Relative Performance Evaluation and Risk Taking in Delegated Investment Decisions*

Providing proper incentives to firm managers is increasingly important in the current competitive environment. Analytical research has suggested that evaluating a manager's performance relative to that of a peer group, in conjunction with standard-based pay, can induce efficient risk-sharing between firm owners and managers while maintaining the latter's incentives to exert effort. To date, direct empirical tests of this proposition have not been reported. This study uses a laboratory experiment to test the effect of relative performance evaluation on the risk-aversion of delegated investment decisions. Project-specific risk is operationalized using operating leverage, in part because the variability of a project's operating profits generally increases with this variable, and in part because many of the new manufacturing approaches held to be important to competitive advantage require significant capital investments and attendant increases in operating leverage. Across two levels of environmental uncertainty, subjects under a relative (as opposed to absolute) performance standard selected investments with significantly higher project-specific risk. Also, as environmental uncertainty increased, subjects under an absolute standard significantly reduced the riskiness of their investments. In contrast, subjects shielded from environmental uncertainty by a relative standard chose investments of about equal riskiness under both low and high uncertainty conditions. If supported by future research, these findings would suggest that relative performance evaluation may reduce managers' reluctance to adopt risky capital investments, especially in firms operating in high-risk economic or technological environments.     

Toward an Understanding of the Behavioral Intention to Use an Information System

Organizational investment in information systems is often large and risky given the variety of information requirements placed on systems today. To make more informed decisions and to meet the challenge of developing systems that satisfy these demands, system developers need to achieve a better understanding of factors that ultimately lead to system usage. To enhance this understanding, we posit a holistic framework to examine several constructs suggested in the literature that lead to the behavioral intention to use an information system. Our framework includes situational involvement, intrinsic involvement, argument for change, perceived usefulness, ease of use, prior usage, and attitude constructs. We extend the Davis, Bagozzi, and Warshaw Technology Acceptance Model (TAM), which is founded on the Theory of Reasoned Action. A diverse sample from industry is used to test our model. Structural equation modeling is used to examine the entire pattern of intercorrelations among the constructs and to test related propositions. A hierarchical structure is used to compare the explanatory ability of TAM with our extension. Our model explains a large portion of the covariance among the constructs that lead to a user's behavioral intention to use an information system and compares favorably with TAM. The results indicate that (1) the direct effect of situational involvement on behavioral intention as well as attitude is significant in the negative direction, (2) attitude seems to play a mediating role, and (3) intrinsic involvement plays a significant role in shaping perceptions. Finally, we conclude that the user involvement construct needs to be separated into its psychological as well as its participative components for developers to understand its impact on the systems development process.     

The Significance of Race in the Private Sphere: Asian Americans and Spousal Preferences

Using qualitative analysis of narratives of United States-born Asians, this article examines how spousal preferences and views on interracial couples are affected by racial status inequalities. It argues that racial inequality affects those who prefer Whites, those who prefer Asians, those indicating no racial preferences, and those whose preferences changed through the life course. The dynamics of racialized preferences are explained by introducing the concept of racialized relationship capital, specifically the appeal of Euro-American vs. ethnic-racial relationship capital. The paper concludes by questioning the popular notion that high rates of interracial marriage indicate successful assimilation for groups such as Asian Americans.     

The changing responsibilities of the state and family toward elders in Hong Kong

With a predominantly Chinese population and a cultural tradition of respecting the old, Hong Kong has long relied on the family to support its elderly members. Economic success has, however, not spared Hong Kong from encountering the same problems as other industrial societies, such as the loosening of its traditional values. This article examines the changing responsibilities of the state and the family in Hong Kong in supporting the old, and in particular, the effectiveness of the "care in community" policy, which the Hong Kong Government has adopted since the mid-1970s. The examination concludes that the responsibility must now be shared between the state and the family.     

Does filial piety exist under Chinese communism?

China has been known for centuries for its traditions of respecting the old. While this tradition has been weakened in the modern era, it still remains as the most important value underlying the practice of supporting the old in present-day China. This article looks into the meaning of filial piety, or xiao, and examines how it has been observed both in the old and modern times. It argues that though the Chinese communists have found filial piety ideologically repulsive, they have nevertheless tolerated it and even used it as the basis for a welfare network to support the elderly in the villages. However, in order to be truthful to their socialist ideology, they have also provided for urban workers the most sophisticated state-financed retirement benefits. Two different kinds of systems to support the elderly hence exist in China. The tensions resulting from this dichotomous situation are examined.     

Death preparation and anxiety: a survey in Hong Kong

This study reports the results of a survey on death preparation, death-related beliefs, and death anxiety in a Hong Kong sample. Respondents (N = 285) recruited from the community were asked if they have prepared for themselves a life insurance, a will, and a resting place (e.g. burial site, columbarium, etc.). Questions about their death-related cultural beliefs and anxiety were also asked. Results indicated that respondents who have thought of preparing for their own deaths but not yet acted out (contemplators) held stronger traditional cultural beliefs about death than respondents who have either done the preparations (planners) or never thought of the idea (non-contemplators). Contemplators also reported higher death anxiety. Despite limitations of the study's design, the current results suggest the beliefs in cultural taboo may play a role in the preparation for one's death.     

On the admissibility of the maximum-likelihood estimator of the binomial variance

This paper addresses the admissibility of the maximum-likelihood estimator (MLE) of the variance of a binomial distribution with parameters n and p under squared-error loss. We show that the MLE is admissible for n ≤ 5 and inadmissible for n≥ 6.     

An economic model of teenage pregnancy decision-making

In this paper, we model unmarried teenagers' decisions about their pregnancy outcome by considering that the teenager contrasts her expected utility (1) as a married mother, (2) as an unmarried mother, or (3) after abortion. We use cross-sectional data on 297 California teenagers aged 13-19 who were pregnant for the first time between 1972 and 1974. Both Anglo and Mexican-American girls are included. We find that pregnant girls who are eligible for or are receiving public assistance are more likely to give birth and remain unmarried. Teenagers with greater time values are more likely to choose abortion, and Mexican-American girls are more likely to carry their pregnancies to term.     

A study on the demographic impact of an IUD programme

Abstract This paper discusses and presents data obtained through various studies and surveys on the effect of the IUD contraceptive programme in Taiwan. It has been demonstrated that the fertility of IUD acceptors before first acceptance was 58 % higher than that of married women in general and that, after acceptance, it declined by about 76%. The corresponding fertility decline among married women in general was only about %. Acceptors had had more recent births, as indicated by their shorter 'open interval' of 20.7 months, compared with 374 months among the women in the KAP survey sample. If the fertility of IUD acceptors had declined at the same rate as that of married women in general in the absence of IUD, the insertion of about 4 IUDs would probably prevent one live birth in the following year. Observation over a longer period, however, is needed to determine the demographic effect of IUD. Data on fertility control practice after termination, type of termination of pregnancies after first acceptance, life-table rates by various socio-demographic characteristics of acceptors, and the 'life expectancy' of the first segment of IUD are also presented.