Analyst judgment: The efficient market hypothesis versus a psychological theory of human judgment

This paper considers the psychological processes used by financial analysts in making earnings forecasts by pitting two models against each other: the efficient market hypothesis, an economic model which asserts that the stock market virtually instantaneously and perfectly assimilates all available investment information; and personal construct theory, a psychological model of human judgment which emphasizes the fact that human decision making is based on formal and informal models of the phenomenon under consideration. Path models derived from personal construct theory fit data for 1963 gathered by Cragg and Malkiel and data for 1979–1983 gathered for this study. The efficient market hypothesis was not supported in any test on either data set.     

The Effects of 10 Mgs. of Benzedrine Sulfate and Low Oxygen Tension on the Span of Attention for Letters,and Other Factors

The three wishes of a random sample of 100 subjects were obtained from each of five age groups: elementary, junior high, high school, early college (18–24 years), and late college (25–50 years). The wishes were placed in appropriate categories and into subcategories including possessions, activities, maintenance, achievement, and altruism. Exploratory measures of “confidence” and “sense of personal control” were taken for each subject. Sex and socioeconomic condition were analyzed. Results supported previously established trends of increasing generality, increasing altruism, and decreasing materialistic content up to different ages in adolescence and early adulthood depending on the data chosen to relate to the generalizations. In addition, a gradual increase in achievement wishes through middle adulthood was observed. The measure of “sense of personal control” was found to yield significant variation, while the data related to “confidence” varied only within chance limits. Comparisons with previous studies led to speculation that achievement orientations of adolescents may have lessened over the past decade.     

家庭社会阶层对大学生择业依赖倾向的影响：当前经济信心的中介作用

采用问卷法探讨了大学生的家庭社会阶层、当前经济信心和择业依赖倾向之间的关系。结果发现：(1) 大学生的家庭社会阶层对其择业依赖倾向有显著的预测作用;2）当前经济信心对家庭社会阶层与择业依赖倾向之间关系起中介作用。     

中国股市边缘化趋势的伦理分析——诚信监管是恢复市场信心的原动力

2002年以来,我国经济保持快速增长的势头,但股指却逐级下滑,股市与宏观经济出现完全"背离"的走势,股票市场的筹资功能、投资功能及优化资源配置功能在逐渐弱化。中国股市边缘化趋势明显。其根本原因在于广大投资者对股市监管当局信心和信任的丧失。股票市场作为我国社会主义市场经济体系的重要组成部分,对我国的经济发展起着至关重要的作用。我们应坚持以科学发展观为指导,以实现国家和人民群众的利益为最高价值追求,推进和实施诚信监管,提高监管公信力,恢复市场信心,实现股票市场的健康稳定和有序发展。     

Mental budgeting versus marginal decision making: training,experience and justification effects on decisions involving sunk costs

Many studies have shown that individuals make economically irrational decisions by using, rather than ignoring, sunk cost information. In this study, the effects of relevant academic training, financial experience and decision justification on investment decisions involving sunk costs were examined. Data on both the process (strategy) and outcome of the decisions were collected. The results indicate that practicing Certified Public Accountants (CPAs), Masters of Business Administration students (MBAs) and undergraduate accounting students perform better than undergraduate psychology students. The level of training, as measured by the number of college courses in managerial accounting, was found to be positively correlated with performance, while the level of experience, as measured by years of financially‐related work, was not. Justification was found to improve decisions only for those participants with significant work experience (MBAs and CPAs). Strategies used in this type of decision were examined with the surprising finding that economically rational decisions can be made even if sunk costs are not ignored. Copyright © 2007 John Wiley & Sons, Ltd.     

An Experimental Investigation of Gender Bias in the Use of Management Information

In a previous study (Estes & Hosseini, 1988), we found that women report lower confidence than men in their investment decisions. As a continuation of that research, this study investigated the effect of gender (management and staff) on management confidence in forecasts prepared by corporate staff. An experiment was administered in a large manufacturing firm to 122 managers who use forecast information. Forecaster gender, age, education, and experience were varied between control and test groups. Manager confidence in forecast information was not affected by the gender of the forecaster or by other forecaster characteristics. Confidence was affected by manager education and experience but not by other personal manager characteristics including gender.     

Fear,excitement, and financial risk-taking

Can fear trigger risk-taking? In this paper, we assess whether fear can be reinterpreted as a state of excitement as a result of contextual cues and promote, rather than discourage, risk-taking. In a laboratory experiment, the participants' emotional states were induced (fear vs. control), followed by a purportedly unrelated financial task. The task was framed as either a stock market investment or an exciting casino game. Our results showed that incidental fear (vs. control) induced risk-averse behaviour when the task was framed as a stock investment decision. However, fear encouraged risk-taking when the very same task was framed as an exciting casino game. The impact of fear on risk-taking was partially mediated by the excitement felt during the financial task.     

Returning to Work Following Childbirth: The Relationship Between Intentions and Behavior

College women's intentions to return to work following childbirth were compared to behavior 10 years later. Using an Ajzen-Fishbein model, college intentions were significantly related to how soon a mother returned to work after the birth of her first child. The amount of variance explained was significant for intentions and behavior. College intentions were influenced by perceived consequences, approval of significant referents, and personal control. Return to work was predicted by intention to do so, even though the behavior occurred an average of seven years after the intention was declared. This behavior was more likely to occur among those who had a sense of personal control.     

Behaviors associated with “good” and “poor” outcomes in a simulated career decision

What career decision-making procedures enable people to make decisions that yield consequences congruent with their own values? The 40 “best” (most congruent) and 40 “worst” decision makers on the Career Decision Simulation were compared in a sample of 148 community college students. No significant differences appeared in the amount of double checking, number of occupations and information sources checked, amount of information collected, decision time required, and the proportion of information sought about high values. The “best” decision makers, however, were significantly more persistent in immediately seeking more information about an occupation that seemed to match one of their most important personal work values. Following a values-guided search appears more effective than simply searching exhaustively.     

Military training and personality trait development: does the military make the man, or does the man make the military?

Military experience is an important turning point in a person's life and, consequently, is associated with important life outcomes. Using a large longitudinal sample of German males, we examined whether personality traits played a role during this period. Results indicated that personality traits prospectively predicted the decision to enter the military. People lower in agreeableness, neuroticism, and openness to experience during high school were more likely to enter the military after graduation. In addition, military training was associated with changes in personality. Compared with a control group, military recruits had lower levels of agreeableness after training. These levels persisted 5 years after training, even after participants entered college or the labor market. This study is one of the first to identify life experiences associated with changes in personality traits. Moreover, our results suggest that military experiences may have a long-lasting influence on individual-level characteristics.     

Evaluating Multiple-Attribute Decision Support Systems

Differences in the perceived usefulness of five multiple-attribute decision support systems versus a basic spreadsheet are empirically assessed. Twenty-four college faculty members participated in a repeated measures experiment in which they used decision support software for personal computers to analyse semistructured multiple-attribute problems. The software packages employed were Criterium, Expert Choice, Logical Decision, VIMDA, VISA and the spreadsheet package Quattro Pro. A questionnaire was developed to assess user-friendliness of the software, confidence in the procedure implemented by the software, and users’ confidence in their results when employing the decision aids. Time to reach a decision was also measured. Significant differences were fund in the overall way users ranked these aids, in the perceived user-friendliness and the confidence in procedure among aids, and in the time it took to arrive at a result. Comments from users are also reported. © 1997 John Wiley & Sons, Ltd.     

老年人和大学生决策规则稳定性的比较研究

遵守规则是理性决策的必要条件。本研究考察了222名大学生和157名老年人进行选择活动时所遵循的规则的稳定性。研究发现,大学生的选择与老年人相比,具有显著的“不规则”倾向,然而此倾向在老年人中并不存在。在面对假设的超市折扣卡时,大学生的“非规则”选择显示出他们在一定程度上缺乏理性,而老年人的“精明”决策进一步证明其与日常生活相关联的复杂认知能力如判断和推理等在老龄期依然处于较高的水平。     

College Major Choice and Personal Adjustment

This investigation focused on the differences in reported personal adjustment problems between freshmen students who made a congruent college major choice and students who made an incongruent choice. Personal adjustment was defined operationally with the Mooney Problem Checklist. Congruent and incongruent college major choice groups were defined operationally using the Vocational Preference Inventory. In the analysis of variance of the adjustment scores, the interaction term involving congruence of major choice and sex and the test for the main effect of sex were not significant. The test for the main effect of congruence was found to be significant. Subjects who had made a congruent college major choice reported fewer personal adjustment problems when compared to subjects in the incongruent group.     

A LONGITUDINAL ANALYSIS OF BIOGRAPHICAL SUBGROUPS USING OWENS' DEVELOPMENTAL-INTEGRATIVE MODEL

The study examined the differential validity of 20 male and 14 female biographical subgroups in terms of 12 factor analyzed dimensions of postcollege experience. Owens' Developmental-Integrative Model hypothesizes that different subgroups of individuals with similar within-group early life experiences should exhibit significant differences (between-group) in a wide variety of life experiences. A sample of 1428 first-year college students were statistically grouped into 23 male and 15 female biodata subgroups after completing a standardized 118-item biodata form (Owens, 1968). Seven years later, a 97-item post-college experience inventory obtained scores for 484 of the original subjects on 12 factors of post-college behavior including job satisfaction, transition from college, personal and marital adjustment, and others. Significant univariate and multivariate differences were found between the biodata subgroups across the 7-year period. Implications for the validity of the D-I model are offered.     

Learned helplessness, depression, and the attribution of failure.

Depressed and nondepressed college students received experience with solvable, unsolvable, or no discrimination problems. When later tested on a series of patterned anagrams, depressed groups performed worse than nondepressed groups, and unsolvable groups performed worse than solvable and control groups. As predicted by the learned helplessness model of depression, nondepressed subjects given unsolvable problems showed anagram deficits parallel to those found in naturally occurring depression. When depressed subjects attributed their failure to the difficulty of the problems rather than to their own incompetence, performance improved strikingly. So, failure in itself is apparently not sufficient to produce helplessness deficits in man, but failure that leads to a decreased belief in personal competence is sufficient.     

The More the Better? Effects of Training,Experience and Information Amount in Legal Judgments

In an experimental study involving German lay judges, law students and controls, effects of legal training and experience as well as information amount on legal judgments was investigated. In a three (legal knowledge: legal training versus legal experience versus controls) x two (information amount: high versus low) between‐subjects design, 137 participants judged the premeditation of a perpetrator in eight real‐world cases decided by the German Federal Court of Justice. Judgment congruency with the Court's ruling increased with legal training, but official lay judges showed lower congruency compared with student controls. Additionally, legal training and experience corresponded with higher confidence. Emotional reactions to the legal cases were stronger when more information was given for individuals without legal training but decreased for individuals with training. An information‐processing perspective to explain the observed differences in legal judgments is advanced, and the issue of using untrained individuals in the legal decision making process is discussed. Copyright © 2011 John Wiley & Sons, Ltd.     

Comparing the Financial Literacy of Public School,Christian School,and Homeschooled Students

The 2008 recession underscored public concern that financial illiteracy has costs that are not limited to the individual who makes poor financial decisions. Considering that college students with limited financial experience are making legally binding decisions, this study explored the personal finance literacy and behavior of Christian college students. The research involved administering an objective item financial literacy and behavior survey. Findings showed a significant positive correlation between financial literacy and behavior. Furthermore, there was no significant difference among Christian college students based on their secondary education experience—Christian, public, or home school. This finding implies that students enter college with similar financial literacy levels, and senior students with inadequate financial literacy demonstrate poor personal financial behavior.     

Reactive personality-environment transactions and adult developmental trajectories

The possibility, which is based on the concept of reactive personality-environment transactions, that individuals learn different things from the same experience as a function of personality differences may help explain individual differences in adult developmental trajectories. In an analogue, longitudinal design, business students were taught about stock market investing, and they engaged in 5 practice investment sessions. Although all participants earned the same returns on their investments, they varied in the expectancies they formed about stock investing as a function of their personality status. As anticipated, behavioral inhibition (heightened sensitivity to punishment) facilitated formation of negative investing expectancies and antagonized formation of positive investing expectancies, and behavioral activation (heightened sensitivity to reward) facilitated formation of positive investing expectancies and antagonized formation of negative investing expectancies. Differential learning in a task that approximated skill acquisition for a developmental transition implies that personality may help shape individual developmental trajectories in the adult years.     

Anxiety sensitivity and panic attacks in a nonclinical population

In the present study, we administered the Anxiety Sensitivity Index (ASI) and a modified version of the Panic Attack Questionnaire (PAQ) to 425 college students to determine whether high anxiety sensitivity ('fear of fear') occurs in the absence of a history of unpredictable ('spontaneous') panic attacks, or whether such attacks are a necessary precursor to high anxiety sensitivity. Based on their ASI scores, subjects were assigned to either the high, medium, or low anxiety sensitivity groups. High anxiety sensitivity subjects more frequently reported both a personal and family history of panic than did subjects in the other groups. Nevertheless, two-thirds of the high anxiety sensitivity subjects had never experienced an unpredictable panic attack. This suggests that the fear of anxiety can be acquired in ways other than through personal experience with panic.     

Memory in motion: Movement dynamics reveal memory strength

Recognition memory is typically examined as a discrete end-state, describable by static variables, such as accuracy, response time, and confidence. In the present study, we combined real-time mouse-tracking with subsequent, overt confidence estimates to examine the dynamic nature of memory decisions. By examining participants' streaming x-, y- mouse coordinates during recognition decisions, we observed that movement trajectories revealed underlying response confidence. More confident decisions were associated with shorter decision times and more linear response trajectories. Less confident decisions were made slowly, with increased trajectory curvature. Statistical indices of curvature and decision times, including area-under-the-curve and time to maximum deviation, suggested that memory strength relates to response dynamics. Whether participants were correct or incorrect, old responses showed a stronger correspondence between mouse trajectories and confidence, relative to new responses. We suggest that people subjectively experience a correspondence between feelings of memory and feelings of confidence; that subjective experience reveals itself in real-time decision processes, as suggested by sequential sampling models of recognition decisions.