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.

Developments in the quality of treated greywater supplies for buildings, and associated user perception and acceptance

A manufactured aeration and nanofiltration MBR greywater system was tested during continuous operation at the University of Reading, to demonstrate reliability in delivery of high quality treated greywater. Its treatment performance was evaluated against British Standard criteria [BSI (Greywater Systems—Part 1 Code of Practice: BS8525-1:2010. BS Press, 2010); (Greywater Systems—Part 2 Domestic Greywater Treatment, Requirements and Methods: BS 8525-2:2011. BS Press, 2011)]. The low carbon greywater recycling technology produced excellent analytical results as well as consistency in performance. User acceptance of such reliably treated greywater was then evaluated through user perception studies. The results inform the potential supply of treated greywater to student accommodation. Out of 135 questionnaire replies, 95% demonstrated a lack of aversion in one or more attributes, to using treated, recycled greywater.

Voices of Occupiers/Liberators: The BBC's Radio Propaganda in Italy between 1942 and 1945

The ambiguity of the role played by British propaganda in Italy during the Second World War is clearly reflected in the phenomenon of Radio London. While Radio London raised the morale of the Italian civilians living under the Fascist regime and provided them with alternative information on the conflict, the microphones of the BBC were also used by the British government to address a country they were planning to occupy. In this article, I will analyse the occupation/liberation operations that were run at the BBC Italian Service from two separate angles. On the one hand, the analysis of the programmes broadcast between the months preceding the Allies’ landing in Sicily and the actual occupation shows how the Allies built their image as liberators and guarantors of better living conditions. On the other, the analysis of the relationships between the Foreign Office and the anti-Fascist exiles reveals that the Italian BBC broadcasters were not always allowed to freely express their political opinion or to dispose of their own lives.

Experimental philosophy of language

Experimental philosophy of language uses experimental methods developed in the cognitive sciences to investigate topics of interest to philosophers of language. This article describes the methodological background for the development of experimental approaches to topics in philosophy of language, distinguishes negative and positive projects in experimental philosophy of language, and evaluates experimental work on the reference of proper names and natural kind terms. The reliability of expert judgments vs. the judgments of ordinary speakers, the role that ambiguity plays in influencing responses to experiments, and the reliability of meta-linguistic judgments are also assessed.

The spiral structure of the Galaxy revealed by CS sources and evidence for the 4:1 resonance

We present a map of the spiral structure of the Galaxy, as traced by molecular carbon monosulphide (CS) emission associated with IRAS sources which are believed to be compact H II regions. The CS line velocities are used to determine the kinematic distances of the sources in order to investigate their distribution in the galactic plane. This allows us to use 870 objects to trace the arms, a number larger than that of previous studies based on classical H II regions. The distance ambiguity of the kinematic distances, when it exists, is solved by different procedures, including the latitude distribution and an analysis of the longitude-velocity diagram. The study of the spiral structure is complemented with other tracers: open clusters, Cepheids, methanol masers and H II regions. The well-defined spiral arms are seen to be confined inside the corotation radius, as is often the case in spiral galaxies. We identify a square-shaped sub-structure in the CS map with that predicted by stellar orbits at the 4:1 resonance (four epicycle oscillations in one turn around the galactic centre). The sub-structure is found at the expected radius, based on the known pattern rotation speed and epicycle frequency curve. An inner arm presents an end with strong inwards curvature and intense star formation that we tentatively associate with the region where this arm surrounds the extremity of the bar, as seen in many barred galaxies. Finally, a new arm with concave curvature is found in the Sagitta to Cepheus region of the sky. The observed arms are interpreted in terms of perturbations similar to grooves in the gravitational potential of the disc, produced by crowding of stellar orbits.

Negative anticipatory contrast: Does it involve anticipation of an impending reward?

Negative anticipatory contrast (NAC) corresponds to the suppression in consumption of a first rewarding substance (e.g., saccharin 0.15%) when it is followed daily by a second preferred substance (e.g., sucrose 32%). The NAC has been interpreted as resulting from anticipation of the impending preferred reward and its comparison with the currently available first reward [Flaherty, CF., Rowan, G.A., 1985. Anticipatory contrast: within-subjects analysis. Anim. Learn. Behav. 13, 2-5]. In this context, one should expect that devaluation of the preferred substance after the establishment of the NAC would either reduce or abolish the contrast effect. However, contrary to this prediction, the results of the present study show that the NAC is insensitive to devaluation of the second, preferred, substance. This allows one to question that interpretation. The results reported in this study support the view that the NAC effect is controlled by memory of the relative value of the first solution, which is updated daily by means of both a gustatory and/or post-ingestive comparison of the first and second solutions, and memory of past pairings. (C) 2010 Elsevier B.V. All rights reserved.

Adapting Web content for low-literacy readers by using lexical elaboration and named entities labeling

This paper presents an approach for assisting low-literacy readers in accessing Web online information. The oEducational FACILITAo tool is a Web content adaptation tool that provides innovative features and follows more intuitive interaction models regarding accessibility concerns. Especially, we propose an interaction model and a Web application that explore the natural language processing tasks of lexical elaboration and named entity labeling for improving Web accessibility. We report on the results obtained from a pilot study on usability analysis carried out with low-literacy users. The preliminary results show that oEducational FACILITAo improves the comprehension of text elements, although the assistance mechanisms might also confuse users when word sense ambiguity is introduced, by gathering, for a complex word, a list of synonyms with multiple meanings. This fact evokes a future solution in which the correct sense for a complex word in a sentence is identified, solving this pervasive characteristic of natural languages. The pilot study also identified that experienced computer users find the tool to be more useful than novice computer users do.

Manipulation in Newspaper Articles : A Political Discourse Analysis of Lexical Choice and Manipulation in Japanese Newspaper Crisis Reporting in the case of North Korea

This paper analyzes some forms of linguistic manipulation in Japanese in newspapers when reporting on North Korea and its nuclear tests. The focus lies on lexical ambiguity in headlines and journalist’s voices in the body of the articles, that results in manipulation of the minds of the readers. The study is based on a corpus of nine articles from two of Japan’s largest newspapers Yomiuri Online and Asahi Shimbun Digital. The linguistic phenomenon that contribute to create manipulation are divided into Short Term Memory impact or Long Term Memory impact and examples will be discussed under each of the categories.The main results of the study are that headlines in Japanese newspapers do not make use of an ambiguous, double grounded structure. However, the articles are filled with explicit and implied attitudes as well as attributed material from people of a high social status, which suggests that manipulation of the long term memory is a tool used in Japanese media.

Effects of a quantum measurement on the electric conductivity : Application to graphene

We generalize the standard linear-response (Kubo) theory to obtain the conductivity of a system that is subject to a quantum measurement of the current. Our approach can be used to specifically elucidate how back-action inherent to quantum measurements affects electronic transport. To illustrate the utility of our general formalism, we calculate the frequency-dependent conductivity of graphene and discuss the effect of measurement-induced decoherence on its value in the dc limit. We are able to resolve an ambiguity related to the parametric dependence of the minimal conductivity.

L'Homme sous le masque : Une étude du personnage principal dans Le Fantôme de l'Opéra

L’objet de la présente étude est le personnage principal dans l’oeuvre Le Fantôme de l’Opéra de Gaston Leroux. Le but de cette analyse littéraire est de mettre en évidence l'ambiguïté et la complexité psychologique et morale de ce personnage.L’analyse est basée sur les théories de Vincent Jouve à propos de la perception du personnage romanesque. Le résultat de l'analyse montre que l'ambiguïté du personnage principal peut être déduite de ce que Jouve appelle le « système de la sympathie » constitué de trois codes : le code narratif, le code affectif et le code culturel.

Nurses' research utilization two years after graduation : a national survey ofassociated individual, organizational, and educational factors

Background. Nurses' research utilization (RU) as part of evidence-based practice is strongly emphasized in today's nursing education and clinical practice. The primary aim of RU is to provide high-quality nursing care to patients. Data on newly graduated nurses' RU are scarce, but a predominance of low use has been reported in recent studies. Factors associated with nurses' RU have previously been identified among individual and organizational/contextual factors, but there is a lack of knowledge about how these factors, including educational ones, interact with each other and with RU, particularly in nurses during the first years after graduation. The purpose of this study was therefore to identify factors that predict the probability for low RU among registered nurses two years after graduation. Methods. Data were collected as part of the LANE study (Longitudinal Analysis of Nursing Education), a Swedish national survey of nursing students and registered nurses. Data on nurses' instrumental, conceptual, and persuasive RU were collected two years after graduation (2007, n = 845), together with data on work contextual factors. Data on individual and educational factors were collected in the first year (2002) and last term of education (2004). Guided by an analytic schedule, bivariate analyses, followed by logistic regression modeling, were applied. Results. Of the variables associated with RU in the bivariate analyses, six were found to be significantly related to low RU in the final logistic regression model: work in the psychiatric setting, role ambiguity, sufficient staffing, low work challenge, being male, and low student activity. Conclusions. A number of factors associated with nurses' low extent of RU two years postgraduation were found, most of them potentially modifiable. These findings illustrate the multitude of factors related to low RU extent and take their interrelationships into account. This knowledge might serve as useful input in planning future studies aiming to improve nurses', specifically newly graduated nurses', RU.

Optimal performance fee and flow of funds in asset management contracts

This paper investigates the importance of ow of funds as an implicit incentive in the asset management industry. We build a two-period bi- nomial moral hazard model to explain the trade-o¤s between ow, per- formance and fees where e¤ort depends on the combination of implicit ( ow of funds) and explicit (performance fee) incentives. Two cases are considered. With full commitment, the investor s relevant trade-o¤ is to give up expected return in the second period vis-à-vis to induce e¤ort in the rst period. The more concerned the investor is with today s pay- o¤, the more willing he will be to give up expected return in the second period by penalizing negative excess return in the rst period. Without full commitment, the investor learns some symmetric and imperfect infor- mation about the ability of the manager to obtain positive excess return. In this case, observed returns reveal ability as well as e¤ort choices. We show that powerful implicit incentives may explain the ow-performance relationship with a numerical solution. Besides, risk aversion explains the complementarity between performance fee and ow of funds.

Avaliando questionários de risco e o comportamento do investidor sobre a ótica de behavioral finance

Tolerância ao risco é fundamental quando se tomam decisões financeiras. No entanto, a avaliação da tolerância ao risco tem se baseado ao longo dos anos em diferentes metodologias, tais como julgamentos heurísticos e a teoria da utilidade esperada que tem como base a hipótese dos mercados eficientes. Foi dentro desta ótica que este trabalho se desenvolveu. O objetivo é analisar três diferentes questionários de avaliação ao risco que são na prática amplamente utilizados por consultores financeiros. Foi assumido para isso que os investidores são considerados racionais, conhecem e ordenam de forma lógica suas preferências, buscam maximizar a "utilidade" de suas escolhas, e conseguem atribuir com precisão probabilidades aos eventos futuros, quando submetidos a escolhas que envolvam incertezas. No entanto, em uma análise preliminar dos questionários, estes poderiam estar utilizando conceitos de behavioral finance para avaliarem a tolerância ao risco, ao invés de utilizarem somente a metodologia tradicional da teoria da utilidade esperada. Dessa forma tornou-se necessário o estudo dos conceitos de behavioral finance. O primeiro capítulo então trata dos aspectos psicológicos do investidor, procurando entender como este se comporta e como este forma suas preferências. Apesar do estudo assumir racionalidade nas decisões, se a teoria de behavioral estiver correta e os investidores apresentarem desvios a racionalidade, como a teoria prospectiva afirma, o questionário poderia ser o veículo ideal para identificar tais desvios, sendo possível então educar e orientar o indivíduo em suas escolhas financeiras, afim de maximizá-las. O capitulo dois coloca a análise dos questionários inserida no contexto da teoria moderna de finanças, falando das escolhas de portfólio para investidores de longo prazo. O capítulo mostra de forma bem resumida e simplificada como o investidor maximiza a sua utilidade da riqueza. A idéia desse capítulo é entender como alguns julgamentos heurísticos assumidos na prática por consultores financeiros afetam as escolhas de portfólio e em quais condições esses julgamentos heurísticos são verdadeiros. Isso se torna importante pois os questionários mesclam medidas de risco com horizonte de investimentos do investidor. Estes questionários são utilizados para traçar uma política de investimentos completa para o investidor. Para cada perfil de risco encontrado a instituição traça um modelo de alocação de portfólio. O capítulo três trata da avaliação dos questionários em si tendo como base a teoria da utilidade esperada, os conceitos de behaviral finance e as lições tiradas das escolhas de portfólio para investidores de longo prazo.

The trade-off between incentives and endogenous risk

Standard models of moral hazard predict a negative relationship between risk and incentives, but the empirical work has not confirmed this prediction. In this paper, we propose a model with adverse selection followed by moral hazard, where effort and the degree of risk aversion are private information of an agent who can control the mean and the variance of profits. For a given contract, more risk-averse agents suppIy more effort in risk reduction. If the marginal utility of incentives decreases with risk aversion, more risk-averse agents prefer lower-incentive contractsj thus, in the optimal contract, incentives are positively correlated with endogenous risk. In contrast, if risk aversion is high enough, the possibility of reduction in risk makes the marginal utility of incentives increasing in risk aversion and, in this case, risk and incentives are negatively related.

Estimating the stochastic discount factor without a utility function

Using the Pricing Equation in a panel-data framework, we construct a novel consistent estimator of the stochastic discount factor (SDF) which relies on the fact that its logarithm is the serial-correlation ìcommon featureîin every asset return of the economy. Our estimator is a simple function of asset returns, does not depend on any parametric function representing preferences, is suitable for testing di§erent preference speciÖcations or investigating intertemporal substitution puzzles, and can be a basis to construct an estimator of the risk-free rate. For post-war data, our estimator is close to unity most of the time, yielding an average annual real discount rate of 2.46%. In formal testing, we cannot reject standard preference speciÖcations used in the literature and estimates of the relative risk-aversion coe¢ cient are between 1 and 2, and statistically equal to unity. Using our SDF estimator, we found little signs of the equity-premium puzzle for the U.S.