Business Management

ISSN: 0861 6604-Print Edition
ISSN: 2534-8396-Electronic Edition

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  • Tsvetelina Nenkova
    CONCEPTUAL FOUNDATIONS OF EFFICIENCY IN PUBLIC PENSIONS
    JEL: J26
    Keywords: efficiency, old age social security, efficiency in old age social security, economic effect, social effect.
    Abstract: This article examines the efficiency of public pensions. The need for an efficiently functioning pension system is highlighted based on the theoretical foundations of pension social security concepts such as: ‘welfare for the elderly’, ‘retirement insurance’ a factor for increasing the ‘productivity of labour’, a form of ‘return on human capital investment’, a solution to the ‘prodigal father’ problem and ‘longevity insurance’.
  • Tsetan Pavlov
    APPLICATION OF BEHAVIORAL FINANCE IN MODELING BULGARIAN EQUITY RISK PREMIUM
    JEL: G10, G14
    Keywords: behavioral finance, equity risk premium puzzle, market efficiency, capital markets, required return
    Abstract: The paper seeks a plausible explanation of the magnitude of equity risk premium, by modeling leading behavioral concepts in the conditions of Bulgarian capital market. Firstly, the fair equity risk premium is derived by basic neoclassical consumption-based model. Subsequently, the conducted comparison between fair and empirical risk premium indicates that the demanded compensation by investors for owning Bulgarian stocks cannot be rationally explained, i.e. there is an equity risk premium puzzle on BSE. On this basis, we have applied a behavioral model based on two well-known characteristics of human behavior in conditions of risk and uncertainty – loss aversion and narrow framing. Set at reasonable levels of risk and loss aversion, the model has managed to generate risk-free rate and market returns close to empirical levels.

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  • Editor in chief: Prof. Borislav Borissov, DSc
  • Co-editor in chief: Prof. Krasimir Shishmanov, Ph.D.