Campaign dynamics of cognitive accessibility of political judgments: measuring the impact of campaigns and campaign events using response latencies in two German rolling cross section studies

Do campaigns matter? Based on two rolling cross-section computer-assisted telephone surveys conducted in the run-up to the 2009 and 2013 German Federal Election, we test whether we can detect campaign effects on the accessibility of voters’ judgments: how do response latencies of political judgments evolve over the course of campaigns? The study uses response latencies, i.e. the standardized time it takes respondents to answer a survey question, as a proxy measurement of cognitive accessibility of political judgments. If campaigns do help voters to make up their minds, we should be able to observe changes at the implicit level of response latencies. Do people answer questions about their voting behavior and political attitudes faster as Election Day comes closer? Our results suggest that attitudes towards candidates and voting intentions become more cognitively accessible during campaigns whereas the accessibility of party identification is conditional on the contextual features of campaigns. In addition we find specific short-term effects of TV debates.     

Country-level Accounting Enforcement and IPO Underpricing

Using a sample of up to 2,503 initial public offerings (IPOs) in 32 countries from 2011–2017, we predict and find that higher levels of country-level accounting enforcement are associated with lower levels of IPO underpricing. IPOs in countries with a relatively low accounting enforcement score (second quintile) exhibit a mean underpricing of 19%, whereas the mean underpricing amounts to just 9% in countries with a relatively high score (fourth quintile). The results remain qualitatively the same when we employ a multi-level model or a difference-in-difference design. In countries that substantially strengthened their accounting enforcement in the 2003–2009 period, the level of IPO underpricing decreased significantly. We show that accounting enforcement matters for the cost of going public.     

Comparing automated text classification methods

Online social media drive the growth of unstructured text data. Many marketing applications require structuring this data at scales non-accessible to human coding, e.g., to detect communication shifts in sentiment or other researcher-defined content categories. Several methods have been proposed to automatically classify unstructured text. This paper compares the performance of ten such approaches (five lexicon-based, five machine learning algorithms) across 41 social media datasets covering major social media platforms, various sample sizes, and languages. So far, marketing research relies predominantly on support vector machines (SVM) and Linguistic Inquiry and Word Count (LIWC). Across all tasks we study, either random forest (RF) or naive Bayes (NB) performs best in terms of correctly uncovering human intuition. In particular, RF exhibits consistently high performance for three-class sentiment, NB for small samples sizes. SVM never outperform the remaining methods. All lexicon-based approaches, LIWC in particular, perform poorly compared with machine learning. In some applications, accuracies only slightly exceed chance. Since additional considerations of text classification choice are also in favor of NB and RF, our results suggest that marketing research can benefit from considering these alternatives.     

Prognose des Abwicklungsergebnisses mittels Chain-Ladder-Verfahren für abhängige Run-Off-Portfolios

In the present paper we analyse how the estimators from Merz u. Wüthrich (2007) could be generalised to the case of N correlated run-off triangles. The simultaneous view on N correlated subportfolios is motivated by the fact, that in practice a run-off portfolio often has to be divided in subportfolios, so that the homogeneity assumption of the claims reserving method on each subportfolio is satisfied. We derive an explicit formula for the process-variance, the estimation-error and the prediction error made by the forecast for the claims development result with the Chain-Ladder method. We illustrate the results by an example.     

The Influence of Past Negotiations on Negotiation Counterpart Preferences

Choosing the right counterpart can have a significant impact on negotiation success. Unfortunately, little research has studied such negotiation counterpart decisions. Three studies examined the influence of past negotiations on preferences to negotiate again with a counterpart. Study 1 found that the more favorable a past negotiated agreement the stronger the preference to negotiate with the counterpart in the future. Moreover, this relation was mediated through liking of the counterpart. Study 2 manipulated the difficulty of achieving a favorable agreement in the negotiation and found a significant effect of this situational factor such that subsequent counterpart preferences were less favorable when the negotiation was difficult. Similar to Study 1, this effect was mediated through liking of the counterpart. Study 3 examined the possibility of debiasing negotiator preferences from the biasing influence of situational characteristics by providing relevant information about the negotiation situation. Replicating the results of Study 2, negotiation difficulty affected counterpart preferences before additional information was given or when irrelevant information was given. However, once negotiators received relevant information on the negotiation situation, the effect of negotiation difficulty disappeared. Theoretical and practical implications are discussed.     

The Impact of Search and Recommendation Systems on Sales in Electronic Commerce

The Internet and related technologies have vastly expanded the variety of products that can be profitably promoted and sold by online retailers. Furthermore, search and recommendation tools reduce consumers’ search costs in the Internet and enable them to extend their search from a few easily found best-selling products (blockbusters) to a large number of less frequently selling items (niches). As a result, Long Tail sales distribution patterns emerge that illustrate an increasing demand in niches. We show in this article how different classes of search and recommendation tools affect the distribution of sales across products, total sales, and consumer surplus. We hereby use an agent-based simulation which is calibrated based on real purchase data of a video-on-demand retailer. We find that a decrease in search costs through improved search technology can either shift demand from blockbusters to niches (search filters and recommendation systems) or from niches to blockbusters (charts and top lists). We break down demand changes into substitution and additional consumption and show that search and recommendation technologies can lead to substantial profit increases for retailers. We also illustrate that decreasing search costs through search and recommendation technologies always lead to an increase in consumer surplus, suggesting that retailers can use these technologies as competitive advantage.     

Proportionality and the power of unequal parties

In this paper we introduce the concept of an overall power function that is meant to combine two sources of a party's power in a parliament. The first source is based on the possibilities for the party to be part of a majority coalition and it is typically modeled using a cooperative simple game. The second source takes into account parties' asymmetries outside the cooperative game and it is displayed by a vector of exogenously given weights. We adopt a normative point of view and provide an axiomatic characterization of a specific overall power function, in which the weights enter in a proportional fashion.     

Loss Aversion,Audit Risk Judgments,and Auditor Liability

Abstract

I investigate how different legal regimes affect auditor's effort and investors' investment decisions when the auditor is subject to probability weighting and loss aversion, which are two important characteristics of Prospect Theory. Probability weighting encourages an auditor to overrate the audit risk and the likelihood of damages leading to inflated audit fees which could help to explain the BigN audit-fee premium. With loss aversion, an auditor is sensitive to the risk of damage compensation and, thus, tends to exert excessive caution which also generates excessive audit fees. Consequently, investors may choose not to hire an auditor and, as a result, may forego an otherwise profitable investment. These effects are more intense with a strict liability regime than with a negligence rule because with the latter, the auditor is not held liable when due care has been exerted. This removes the risk of incurring losses. The paper highlights the robustness of the negligence regime when preferences are unobservable.