Most of the theories in behavioral finance rely on some kind of psychological biases. However, the potentially boundless set of psychological biases that theorists can use to build behavioral models and explain observed phenomena creates the potential for “theory dredging.” We develop a unified theory of human psychology based on entropy law, the most universal natural law. This unified theory of human psychology will help us determine whether patterns discussed in the finance literature are genuine or the result of data mining. It will also greatly reduce the possibility of “theory dredging” in the future works on behavioral finance.
Because of the inability of efficient market theory to explain the persistence of some patterns in the financial markets, many new theories have emerged to understand these patterns. Most of these theories rely on some kind of human psychological biases and are generally grouped under the category of behavioral finance. However, “the potentially boundless set of psychological biases that theorists can use to build behavioral models and explain observed phenomena creates the potential for ‘theory dredging.’” (Chan, Frankel and Kothari, 2002) Thus it is difficult to distinguish data mining from genuine patterns. It would be very helpful to develop a unified theory of human psychology based on a sound foundation to understand market patterns.
Today’s automotive landscape would look a lot different without the influence of Nissan. Just a few iconic vehicles like the Z®, GT-R and Patrol have had significant impact on the automotive industry and stirred passion in car enthusiasts around the world.
Nissan’s rise to prominence began in 1935, when it became the first Japanese manufacturer to mass produce a vehicle, the Type 15. Through its steady growth after World War II, Nissan built a name for itself through performance, quality, safety and innovation. It was during the time of recovery from the technological vacuum of World War II that Nissan focused its energies on technological leadership. Throughout the period, Nissan also was steadily developing a strong organization to support the company’s next stage of dramatic growth overseas.
In the 1960s, Nissan launched its U.S. sales operations under the Datsun name and began developing its NISSAN HERITAGE overseas manufacturing operations, starting with a vehicle assembly plant at Yulon Motor Co., Ltd. in Taiwan and the establishment of Nissan Mexicana, S.A. de C.V. In the 1980s, Nissan established two strategic manufacturing bases overseas in the U.S. and the U.K.
Today, Nissan operates manufacturing and assembly plants in 25 countries around the world. In addition to manufacturing, Nissan is enhancing its design development strengths on a global scale, and always challenging prevailing standards in the automotive industry and global business.
The standard Heckscher-Ohlin model predicts that a country rich in labor, natural resources, physical or human capital has a comparative advantage in goods intensive in the abundant input factors. This view abstracts from market frictions that may arise from agency problems, and presumes that entrepreneurs can enter any industry regardless of its need for outside finance or endowment of collaterizable assets.
