Behavioural biases and information disclosure laws relating to residential property sales : narrowing the gap between existing laws and calls for future reforms

Market failures involving the sale of complex merchandise, such as residential property, financial products and credit, have principally been attributed to information asymmetries. Existing legislative and regulatory responses were developed having regard to consumer protection policies based on traditional economic theories that focus on the notion of the ‘rational consumer’. Governmental responses therefore seek to impose disclosure obligations on sellers of complex goods or products to ensure that consumers have sufficient information upon which to make a decision. Emergent research, based on behavioural economics, challenges traditional ideas and instead focuses on the actual behaviour of consumers. This approach suggests that consumers as a whole do not necessarily benefit from mandatory disclosure because some, if not most, consumers do not pay attention to the disclosed information before they make a decision to purchase. The need for consumer policies to take consumer characteristics and behaviour into account is being increasingly recognised by governments, and most recently in the policy framework suggested by the Australian Productivity Commission

Last shall be first : a field study of biases in sequential performance evaluation on the Idol series

When performances are evaluated they are very often presented in a sequential order. Previous research suggests that the sequential presentation of alternatives may induce systematic biases in the way performances are evaluated. Such a phenomenon has been scarcely studied in economics. Using a large dataset of performance evaluation in the Idol series (N=1522), this paper presents new evidence about the systematic biases in sequential evaluation of performances and the psychological phenomena at the origin of these biases.

Genome-scale phylogeny and the detection of systematic biases

Phylogenetic inference from sequences can be misled by both sampling (stochastic) error and systematic error (nonhistorical signals where reality differs from our simplified models). A recent study of eight yeast species using 106 concatenated genes from complete genomes showed that even small internal edges of a tree received 100% bootstrap support. This effective negation of stochastic error from large data sets is important, but longer sequences exacerbate the potential for biases (systematic error) to be positively misleading. Indeed, when we analyzed the same data set using minimum evolution optimality criteria, an alternative tree received 100% bootstrap support. We identified a compositional bias as responsible for this inconsistency and showed that it is reduced effectively by coding the nucleotides as purines and pyrimidines (RY-coding), reinforcing the original tree. Thus, a comprehensive exploration of potential systematic biases is still required, even though genome-scale data sets greatly reduce sampling error.

Students' perceptions of teacher biases : experimental economics in schools

We put forward a new experimental economics design with monetary incentives to estimate students’ perceptions of grading discrimination. We use this design in a large field experiment which involved 1,200 British students in grade 8 classrooms across 29 schools. In this design, students are given an endowment they can invest on a task where payoff depends on performance. The task is a written verbal test which is graded non anonymously by their teacher, in a random half of the classrooms, and graded anonymously by an external examiner in the other random half of the classrooms. We find significant evidence that students’ choices reflect perceptions of biases in teachers’ grading practices. Our results show systematic gender interaction effects: male students invest less with female teachers than with male teachers while female students invest more with male teachers than with female teachers. Interestingly, female students’ perceptions are not in line with actual discrimination: Teachers tend to give better grades to students of their own gender. Results do not suggest that ethnicity and socioeconomic status play a role. .

Processing biases towards gain-framed messages may lead reward sensitive individuals to adopt safer driving behaviours

Using Gray and McNaughton’s revised RST, this study investigated the extent to which the Behavioural Approach System (BAS) and the Fight-Flight-Freeze System (FFFS) influence the processing of gain-framed and loss-framed road safety messages and subsequent message acceptance. It was predicted that stronger BAS sensitivity and FFFS sensitivity would be associated with greater processing and acceptance of the gain-framed messages and loss-framed messages, respectively. Young drivers (N = 80, aged 17–25 years) viewed one of four road safety messages and completed a lexical decision task to assess message processing. Both self-report (e.g., Corr-Cooper RST-PQ) and behavioural measures (i.e., CARROT and Q-Task) were used to assess BAS and FFFS traits. Message acceptance was measured via self-report ratings of message effectiveness, behavioural intentions, attitudes and subsequent driving behaviour. The results are discussed in the context of the effect that differences in reward and punishment sensitivities may have on message processing and message acceptance.

Measuring the biases in self-reported disability status : Evidence from aggregate data

Self-reported health status measures are generally used to analyse Social Security Disability Insurance's (SSDI) application and award decisions as well as the relationship between its generosity and labour force participation. Due to endogeneity and measurement error, the use of self-reported health and disability indicators as explanatory variables in economic models is problematic. We employ county-level aggregate data, instrumental variables and spatial econometric techniques to analyse the determinants of variation in SSDI rates and explicitly account for the endogeneity and measurement error of the self-reported disability measure. Two surprising results are found. First, it is shown that measurement error is the dominating source of the bias and that the main source of measurement error is sampling error. Second, results suggest that there may be synergies for applying for SSDI when the disabled population is larger. © 2011 Taylor & Francis.

The importance of gestation process dynamics

Principal Topic In this paper we seek to highlight the important intermediate role that the gestation process plays in entrepreneurship by examining its key antecedents and its consequences for new venture emergence. In doing so we take a behavioural perspective and argue that it is not only what a nascent venture is, but what it does (Katz & Gartner, 1988; Shane & Delmar, 2004; Reynolds, 2007) and when it does it during start-up (Reynolds & Miller, 1992; Lichtenstein, Carter, Dooley & Gartner, 2007) that is important. To extend an analogy from biological development, what we suggest is that the way a new venture is nurtured is just as fundamental as its nature. Much prior research has focused on the nature of new ventures and attempted to attribute variations in outcomes directly to the impact resource endowments and investments have. While there is little doubt that venture resource attributes such as human capital, and specifically prior entrepreneurial experience (Alsos & Kolvereid, 1998), access to social (Davidsson & Honig, 2003) and financial capital have an influence. Resource attributes themselves are distal from successful start-up endeavours and remain inanimate if not for the actions of the nascent venture. The key contribution we make is to shift focus from whether or not actions are taken, but when these actions happen and how that is situated in the overall gestation process. Thus, we suggest that it is gestation process dynamics, or when gestation actions occur, that is more proximal to venture outcomes and we focus on this. Recently scholars have highlighted the complexity that exists in the start-up or gestation process, be it temporal or contextual (Liao, Welsch & Tan, 2005; Lichtenstein et al. 2007). There is great variation in how long a start-up process might take (Reynolds & Miller, 1992), some processes require less action than others (Carter, Gartner & Reynolds, 1996), and the overall intensity of the start-up effort is also deemed important (Reynolds, 2007). And, despite some evidence that particular activities are more influential than others (Delmar & Shane, 2003), the order in which events may happen is, until now, largely indeterminate as regard its influence on success (Liao & Welsch, 2008). We suggest that it is this complexity of the intervening gestation process that attenuates the effect of resource endowment and has resulted in mixed findings in previous research. Thus, in order to reduce complexity we shall take a holistic view of the gestation process and argue that it is its’ dynamic properties that determine nascent venture attempt outcomes. Importantly, we acknowledge that particular gestation processes of themselves would not guarantee successful start-up, but it is more correctly the fit between the process dynamics and the ventures attributes (Davidsson, 2005) that is influential. So we aim to examine process dynamics by comparing sub-groups of venture types by resource attributes. Thus, as an initial step toward unpacking the complexity of the gestation process, this paper aims to establish the importance of its role as an intermediary between attributes of the nascent venture and the emergence of that venture. Here, we make a contribution by empirically examining gestation process dynamics and their fit with venture attributes. We do this by firstly, examining that nature of the influence that venture attributes such as human and social capital have on the dynamics of the gestation process, and secondly by investigating the effect that gestation process dynamics have on venture creation outcomes. Methodology and Propositions In order to explore the importance that gestation processes dynamics have in nascent entrepreneurship we conduct an empirical study of ventures start-ups. Data is drawn from a screened random sample of 625 Australian nascent business ventures prior to them achieving consistent outcomes in the market. This data was collected during 2007/8 and 2008/9 as part of the Comprehensive Australian Study of Entrepreneurial Emergence (CAUSEE) project (Davidsson et al., 2008). CAUSEE is a longitudinal panel study conducted over four years, sourcing information from annually administered telephone surveys. Importantly for our study, this methodology allows for the capture and tracking of active nascent venture creation as it happens, thus reducing hindsight and selection biases. In addition, improved tests of causality may be made given that outcome measures are temporally removed from preceding events. The data analysed in this paper represents the first two of these four years, and for the first time has access to follow-up outcome measures for these venture attempts: where 260 were successful, 126 were abandoned, and 191 are still in progress. With regards to venture attributes as gestation process antecedents, we examine specific human capital measured as successful prior experience in entrepreneurship, and direct social capital of the venture as ‘team start-ups’. In assessing gestation process dynamics we follow Lichtenstein et al. (2007) to suggest that the rate, concentration and timing of gestation activities may be used to summarise the complexity dynamics of that process. In addition, we extend this set of measures to include the interaction of discovery and exploitation by way of changes made to the venture idea. Those ventures with successful prior experience or those who conduct symbiotic parallel start-up attempts may be able to, or be forced to, leave their gestation action until later and still derive a successful outcome. In addition access to direct social capital may provide the support upon which the venture may draw in order to persevere in the face of adversity, turning a seemingly futile start-up attempt into a success. On the other hand prior experience may engender the foresight to terminate a venture attempt early should it be seen to be going nowhere. The temporal nature of these conjectures highlight the importance that process dynamics play and will be examined in this research Statistical models are developed to examine gestation process dynamics. We use multivariate general linear modelling to analyse how human and social capital factors influence gestation process dynamics. In turn, we use event history models and stratified Cox regression to assess the influence that gestation process dynamics have on venture outcomes. Results and Implications What entrepreneurs do is of interest to both scholars and practitioners’ alike. Thus the results of this research are important since they focus on nascent behaviour and its outcomes. While venture attributes themselves may be influential this is of little actionable assistance to practitioners. For example it is unhelpful to say to the prospective first time entrepreneur “you’ll be more successful if you have lots of prior experience in firm start-ups”. This research attempts to close this relevance gap by addressing what gestation behaviours might be appropriate, when actions best be focused, and most importantly in what circumstances. Further, we make a contribution to the entrepreneurship literature, examining the role that gestation process dynamics play in outcomes, by specifically attributing these to the nature of the venture itself. This extension is to the best of our knowledge new to the research field.

Attention and memory bias for body image and health related information using an Emotional Stroop task in a non-clinical sample

It has been proposed that body image disturbance is a form of cognitive bias wherein schemas for self-relevant information guide the selective processing of appearancerelated information in the environment. This threatening information receives disproportionately more attention and memory, as measured by an Emotional Stroop and incidental recall task. The aim of this thesis was to expand the literature on cognitive processing biases in non-clinical males and females by incorporating a number of significant methodological refinements. To achieve this aim, three phases of research were conducted. The initial two phases of research provided preliminary data to inform the development of the main study. Phase One was a qualitative exploration of body image concerns amongst males and females recruited through the general community and from a university. Seventeen participants (eight male; nine female) provided information on their body image and what factors they saw as positively and negatively impacting on their self evaluations. The importance of self esteem, mood, health and fitness, and recognition of the social ideal were identified as key themes. These themes were incorporated as psycho-social measures and Stroop word stimuli in subsequent phases of the research. Phase Two involved the selection and testing of stimuli to be used in the Emotional Stroop task. Six experimental categories of words were developed that reflected a broad range of health and body image concerns for males and females. These categories were high and low calorie food words, positive and negative appearance words, negative emotion words, and physical activity words. Phase Three addressed the central aim of the project by examining cognitive biases for body image information in empirically defined sub-groups. A National sample of males (N = 55) and females (N = 144), recruited from the general community and universities, completed an Emotional Stroop task, incidental memory test, and a collection of psycho-social questionnaires. Sub-groups of body image disturbance were sought using a cluster analysis, which identified three sub-groups in males (Normal, Dissatisfied, and Athletic) and four sub-groups in females (Normal, Health Conscious, Dissatisfied, and Symptomatic). No differences were noted between the groups in selective attention, although time taken to colour name the words was associated with some of the psycho-social variables. Memory biases found across the whole sample for negative emotion, low calorie food, and negative appearance words were interpreted as reflecting the current focus on health and stigma against being unattractive. Collectively these results have expanded our understanding of processing biases in the general community by demonstrating that the processing biases are found within non-clinical samples and that not all processing biases are associated with negative functionality

Understanding how to enhance business creativity

This PhD study examines some of what happens in an individual’s mind regarding creativity during problem solving within an organisational context. It presents innovations related to creative motivation, cognitive style and framing effects that can be applied by managers to enhance individual employee creativity within the organisation and thereby assist organisations to become more innovative. The project delivers an understanding of how to leverage natural changes in creative motivation levels during problem solving. This pattern of response is called Creative Resolve Response (CRR). The project also presents evidence of how framing effects can be used to influence decisions involving creative options in order to enhance the potential for managers get employees to select creative options more often for implementation. The study’s objectives are to understand: • How creative motivation changes during problem solving • How cognitive style moderates these creative motivation changes • How framing effects apply to decisions involving creative options to solve problems • How cognitive style moderate these framing effects The thesis presents the findings from three controlled experiments based around self reports during contrived problem solving and decision making situations. The first experiment suggests that creative motivation varies in a predictable and systematic way during problem solving as a function of the problem solver’s perception of progress. The second experiment suggests that there are specific framing effects related to decisions involving creativity. It seems that simply describing an alternative as innovative may activate perceptual biases that overcome risk based framing effects. The third experiment suggests that cognitive style moderates decisions involving creativity in complex ways. It seems that in some contexts, decision makers will prefer a creative option, regardless of their cognitive style, if this option is both outside the bounds of what is officially allowed and yet ultimately safe. The thesis delivers innovation on three levels: theoretical, methodological and empirical. The highlights of these findings are outlined below: 1. Theoretical innovation with the conceptualisation of Creative Resolve Response based on an extension of Amabile’s research regarding creative motivation. 2. Theoretical innovation linking creative motivation and Kirton’s research on cognitive style. 3. Theoretical innovation linking both risk based and attribute framing effects to cognitive style. 4. Methodological innovation for defining and testing preferences for creative solution implementation in the form of operationalised creativity decision alternatives. 5. Methodological innovation to identify extreme decision options by applying Shafir’s findings regarding attribute framing effects in reverse to create a test. 6. Empirical innovation with statistically significant research findings which indicate creative motivation varies in a systematic way. 7. Empirical innovation with statistically significant research findings which identify innovation descriptor framing effects 8. Empirical innovation with statistically significant research findings which expand understanding of Kirton’s cognitive style descriptors including the importance of safe rule breaking. 9. Empirical innovation with statistically significant research findings which validate how framing effects do apply to decisions involving operationalised creativity. Drawing on previous research related to creative motivation, cognitive style, framing effects and supervisor interactions with employees, this study delivers insights which can assist managers to increase the production and implementation of creativity in organisations. Hopefully this will result in organisations which are more innovative. Such organisations have the potential to provide ongoing economic and social benefits.

A review of prostate-specific antigen screening prevalence and risk perceptions for first-degree relatives of men with prostate cancer

First-degree relatives of men with prostate cancer have a higher risk of being diagnosed with prostate cancer than men without a family history. The present review examines the prevalence and predictors of testing in first-degree relatives, perceptions of risk, prostate cancer knowledge and psychological consequences of screening. Medline, PsycInfo and Cinahl databases were searched for articles examining risk perceptions or screening practices of first-degree relatives of men with prostate cancer for the period of 1990 to August 2007. Eighteen studies were eligible for inclusion. First-degree relatives participated in prostate-specific antigen (PSA) testing more and perceived their risk of prostate cancer to be higher than men without a family history. Family history factors (e.g. being an unaffected son rather than an unaffected brother) were consistent predictors of PSA testing. Studies were characterized by sampling biases and a lack of longitudinal assessments. Prospective, longitudinal assessments with well-validated and comprehensive measures are needed to identify factors that cue the uptake of screening and from this develop an evidence base for decision support. Men with a family history may benefit from targeted communication about the risks and benefits of prostate cancer testing that responds to the implications of their heightened risk.

Eucharistic rituals in Catholic primary schools in the Archdiocese of Brisbane : a study of administrators' conceptions

The focus of this study is the celebration of Eucharist in Catholic primary schools within the Archdiocese of Brisbane. The context of the contemporary Australian Catholic primary school embodies certain 'problematical realities' in relation to the time-honoured way in which school Eucharistic rituals have been celebrated. These contemporary realities raise a number of issues that impact on school celebrations of Eucharist. The purpose of this study is to explore administrators' differing conceptions of school Eucharistic rituals in an attempt to investigate some of these issues and assist members of individual school communities as they strive to make celebrations of Eucharist appropriate and meaningful for the group gathered. The phenomenographic research approach was adopted, as it is well suited to the purpose of this study and the nature of the research question. Phenomenography is essentially a study of variation. It attempts to map the 'whole' phenomenon under investigation by describing on equal terms all conceptions of the phenomenon and establishing an ordered relationship among them. The purpose of this study and the nature of the research question necessitate an approach that allows the identification and description of the different ways in which administrators' experience school Eucharistic rituals. Accordingly, phenomenography was selected. Members of the Administration Team, namely the principal, the APRE (Assistant to the Principal Religious Education) and, in larger primary schools, the AP A (Assistant to the Principal Administration) share responsibility for leading change in Catholic primary schools in the Archdiocese of Brisbane. In practice, however, principals delegate the role of leading the development of the school's religion program and providing leadership in the religious life of the school community to the APRE (Brisbane Catholic Education, 1997). Informants in this study are nineteen APREs from a variety of Catholic primary schools in the Archdiocese of Brisbane. These APREs come from schools across the archdiocese, rather than from within one particular region. Several significant findings resulted from this study. Firstly, the data show that there are significant differences in how APREs' experience school Eucharistic rituals, although the number of these qualitatively different conceptions is quite limited. The study identifies and describes six distinct yet related conceptions of school Eucharistic rituals. The logical relationship among these conceptions (the outcome space) is presented in the form of a diagram with accompanying explication. The variation among the conceptions is best understood and described in terms of three dimensions of the role of Eucharist in the Catholic primary school and is represented on the model of the outcome space. Individual transcripts suggest that individual APREs tend to emphasise some conceptions more than others. It is the contention of the present study that change in the practice of school Eucharistic rituals is unlikely to occur until all of a school community's conceptions are brought out into the open and articulated. As leaders of change, APREs need to be alerted to their own biases and become aware of alternative ways of conceiving school Eucharistic ritual. It is proposed that the different categories of description and dimensions, represented by the model of the outcome space, can be used to help in the process of articulating a school community's conceptions of Eucharist, with the APRE as facilitator of this process. As a result, the school community develops a better understanding of why their particular school does what it does in relation to school Eucharistic rituals.