Displaying expected values in risk elicitation tasks: the effect of information in experimental risk research

We investigate the influence of providing expected lottery results to experiment participants in two common risk attitude elicitation tasks. In a between-subject design, either the Holt and Laury task or the Eckel and Grossman task is carried out by a sample of 208 students. We find no significant effect of shown expected values on the risk attitude measured by the tasks. This result even holds true if we divide the experiment participants into specific sub-groups, i.e. female and male, or lower numeracy and higher numeracy participants. Furthermore, comprehension and processing time are not significantly influenced by presented expected values. Therefore, we conclude that providing information on expected values does not influence decision-making in tasks involving risk. This result indicates the robustness of elicited risk attitudes to variation in common experimental methods, and demonstrates that more information could be provided without creating bias in the results.     

Understanding the Limitations of Maastricht

Intereconomics - “The unspoken, implicit assumption was that financial instability can only arise alongside inflation and that the stability of financial markets should remain a national...     

Platform Competition With Cash-Back Rebates Under No Surcharge Rules

We analyze competing strategic platforms setting fees to a local monopolist merchant and cash-back rebates to end users, when the merchant may not surcharge platforms’ customers, a rule imposed by some credit card networks. Each platform has an incentive to gain transactions by increasing the spread between its merchant fee and user rebate above its rival's spread. This incentive yields non-existence of a pure strategy equilibrium in many natural environments. In some circumstances, a mixed strategy equilibrium exists where platforms choose fee structures that induce merchants to accept only one platform with equal probability, a form of monopolistic market allocation.     

Blending package shape with the gender dimension of brand image: How and why?

We investigate the congruence of brand image and package shape on product preferences, the moderating role of a creative mindset, and the underlying processes. Across four studies, we show that consumers generally prefer products with curved-shaped (versus angular-shaped) packaging for a “feminine” brand and prefer products with angular-shaped (versus curved-shaped) packaging for a “masculine” brand (Study 1a). This effect is mediated by the perceived congruence between brand image and package shape (Study 1b). We further demonstrate that the congruence effect is reversed when consumers adopt a creative (versus less creative) mindset (Study 2), since a creative mindset leads consumers to perceive curved-shaped packaging as more congruent with a masculine (versus feminine) brand and angular-shaped packaging as more congruent with a feminine (versus masculine) brand (Study 3).     

公司选聘关系型独董仅是任人唯亲吗?—基于商业关系维护视角的分析

在我国人情交织的商业背景下,许多公司聘请了与高管存在社会关联的独立董事,由此产生了拖累企业治理效果的担忧.然而,企业聘请这类独立董事仅仅是关系作用下任人唯亲的行为吗?文章通过收集我国上市公司独立董事与董事长或总经理的社会关系数据,以2008-2015年上市公司作为研究样本,发现较多地与商业伙伴进行关系型交易的企业更倾向于聘请关系型独董.其原因在于,社会关系带来的信任使关系型独董能够为企业保守交易过程中的商业信息,并且支持企业为稳固商业关系而做出的相关决策.这一现象在企业处于激烈的行业竞争及较差的地区商业环境时更加明显.经济后果分析表明,这类企业聘请关系型独董后进行了更多的专有资产投资,并获得了更快的销售增长.文章研究表明,企业选择关系型独董不仅仅是关系使然,很可能是企业权衡自身特质后的一种理性选择.     

IQ and Audit Quality: Do Smarter Auditors Deliver Better Audits?

This study examines the role of an individual auditor's cognitive ability in delivering high‐quality audits. Our results from analyzing archival data from Sweden show that audit partners' IQ scores obtained from psychological tests are positively associated with going‐concern audit reporting accuracy and audit fee premiums. We also find some, albeit weak, evidence that audit partners' IQ scores are negatively associated with the income‐increasing abnormal accruals of the client. These results suggest that, although audit services are standardized through various control mechanisms and audits are conducted by teams rather than by individual auditors, the cognitive ability of audit partners responsible for an audit remains important in delivering high‐quality audit services.     

YOLO: Mortality Beliefs and Household Finance Puzzles

We study the effect of subjective mortality beliefs on life‐cycle behavior. With new survey evidence, we document that survival is underestimated (overestimated) by the young (old). We calibrate a canonical life‐cycle model to elicited beliefs. Relative to calibrations using actuarial probabilities, the young undersave by 26%, and retirees draw down their assets 27% slower, while the model's fit to consumption data improves by 88%. Cross‐sectional regressions support the model's predictions: Distorted mortality beliefs correlate with savings behavior while controlling for risk preferences, cognitive, and socioeconomic factors. Overweighting the likelihood of rare events contributes to mortality belief distortions.     

Strategic consequences of being unsympathetic: For‐profit companies benefit more than individuals from focusing on responsibility

Previous research has found that consumers ascribe mental states to for‐profit companies that enable them to elicit anger more easily than sympathy. The current study applies these findings to demonstrate how this evaluative asymmetry in consumer perceptions favor different strategies for individuals and companies managing conflicts and crises. First, it is shown that the mental states consumers ascribe to for‐profit companies enable them to elicit anger and admiration more easily than sympathy. Second, due to their ability to elicit anger more easily than sympathy, it is found that in conflicts between for‐profit companies and individuals, companies are evaluated more favorably when they focus attention on which side perpetrated the most harm, while individuals are evaluated more favorably when they focus on which side was most victimized. Third, due to their ability to elicit admiration more easily than sympathy, it is found that for‐profit companies derive greater benefits than individuals do from proactively taking responsibility to resolve crises rather than deflecting responsibility through claims of victimhood. Discussion focuses on marketing applications for companies managing conflicts and crises.     

How the Internet Promotes China's Exports: A Firm‐level Perspective

The development of information and communications technology (ICT), particularly the Internet, has reduced trade costs. However, it remains unclear whether these reduced costs are reflected in the “extensive margins” of firms’ exports (which refer to the probability of firms exporting) or the “intensive margins” (which refer to the value of firms’ export). To test this, we used the concepts of information cost and binary margins, an augmented trade model of firm heterogeneity, a two‐stage Heckman estimation, and data from the World Bank Enterprise Survey of Chinese firms in 2012. The results revealed that reduced trade costs from the use of ICT were positively related to extensive margins but that the connection with intensive margins was not significant. The results lead to the conclusion that reduced information costs related to a firm's exporting behavior were primarily reflected in variable trade costs. This study offers theoretical and empirical evidence for China's policies towards the Internet, which are relevant for the export of manufactured goods. The government should encourage the use of ICT to enhance firms’ export opportunities while facing current trade policy uncertainty.     

Privacy concerns,internal political efficacy,intrusiveness, and voter resistance to the acceptance of political mobile marketing campaigns

Political parties increasingly rely on information systems‐based approaches to present their messages, engender voter participation, and solicit voter support. Although research is being conducted on how mobile devices, mobile Internet, and social media are used to galvanize voters' participation in the political process, there is an observable dearth of research on how the use of these approaches by politicians might be resisted by voters. This study examines the antecedents of voter resistance to political mobile marketing campaigns with a conceptual model, and it employs reactance and internal political efficacy theories. Data for the empirical testing of the conceptual model were obtained through a survey of 971 South African voters. The findings of the study suggest that the proposed model provides a reasonable explanation of voter resistance to political mobile marketing campaigns and identifies privacy concerns, intrusiveness, and internal political efficacy as salient factors underlying voter resistance to political mobile marketing. The findings further suggest that internal political efficacy significantly moderates and reinforces the positive impact of privacy concerns on resistance. These findings provide important guidelines for reducing voters' resistance to political mobile marketing campaigns. They also provide a point of departure for future research into this relatively unexplored but potentially fertile domain.