Willingness-To-Comply, Legal-Process-Efficiency And Alternative Risk Premia Under MN-TU, WTAL And Regret-Minimization Regimes In Cyber-Physical Systems During Pandemics/Crisis.

28 Pages Posted: 4 Nov 2015 Last revised: 9 Nov 2022

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Date Written: 2005 (Revised 2022)

Abstract

At the present time and in most developed countries, Complex Corporate Instruments (“CCIs”) and Climate Finance Instruments (CFI) are regulated by a myriad of laws at the local, state and federal levels. This introduces or can cause conflicts, greater transaction costs, and opportunities for forum shopping and regulatory arbitrage. This article analyzes the efficiency of legal processes for misconduct pertaining to CCIs and CFIs and also introduces new theories pertaining to the degree of government regulation of CCIs and CFIs; and develops new models and a model of Willingness-to-Comply for CCIs and CFIs under a combined MN-Transferable-Utility (MN-TU), WTAL and Regret Minimization Regime (WTAL and Regret-Minimization were defined in Nwogugu (2006)). This article is the first to: i) develop a WTC model for CCIs and CFIs within the context of Pandemics and Economic/Financial Crises; and ii) formally prove the supremacy/efficiency of the use of civil or criminal statutes for a specific context; iii) introduce Anomaly-Detection based models that can measure Legal-Process-Efficiency. The major findings of this study are that: i) its most efficient to regulate each of CCIs and CFIs with one set of laws and a combination of civil and criminal laws; ii) the degree of government regulation of CCIs/CFIs and the penalty regime (criminal or civil) for illegal activities in CCI/CFI related matters should be variable and should depend on several key factors such as company size and employee tenure; iii) an “Anomaly-Detection” index of Willingness-To-Comply (WTC) is developed (within the context of Cyber-Physical Systems and Multi-Agents) which accounts for Spatio-Temporal Cognition and reflects both group-level and company-level dynamics; iv) the WTC-Index can serve as a discriminating factor in stock and bond portfolio management in order to generate alternative risk premia.

Keywords: Pandemics and Economic/Financial Crises; Cyber-Physical Systems; Agents And preferences; Environmental Finance; Anomaly-Detection Learning Algorithms; Mixed Games; Alternative Risk Premia.

Suggested Citation

Nwogugu, Michael C. I., Willingness-To-Comply, Legal-Process-Efficiency And Alternative Risk Premia Under MN-TU, WTAL And Regret-Minimization Regimes In Cyber-Physical Systems During Pandemics/Crisis. (2005 (Revised 2022)). Available at SSRN: https://ssrn.com/abstract=2375033 or http://dx.doi.org/10.2139/ssrn.2375033

Michael C. I. Nwogugu (Contact Author)

Independent ( email )

P. O. Box 11104
Enugu 400007, Enugu State 400007
Nigeria
2348149062100 (Phone)

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