or convention facility you should discuss emergency plans with the Director of Sales and Maintenance Engineer. They should provide you with a contact at the site who will take care of any emergency or maintenance issues. If your event is being held in a private hall, find out who in their organization is responsible for facility maintenance and ask for someone to be available during your event. In your contact list, keep numbers of 24-hour locksmiths, plumbers and electricians. b. Medical Emergencies When planning a large outdoor festival or sporting event, it is advisable to have first aid personnel on hand for emergencies. Festival-goers may suffer from heat stroke (or hypothermia in a cold location), minor or major cuts, sunburn or food poisoning. It’s a good idea to include in your rental items a tent that can be used to shelter people fro the sun or cold while receiving treatment for minor injuries. Discuss option and get advice from your local ambulance volunteer force or contracted service providers. Be sure to include the local hospital, emergency line and non-emergency police number in your list of contacts. Organizing the Team for the Event Most events are organized through good team (2 or more persons working together) work. It is important that when tasks are allocated within a team the strengths of its members are put to good use. For example, it is no good asking someone to be the secretary who is has little skills in oral communications. The following are the roles that can be adopted in any event: Coordinator Secretary Treasurer Marketing/Promotion **The Number in the Team and their responsibilities will vary according to the scale of the event. It is important that all team members fully understand what their jobs entail and are aware of all the schedules and deadlines that have been agreed. It is much better to have someone in your team who is reliable rather than a â€Å"prima donna† who promises everything and delivers nothing. Planning Contributions to A Team Event Most events are not the result of one person’s work alone. Events are made through the concerted efforts of a group of people or a team who are working for the same general objective ~ to achieve a successful event. Within this team there will be a number of weakness in their areas of work. These skills, strengths and weaknesses should considered carefully when the various jobs within the team are allocated. Each team member will plan their own contribution to the event to be staged. The following details have to be considered: How one’s role in an event can support another’s and can support the objectives of the event How by adopting certain methods the resources available can be used to their maximum benefit What a person should do when something happens and their role does not go to plan Problems that may occur and how they could be handled effectively to try to reduce their impact on the event How staff and customers can be informed promptly and clearly of any changes which may affect them General guidelines for undertaking a role in an event Roles and Responsibilities of the Team The Coordinator (Chairperson) Overseas the Event Liaising with other members of the team Ensures that deadlines are met Raises any problems that may be occurring and finding solutions Chairs meetings of the event committee Ensures that everyone has a fair share of time to raise issues. Voice opinions etc. at meeting discuss issues Makes sure that the agenda for the meeting is covered Resolves any disagreements in the team regarding issues concerning the event through voting The Administrator Deals with correspondence, letters and other forms of communications Produces minutes of committee meetings Assist other members of the team with administrator The Financial Controller (Treasurer) Overseas all financial transactions Records financial transactions Holds the cheque book Sets-up a secure system using money available Produces income/expenditure accounts with receipts and others clearly documented Designs procedures for the secure holding of income before, during and after the event Ensures that the event meets the budget set The Publicity Officer Promotes the event Organizes promotional materials (ads, leaf- lets, brochures, flyers, etc) according to the scale of the event Liaising with outside agencies (eg. Local newspaper companies, radio/TV stations, etc. ) Organizes press coverage of the event The Facility Officer Finds and organizes the venue Organizes special tools and equipment needed in the event such as lighting fixtures, sound system etc Arranges for security Arranges for parking Arranges toilet facilities and waste disposal **Though each team member has his own set of res- ponsibilities, it is imperative that he communicate effectively with the others so that problems (should they arise) can be highlighted and dealt with as effectively as possible. After the Team has been organized, the following details will now be covered: Reason/s for holding the event Objectives to be attained Your target beneficiaries/market Period to hold the event Identifying the best site to hold the event The cost of the event including budget allocation The selling price of the event (per person/ per total package cost) The financial goal of the event ~ To raise money To make a profit To cover costs of the event A time-scale of how different tasks to be planned and implemented The need for good team effort, sticking to budgets and using resources available to their best advantages Efficient uses of communications between members Effective publicity Contingency plans Strategy for dealing with customers A good working environment friendly, support, etc Feedback to all contributions on the outcome of the event 3 PHASES OF EVENT MANAGEMENT 1. Pre~Event Phase (Preparation of Materials) Organization of the Team Venue/Site Selection Food Requirements Equipments & Tools Preparation of Materials Decors/Artwork Communications & Proposal Promotions Schedule of Activities (Program) Costing and Design 2. Actual Event Phase (Implementation & Administrative Stage) Production of Materials Needed for the Event Promotions Rehearsal/ Final Briefing Decorations Registration The Output Security Participant’s Evaluation 3. Post Event Phase (Disposal Stage) Egress Evaluation Profitability of the Event Building your Budget Defining the budget is the first major challenge an event organizer faces as eh plans the event. An experienced organizer will know whether the budget is sufficient to do the job to the standard expected. Depending on the event you are organizing, compile a checklist of all costs that will be incurred in making the event happen. Classify costs accordingly: Fixed Costs Variable Costs Contingency Budget CO-PRENEURS OF AN EVENT ORGANIZER 1. Hotels and Other lodging Facilities 2. Travel Agents/Consultants 3. Caterers/ Food Establishment 4. Airline Companies and Other modes of Transportation 5. Artist 6. Audio/ Visuals Consultants 7. Other events specialist (wedding planner/meeting Planner/tour planner) 8. Entertainers/Talents 9. Professionals and consultants, EVALUATING THE EVENT Evaluation of any event is concerned with the feedback from the event – not just from those who organized or staffed the event but from anyone who played a part in it. This could include: Staff Organizers Clients/Visitors Volunteers Sponsors Officials And other co-preneurs of the event planner When an event is planned the purpose of the event is clearly defined. It is against this that the event should be evaluated. Evaluation does not just take place at the end of an event. It is an ongoing process which occurs throughout the event. During the planning stage everything to do with the event is monitored and if any problems appear, adjustments have to be made. It is through this process that the event is finally stage and organized to meet the objectives of the event. **The opportunity to review and evaluate the event is important as a learning exercise. If the event is to be stage again in the future it is an invaluable help as the thing that went well can be repeated and those things that were not too successful can be changed next time. GENERAL GUIDELINES FOR EVENTS BE PREPARED. As the Scout motto says! Good preparation is the foundation for a good event. If the team as a whole are well prepared this will set the tone for the event. BE CLEAR ABOUT YOUR OBJECTIVES. Make sure that the all team fully understand what is to be achieved by the staging of this event. If all team members are will informed, everyone will be working towards the same goal. WORKS AS A TEAM. Any good team builds on the strength of its members and is supportive and helpful to each other. To operate effectively the team should meet on a regular basis and be able to communicate with each other with relative and be able to communicate with each other with relative ease. A good team has a good team leader at its front. This team leader should be a good motivator who can generate enthusiasm and perseverance. REMEMBER CUSTOMER CARE. A smile of welcome costs nothing and will affect the way visitors feel about the event. Remember, even if your stand/ job in the event isn’t very busy do not sir around looking bored and uninterested – this is sure to put potential clients off. Try to be alert, ready for action and enthusiastic at all times. If clients enjoy the event they will come back and tell their friends. BE RECOGNIZABLE. More and more teams in organizations are adopting their own uniforms. These help the visitors as it makes the staff immediately recognizable from the clients. When you stage an event you should consider adopting a uniform for all the staff involved in the event. This does not have to be complicated or expensive . For example, the team may decide to wear black trousers and a white T-shirt. These are items of clothing that most people have in their wardrobes. Plain colored T-shirts are relatively inexpensive to purchase. You may have the name of your event on the front, or local screen printer would do this at a small cost. This creates a good image for the visitors of the event and is something the rest of the team can keep to remind them of the event in the future. KEEP TO SCHEDULES. Reliability, both within the team and within the event itself, sis important. The team should make sure the all deadlines are met if it is at all possible to do so. Punctuality should be important for all team meetings etc. If someone is always late for a meeting it is unsurprising that other team members act on their knowledge and turn up, not at the start time of befo

Lloyd Georgewin Essay

The stage direction ‘with a sense of her childhood, her babyhood and the years’ describes the great sense of loss Eddie feels as he has cared and loved her all her life. Beatrice remains faithful to Eddie throughout although she is frustrated, ‘When am I gonna be a wife again, Eddie? ‘ she tells him, desperate from him to forget about Catherine and go back to caring for her. Beatrice’s love for Eddie is one of the strongest in the play, she wants desperately for Eddie to pay her the attention she deserves as a loving wife. Eddies obsessive behaviour towards Catherine puts great strain on his marriage ‘I want my respect’ he says when Beatrice tries to confront him, Eddie is angry and shouts at her for complaining about him being so strict with Catherine. Beatrice is struggling to keep her marriage intact, but she cannot understand the love Eddie feels towards Catherine. I believe Eddie loves his wife dearly but his love for Catherine takes priority when Rodolfo comes on the scene, which leads him to mistreat Beatrice. I cannot help feeling sorry for her as she is forced into a situation that was not her doing. It seems her love for Eddie is unrequited. Eddie’s hatred for Rodolfo is fuelled by his jealousy for the love and attention Catherine bestows upon him, ‘I’m telling ya the guy ain’t right’ he says trying to justify his hatred. Nobody believes Eddie’s comments about Rodolfo and everyone but Eddie can see through to his jealousy. It isn’t right for a man of Eddie’s age to be obsessed with his young niece, but nobody understands the depth and passion of Eddie’s love, which drives him to keep Catherine at any cost. Eddie’s obsessive love compels him to see Mr Alfieri, family friend and lawyer ‘He ain’t right Mr Alfieri’ Eddie pleads, but it is obvious he has no jurisdiction within he law. The fact Eddie has gone to see Alfieri shows the power of his love towards Catherine and his desperation to have her for himself. Love is the main driving force behind all the characters actions, ‘the truth is not as bad as blood Eddie’ Beatrice tells him trying to quell his anger and hatred. Beatrice believes that love is not a worthy enough cause for the use of violence. It is Eddie’s deep love that drives him to use all force necessary to have what he believes to be his Catherine. This unfaltering love to the bitter end is misunderstood by Marco ‘He degraded my brother. My blood. ‘ Marco says; he cannot see why Eddie turned him and Rodolfo into the police. But it is obvious to the reader that it was Eddies’ love that compelled his actions and not his hatred for Marco and his brother. Eddies’ love finally leads him to his death ‘You lied about me Marco’ Eddie cries before lunging at him. This is Eddies last desperate attempt to win back his dignity. Eddies’ love has driven him to a point where he has no other option but to follow his feelings to the end. The fate of Eddie Carbone is a tragic one as his obsessive feelings towards Catherine took control of him and his actions that followed he could not help. I believe the story is a testament to the power of love and how once it has infected someone in a certain way; they are powerless to stop it. Emlyn Roberts Pluto10X Show preview only The above preview is unformatted text This student written piece of work is one of many that can be found in our GCSE Arthur Miller section.