Chinese Corporate Social Responsibility by Multiple Objective Portfolio Selection and Genetic Algorithms

In this paper, we study corporate social responsibility (CSR) in China through the prism of investments. We work with large stocks and assess their CSR performance from agency CSR data. We formulate Chinese CSR by a multiple objective extension of a traditional portfolio selection model and analytically solve the extension. We also solve the extension by a genetic algorithm and directly evaluate the algorithm's performance against the analytical solution. The multiple objective formulation is tested by randomly choosing nondominated portfolios with out‐of‐sample data to identify nondominated portfolios that outperform the 1/n portfolio (equally weighted portfolio). Copyright © 2013 John Wiley & Sons, Ltd.     

Reference point adaptation: Tests in the domain of security trading

According to prospect theory [Kahneman, D., & Tversky, A. (1979). Prospect theory: An analysis of decision under risk, Econometrica, 47, 263–292], gains and losses are measured from a reference point. We attempted to ascertain to what extent the reference point shifts following gains or losses. In questionnaire studies, we asked subjects what stock price today will generate the same utility as a previous change in a stock price. From participants’ responses, we calculated the magnitude of reference point adaptation, which was significantly greater following a gain than following a loss of equivalent size. We also found the asymmetric adaptation of gains and losses persisted when a stock was included within a portfolio rather than being considered individually. In studies using financial incentives within the BDM procedure [Becker, G. M., DeGroot, M. H., & Marschak, J. (1964). Measuring utility by a single-response sequential method. Behavioral Science, 9(3), 226–232], we again noted faster adaptation of the reference point to gains than losses. We related our findings to several aspects of asset pricing and investor behavior.     

Effect of salespeople's acquisition–retention trade-off on performance

This research examines the impact of the acquisition–retention resource allocation at the individual salesperson level – that is, the proportion of their time dedicated to acquisition versus retention activities – on their sales performance. We extend prior research that investigates the acquisition–retention trade-off below (i.e., customer value approach) or above (i.e., firm portfolio approach) the salesperson's perspective by also incorporating many ‘within-firm’ factors that are critical to capturing the contingent nature of the allocation decision. The results suggest that firms can double their sales gains by implementing a trade-off strategy that customizes the acquisition allocation at the salesperson level. Using matched triadic data gathered from 227 salespersons, 106 supervisors and the seller's database, the authors find an inverted U-shaped linkage between the proportion of time allocated to acquisition activities and sales performance. Moderation analyses show that salespeople's optimal acquisition allocation depends on their knowledge breadth and job commitment, their supervisor's experience and job commitment and the quantity and quality of the prospects in their relationship portfolio.     

Evaluating the desirability of meals: an illustrative multiattribute decision analysis procedure to assess portfolios with interdependent items

This paper presents an exploratory study designed to address complex scaling problems in applying value/utility theory to measuring preferences over alternative combinations (or portfolios) of multiattributed items. This application considers meals served to nursing home residents as portfolios of food items and seeks to maximize meal appeal. We consider food interrelation and link single food measurements to overall meal measurements in the process of constructing meal desirability scales. We test the resulting scales to capture one expert's professional judgments and discuss issues raised in this specific application in the context of general portfolio evaluation problems. © 1998 John Wiley & Sons, Ltd.     

Monetary Wisdom: How Do Investors Use Love of Money to Frame Stock Volatility and Enhance Stock Happiness?

Monetary intelligence asserts: individuals apply their money attitude to frame critical concerns in the context and strategically select certain options to achieve financial goals and ultimate happiness. Bridging the gap between stock volatility and behavioral economics, we collected longitudinal data from multiple sources and at multiple times: First, private investors (N = 229) in Shanghai—the financial capital of China—completed their love of money attitude measure (Rich-affect, Motivator-behavior, and Importance-cognition) and demographic variables in a survey. Second, we recorded daily Shanghai Stock Exchange Composite Index (“the Index”) for 30 consecutive trading days during the financial crisis in 2008—public records. Third, we text-messaged investors, collecting their daily Index Happiness, Stock Percentage (stocks/liquid assets), and Stock Happiness—private information. Here, investors illustrate: high Rich investors fret about low Index happiness, yet high Rich and high Importance investors boast high stock happiness, supporting the endowment effect and investor hubristic smirk. High Motivator investors quickly adjust their stock percentage/portfolio, suffering low Index happiness and low stock happiness. Gender moderates the relationship between the Index and Index happiness. Our panel data of intra-personal changes of stock happiness demonstrate investor monetary wisdom in the boom-and-bust cycles. Behaviorally, investor must become masters (but not slaves) of money and deactivate money as a Motivator. Curbing the desire to become Rich enhances happiness after gains (boom/risk aversion); appreciating money’s Importance bestows happiness after losses (bust/risk seeking). We expand prospect theory and offer implications to investor wealth, health, and happiness during financial crisis in particular as well as individual subjective well-being and happiness in general.     

Particle swarm optimised analysis of investment decision

A portfolio forecasting model based on particle swarm optimization (PSO) algorithm with automatic factor scaling is proposed in this Article to effectively improve the accuracy of related analysis model in portfolio application. Firstly, the portfolio problem is analyzed and a hybrid constraint portfolio model is obtained by improving portfolio model with consideration of general portfolio model and combination of market value constraint and upper bound constraint according to Markowitz's theory. Secondly, PSO algorithm is introduced during analysis on portfolio model and solution is found with the hybrid constraint portfolio model of PSO on portfolio. In addition, in order to further improve the performance of PSO in model solution, automatic factor scaling is used for adaptive learning on parameters associated with PSO, to improve convergence of the algorithm. At last, simulation experiments show that the algorithm proposed can obtain a more ideal investment portfolio scheme, thereby reducing investment risks and obtaining greater investment returns.     

Values,Susceptibility to Normative Influence,and Attribute Importance Weights: A Nomological Analysis

It is argued that the construct of individual susceptibility to normative influence (SNI) needs to be put into a wider nomological framework, with antecedents and consequences. Based on prior literature, a causal sequence is hypothesized in which values are antecedent to SNI, which itself shapes the importance placed by the individual on different attributes. It is further suggested that the relation between values and SNI is strongest for “external” values, and that high SNI leads to greater importance for attributes that provide “socially visible” benefits. Data from a national field survey (N= 663) on consumer preferences are analyzed to test these hypotheses, using confirmatory factor analysis via LISREL 8.30 (Jöreskog & Sörbom, 1993). The analysis finds support for most of the hypothesized structural relations.     

A Longitudinal Study of the Effectiveness of Business Ethics Education: Establishing the Baseline

This paper is the first phase of a longitudinal study of the class of 2014 on the effectiveness of ethics education at a business university. This phase of the project establishes the baseline attributes of incoming college freshmen with a pretest of the students’ ethical proclivity as measured by Defining Issues Test (DIT-2) scores. The relationship between the students’ ethical reasoning and their behavior in experimental stock trading sessions is then examined. In the trading simulations, randomly selected students were provided with the option of receiving privileged insider information about the final payoff of several stocks. The students could either accept or reject such information, with acceptance considered illegal insider trading. The results of the pretest indicate that moral reasoning as measured by the DIT-2 is related to insider trading behavior, with students with higher DIT-2 scores being less likely to accept insider information. The paper also presents demographic differences across DIT-2 scores and trading behavior as a foundation for the longitudinal examination of changes in students’ moral cognition characteristics and behavior during their undergraduate career.     

Information repetition in evaluative judgments: Easy to monitor,hard to control

The sampling approach [Fiedler, K. (2000a). Beware of samples! A cognitive-ecological sampling approach to judgment biases. Psychological Review, 107(4), 659–676.] attributes judgment biases to the information given in a sample. Because people usually do not monitor the constraints of samples and do not control their judgments accordingly, systematic judgment biases occur. Three experiments demonstrate this for an obvious sampling constraint, the emptiness of merely repeated information. When evaluating stock market shares, participants did not correct for the repetition of positive or negative information about a share. Although original and repeated information was reliably distinguished in estimates of occurrence (successful monitoring), preferences were misled by mere repetition of success and failure reports (unsuccessful control). This effect could even override a share’s actual success rate. Explicit instructions to ignore repetitions provided no remedy; however, a cognitive load manipulation reduced repetition’s undue influence. Possible reasons for and benefits of this lack of direct metacognitive control are discussed.     

Which is the compromise option? Information format and task format as determinants

When consumers must make a decision but are uncertain of their preferences, they often select a compromise choice. Early studies emphasized the relational properties of choice alternatives and indicated that the middle option, whose attribute values fall between the values of other alternatives, is always the compromise option. More recent studies have suggested that when consumers rate two attributes with the same metrics, the attribute–balance choice whose two attributes have equal ratings, might represent the compromise choice. We propose that the different characteristics of the middle and attribute–balance options—which may be compatible with certain determinants such as information and task formats—might be more salient and affect the relative attractiveness of each option. The results of three experiments confirmed this prediction: the middle option was more attractive in list‐by‐attributes and rejecting conditions, whereas the attribute–balance option was more attractive in list‐by‐alternatives and choosing conditions. Copyright © 2007 John Wiley & Sons, Ltd.     

Green consumerism: The influence of product attributes and values on purchasing intentions

Generally, a majority of consumers support the idea of purchasing green products. However, this is often not translated into actual behaviour. We argue that there is a trade‐off between the influence of product attributes on purchasing decisions, whereby it is assumed that consumers tend to focus on egoistic product attributes first, followed by green product attributes. In two experimental studies (N = 100 and N = 107), we find support for this reasoning: If product attributes fulfil self‐serving motives (low price, familiar or well‐known brand), green product attributes (cruelty free and low environmental impact) influence purchasing intentions more than when self‐serving motives are not fulfilled (high price, unfamiliar or unknown brand). Further, we investigated if and how values weaken or strengthen the influence of product attributes on purchasing intentions. We conclude that biospheric values steer how product attributes influence purchasing intentions stronger than egoistic values. In line with our expectations, we find that if biospheric values are weak, egoistic product attributes are more influential, whereas if biopheric values are strong, green product attributes are more influential. Copyright © 2014 John Wiley & Sons, Ltd.     

Information Context Structure and Risk Assessment

Abstract

Assessment of probabilistic values which comprise multidimensional attributes (e.g. risk) involves complex cognitive processes. This study explores the degree to which three informational context variables (nature of information, presentational conditions, and context structure), allocated according to a factorial design, affect risk assessment. The risk situation is represented by alarm over a potentially toxic cloud stagnating above a town, and is rated from 1 (negligible) to 10 (lethal) by subjects randomly assigned to one of the eight experimental modalities. Ratings are then processed by analysis of variance. Significant effect is found for the first variable (concrete information gives rise to significantly higher ratings than abstract information) and the second variable (sequential presentation leads to higher ratings), but the third variable would appear to have less functional impact. These results are discussed in the general framework of behavioural theories of decision-making, stressing the relevance of certain concepts and cognitive processes involved in risk assessment.     

Multi-attribute sequential search

This article describes empirical and theoretical results from two multi-attribute sequential search tasks. In both tasks, the DM sequentially encounters options described by two attributes and must pay to learn the values of the attributes. In the continuous version of the task the DM learns the precise numerical value of an attribute when she pays to view it. In the threshold version the DM learns only whether the value of an attribute is above or below a threshold that she sets herself. Results from the continuous condition reveal that DMs tended to terminate their searches too early relative to the optimal policy. The pattern reversed in the threshold condition: DMs searched for too long. Maximum likelihood comparisons of two different stochastic decision models showed that DMs under both information conditions performed in ways consistent with the optimal policies. Those offered continuous-valued attribute information did not, however, spontaneously degrade this information into binary (acceptable/unacceptable) form, despite the theoretical finding that satisficing can be a very effective and efficient search strategy.     

Rough approximation of pairwise comparisons described by multi‐attribute stochastic dominance

Given a finite set A of actions evaluated by a set of attributes, preferential information is considered in the form of a pairwise comparison table including pairs of actions from subset B⊂A described by stochastic dominance relations on particular attributes and a total order on the decision attribute. Using a rough sets approach for the analysis of the subset of preference relations, a set of decision rules is obtained, and these are applied to a set A\B of potential actions. The rough sets approach of looking for the reduction of the set of attributes gives us the possibility of operating on a multi‐attribute stochastic dominance for a reduced number of attributes. Copyright © 1999 John Wiley & Sons, Ltd.     

Listener perceptions along a fluency--disfluency continuum: a phenomenological analysis

The purpose of this study was to conduct a phenomenological analysis (a qualitative research method) of unbiased listeners' perceptions to six speech samples across a fluency-disfluency continuum. A sample of 60 individuals heard only one sample chosen from three levels of fluent or three levels of disfluent speech. Listeners were interviewed following the presentation of the speech sample and their comments were analyzed with respect to the perception of the speaker's communicative effectiveness. Communicative effectiveness was supported by three phenomenological categories: speaker attributes, listener attributes, and story attributes. Five theme clusters further supported these categories: speech production, context, speaker identity, listener comfort, and story comprehension. The results showed that listener perceptions within theme clusters varied across the six speech samples. The results also showed that listeners differentially respond to a broad array of information in the speech signal (not simply fluency or disfluency). These findings support Traunmuller's (1994) modulation theory associated with information that can be obtained from the speech signal. Implications for the treatment of stuttering are also discussed. EDUCATIONAL OBJECTIVES: The reader will learn (1) how listeners may have multiple and varying perceptual experiences depending upon where along a fluency-disfluency continuum a speech sample is heard; (2) how perceptual experiences are influenced by speaker, listener, and story attributes; and (3) how phenomenological analysis may expand our understanding of multifactorial issues associated with stuttering.     

How learning one category influences the learning of another: intercategory generalization based on analogy and specific stimulus information

We investigated the effect of learning one category structure on the learning of a related category structure. Photograph-name combinations, called identifiers, were associated with values of four demographic attributes. Two problems were related by analogous demographic attributes, common identifiers, or both to examine the impact of common identifier, related general characteristics, and the interaction of the two variables in mediating learning transfer from one category structure to another. Problems sharing the same identifier information prompted greater positive transfer than those not sharing the same identifier information. In contrast, analogous defining characteristics in the two problems did not facilitate transfer. We computed correlations between responses to first-problem stimuli and responses to analogous second-problem stimuli for each participant. The analogous characteristics produced a tendency to respond in the same way to corresponding stimuli in the two problems. The results support an alignment between category structures related by analogous defining characteristics, which is facilitated by specific identifier information shared by two category structures.     

Remembering less and inferring more: effects of time of judgment on inferences about unknown attributes

Perceivers often infer the values of unknown attributes from evaluative expectancies. In 2 experiments, inferences about unknown attributes of a target made shortly after initial processing tended to be moderate, as perceivers presumably adjusted for the lack of directly relevant evidence. However, stronger inferences were drawn with the passage of time as memory of the absence of information faded. Expertise moderated this effect, as subjects highly knowledgeable of the target domain were much less likely than low or moderate knowledge subjects to draw extreme inferences over time. Memory-based inferences about unknown attributes were also found to be held with greater confidence than inferences made shortly after stimulus presentation.     

When choices give in to temptations: Explaining the disagreement among importance measures

Respondents’ overt statements of relative importance rarely correspond to weights derived from a regression analysis of their decisions. This paper conjectures that differential effects of high-level goals on importance beliefs and choices can explain these discrepancies. It is argued that the goal to justify decisions influences importance beliefs more than choices whereas the goal to assess preferences accurately affects choices more than importance beliefs. It is also argued that differential effects of high-level goals on importance statements and choices vary as a function of whether decision-maker controls the information flow and the extent of prior knowledge and experiences with choice options. These predictions were tested within the context of a contraceptive decision-making task. Choices among contraceptives made the justification goal salient to subjects by requiring tradeoffs between attributes that are either considered rational or tempting in making such decisions (e.g., health risks vs. pleasure/convenience). As predicted, subjects assigned larger importance weights to rational attributes in their subjective evaluations than in their choices whereas the impact of tempting attributes was stronger for choices than for subjective importance evaluations. Moreover, these observed discrepancies between importance measures were reduced in favor of rational attributes when subjects controlled the information flow and could not access their prior experiences. Overall, the results suggest that, although tempting attributes affect choices, decision makers appear to be unwilling to acknowledge the impact of tempting attributes on their decisions in judging attribute importance.     

Expected risk and single-peaked preferences

Eight ordinal conditions necessary for Huang's (1971a) theory of expected risk were tested in empirical risk orders over 31 two-outcome money gambles elicited from 20 subjects. Additionally, the single peakedness assumption of Coombs' (1969) portfolio theory was tested with preference orders over a subset of 15 of these gambles with equal expected values. The theory of expected risk was well corroborated; the portfolio theory was not.