Avoiding the dark side of positive online consumer reviews: enhancing reviews' usefulness for high risk-averse travelers

The influence of positive online consumer reviews on a traveler's decision making remains unclear. To better understand the perceived usefulness of online reviews, this study conducts two experiments using positive and negative online consumer reviews. Study results suggest that high risk-averse travelers find negative online reviews more useful than positive reviews. For positive online reviews, high-risk averse travelers feel expert reviewers' postings, travel product pictures, and well-known brand names enhance usefulness of the positive online reviews. These findings offer interesting implications for both marketing theory and practice.

Production risk, pesticide use and GM crop technology in South Africa

Technology involving genetic modification of crops has the potential to make a contribution to rural poverty reduction in many developing countries. Thus far, pesticide-producing Bacillus thuringensis (Bt) varieties of cotton have been the main GM crops under cultivation in developing nations. Several studies have evaluated the farm-level performance of Bt varieties in comparison to conventional ones by estimating production technology, and have mostly found Bt technology to be very successful in raising output and/or reducing pesticide input. However, the production risk properties of this technology have not been studied, although they are likely to be important to risk-averse smallholders. This study investigates the output risk aspects of Bt technology by estimating two 'flexible risk' production function models allowing technology to independently affect the mean and higher moments of output. The first is the popular Just-Pope model and the second is a more general 'damage control' flexible risk model. The models are applied to cross-sectional data on South African smallholders, some of whom used Bt varieties. The results show no evidence that a 'risk-reduction' claim can be made for Bt technology. Indeed, there is some evidence to support the notion that the technology increases output risk, implying that simple (expected) profit computations used in past evaluations may overstate true benefits.

Output risk aspects of genetically modified crop technology in South Africa

Technology involving genetic modification of crops has the potential to make a contribution to rural poverty reduction in many developing countries. Thus far, insecticide-producing 'Bt' varieties of cotton have been the main GM crops under cultivation in developing nations. Several studies have evaluated the farm-level performance of Bt varieties in comparison to conventional ones by estimating production technology, and have mostly found Bt technology to be very successful in raising output and/or reducing insecticide input. However, the production risk properties of this technology have not been studied, although they are likely to be important to risk-averse smallholders. This study investigates the output risk aspects of Bt technology using a three-year farm-level dataset on smallholder cotton production in Makhathini flats, Kwa-Zulu Natal, South Africa. Stochastic dominance and stochastic production function estimation methods are used to examine the risk properties of the two technologies. Results indicate that Bt technology increases output risk by being most effective when crop growth conditions are good, but being less effective when conditions are less favourable. However, in spite of its risk increasing effect, the mean output performance of Bt cotton is good enough to make it preferable to conventional technology even for risk-averse smallholders.

Production risk, pesticide use and GM crop technology in South Africa

Technology involving genetic modification of crops has the potential to make a contribution to rural poverty reduction in many developing countries. Thus far, pesticide-producing Bacillus thuringensis (Bt) varieties of cotton have been the main GM crops under cultivation in developing nations. Several studies have evaluated the farm-level performance of Bt varieties in comparison to conventional ones by estimating production technology, and have mostly found Bt technology to be very successful in raising output and/or reducing pesticide input. However, the production risk properties of this technology have not been studied, although they are likely to be important to risk-averse smallholders. This study investigates the output risk aspects of Bt technology by estimating two 'flexible risk' production function models allowing technology to independently affect the mean and higher moments of output. The first is the popular Just-Pope model and the second is a more general 'damage control' flexible risk model. The models are applied to cross-sectional data on South African smallholders, some of whom used Bt varieties. The results show no evidence that a 'risk-reduction' claim can be made for Bt technology. Indeed, there is some evidence to support the notion that the technology increases output risk, implying that simple (expected) profit computations used in past evaluations may overstate true benefits.

Accounting for the economic risk, caused by variation in disease severity, in fungicide dose decisions: exemplified for Mycosphaerella graminicola on winter wheat

A method is presented to calculate economic optimum fungicide doses accounting for the risk-aversion of growers responding to variability in disease severity between crops. Simple dose-response and disease-yield loss functions are used to estimate net disease-related costs (fungicide cost, plus disease-induced yield loss) as a function of dose and untreated severity. With fairly general assumptions about the shapes of the probability distribution of disease severity and the other functions involved, we show that a choice of fungicide dose which minimises net costs on average across seasons results in occasional large net costs caused by inadequate control in high disease seasons. This may be unacceptable to a grower with limited capital. A risk-averse grower can choose to reduce the size and frequency of such losses by applying a higher dose as insurance. For example, a grower may decide to accept ‘high loss’ years one year in ten or one year in twenty (i.e. specifying a proportion of years in which disease severity and net costs will be above a specified level). Our analysis shows that taking into account disease severity variation and risk-aversion will usually increase the dose applied by an economically rational grower. The analysis is illustrated with data on septoria tritici leaf blotch of wheat caused by Mycosphaerella graminicola. Observations from untreated field plots at sites across England over three years were used to estimate the probability distribution of disease severities at mid-grain filling. In the absence of a fully reliable disease forecasting scheme, reducing the frequency of ‘high loss’ years requires substantially higher doses to be applied to all crops. Disease resistant cultivars reduce both the optimal dose at all levels of risk and the disease-related costs at all doses.

Accounting for risk aversion in repeated prisoners’ dilemma games: an experimental test

We apply experimental methods to study the role of risk aversion on players’ behavior in repeated prisoners’ dilemma games. Faced with quantitatively equal discount factors, the most risk-averse players will choose Nash strategies more often in the presence of uncertainty than when future profits are discounted in a deterministic way. Overall, we find that risk aversion relates negatively with the frequency of collusive outcomes.

The lottery-panel task for bi-dimensional parameter-free elicitation of risk attitudes

We propose first, a simple task for the eliciting attitudes toward risky choice, the SGG lottery-panel task, which consists in a series of lotteries constructed to compensate riskier options with higher risk-return trade-offs. Using Principal Component Analysis technique, we show that the SGG lottery-panel task is capable of capturing two dimensions of individual risky decision making i.e. subjects’ average risk taking and their sensitivity towards variations in risk-return. From the results of a large experimental dataset, we confirm that the task systematically captures a number of regularities such as: A tendency to risk averse behavior (only around 10% of choices are compatible with risk neutrality); An attraction to certain payoffs compared to low risk lotteries, compatible with over-(under-) weighting of small (large) probabilities predicted in PT and; Gender differences, i.e. males being consistently less risk averse than females but both genders being similarly responsive to the increases in risk-premium. Another interesting result is that in hypothetical choices most individuals increase their risk taking responding to the increase in return to risk, as predicted by PT, while across panels with real rewards we see even more changes, but opposite to the expected pattern of riskier choices for higher risk-returns. Therefore, we conclude from our data that an “economic anomaly” emerges in the real reward choices opposite to the hypothetical choices. These findings are in line with Camerer's (1995) view that although in many domains, paid subjects probably do exert extra mental effort which improves their performance, choice over money gambles is not likely to be a domain in which effort will improve adherence to rational axioms (p. 635). Finally, we demonstrate that both dimensions of risk attitudes, average risk taking and sensitivity towards variations in the return to risk, are desirable not only to describe behavior under risk but also to explain behavior in other contexts, as illustrated by an example. In the second study, we propose three additional treatments intended to elicit risk attitudes under high stakes and mixed outcome (gains and losses) lotteries. Using a dataset obtained from a hypothetical implementation of the tasks we show that the new treatments are able to capture both dimensions of risk attitudes. This new dataset allows us to describe several regularities, both at the aggregate and within-subjects level. We find that in every treatment over 70% of choices show some degree of risk aversion and only between 0.6% and 15.3% of individuals are consistently risk neutral within the same treatment. We also confirm the existence of gender differences in the degree of risk taking, that is, in all treatments females prefer safer lotteries compared to males. Regarding our second dimension of risk attitudes we observe, in all treatments, an increase in risk taking in response to risk premium increases. Treatment comparisons reveal other regularities, such as a lower degree of risk taking in large stake treatments compared to low stake treatments and a lower degree of risk taking when losses are incorporated into the large stake lotteries. Results that are compatible with previous findings in the literature, for stake size effects (e.g., Binswanger, 1980; Antoni Bosch-Domènech & Silvestre, 1999; Hogarth & Einhorn, 1990; Holt & Laury, 2002; Kachelmeier & Shehata, 1992; Kühberger et al., 1999; B. J. Weber & Chapman, 2005; Wik et al., 2007) and domain effect (e.g., Brooks and Zank, 2005, Schoemaker, 1990, Wik et al., 2007). Whereas for small stake treatments, we find that the effect of incorporating losses into the outcomes is not so clear. At the aggregate level an increase in risk taking is observed, but also more dispersion in the choices, whilst at the within-subjects level the effect weakens. Finally, regarding responses to risk premium, we find that compared to only gains treatments sensitivity is lower in the mixed lotteries treatments (SL and LL). In general sensitivity to risk-return is more affected by the domain than the stake size. After having described the properties of risk attitudes as captured by the SGG risk elicitation task and its three new versions, it is important to recall that the danger of using unidimensional descriptions of risk attitudes goes beyond the incompatibility with modern economic theories like PT, CPT etc., all of which call for tests with multiple degrees of freedom. Being faithful to this recommendation, the contribution of this essay is an empirically and endogenously determined bi-dimensional specification of risk attitudes, useful to describe behavior under uncertainty and to explain behavior in other contexts. Hopefully, this will contribute to create large datasets containing a multidimensional description of individual risk attitudes, while at the same time allowing for a robust context, compatible with present and even future more complex descriptions of human attitudes towards risk.

Implications of recent Australian wheat industry developments for overseas and domestic prices

This study is motivated by the proposition that the objectives of the AWB Ltd have changed since semi-privatisation of the Australian Wheat Board under the Wheat Marketing Act, 1989. Conceptualising this change of objectives as a shift from revenue maximization to profit maximization, this study examines the impact of such a change on the pricing policies of a multi-market price-setting firm. More specifically, this paper investigates, using two hypothetical objective functions, a risk averse AWB�s price-setting behaviour in an �overseas� and a �domestic� market in response to recent wheat industry developments. In the analysis these developments manifest themselves as differing price elasticities, differing transport costs and uncertain demand functions, and their implications particularly for the prices paid by domestic consumers are explored.

Evidence of systematic approaches to innovation in facilities management

Purpose – This paper seeks to examine the nature of “service innovation” in the facilities management (FM) context. It reviews recent thinking on “service innovation” as distinct from “product innovation”. Applying these contemporary perspectives it describes UK case studies of 11 innovations in different FM organisations. These include both in-house client-based innovations and third-party innovations. Design/methodology/approach – The study described in the paper encompasses 11 different innovations that constitute a mix of process, product and practice innovations. All of the innovations stem from UK-based organisations that were subject to in-depth interviews regarding the identification, screening, commitment of resources and implementation of the selected innovations. Findings – The research suggested that service innovation is highly active in the UK FM sector. However, the process of innovation rarely followed a common formalized path. Generally, the innovations were one-shot commitments at the early stage. None of the innovations studied failed to proceed to full adoption stage. This was either due to the reluctance of participating organisations to volunteer “tested but unsuccessful” innovations or the absence of any trial methods that might have exposed an innovations shortcomings. Research limitations/implications – The selection of innovations was restricted to the UK context. Moreover, the choice of innovations was partly determined by the innovating organisation. This selection process appeared to emphasise “one-shot” high profile technological innovations, typically associated with software. This may have been at the expense of less resource intensive, bottom-up innovations. Practical implications – This paper suggests that there is a role for “research and innovation” teams within larger FM organisations, whether they are client-based or third-party. Central to this philosophy is an approach that is open to the possibility of failure. The innovations studied were risk averse with a firm commitment to proceed at the early stage. Originality/value – This paper introduces new thinking on the subject of “service innovation” to the context of FM. It presents research and development as a planned solution to innovation. This approach will enable service organisations to fully test and exploit service innovations.

Untangling rhetoric and reality in the CSR debate – the role of corporate social responsibility in effective business strategy

While there is a strong moral case for corporate social responsibility (CSR), the business case for CSR is certainly not irrefutable. A better understanding of how to integrate CSR into business strategy is needed but with ever increasing momentum towards sustainability as a business driver, it is often difficult to untangle the rhetoric from reality in the CSR debate. Through an analysis of eight case studies of leading firms from throughout the construction supply chain who claim to engage in CSR, we explore how consulting and contracting firms in the construction and engineering industries integrate CSR into their business strategy. Findings point to an inherent caution of moving beyond compliance and to a risk-averse culture which adopts very narrow definitions of success. We conclude that until this culture changes or the industry is forced by clients or regulation to change, the idea of CSR will continue to mean achieving economic measures of success, with ecological goals a second regulated priority and social goals a distant third.

Attitudinal and demographic determinants of diet quality and implications for policy targeting

Background:  Poor diet quality is a major public health concern that has prompted governments to introduce a range of measures to promote healthy eating. For these measures to be effective, they should target segments of the population with messages relevant to their needs, aspirations and circumstances. The present study investigates the extent to which attitudes and constraints influence healthy eating, as well as how these vary by demographic characteristics of the UK population. It further considers how such information may be used in segmented diet and health policy messages. Methods:  A survey of 250 UK adults elicited information on conformity to dietary guidelines, attitudes towards healthy eating, constraints to healthy eating and demographic characteristics. Ordered logit regressions were estimated to determine the importance of attitudes and constraints in determining how closely respondents follow healthy eating guidelines. Further regressions explored the demographic characteristics associated with the attitudinal and constraint variables. Results:  People who attach high importance to their own health and appearance eat more healthily than those who do not. Risk-averse people and those able to resist temptation also eat more healthily. Shortage of time is considered an important barrier to healthy eating, although the cost of a healthy diet is not. These variables are associated with a number of demographic characteristics of the population; for example, young adults are more motivated to eat healthily by concerns over their appearance than their health. Conclusions:  The approach employed in the present study could be used to inform future healthy eating campaigns. For example, messages to encourage the young to eat more healthily could focus on the impact of diets on their appearance rather than health.

Language capital and development: the case of African language publishing for children in South Africa

In recognizing 11 official languages, the 1996 South African Constitution provides a context for the management of diversity with important implications for the redistribution of wealth and power. The development and implementation of the language-in-education policies which might be expected to flow from the Constitution, however, have been slow and ineffective. One of the casualties of government procrastination has been African language publishing. In the absence of well-resourced bilingual education, most learners continue to be taught through the medium of English as a second language. Teachers are reluctant to use more innovative pedagogies without the support of adequate African language materials and publishers are cautious about producing such materials. Nonetheless, activity in this sector offers many opportunities for African language speakers. This paper explores the challenges and constraints for African language publishing for children and argues that market forces and language policy need to work in mutually reinforcing ways. Further progress is necessarily dependent on the political will to implement language-in-education policies that promote additive bilingualism and, in the process, guarantee sales for risk-averse publishers.

El papel del género en la toma de decisiones bajo incertidumbre

We study gender differences in individual decision making under uncertainty. we use the lottery panel test introduced in Sabater-Grande and Georgantzís (2002). We find that females are more risk averse than males. Moreover, females are less sensitive to risk premia than males.

Asset liability modelling and pension schemes: the application of robust optimization to USS

This paper uses a novel numerical optimization technique - robust optimization - that is well suited to solving the asset-liability management (ALM) problem for pension schemes. It requires the estimation of fewer stochastic parameters, reduces estimation risk and adopts a prudent approach to asset allocation. This study is the first to apply it to a real-world pension scheme, and the first ALM model of a pension scheme to maximise the Sharpe ratio. We disaggregate pension liabilities into three components - active members, deferred members and pensioners, and transform the optimal asset allocation into the scheme’s projected contribution rate. The robust optimization model is extended to include liabilities and used to derive optimal investment policies for the Universities Superannuation Scheme (USS), benchmarked against the Sharpe and Tint, Bayes-Stein, and Black-Litterman models as well as the actual USS investment decisions. Over a 144 month out-of-sample period robust optimization is superior to the four benchmarks across 20 performance criteria, and has a remarkably stable asset allocation – essentially fix-mix. These conclusions are supported by six robustness checks.