Explanations determine the impact of information on financial investment judgments

Previous research has shown that some types of judgments are influenced by the results of an explanation‐seeking comprehension process. The present experiments investigated novice investors' stock price forecasts and investment decisions. Information presented in a narrative story order was hypothesized to promote the construction of a coherent mental representation that would affect how information was interpreted and subsequently used to predict stock price changes. The results showed that outcome information had a distinctively high impact, but only when the information was read in story order. These results imply that presentation order affects the mental representation of evidence relevant to the forecast, and the form of that mental representation moderates the impact of individual pieces of information on the ultimate judgment. Copyright © 2005 John Wiley & Sons, Ltd.     

Cognition and emotion from the ret viewpoint

This article discusses the considerable overlap between my own (R. S. Lazarus) and Albert Ellis' cognitive view of emotions. In discussing Ellis' approach, the hallmarks of a cognitive theory of emotion are identified. My own theory concerning the role of cognitive appraisal and coping in emotions is discussed as well as the crucial metatheoretical concepts of transaction and process. It is stretching things to say that Albert Ellis has presented a fully elaborated theory of emotion. Rather, he has achieved the beginnings of a good theory especially as applied to the pathology of emotional life and how to correct it. Most lacking is how the emotion process works from encounter to encounter, moment to moment. Irrational beliefs as structural, static variables do not adequately account for emotional flux nor adequately explain the content and intensities of the full range of positive and negative emotions. The present article is a condensed and updated version of a previously published chapter: Lazarus, R. S. Cognition and emotion from the RET viewpoint. In M.E. Bernard & R. DiGiuseppe (Eds.),Inside rational-emotive therapy (pp. 47–68). San Diego, CA: Academic Press.     

Syllogizing ret: Applying formal logic in rationalemotive therapy

In this paper, it is shown how formal (deductive) logic can be applied to rational-emotive therapy. Several formal methodologies or techniques of belief system analysis are presented and illustrated.     

Resemblance and investment in children

According to evolutionary explanations men hardly ever are absolutely certain about their biological fatherhood therefore they must seek various sources of information to subjectively establish whether they are the genetic fathers of the children they raise. Apicella and Marlowe (2004) showed that fathers who perceived greater similarity between their children and themselves were willing to invest more resources (e.g., time, money, care) in their offspring presumably because the perceived resemblance indicated to the fathers their genetic relatedness with their children. The present study extended the design of Apicella and Marlowe's original study and included both fathers and mothers as participants. Parents were recruited by a female confederate at the airport and at the railway station in Wroclaw (Poland). Multiple regression analyses showed that perceived resemblance predicted parental investment in the child for both men and women. The fact that mothers' declarations of investment in their children also depended on the perceived resemblance factor is not consistent with evolutionary formulations delineated by Apicella and Marlowe (2004; 2007). Future studies must resolve the issue of whether the resemblance‐investment relation in fathers results from men relaying on child's resemblance to themselves as an indicator of their own biological paternity, or whether it results from the more parsimonious phenomenon that people in general are attracted more to other people who are similar to them.     

The role of trust in financial customer–seller relationships before and after the financial crisis

This study examines the role of trust in customer–seller relationships before and after the 2008 financial crisis. On the basis of two surveys comprising 1155 and 757 bank customers, respectively, it is shown that trust is less likely to mediate the relationship between satisfaction and loyalty after the financial crisis compared with before the financial crisis. The results suggest that consumers rely more on satisfaction and less on trust after the financial crisis compared with before the financial crisis when determining whether they should remain loyal to a particular financial service provider. Hence, as a direct managerial implication, financial service managers should consider investing additional resources in satisfying their customers in the after crisis era. In addition, it is suggested that managers should seek to rebuild the positive relationship between trust and loyalty in order to receive the full benefit of their trust‐building efforts. Copyright © 2014 John Wiley & Sons, Ltd.     

Maternal age, investment, and parent-child conflict: a mediational test of the terminal investment hypothesis

Drawing on the evolutionary terminal investment hypothesis and Trivers' (1974) parent-offspring conflict theory, we advance and evaluate a mediational model specifying why and how maternal age, via mating effort and parental investment, affects mother-child conflict. Data from a longitudinal study of 757 families indicate that (a) older maternal age predicts lower mating effort during the child's first 5 years of life, and (b) thereby, higher maternal investment in middle childhood when the child is around 10 years old. (c) Higher maternal investment, in turn, forecasts less child-perceived mother-child conflict in adolescence (age 15). These results proved robust against theoretically relevant covariates (family resources, parity, maternal education, and maternal personality characteristics) and in the context of an autoregressive model. Study limitations are noted and results are discussed in terms of the unique contributions of an evolutionary perspective to the determinants-of-parenting literature.     

On counsellors' investment in theory

Abstract

Working as a counsellor presupposes some kind of relationship to theory. No such relationship could be acquired without considerable investment of personal resources. But sometimes the significance with which theories or theoretical outlooks are invested can interfere with actual communication, as, for instance, when the awkward issue of theoretical difference can seem to become the real agenda in discussions ostensibly about clinical material. Such occurrences are the product of strong mutual influence between individuals' investments and the current interpersonal situation.     

Appearance investment in Australian brides-to-be

The present study examined the appearance concerns of 440 engaged women recruited from bridal websites across Australia. Participants completed a short online questionnaire incorporating measures of appearance investment, dietary restraint, and their pre-wedding beauty preparation plans. Overall, brides-to-be reported similar levels of both facets of appearance investment (self-evaluative salience and motivational salience) to normative samples. High appearance investment and dietary restraint were significantly related to a greater number of pre-wedding beauty, diet, and exercise regimes. Furthermore, pre-wedding plans were predicted differently by the two facets of appearance investment. Specifically, self-evaluative salience predicted wedding weight discrepancy, while motivational salience was a significant predictor of both appearance-related and exercise/eating behaviors. Results indicate that reducing the focus on appearance surrounding weddings and promoting a healthier bridal weight ideal may be useful in discouraging harmful appearance altering behaviors and attitudes (e.g., tanning, surgery, desire to lose weight) among women with high appearance investment.     

Agricultural policy and strategic investment in information technology

In this article the perspective shifts to the “upstream” end of the agricultural knowledge and information system (AKIS). Because knowledge policy and strategic decision-making are not the prerogative of the public sector, organizations such as cooperative unions and multinational companies are included. After considering the influence of the changing environment on the nature of the AKIS, the role of knowledge management and policy in the emerging knowledge and information market is examined. Special attention is given to public and private R&D. The article then looks where information technology (IT) fits in and what considerations determine strategic investment in IT projects and sustained services. Some of the European experiences with this strategic investment are evaluated.     

Regulatory focus and investment decisions in small groups

Regulatory Focus Theory was applied to small interactive groups. Based on previous research, it was expected that groups with a promotion focus would discuss gain-relevant information, whereas groups with a prevention focus would be concerned with potential losses. Furthermore, promotion groups were expected to make riskier decisions than prevention groups. Regulatory focus was manipulated by rewarding good or penalizing poor group performance on a preliminary task. Subsequently, three-person groups discussed several investment funds and made a consensual investment decision. Results supported the hypotheses and suggested that regulatory focus requires time to exert its influence in groups.     

Narrative expectations in financial forecasting

How do people form expectations about the future? We use amateur and expert investors' expectations about financial asset prices to study this question. Three experiments contrast the rational expectations assumption from neoclassical economics (investors forecast according to neoclassical financial theory) against two psychological theories of expectation formation—behaviorally informed expectations (investors understand empirical market anomalies and expect these anomalies to occur) and narrative expectations (investors use narrative thinking to predict future prices). Whereas neoclassical financial theory maintains that past public information cannot be used to predict future prices, participants used company performance information revealed before a base price quotation to project future price trends after that quotation (Experiment 1), contradicting rational expectations. Importantly, these projections were stronger when information concerned predictions about a company's future performance rather than actual data about its past performance, suggesting that people not only rely on financially irrelevant (but narratively relevant) information for making predictions but erroneously impose temporal order on that information. These biased predictions had downstream consequences for asset allocation choices (Experiment 2), and these choices were driven in part by affective reactions to the company performance news (Experiment 3). There were some mild effects of expertise, but overall the effects of narrative appear to be consistent across all levels of expertise studied, including professional financial analysts. We conclude by discussing the prospects for a narrative theory of choice that provide new microfoundational insights about economic behavior.     

Financial satisfaction and financial stressors in marital satisfaction

Using a sample of 310 married respondents from one U.S. Midwestern state, a test was conducted to examine the association of financial satisfaction and financial stressors in a spouse's decision to stay married to the same person or leave the relationship. The role of demographic and socioeconomic variables, religiosity, psychological constructs, financial satisfaction, and financial stressors as factors influencing marital satisfaction was tested. Financial stressors were measured using a list of financial stressors adapted from the literature. Financial satisfaction was measured with a one-item scale. The Kansas Marital Satisfaction Scale was used as a validation tool to assess whether individuals would marry or not marry again. Religiosity and financial satisfaction were positively associated with marital satisfaction. A negative interaction between financial satisfaction and financial stressors was also noted. Findings suggest that respondents who are financially satisfied tend to be more stable in their marriages.     

Countering perfectionism in research on clinical practice I: Surveying rationality changes after a single intensive ret intervention

The failure of controlled experimental research on therapy out-come to produce findings of clinical as well as statistical significance seems at least partly due to irrational, perfectionistic, beliefs about how research can be used to infer causes of therapeutic change. Irrational beliefs about controlled experimental designs and about incomplete sampling, in particular, appear to prevent appropriate consideration of probatively valuable quasi-experimental research. Models of more rational alternatives are identified, and an example of the functional advantages of adopting these rational beliefs is explicated. The example demonstrates that single-shot pre-post survey data from self-selected catch-as-catch-can samples can permit legitimate, but not absolutely certain, conclusions about the efficacy and efficiency of RET.Albert Ellis, Ph.D. is executive director of the Institute for Rational-Emotive Therapy in New York City.     

Investigating the interface of the investment model and adult attachment theory

We examined whether the extent to which individuals accord importance to components of the investment model varies by attachment. In Study 1, rewards and costs in a hypothetical relationship were experimentally manipulated, and participants (single and dating undergraduates) reported perceptions of rewards, costs, and satisfaction. In Study 2, investments and alternative quality were manipulated, and participants reported perceptions of investments, alternatives, satisfaction, and commitment. Study 1 revealed that relative to others, individuals high in both anxiety and avoidance (i.e., fearful) accord less weight to rewards when determining satisfaction. Study 2 revealed that relative to others, individuals low in anxiety and high in avoidance (i.e., dismissing) accord more weight to investments and alternatives, and less weight to satisfaction when determining commitment. Copyright © 2013 John Wiley & Sons, Ltd.     

Social investment and personality: a meta-analysis of the relationship of personality traits to investment in work, family, religion, and volunteerism.

Investing in normative, age-graded social roles has broad implications for both the individual and society. The current meta-analysis examines the way in which personality traits relate to four such investments -- work, family, religion, and volunteerism. The present study uses meta-analytic techniques (K = 94) to identify the cross-sectional patterns of relationships between social investment in these four roles and the personality trait domains of agreeableness, conscientiousness, and emotional stability. Results show that the extent of investment in social roles across these domains is positively related to agreeableness, conscientiousness, emotional stability, and low psychoticism. These findings are more robust when individuals are psychologically committed to rather than simply demographically associated with the investment role.     

Commitment and satisfaction in romantic associations: A test of the investment model

Two experiments were designed to test the adequacy of the investment model of developing relationships in predicting satisfaction with and commitment to ongoing associations. According to the investment model, attraction to and satisfaction with a relationship is a function of a comparison of the relationship outcome value (both rewards and costs) to the individual's expectations, or comparison level. Commitment to a relationship is said to be a function not only of the relationship outcome value, but also the quality of the best available alternative and the magnitude of the individual's investment in the relationship. The intrinsic or extrinsic investment of resources serves to increase commitment by increasing the costs of leaving the relationship. Thus, increases in investment size, decreases in alternative value, and increases in relationship value should increase commitment to an ongoing relationship. In Experiment 1, a role-playing study, commitment to relationships increased with intrinsic and extrinsic investment size and decreased with the value of alternatives, but was not appreciably affected by relationship costs. Satisfaction/attraction significantly increased as relationship costs decreased. In Experiment 2, a survey of ongoing romantic associations, satisfaction/attraction was predicted by relationship reward value and relationship cost value. Commitment to relationships increased as relationship reward value and investment size increased and as alternative value and relationship cost value decreased, although the effects of cost value were weak.