Effort, reward and self-reported mental health: a simulation study on negative affectivity bias.

Background : In the present article, we propose an alternative method for dealing with negative affectivity (NA) biases in research, while investigating the association between a deleterious psychosocial environment at work and poor mental health. First, we investigated how strong NA must be to cause an observed correlation between the independent and dependent variables. Second, we subjectively assessed whether NA can have a large enough impact on a large enough number of subjects to invalidate the observed correlations between dependent and independent variables.Methods : We simulated 10,000 populations of 300 subjects each, using the marginal distribution of workers in an actual population that had answered the Siegrist's questionnaire on effort and reward imbalance (ERI) and the General Health Questionnaire (GHQ).Results : The results of the present study suggested that simulated NA has a minimal effect on the mean scores for effort and reward. However, the correlations between the effort and reward imbalance (ERI) ratio and the GHQ score might be important, even in simulated populations with a limited NA.Conclusions : When investigating the relationship between the ERI ratio and the GHQ score, we suggest the following rules for the interpretation of the results: correlations with an explained variance of 5% and below should be considered with caution; correlations with an explained variance between 5% and 10% may result from NA, although this effect does not seem likely; and correlations with an explained variance of 10% and above are not likely to be the result of NA biases. [Authors]

Three essays on the psychology of investment and financial markets

Préface My thesis consists of three essays where I consider equilibrium asset prices and investment strategies when the market is likely to experience crashes and possibly sharp windfalls. Although each part is written as an independent and self contained article, the papers share a common behavioral approach in representing investors preferences regarding to extremal returns. Investors utility is defined over their relative performance rather than over their final wealth position, a method first proposed by Markowitz (1952b) and by Kahneman and Tversky (1979), that I extend to incorporate preferences over extremal outcomes. With the failure of the traditional expected utility models in reproducing the observed stylized features of financial markets, the Prospect theory of Kahneman and Tversky (1979) offered the first significant alternative to the expected utility paradigm by considering that people focus on gains and losses rather than on final positions. Under this setting, Barberis, Huang, and Santos (2000) and McQueen and Vorkink (2004) were able to build a representative agent optimization model which solution reproduced some of the observed risk premium and excess volatility. The research in behavioral finance is relatively new and its potential still to explore. The three essays composing my thesis propose to use and extend this setting to study investors behavior and investment strategies in a market where crashes and sharp windfalls are likely to occur. In the first paper, the preferences of a representative agent, relative to time varying positive and negative extremal thresholds are modelled and estimated. A new utility function that conciliates between expected utility maximization and tail-related performance measures is proposed. The model estimation shows that the representative agent preferences reveals a significant level of crash aversion and lottery-pursuit. Assuming a single risky asset economy the proposed specification is able to reproduce some of the distributional features exhibited by financial return series. The second part proposes and illustrates a preference-based asset allocation model taking into account investors crash aversion. Using the skewed t distribution, optimal allocations are characterized as a resulting tradeoff between the distribution four moments. The specification highlights the preference for odd moments and the aversion for even moments. Qualitatively, optimal portfolios are analyzed in terms of firm characteristics and in a setting that reflects real-time asset allocation, a systematic over-performance is obtained compared to the aggregate stock market. Finally, in my third article, dynamic option-based investment strategies are derived and illustrated for investors presenting downside loss aversion. The problem is solved in closed form when the stock market exhibits stochastic volatility and jumps. The specification of downside loss averse utility functions allows corresponding terminal wealth profiles to be expressed as options on the stochastic discount factor contingent on the loss aversion level. Therefore dynamic strategies reduce to the replicating portfolio using exchange traded and well selected options, and the risky stock.

Development of allocentric spatial memory abilities in children from 18 months to 5 years of age.

Episodic memories for autobiographical events that happen in unique spatiotemporal contexts are central to defining who we are. Yet, before 2 years of age, children are unable to form or store episodic memories for recall later in life, a phenomenon known as infantile amnesia. Here, we studied the development of allocentric spatial memory, a fundamental component of episodic memory, in two versions of a real-world memory task requiring 18 month- to 5-year-old children to search for rewards hidden beneath cups distributed in an open-field arena. Whereas children 25-42-months-old were not capable of discriminating three reward locations among 18 possible locations in absence of local cues marking these locations, children older than 43 months found the reward locations reliably. These results support previous findings suggesting that allocentric spatial memory, if present, is only rudimentary in children under 3.5 years of age. However, when tested with only one reward location among four possible locations, children 25-39-months-old found the reward reliably in absence of local cues, whereas 18-23-month-olds did not. Our findings thus show that the ability to form a basic allocentric representation of the environment is present by 2 years of age, and its emergence coincides temporally with the offset of infantile amnesia. However, the ability of children to distinguish and remember closely related spatial locations improves from 2 to 3.5 years of age, a developmental period marked by persistent deficits in long-term episodic memory known as childhood amnesia. These findings support the hypothesis that the differential maturation of distinct hippocampal circuits contributes to the emergence of specific memory processes during early childhood.

Poor reward sensitivity and apathy after stroke: implication of basal ganglia.

OBJECTIVE: To examine the relationship between reward sensitivity and self-reported apathy in stroke patients and to investigate the neuroanatomical correlates of both reward sensitivity and apathy. METHODS: In this prospective study, 55 chronic stroke patients were administered a questionnaire to assess apathy and a laboratory task to examine reward sensitivity by measuring motivationally driven behavior ("reinforcement-related speeding"). Fifteen participants without brain damage served as controls for the laboratory task. Negative mood, working memory, and global cognitive functioning were also measured to determine whether reward insensitivity and apathy were secondary to cognitive impairments or negative mood. Voxel-based lesion-symptom mapping was used to explore the neuroanatomical substrates of reward sensitivity and apathy. RESULTS: Participants showed reinforcement-related speeding in the highly reinforced condition of the laboratory task. However, this effect was significant for the controls only. For patients, poorer reward sensitivity was associated with greater self-reported apathy (p < 0.05) beyond negative mood and after lesion size was controlled for. Neither apathy nor reward sensitivity was related to working memory or global cognitive functioning. Voxel-based lesion-symptom mapping showed that damage to the ventral putamen and globus pallidus, dorsal thalamus, and left insula and prefrontal cortex was associated with poorer reward sensitivity. The putamen and thalamus were also involved in self-reported apathy. CONCLUSIONS: Poor reward sensitivity in stroke patients with damage to the ventral basal ganglia, dorsal thalamus, insula, or prefrontal cortex constitutes a core feature of apathy. These results provide valuable insight into the neural mechanisms and brain substrate underlying apathy.