Similarity bias in credit decisions for entrepreneurs on the brink of bankruptcy

For entrepreneurs in financial distress, it is of vital importance that investors and bankers accurately assess the viability of their business, free of unwanted biases that bear no relevance to the assessment of the chance of survival. Despite the prevalence of entrepreneurs facing financial distress, little research has yet investigated the role of cognitive biases in funding decisions in this important context. The current research attends to this issue and investigated whether entrepreneurs who are perceived by a banker as more similar are more likely to receive capital to save their business from bankruptcy than entrepreneurs who are perceived as less similar to the banker. Additionally, we investigated whether similarity bias affected bankers' attributions of what caused the financial distress as well as their perceptions of entrepreneurs' trustworthiness. Using an experimental research design, we found a similarity bias in bankers' causal attributions and trustworthiness judgments, but not in their credit decisions. We contrast our findings with similarity bias research among equity investors and discuss the implications for theory and practice.     

The neural underpinnings of facial emotion recognition in ischemic stroke patients

Deficits in facial emotion recognition occur frequently after stroke, with adverse social and behavioural consequences. The aim of this study was to investigate the neural underpinnings of the recognition of emotional expressions, in particular of the distinct basic emotions (anger, disgust, fear, happiness, sadness and surprise). A group of 110 ischaemic stroke patients with lesions in (sub)cortical areas of the cerebrum was included. Emotion recognition was assessed with the Ekman 60 Faces Test of the FEEST. Patient data were compared to data of 162 matched healthy controls (HC’s). For the patients, whole brain voxel-based lesion–symptom mapping (VLSM) on 3-Tesla MRI images was performed. Results showed that patients performed significantly worse than HC’s on both overall recognition of emotions, and specifically of disgust, fear, sadness and surprise. VLSM showed significant lesion–symptom associations for FEEST total in the right fronto-temporal region. Additionally, VLSM for the distinct emotions showed, apart from overlapping brain regions (insula, putamen and Rolandic operculum), also regions related to specific emotions. These were: middle and superior temporal gyrus (anger); caudate nucleus (disgust); superior corona radiate white matter tract, superior longitudinal fasciculus and middle frontal gyrus (happiness) and inferior frontal gyrus (sadness). Our findings help in understanding how lesions in specific brain regions can selectively affect the recognition of the basic emotions.     

Features of the Value Function for Voice and Their Consistency across Participants from Four Countries: Great Britain, Mexico, The Netherlands, and the United States

This study investigated features of the value function for voice using subjects from four countries: Great Britain, Mexico, The Netherlands, and the United States. Across these four groups of subjects the shape of the value function was found to be similar, though differences in the estimated reference points were detected. Consistent with predictions derived from prospect theory (Kahneman & Tversky, 1979) the relationship between the value of voice and the magnitude of voice was found to be direct, monotonic, and nonlinear. The largest increment in value occurred when the magnitude of voice shifted from mute to some voice. Thereafter, increments in value tended to decline in magnitude suggesting diminishing marginal returns on the response measure of procedural fairness. An unexpected finding was that the final segment of the value function was convex indicating increasing marginal returns as the magnitude of voice shifted from its penultimate level to its maximum possible level. The study also investigated whether subjects' reported expectations of voice correspond to the value function reference point as theorized in the literature. Findings suggest that self-reported expectations of voice are higher than the estimated value function reference point.     

Old and new ways to study characteristics of reading disability: The case of the nonword-reading deficit

Theoretical and computational models of reading have traditionally been informed by specific characteristics of disabled readers. One of the most frequently studied marker effects of developmental dyslexia is the nonword-reading deficit. Disabled readers are generally believed to show a specific problem in reading nonwords. This study presents a survey of frequently cited methods used to examine this effect by controlling general reading ability in various ways. An extensive analysis, however, shows that the majority of these methods (grade equivalents scores, the reading-level match design, and interactions in a chronological-age match design) actually fail to account for confounding variables such as age and general slowing, potentially affecting the conclusions reached. To alleviate this problem, an alternative method is presented: i.e. state trace analysis. Applying this method in a sample of Dutch disabled and typical readers, the results revealed an absence of a nonword-reading deficit in the disabled readers. Furthermore, after controlling for their decoding ability, disabled readers showed inferior word reading performance, which strongly suggests that the fundamental problem of disabled readers does not relate to the reading of nonwords but concerns their (dis)ability to acquire orthographic (word-specific) knowledge. Further, predictions for disabled readers in an inconsistent orthography like English are formulated. Finally, based on a review of neurobiological studies, implications for theories of reading disability are discussed.     

Emotions that associate with uncertainty lead to structured ideation

This study tested the role of emotion in structured ideation, a process in which newly generated ideas and insights closely follow previously generated ideas and insights. Emotions can be differentiated on a number of underlying dimensions, including uncertainty, and uncertainty can influence information processing. On these grounds, we proposed and tested the idea that (1) emotions that associate with appraisals of uncertainty (fear, sadness) lead to more structured ideation than emotions that associate with appraisals of certainty (happiness, anger) and that (2) appraisals of uncertainty drive this effect. Findings of four experiments on idea generation in which (un)certainty was primed (Study 1) and emotions were induced through self-generated imagery (Study 2-4) supported these predictions. (PsycINFO Database Record (c) 2012 APA, all rights reserved).     

The role of affect in attitudes toward organ donation and donor-relevant decisions

We argue that affect plays a vital role in attitudes toward organ donation and that reluctance to become an organ donor is likely to be related to the experience of affective ambivalence. Assessing the affect associated with organ donation could help to predict donor-relevant decisions. Results of a confirmatory factor analysis on 464 students showed that affective evaluations can be distinguished both from cognitive evaluations and from overall evaluations. As expected, affective evaluations revealed ambivalence (using the ‘Griffin’ measure of ambivalence) toward organ donation, whereas the two other types of evaluations did not. Results of a follow-up study using logistic regression (n?=?85), showed that affective evaluations predicted donor-relevant decisions six months later. The present findings support the proposal to include separate affective evaluations in measures of attitudes to organ donation. More general implications for the measurement and structure of attitudes in health related domains are discussed.     

How people make decisions about predictive genetic testing: An analogue study

Abstract

Persons scoring high on negative affectivity (NA) have more subjective health complaints. In this study, we tested the hypothesis that high NA persons are more likely to experience internal sensations as threatening signs of health problems. Low and high NA participants (N=44) were given four breathing trials: one room air trial followed by three trials containing 5.5% CO₂ which induced transient low intensity somatic sensations. Prior to each CO₂ trial, participants received either positive, negative or uncertain labelings of the sensations that might occur. Participants rated the (un)pleasantness of the experienced somatic sensations and the perceived intensity. Also respiratory responses were measured. During CO₂ trials, reliable main effects of information were found but no effects involving NA were observed, neither on pleasantness ratings nor on respiratory responses. However, during room air breathing, high NA participants reported more intense somatic sensations than low NA participants. Post-experimental data suggested that high NA participants had more negative meanings and worries about the consequences of the physical sensations. It is concluded that interpretational biases in high NA is situated at the level of attributional processes.