It is argued that due to inconsistencies in existing methods to approximate the prices of equity options on assets which pay out fixed cash dividends at future dates, a new approach to this problem may be useful. Logically consistent methods which are guaranteed to exclude arbitrage exist, but they are not very popular in practice due to their computational complexity. An algorithm is defined which is easy to understand, computationally efficient, and which guarantees to generate prices which exclude arbitrage possibilitites. It is shown that for the method to work a mild uniform convergence condition must be satisfied and this condition is indeed satisfied for standard European and American options. Numerical results testify to the accuracy and flexibility of the method.Equity option, pricing dividends, numerical methods,

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This paper assesses whether and how common characteristics of jury members or peer voters affect the outcomes of voting systems. In particular, we analyze to what extent these common features result in voting bias. We take as a case study the Eurovision Song Contest for which an extensive amount of historical data is available. In contrast to earlier studies we analyze the impact of common factors on the bias individually for each country, which is necessary to substantiate the publicly debated accusations of regional block voting by certain groups of countries. We establish strong evidence for voting bias in the song contest on the basis of geography, even after correction for culture, language, religion and ethnicity. However, these effects do generally not correspond to the usual accusations. We believe that our findings extend to all instances where groups of jury members or peer voters share certain common factors, which may cause voting bias. It is important to identify such structures explicitly, as it can help avoiding bias in the first place.The authors are grateful to Marieke van Dijk for excellent research assistance and to Laurens Swinkels, Ieva Pudane, Gijsbert van Lomwel, Jelena Stefanovic, and Bas van den Heuvel for useful comments. The usual disclaimer applies. L. Spierdijk (B)

We investigate an optimal consumption and investment problem where we receive a certain fixed income stream that is terminated at a random time. It turns out that the optimal strategy and the value function for this problem differ considerably from the case where our income stream is certain to continue indefinitely. More specifically, the optimal consumption policy involves a function that is not analytic around the point that represents zero wealth.