Let's Call it Quits: Break‐Even Effects in the Decision to Stop Taking Risks

“Chasing” behavior, whereby individuals, driven by a desire to break even, continue a risky activity (RA) despite incurring large losses, is a commonly observed phenomenon. We examine whether the desire to break even plays a wider role in decisions to stop engaging in financially motivated RA in a naturalistic setting. We test hypotheses, motivated by this research question, using a large data set: 707,152 transactions of 5,379 individual financial market spread traders between September 2004 and April 2013. The results indicate strong effects of changes in wealth around the break‐even point on the decision to cease an RA. An important mediating factor was the individual's historical long‐term performance. Those with a more profitable trading history were less affected by a fall in cash balance below the break‐even point compared to those who had been less profitable. We observe that break‐even points play an important role in the decision of nonpathological risk takers to stop RAs. It is possible, therefore, that these nonpathological cognitive processes, when occurring in extrema, may result in pathological gambling behavior such as “chasing.” Our data set focuses on RAs in financial markets and, consequently, we discuss the implications for institutions and regulators in the effective management of risk taking in markets. We also suggest that there may be a need to consider carefully the nature and role of “break‐even points” associated with a broader range of nonfinancially‐focused risk‐taking activities, such as smoking and substance abuse.     

Cross‐Sectional Psychological and Demographic Associations of Zika Knowledge and Conspiracy Beliefs Before and After Local Zika Transmission

Perceptions of infectious diseases are important predictors of whether people engage in disease‐specific preventive behaviors. Having accurate beliefs about a given infectious disease has been found to be a necessary condition for engaging in appropriate preventive behaviors during an infectious disease outbreak, while endorsing conspiracy beliefs can inhibit preventive behaviors. Despite their seemingly opposing natures, knowledge and conspiracy beliefs may share some of the same psychological motivations, including a relationship with perceived risk and self‐efficacy (i.e., control). The 2015–2016 Zika epidemic provided an opportunity to explore this. The current research provides some exploratory tests of this topic derived from two studies with similar measures, but different primary outcomes: one study that included knowledge of Zika as a key outcome and one that included conspiracy beliefs about Zika as a key outcome. Both studies involved cross‐sectional data collections that occurred during the same two periods of the Zika outbreak: one data collection prior to the first cases of local Zika transmission in the United States (March–May 2016) and one just after the first cases of local transmission (July–August). Using ordinal logistic and linear regression analyses of data from two time points in both studies, the authors show an increase in relationship strength between greater perceived risk and self‐efficacy with both increased knowledge and increased conspiracy beliefs after local Zika transmission in the United States. Although these results highlight that similar psychological motivations may lead to Zika knowledge and conspiracy beliefs, there was a divergence in demographic association.     

Linking Decision Theory and Quantitative Microbial Risk Assessment: Tradeoffs Between Compliance and Efficacy for Waterborne Disease Interventions

Achieving health gains from the U.N. Sustainable Development Goals of universal coverage for water and sanitation will require interventions that can be widely adopted and maintained. Effectiveness—how an intervention performs based on actual use—as opposed to efficacy will therefore be central to evaluations of new and existing interventions. Incomplete compliance—when people do not always use the intervention and are therefore exposed to contamination—is thought to be responsible for the lower‐than‐expected risk reductions observed from water, sanitation, and hygiene interventions based on their efficacy at removing pathogens. We explicitly incorporated decision theory into a quantitative microbial risk assessment model. Specifically, we assume that the usability of household water treatment (HWT) devices (filters and chlorine) decreases as they become more efficacious due to issues such as taste or flow rates. Simulations were run to examine the tradeoff between device efficacy and usability. For most situations, HWT interventions that trade lower efficacy (i.e., remove less pathogens) for higher compliance (i.e., better usability) contribute substantial reductions in diarrheal disease risk compared to devices meeting current World Health Organization efficacy guidelines. Recommendations that take into account both the behavioral and microbiological properties of treatment devices are likely to be more effective at reducing the burden of diarrheal disease than current standards that only consider efficacy.     

Synergy from configuration of global production networks: drivers,mechanisms, and outcomes

Abstract

This paper explores the network synergies available from the configuration of highly dispersed, global production networks (GPNs). Synergy theory from the literature on intra-firm and inter-firm GPNs is examined in terms of drivers, mechanisms and outcomes. An explanatory model is developed and enriched via a series of extended case studies of firms undertaking re-configuration of their GPNs during the period 2003–2014. The primary finding is that firms create synergy in their GPNs by selecting specific configuration mechanisms, in response to a certain set of external drivers, in order to achieve certain synergistic outcomes. The paper classifies the main types of drivers, mechanisms and outcomes in terms of key variables and discusses their inter-connections and relationships.     

Effects of Firm-specific and Country-specific Advantages on Relative Acquisition Size in Service Sector Cross-Border Acquisitions: An Empirical Examination

Using a sample of 348 service sector cross-border acquisitions by U.S. firms in 44 countries during 1990–2006, our study seeks to identify factors that influence relative acquisition size (acquisition transaction value as a percentage of acquiring firm's asset value). Our findings indicate that firm-specific advantages (FSAs) in the form of available financial slack and target industry knowledge were positively associated with relative acquisition size. However, contrary to expectations, we observed a negative relationship between cross-border acquisition experience and relative acquisition size. In addition, our results suggest that country-specific advantages (CSAs) associated with higher market potential, lower political risk, and greater cultural similarity contributed to increased relative acquisition size in service industry cross-border acquisitions. Finally, our analysis reveals that the relationship between available financial slack and relative acquisition size is contingent on cultural similarity with the relationship being more pronounced when cultural similarity is high.     

Generalized perfect domination in graphs

Let k be a positive integer and G=(V,E) be a graph. A vertex subset D of a graph G is called a perfect k-dominating set of G, if every vertex v of G, not in D, is adjacent to exactly k vertices of D. The minimum cardinality of a perfect k-dominating set of G is the perfect k-domination number γ _kp (G). In this paper, we give characterizations of graphs for which γ _kp (G)=γ(G)+k?2 and prove that the perfect k-domination problem is NP-complete even when restricted to bipartite graphs and chordal graphs. Also, by using dynamic programming techniques, we obtain an algorithm to determine the perfect k-domination number of trees.     

On the total outer-connected domination in graphs

A set S of vertices of a graph G is a total outer-connected dominating set if every vertex in V(G) is adjacent to some vertex in S and the subgraph induced by V?S is connected. The total outer-connected domination number γ _toc (G) is the minimum size of such a set. We give some properties and bounds for γ _toc in general graphs and in trees. For graphs of order n, diameter 2 and minimum degree at least 3, we show that $\gamma_{toc}(G)\le \frac{2n-2}{3}$ and we determine the extremal graphs.     

Social Networking and Individual Perceptions: Examining Predictors of Participation

Social networking is a process and practice that draws people and organizations together in an electronic medium. This article explores social interaction-based theories to suggest a social networking participation model that may help organizations understand acceptance or rejection of participation. Responses from 191 public administrators were analyzed using structural equation modeling (SEM), focusing on relationships between participation and five constructs: perceived usefulness, perceived ease of use, perceived improvement potential (PIP), intra-organizational trust, and type of use. The study found favorable model fit statistics that support positive correlations between the latent variables examined and participation in social networking activities. The results demonstrate the potential of the survey instrument to serve as an adoption and participation model to predict and promote social networking activities as they relate to perceived performance improvement.     

Incentives in a Stage‐Gate Process

Many large organizations use a stage‐gate process to manage new product development projects. In a typical stage‐gate process project managers learn about potential ideas from research and exert effort in development while senior executives make intervening go/no‐go decisions. This decentralized decision making results in an agency problem because the idea quality in early stages is unknown to the executive and the project manager must exert unobservable development effort in later stages. In light of these challenges, how should the firm structure incentives to ensure that project managers reveal relevant information and invest the appropriate effort to create value? In this study, we develop a model of adverse selection in research and moral hazard in development with a go/no‐go decision at the intervening gate. Our results show that the principal's uncertainty regarding early‐stage idea quality—a term we refer to as idea risk—alters the effect of late‐stage development risk. The presence of idea risk can alter the incentives offered to the agent and may lead the principal to reject projects that otherwise seem favorable in terms of positive net present value. A simulation of early‐stage ideas, found through search on a complex landscape, shows that the firm can mitigate the negative effects of idea risk by encouraging breadth of search and high tolerance for failure.     

Linking Process Quality and Resource Usage: An Empirical Analysis

Motivated by an increasing adoption of evidence‐based medical guidelines in the delivery of medical care, we examine whether increased adherence to such guidelines (typically referred to as higher process quality) is associated with reduced resource usage in the course of patient treatment. In this study, we develop a sample of US hospitals and use cardiac care as our context to empirically examine our questions. To measure a patient's resource usage, we use the total length of stay, which includes any additional inpatient stay necessitated by unplanned readmissions within thirty days after initial hospitalization. We find evidence that higher process quality, and more specifically its clinical (as opposed to its administrative) dimensions, are associated with a reduction in resource usage. Moreover, the standardization of care that is achieved via the implementation of medical guidelines, makes this effect more pronounced in less focused environments: higher process quality is more beneficial when the cardiac department's patient population is distributed across a wider range of medical conditions. We explore the implications of these findings for process‐oriented pay‐for‐performance programs, which tie the reimbursement of hospitals to their adherence to evidence‐based medical guidelines.