Noise, predation risk compensation and vigilance in the chaffinch Fringilla coelebs

Background noise should in theory hinder detection of auditory cues associated with approaching danger. We tested whether foraging chaffinches Fringilla coelebs responded to background noise by increasing vigilance, and examined whether this was explained by predation risk compensation or by a novel stimulus hypothesis. The former predicts that only inter-scan interval should be modified in the presence of background noise, not vigilance levels generally. This is because noise hampers auditory cue detection and increases perceived predation risk primarily when in the head-down position, and also because previous tests have shown that only interscan interval is correlated with predator detection ability in this system. Chaffinches only modified interscan interval supporting this hypothesis. At the same time they made significantly fewer pecks when feeding during the background noise treatment and so the increased vigilance led to a reduction in intake rate, suggesting that compensating for the increased predation risk could indirectly lead to a fitness cost. Finally, the novel stimulus hypothesis predicts that chaffinches should habituate to the noise, which did not occur within a trial or over 5 subsequent trials. We conclude that auditory cues may be an important component of the trade-off between vigilance and feeding, and discuss possible implications for anti-predation theory and ecological processes

Paying for long-term performance: restructuring bankers’ pay for risk regulation

The purpose of this paper is to propose hybrid capital securities as a new approach to compensation for senior bank executives and risk-takers instead of cash or equity-based compensation currently adopted by the industry. The global financial turmoil indicated that misaligned pay-for-performance compensation arrangements encouraged management short-termism and rewarded excessive risk-taking behaviour in Anglo-Saxon system. Rather than regulating specific instruments and processes, we believe that it is much more efficient to overhaul the compensation scheme to align it with risk management and governance. This empirical paper investigates the European hybrid market by employing data from the Merrill Lynch Global Index System from 2000 to 2010. Our paper contributes to both literature and practices by designing a structured scheme to tie the executive’s interests to long-term performance of the bank, the goal of regulators and the economy at large which consequently reduce the probability of future bank failures.

Energy compensation following consumption of sugar-reduced products: a randomized controlled trial

PURPOSE: Consumption of sugar-reformulated products (commercially available foods and beverages that have been reduced in sugar content through reformulation) is a potential strategy for lowering sugar intake at a population level. The impact of sugar-reformulated products on body weight, energy balance (EB) dynamics and cardiovascular disease risk indicators has yet to be established. The REFORMulated foods (REFORM) study examined the impact of an 8-week sugar-reformulated product exchange on body weight, EB dynamics, blood pressure, arterial stiffness, glycemia and lipemia. METHODS: A randomized, controlled, double-blind, crossover dietary intervention study was performed with fifty healthy normal to overweight men and women (age 32.0 ± 9.8 year, BMI 23.5 ± 3.0 kg/m2) who were randomly assigned to consume either regular sugar or sugar-reduced foods and beverages for 8 weeks, separated by 4-week washout period. Body weight, energy intake (EI), energy expenditure and vascular markers were assessed at baseline and after both interventions. RESULTS: We found that carbohydrate (P < 0.001), total sugars (P < 0.001) and non-milk extrinsic sugars (P < 0.001) (% EI) were lower, whereas fat (P = 0.001) and protein (P = 0.038) intakes (% EI) were higher on the sugar-reduced than the regular diet. No effects on body weight, blood pressure, arterial stiffness, fasting glycemia or lipemia were observed. CONCLUSIONS: Consumption of sugar-reduced products, as part of a blinded dietary exchange for an 8-week period, resulted in a significant reduction in sugar intake. Body weight did not change significantly, which we propose was due to energy compensation.

Risk taking of executives under different incentive contracts: experimental evidence

Classic financial agency theory recommends compensation through stock options rather than shares to counteract excessive risk aversion in agents. In a setting where any kind of risk taking is suboptimal for shareholders, we show that excessive risk taking may occur for one of two reasons: risk preferences or incentives. Even when compensated through restricted company stock, experimental CEOs take large amounts of excessive risk. This contradicts classical financial theory, but can be explained through risk preferences that are not uniform over the probability and outcome spaces, and in particular, risk seeking for small probability gains and large probability losses. Compensation through options further increases risk taking as expected. We show that this effect is driven mainly by the personal asset position of the experimental CEO, thus having deleterious effects on company performance.

Reining in excessive risk-taking by executives: the effect of accountability

Performance-contingent compensation by means of stock options may induce risk-taking in agents that is excessive from the point of view of the company or the shareholders. We test whether increasing shareholder control may be an effective checking mechanism to rein in such excessive risk-taking. We thus tell one group of experimental CEOs that they may have to justify their decision-making processes in front of their shareholders. This indeed reduces risk-taking and increases the performance of the companies they manage. Implications are discussed.