Optimistic Hypothesis Research Articles

Is the Market Optimistic about the Future Earnings of Seasoned Equity Offering Firms?

The leading explanation for the post-issue long-run stock return underperformance of sea? soned equity offering firms is that investors have optimistic expectations regarding future earnings and the underperformance occurs as these expectations are corrected over time. To directly test this hypothesis, we examine investors' reaction to quarterly earnings an? nouncements over a five-year period following the offering for a large sample of seasoned equity issuing firms. In general, our evidence suggests that investors are not disappointed by earnings announcements that follow seasoned equity offerings. This result is not sen? sitive to widening the window over which earnings announcement returns are computed. This result also holds true for subsets of equity issuing firms classified as glamour issuing firms, Nasdaq listed issuing firms, and hot market issuing firms. The choice of these three subsets is predicated by extant evidence that these firms are likely to convey relatively more unfavorable information through their earnings announcements. Overall, our findings are inconsistent with the optimistic expectations hypothesis.

The relative stability of belligerent and peaceful societies: implications for SETI

Although initially we will know virtually nothing about any society that our microwave search detects, in all likelihood their society will be far older than ours. It will have evolved mechanisms to ensure longevity. A pessimistic hypothesis would lead us to expect a powerful, aggressive and self-serving society that has vanquished all challengers. If this hypothesis were true, a response by us to their signal could be dangerous. An optimistic hypothesis, that it is the peaceful societies that survive, would lead us to expect a benign or even friendly civilization. If this second hypothesis were true, our response would gratify their scientific curiosity and perhaps lead to a useful exchange of information. Convergent evidence from the quantitative analyses of long-term historical trends and computer modeling support the optimistic hypothesis. Although not conclusive, this analysis suggests that revealing our presence in the Universe is a low risk activity.

Social theory and fisheries co-management

Co-management is a tool of fisheries management that has received much attention in recent years. Although there are great hopes about what it may accomplish, there are also serious doubts, questions and criticisms regarding its general applicability. We believe that many of these concerns are valid ones. However, many of the negative predictions reflect overly narrow perspectives on the role and nature of institutions. Other, no less valid, presuppositions lead to more optimistic hypotheses concerning the outcomes of co-management arrangements. The institutional problems associated with co-management have been analyzed from the perspective of rational choice. We offer another perspective by analyzing these problems from the standpoint of how institutions are embedded in human community.

Loss of power from an optimistic alternative hypothesis.

In the planning of a clinical trial to compare the proportion of responses to two treatments one determines the sample size to yield the desired power of achieving a significant difference at a pre-selected type I error under the assumption that the expected treatment difference exceeds a prescribed minimum. To achieve a practicable sample size, an investigator may be tempted to require a large treatment difference and thereby risk the chance of missing a somewhat smaller but clinically important difference. We obtain in this paper an expression for this loss of power if the true treatment difference is smaller than the minimum used to plan the study. The expression does not explicitly depend on the sample size and for most practical purposes does not depend on the actual response rates but rather varies only as a function of the fractional difference between the required minimum and true treatment difference. With provision of a prior distribution for this fractional difference, we can use the expression to calculate an expected power for the study. An illustration considers the case where the prior follows a beta distribution.

The Helsinki Conference, Belgrade and European Security

The on Security and Cooperation in Europe (CSCE), the Final Act of which was signed at Helsinki in August 1975 by 33 European countries and the United States and Canada, was treated in many early commentaries as a discrete and essentially competitive event be analysed in terms of who won. This approach has not proved very productive, and the more recent tendency has been focus attention on the provisions of the Final Act as a yardstick against which actions of the participating states can be judged. The follow-up meeting of the 35 this year at Belgrade will further emphasize this aspect of the question, and it is likely remain of importance thereafter. For the Belgrade meeting is a reminder that the CSCE should not be analysed only in static terms: the Final Act notes the resolve of the participating states to continue the multilateral process initiated by the Conference and provides that they should at Belgrade inter alia define the appropriate modalities for the holding of other meetings. It seems probable that the CSCE will remain in some way or other part of the European security picture, and thus appropriate ask what it may be able contribute. To the extent that East-West negotiations are seen as a zero-sum game, the CSCE can do little but serve as an arena and scoreboard for the contest as it develops. There would seem little point in continuing it for this purpose, and the process may be better viewed as a means of testing a more optimistic hypothesis: that there is a possibility of mutual gain; and that a multilateral framework, comprising the neutrals and nonaligned as well as the members of the two alliances, offers a useful means of identifying and building upon the common ground. This in turn requires that each participant should feel reasonably confident that the process will not be exploited by others in a way which would be damaging its security; and it seems clear that this essential element of confidence cannot at present be taken for granted. On the Western side, there is still much concern about Soviet intentions. Western Europe can be said have three main politico-military options: continue rely for its security on the alliance with the United States; substitute for the American commitment an increased defense effort of its own; or accept and adapt the fact of Soviet military preponderance. The text of the 1966