Insurers' Demutualization Decisions

ABSTRACT: Several explanations of why mutual insurers choose to demutualize their businesses are examined with a recent survey of mutual insurers. This study adds to the literature by surveying mutual insurers' executives on those factors that would lead them to demutualize their companies. Both univariate and multivariate techniques are applied to analyze those responses. Demutualization is most strongly influenced by access to capital markets, increased organizational flexibility, and the chance for company officers to increase their pay, as prior literature has suggested.     

Decisions and desire

When we make decisions, we're not always in charge. One moment we hotheadedly let our emotions get the better of us; the next, we're paralyzed by uncertainty. Then we'll pull a brilliant decision out of thin air--and wonder how we did it. Though we may have no idea how decision making happens, neuroscientists peering deep into our brains are beginning to get the picture. What they're finding may not be what you want to hear, but it's worth listening. We have dog brains, basically, with human cortexes stuck on top. By watching the brain in action as it deliberates and decides, neuroscientists are finding that not a second goes by that our animal brains aren't conferring with our modern cortexes to influence their choices. Scientists have discovered, for example, that the "reward" circuits in the brain that activate in response to cocaine, chocolate, sex, and music also find pleasure in the mere anticipation of making money--or getting revenge. And the "aversion" circuits that react to the threat of physical pain also respond with disgust when we feel cheated by a partner. In this article, HBR senior editor Gardiner Morse describes the experiments that illuminate the aggressive participation of our emotion-driven animal brains in decision making. This research also shows that our emotional brains needn't always operate beneath our radar. While our dog brains sometimes hijack our higher cognitive functions to drive bad, or at least illogical, decisions, they play an important part in rational decision making as well. The more we understand about how we make decisions, the better we can manage them.     

REIT Going Private Decisions

Over the recent decade there was a wave of REITs going private, from an average of about three per year to 40 between 2005 and 2007. Standard corporate finance theory posits that firms go private when there is no longer a positive tradeoff between the expected benefits and the costs of being public, and it provides empirical evidence that going private decisions are motivated by potential gains from leverage, tax benefits, and expected improvements in corporate governance. Given the unique institutional environment for the REIT industry, this paper sheds new light on the going-private decision. Specifically, we examine the determinants of the going-private decision and document announcement wealth changes using a sample of 160 REITs from 1985 to 2009. We find firm performance and agency-related factors significantly impact the probability that a REIT announces to go private. We find that the passage of Sarbanes-Oxley and a proxy for differential performance in the private and public markets have no significant impact on the decision. The announcement day abnormal return is almost 12% and the three-day abnormal return is 15%, magnitudes that are both statistically and economically significant. Variations in the market reaction are associated with lower levels of cash and higher stock price volatility. Overall, we document a new set of going-private factors and wealth impacts for the REIT industry that are unique from those of previous corporate finance literature.     

管理会计决策中的框架效应初探——以转移定价决策为例

近年来,西方管理会计研究中,有两大趋势值得关注:第一,研究方法不断丰富,实验研究方法的地位日益凸现;第二,立足于管理会计实践,越来越多的引入行为学、心理学理论研究管理会计问题。基于此,本文引入心理学中的框架效应理论,以转移定价决策为例采取实验研究的方法,研究管理会计决策中的框架效应问题。研究表明,转移定价决策受到框架效应的影响,缓解框架效应有助于优化决策。本研究丰富了我国管理会计的研究方法,为管理会计理论与实践长期脱节现状的改观做出贡献。