Experimental tests of the Somatic Marker hypothesis

Damasio's [Descarte's Error: Emotion, Rationality and the Human Brain. Putnam (Grosset Books), New York, 1994] Somatic Marker hypothesis posits that emotion-generated mental markers influence our decisions and, in particular, tend to curb inherent tendencies to seek risk, to be impatient and to be callous in social situations. Ventromedial (VM) prefrontal cortex damage interferes with this marking process, resulting in risk seeking behavior, impatience and socially inappropriate behavior. In the present study, we present 27 normal controls and 17 patients with prefrontal cortex lesions with batteries of questions designed to probe their attitudes toward risk, intertemporal preferences and behavior in social contexts. The results demonstrate that VM patients are no more risk seeking, impatient, or prone to behavior in socially inappropriate manners than normal subjects. Indeed, we find no significant differences of any sort between the two groups of subjects on any the dimensions investigated. We discuss why VM cortex damage in humans appears to influence decisions in certain circumstances but not in others.     

On dynamic investment strategies

This paper presents a new approach for analyzing dynamic investment strategies. Previous studies have obtained explicit results by restricting utility functions to a few specific forms; not surprisingly, the resultant dynamic strategies have exhibited a very limited range of behavior. In contrast, we examine what might be called the inverse problem: given any specific dynamic strategy, can we characterize the results of following it through time? More precisely, can we determine whether it is self-financing, yields path-independent returns, and is consistent with optimal behavior for some expected utility maximizing investor? We provide necessary and sufficient conditions for a dynamic strategy to satisfy each of these properties.     

The determinants of excessive indebtedness of the rural poor

Conclusion The foregoing analysis helps to explain how the poverty cycle deepens and becomes increasingly intolerable for the rural poor. The authors acknowledge the assistance of Les Pinter and Riad Chehlaoui, graduate students, Rice University and the University of Houston, respectively, for some statistical work.     

THE RECENT REGULATORY RESPONSE TO CORPORATE ECONOMIC CRIME IN THE UNITED STATES: OBSERVATIONS AND COMMENTS

Corporate economic crime, including accounting and auditing fraud and inappropriate behaviour by directors on the boards of US corporations, has resulted in stockholder financial losses and the loss of confidence in investing in the US stock market. We observe the modern corporation with its absentee ownership and professional management team and discuss its inherent incentives to commit management crime. In spite of financial reporting, audits and the use of boards of directors to represent stockholders, management misbehaviour persists. We conclude that the failure of these potential remedies is due to a lack of independence from management in their execution. We comment on some of the provisions of the Sarbanes–Oxley Act, enacted in 2002, and their potential to mitigate some of these conflict of interest conditions.     

Project Turis—coastal tourism development in Southern Brazil

Dr Nicholls undertook field research at a number of the Brazilian Atlantic Ocean tourist destinations in December 1981–January 1982. The main focus of the research was on the development of coastal tourism within Project Turis—a major state-funded tourism development project. This article reports on the progress of the project, and was prepared for delivery at the annual meeting of the Travel and Tourism Research Association in Miami, FL, USA, 13–16 June 1982.     

Corporate Giving Behavior and Decision-Maker Social Consciousness

This paper investigates why some companies give to charity and others do not. The study uncovers a strong relationship between the personal attitudes of the charitable decision maker and the firm's giving behavior. This relationship indicates that the human element of personal attitudes may interact and play a very important role in a firm's decision to become involved with philanthropic activities. The study also shows that firms who have a history of giving to charity cite altruistic motives for their behavior. On the other hand, firms that do not give to charity tend to use business reasons to explain their non-involvement.