Welcome Women in Israel
W-T-W invites the women of Israel to join us. Post articles of local interest, and of interest in international finance. We focus on financial literacy and fighting corruption.
Introducing:
Orly Sade is a Professor of Finance Worldwide. At Hebrew University, she teaches undergraduate students, MBAs, executive MBAs and advises PhD candidates. She also teaches MBA summer students at NYU in New York. She has taught several times at IE in Madrid and at the NES, Moscow.
Dr. Sade made a rare choice for a woman. “My undergraduate degree was economics and management. I picked this topic because it combines analytical tools with common sense and creativity. I decided to concentrate on finance when I took a very interesting course on investment at Tel Aviv University. The professor was Avner Kalay and later he was my thesis adviser in my PhD studies and my co-author.
Dr. Sade says: My main strength in this profession is my creativity. I like working with smart colleagues and usually we end up doing more than one project. I like to work in an environment where each team player is involved in every aspect from the idea to the execution. I am deeply involved in each of my projects, the ideas, and the execution, the presentations and the publication processes.
For example with Jaime Zender and Charles Schnitzlein I worked on 4 different experimental economics projects over the last 12 years or so. With both Dan Galai and Menachem Brenner I did 2 projects.
So far I have only worked with male collaborators, as there are very few women finance professors. To the best of my knowledge in Israel I was the first woman to receive tenure in finance in leading academic university. I am the only female full time faculty in the finance department at the Hebrew university.
Dr. Sade concentrates on financial auctions price mechanisms, illiquidity and behavioral finance. We have provided précis of her articles and the articles themselves. We will continue to feature them.
Dr. Sade comments: The impact of the price mechanism in financial auctions depends on several factors: the level of certainty regarding the value of the underlying asset, the bidding environment and the saturation of the financial markets.
Collusion is a big concern in every market, and together with my co-authors have investigated what in what market structures collusion is more likely to occur.
Given the recent financial crisis it is clear to us that liquidity is a critical factor. In one of my research projects my co-authors and I proposed a way of estimating liquidity and showed how it varies during the trading day. As an investor it is very important to optimize trades.
The option to cancel orders existed in actual markets but was ignored in some of the research work that either allowed it or disallowed it in the trading experiments. I argued that it is a factor that needs to be taken into account when you compare research work so you know that you are comparing “apples” to ” apples” and not “oranges” to ” apples.”
I care deeply about financial literacy at home and in school and I am actively engaged in activities to promote it in several ways.” I served as academic advisor to the Israeli group of the PISA Financial Literacy pilot exam. At the Milken institute in Israel I am an advisor a project that aims to develop a financial literacy program for ultra-religious women in Israel. I gave lectures about financial literacy at my kids’ school and advocated about the topic in the mass media in Israel.
Dr. Sade’s wonderful book for children and parents, “How Ella Grew a Guitar” is available at amazon.com and reviewed on this site.
We look forward to Dr. Sade’s future articles and also articles she suggests that we post that are of particular interest.
Why Less (Potential Demand) is More (Revenue): Asymmetric Bidding Capacities in Divisible Good Auctions Asymmetric Bidding Sade
We show that asymmetry in bidders’ capacity constraints plays an important role in inhibiting collusion and promoting competitive outcomes in multi-unit common value auctions. This effect seems to be related to the increased difficulty of coordination when there are fundamental differences between bidders. The discriminatory auction is shown to be more susceptible to collusion than is the uniform-price auction and consequently asymmetry in capacity constraints plays a more important role in the discriminatory auction. These results suggest that the revenue maximizing auction format depends heavily on a variety of factors specific to particular auction settings.
Does the Option to Cancel an Order in a Double Auction Market Matter?
Effect of Option to Cancel in Double Auction Market
The double auction trading environment has become one of the most experimentally investigated trading environments. This paper seeks is to determine whether the ability of traders to cancel orders, before their potential execution, in a double auction framework, can affect price variables and the volume of orders and transactions. Not all researchers in the experimental markets literature allow that option. The vast majority of experimental markets researchers do not report whether they allowed that option or not. Because of the non-standardized use of the cancellation rule in the experimental-markets literature, presenting evidence on the possible effect of the cancellation option will be of interest to those conducting research in an experimental- market context.
Our results indicate that the option to cancel affects trading volume more than price associated variables. We find that players use the option to cancel if the option is given to them. We also find that the number of submitted orders and the number of transactions is higher when we allow the players to cancel their orders. We present evidence that the obtained findings are not only due to budget constraints but also due to changes in the bidding behavior of the players. We do not find differences in the standard deviation of the limits of the standing submitted orders or in the price of the transactions.
How Ella Grew an Electric Guitar
written by Orly Sade and Ellen Neuborne
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