The intrinsic value of choice: The propensity to under-delegate in the face of potential gains and losses

Human beings are often faced with a pervasive problem: whether to make their own decision or to delegate the decision task to someone else. Here, we test whether people are inclined to forgo monetary rewards in order to retain agency when faced with choices that could lead to losses and gains. In a simple choice task, we show that participants choose to pay in order to control their own payoff more than they should if they were to maximize monetary rewards and minimize monetary losses. This tendency cannot be explained by participants’ overconfidence in their own ability, as their perceived ability was elicited and accounted for. Nor can the results be explained by lack of information. Rather, the results seem to reflect an intrinsic value for choice, which emerges in the domain of both gains and of losses. Moreover, our data indicate that participants are aware that they are making suboptimal choices in the normative sense, but do so anyway, presumably for psychological gains.     

Managerial hubris, firm expansion and firm performance: Evidence from China

Examining Chinese publicly traded firms from 2002 to 2005, we find managerial overconfidence to be positively correlated with the rate of firm expansion. In particular, overconfident managers tend to internally expand firms in an aggressive manner. We also find a negative, though not statistically significant, relationship between managerial overconfidence and M&A activity. Lastly, we examine the relationship between managerial overconfidence and firm performance, finding that managerial overconfidence decreases firm profitability due to overinvestment.     

Financial Capability,Asset Ownership,and Later-Age Immigration: Evidence From a Sample of Low-Income Older Asian Immigrants

We examined financial capability and asset ownership among low-income older Asian immigrants with special attention given to later-age immigrants who came to the United States when they were 55 years old or older. Survey data collected from supported employment program participants (N = 150) were used. The analyses demonstrated a low level of financial knowledge and asset ownership in the sample. The findings also indicated that later-age immigrants’ financial-management skills, knowledge of social programs, and asset ownership were significantly lower than those of young-age immigrants. These findings call for active interventions to enhance economic security among low-income older Asian immigrants.     

Do bettors prefer long shots because they are risk-lovers,or are they just overconfident?

This study examines whether bettors' risk preferences or overconfidence in choosing winners better explains their well documented preference for low-probability wagers. Although previous studies using racetrack data often suggest that risk-loving behavior explains long-shot preference, such data cannot distinguish between the alternative explanations. We use football betting data to make the comparison and find that overconfidence more closely fits the data. This result complements evidence of overconfidence from behavioral studies as well as stock-market models of overconfident noise traders.     

The attraction of uncertainty: Interactions between skill and levels of uncertainty in market-entry games

The experimental market entry paradigm has been used to illuminate the role of self-assessed skill in risk taking. Specifically, success only accompanies entry if a participant is one of the better ranked entrants on the skill criterion. We investigate what happens when participants face an additional source of uncertainty that perturbs relative skill rankings. Interestingly, this has asymmetric effects. On average, chances of success are increased for those with low rankings but decreased for those with high rankings. Thus, we predicted that the additional uncertainty would lead to more entry by the former but less by the latter. Our data supported the first prediction but, for those with high skill rankings, the existence of additional uncertainty made little difference. Finally, although we observed “excess entry” (i.e., too many participants entered markets), this could not be attributed to overconfidence. We conclude by contrasting our results with others in the literature.     

The relationship between normatively versus attitudinally controlled people and normatively versus attitudinally controlled behaviors

We proposed a hypothesis that not only can people be under attitudinal or normative control across a large number of behaviors (Trafimow & Finlay, 1996), but behaviors can be under attitudinal or normative control across a large number of people. Further, both types of findings can be obtained using the same sets of people and behaviors. To test the hypothesis, a large number of participants were asked to indicate their attitudes, subjective norms, and intentions towards performing 30 behaviors. On the basis of within-participants multiple regression analyses, participants were deemed to be generally under attitudinal or normative control across the 30 behaviors. In addition, consistent with previous research (Trafimow & Finlay, 1996), the unique variance in intentions accounted for by attitudes and subjective norms was highly dependent upon whether attitudinally or normatively controlled participants were used. Finally, however, attitudes accounted for more variance in intentions than did subjective norms for some behaviors, even when normatively controlled participants were analyzed! Thus, the hypothesis was strongly supported.     

The complex politics of catastrophe economics

The purpose of this essay is to explore the implications for public policy of the assumption that policy makers exhibit the same cognitive and perceptual problems as other citizens regarding catastrophic events. The key conclusion is that the same factors that cause citizens to behave inefficiently in preparing for and responding to disasters also will cause inefficiencies in policies concerning catastrophic events. Among the more important expected pathologies of disaster policies are: (1) a failure to balance benefits and costs at the margin for different types of disasters, due to cognitive pathologies such as availability and overconfidence; (2) a tendency for policy to underinvest in protection and overinvest in response; and (3) a skepticism for policies based on sound insurance principles for spreading costs and assessing claims.     

Are people overoptimistic about the effects of heavy drinking?

We test whether heavy or binge drinkers are overly optimistic about probabilities of adverse consequences from these activities or are relatively accurate about these probabilities. Using data from a survey in eight cities, we evaluate the relationship between subjective beliefs and drinking. We assess accuracy of beliefs about several outcomes of heavy/binge drinking: reduced longevity, liver disease onset, link between alcohol consumption and Driving While Intoxicated (DWI), probability of an accident after drinking, accuracy of beliefs about encountering intoxicated drivers on the road, and legal consequences of DWI—ranging from being stopped to receiving fines and jail terms. Overall, there is no empirical support for the optimism bias hypothesis. We do find that persons consuming a lot of alcohol tend to be more overconfident about their driving abilities and ability to handle alcohol. However, such overconfidence does not translate into over-optimism about consequences of high levels of alcohol consumption.     

Discriminating among probability weighting functions using adaptive design optimization

Probability weighting functions relate objective probabilities and their subjective weights, and play a central role in modeling choices under risk within cumulative prospect theory. While several different parametric forms have been proposed, their qualitative similarities make it challenging to discriminate among them empirically. In this paper, we use both simulation and choice experiments to investigate the extent to which different parametric forms of the probability weighting function can be discriminated using adaptive design optimization, a computer-based methodology that identifies and exploits model differences for the purpose of model discrimination. The simulation experiments show that the correct (data-generating) form can be conclusively discriminated from its competitors. The results of an empirical experiment reveal heterogeneity between participants in terms of the functional form, with two models (Prelec-2, Linear-in-Log-Odds) emerging as the most common best-fitting models. The findings shed light on assumptions underlying these models.     

The Model Development Dissertation

ABSTRACT

Asset-building programs, such as Individual Development Account (IDA) programs within social service agencies, assist low-income employed clients in building credit, purchasing affordable assets, and gaining wealth. This longitudinal exploratory study examines the credit outcomes of IDA programs to add to the knowledge concerning the effects of IDAs as an asset-building tool. Data were analyzed using a convenience sample of IDA participants and nonparticipants (N = 164), and the results indicated that initial credit score and history are associated with program participation. However, results also suggested that initial credit score is not a meaningful indicator of program completion, time to completion, or type of asset purchased for participants. Those who completed the IDA program within 2 years experienced the highest credit gains. Future research with larger samples is needed to further assess the impact of credit on program participation and completion and on whether credit gains are sustained.     

Emotionally supportive counselling for health care personnel led by social welfare officers: effects on well-being

The aim of this study was to evalute an emotionally supportive counselling program for health care personnel that can be led by social welfare officers. The program consisted of 1-hour sessions conducted every second week for 7 months. The meetings were devoted to talks about personal stress experiences related to patients and their relatives. Nurses and nursing aides (n = 51) in counselling groups showed significant changes in a favourable direction on the following variables: fewer perceived daily hassles; fewer self-reported physical and psychological symptoms; and improved subjective well-being. No effects were noted on sense of coherence and subjective physical health status. Interviews with program participants, the group leaders (social welfare officers), and their supervisor (a psychotherapist) indicated how the counselling program may be affected by the personality and competence of the group leader, the working conditions of the wards in general and the attitudes of the head nurse in particular. The results were discussed as promising.     

Community Practice Researchers as Reflective Learners

The article outlines a process for community practice researchas a reflective process. Through the interplay of key conceptsassociated with subjective research–personal engagement,experiential affinity and parallel struggles–and transcribedinterviews with community practitioners, the authors elaboratethe subjective community researcher posture. Subjectivity contributesto the researchers’ position as learners within the researchprocess. The research team plays a key role in reflecting onthe effects of the research on participants.     

Corporate Environmental Behaviors in Voluntary Programs: Does Timing Matter?*

Objective. Why do some firms participate in voluntary programs earlier than others? What conditions dictate whether firms participate in voluntary programs earlier rather than later? Current research on voluntary programs has not considered discrete processes in which corporate actors could have different motives and objectives in different time dimensions, that is, early versus late. Methods. We adopt a diffusion theory to disaggregate corporate voluntary participation behavior in the Environmental Protection Agency (EPA) sponsored Green Lights (GL) voluntary program. We focus on the GL participants during two periods—the early joiners in 1993–1994, and the late joiners in 1995–1996. Results. At the early diffusion stage, firms are more likely driven by the market motive that garners a “green” reputation, an important strategic asset to promote market competitiveness; at the late diffusion stage, firms are more driven by the institutional motive to improve their relationships with regulatory agencies and subsequently relieve regulatory pressures from them. Conclusion. We find that firms have different motives for GL participation at different diffusion stages. We suggest that policymakers who want to induce firms to join voluntary programs should pay more attention to program designs and implementation schemes that accommodate different corporate interests and objectives in different time orders of firms' participations in voluntary programs.     

Personal probabilities of probabilities

By definition, the subjective probability distribution of a random event is revealed by the (‘rational’) subject's choice between bets — a view expressed by F. Ramsey, B. De Finetti, L. J. Savage and traceable to E. Borel and, it can be argued, to T. Bayes. Since hypotheses are not observable events, no bet can be made, and paid off, on a hypothesis. The subjective probability distribution of hypotheses (or of a parameter, as in the current ‘Bayesian’ statistical literature) is therefore a figure of speech, an ‘as if’, justifiable in the limit. Given a long sequence of previous observations, the subjective posterior probabilities of events still to be observed are derived by using a mathematical expression that would approximate the subjective probability distribution of hypotheses, if these could be bet on. This position was taken by most, but not all, respondents to a ‘Round Robin’ initiated by J. Marschak after M. H. De-Groot's talk on Stopping Rules presented at the UCLA Interdisciplinary Colloquium on Mathematics in Behavioral Sciences. Other participants: K. Borch, H. Chernoif, R. Dorfman, W. Edwards, T. S. Ferguson, G. Graves, K. Miyasawa, P. Randolph, L. J. Savage, R. Schlaifer, R. L. Winkler. Attention is also drawn to K. Borch's article in this issue.     

QWL and Related Factors for Migrant Workers Survey in Guangdong Province,China

Abstract

The quality of work and life (abbreviated as QWL) of migrant workers in China is related to urbanization and social development and reflects subjective well-being. This study examined migrant workers’ quality of work and life and constructed an index system to evaluate overall quality. Survey data from 3,375 participants in Guangdong, China, were analyzed using ordinary least square regression. The results showed that migrant workers’ quality of work and life is low. Quality of life is lower than quality of work, indicating that social services provision was rated lower than employment situation. Quality of work and life is influenced both by objective institutional factors and subjective human capital factors, particularly training, social security, public services, and social institutional factors. Subjective quality of work and life is based on evaluation of objective situations. This study proposes several reforms in training, employment, the household registration system, enterprise management, rights protection, social inclusion, and the rural land transfer system. Future research should address the relationship between quality of work and life and related factors using longitudinal survey data, interaction of indexes and individual factors, and differences in quality of work and life of migrant workers under different institutional systems. International comparative research should also be conducted.     

Empirically supported ethical research practice: the costs and benefits of research from the participants' view

Researchers and institutional review boards are routinely called upon to evaluate the cost-benefit status of proposed research protocols that involve human participants. Often these assessments are based on subjective judgments in the absence of empirical data. This reliance on subjective judgments is of particular concern for studies involving clinical samples where unfounded assumptions may adversely affect research progress or clinical outcomes. The Reactions to Research Participation Questionnaire (RRPQ) was designed to address this shortcoming and to help promote ethical decision making about research practice. The present study describes development of the RRPQ and presents a series of exploratory and confirmatory analyses investigating its structure. Based on these findings, a revised version of the instrument and suggestions for future research are presented. This approach provides a foundation for scientifically informed protection of human subjects.     

The prevalence and composition of asset poverty in Canada: 1999, 2005, and 2012

A household is considered asset poor if its assets (financial assets or net worth, taken separately) are insufficient to maintain well‐being at a low‐income threshold for 3 months. We provide the first national‐level estimates of asset poverty for Canada, using the 1999, 2005, and 2012 cycles of the Survey of Financial Security, and juxtapose these estimates with income poverty. The analysis provides new insight into economic insecurity by showing that asset poverty rates are consistently two to three times higher than income poverty rates. In addition to the prevalence of asset poverty across socio‐demographic groups, we analyzed how the composition of the poor change over time. Age and geography shape the risk for asset poverty in distinct ways. We found that while education appears to play a comparable role in shaping both income poverty and asset poverty, immigration places Canadians at a relatively higher risk of income poverty but not asset poverty. Key Practitioner Message: ? Practitioners ought to consider assets as well as income in assessing economic vulnerability; ? Asset poverty levels are 2–3 times higher than income poverty levels; ? Certain groups (e.g., immigrants) may be income poor but maintain sufficient assets.     

技术资产评估的方法选择研究

技术资产是指含有技术内容的无形资产 ,现行的技术资产评估普遍采用重置成本、现行市价、收益现值等评估标准及方法。在不同的客观环境下 ,应选择适当的评估方法。影响方法选择的因素主要包括 :评估目标、评估条件和评估对象。     

Empirically supported ethical research practice: The costs and benefits of research from the participants’ view

Researchers and institutional review boards are routinely called upon to evaluate the cost‐benefit status of proposed research protocols that involve human participants. Often these assessments are based on subjective judgments in the absence of empirical data. This reliance on subjective judgments is of particular concern for studies involving clinical samples where unfounded assumptions may adversely affect research progress or clinical outcomes. The Reactions to Research Participation Questionnaire (RRPQ) was designed to address this shortcoming and to help promote ethical decision making about research practice. The present study describes development of the RRPQ and presents a series of exploratory and confirmatory analyses investigating its structure. Based on these findings, a revised version of the instrument and suggestions for future research are presented. This approach provides a foundation for scientifically informed protection of human subjects.     

中国民众主观社会地位的地域差异:基于对CFPS2012成人问卷数据的“虚拟情境锚定法”分析

本文基于“中国家庭动态跟踪调查”的2012年成人问卷数据,通过“虚拟情境锚定法”研究中国民众的主观社会地位差异,探讨当前中国社会的分层现状。研究显示,当前中国社会居民的主观社会地位存在地区差异。在中国现代化发展程度较高的地区,个体的后致性因素（如教育、职业等）对社会地位认同具有更加显著的影响,而在欠发达地区,还没有形成稳定的评价标准。本研究体现了“虚拟情境锚定法”善于处理主观抽象概念的特征,这种方法在未来的社会科学研究中将会有很广泛的应用空间。