How do investors make predictions? Insights from analogical reasoning research

Previous work on investor decision making has focused almost exclusively on information specific to the company being judged. Consequently, every decision is viewed as a novel event, disconnected from the investor's existing knowledge. In this study, the analogical reasoning literature provides the theoretical support for arguing that investors frequently utilize existing knowledge as a basis for generating predictions about a company's future. The specific proposal is that investors transfer their existing knowledge via two different forms of analogical reasoning. The first, relational reasoning, is based primarily on structural correspondence between a novel company and an existing schema. The second, literal similarity reasoning, is based primarily on surface correspondence of a novel company and a previously encountered company. Our theoretical framework is tested in a study in which experienced investors predict the outcome of a novel company's strategy after reading about the experiences of other companies who implemented a similar strategy. The results are consistent with the occurrence of both relational and literal similarity reasoning, with relational reasoning emerging as the dominant approach to generating investors' predictions. Copyright © 2000 John Wiley & Sons, Ltd.     

Effects of contact and personality on intergroup attitudes of different professionals†

The aim of this study was to examine the effects of intergroup contact, personality, and demographic characteristics on the intergroup attitudes of police officers, medical doctors and nurses (N=421; 274 females, 147 males). Following the contact hypothesis, intergroup contact in and of itself was not expected to be sufficient for reducing intergroup prejudice, especially in unequal contacts between professionals and their clients. It was argued that the quality of contact required for the improvement of intergroup attitudes is not equal status or emotional closeness of the participants, but rather that of individuation and familiarity of the outgroup member. The results showed that both level of authoritarianism and individuation of an outgroup member affected intergroup attitudes across all types of contact. For authoritarianism, this result did not hold separately for males, but the individuation effect was very stable; those who knew an outgroup member only superficially held more negative intergroup attitudes than those who knew him or her well, even in unequal and non‐voluntary contacts, and even when controlling for authoritarianism, gender, education and professional field. The effect was non‐significant in voluntary contacts. No differences in intergroup attitudes were found between males and females or between the professional groups among males after controlling for authoritarianism. Copyright © 2000 John Wiley & Sons, Ltd.     

Cognitive adaptation and its consequences: a test of cognitive continuum theory

Cognitive Continuum Theory (CCT) is an adaptive theory of human judgement and posits a continuum of cognitive modes anchored by intuition and analysis. The theory specifies surface and depth task characteristics that are likely to induce cognitive modes at different points along the cognitive continuum. The current study manipulated both the surface (information representation) and depth (task structure) characteristics of a multiple‐cue integration threat assessment task. The surface manipulation influenced cognitive mode in the predicted direction with an iconic information display inducing a more intuitive mode than a numeric information display. The depth manipulation influenced cognitive mode in a pattern not predicted by CCT. Results indicate this difference was due to a combination of task complexity and participant satisfacing. As predicted, analysis produced a more leptokurtic error distribution than intuition. Task achievement was a function of the extent to which participants demonstrated an analytic cognitive mode index, and not a function of correspondence, as predicted. This difference was likely due to the quantitative nature of the task manipulations. Copyright © 2000 John Wiley & Sons, Ltd.     

Emotional state and the detection of change in facial expression of emotion

A new method is presented for examining effects of emotion in the detection of change in facial expression of emotion. The method was used in one experiment, reported here. Participants who were induced to feel happiness, sadness, or neutral emotion, saw computerized 100‐frame movies in which the first frame always showed a face expressing a specific emotion (e.g. happiness). The facial expression gradually became neutral over the course of the movie. Participants played the movie, changing the facial expression, and indicated the frame at which the initial expression was no longer present on the face. Emotion congruent expressions were perceived to persist longer than were emotion incongruent expressions. The findings are consistent with previous findings documenting enhanced perceptual processing of emotion congruent information. The value of the current technique, and the types of everyday situations that it might model are discussed. Copyright © 2000 John Wiley & Sons, Ltd.     

Impact of emotional appeal on non-profit advertising: A neurophysiological analysis

The number of Non-Profit Organisations (NPOs) has increased in the past years, and they rely on advertising to communicate their causes. Although the effectiveness of NPO advertising has been studied previously, there is still no consensus about which appeal (emotionally positive or negative) increases its effectiveness. On the other hand, the most prevalent research approaches to NPO advertising are traditional research methodologies based on declarative techniques. So, the purpose of this study is to identify which appeal (positive or negative) in NPO advertising is more effective at the three levels of effectiveness (perceptual or communicational effectiveness, psychological or attitudinal effectiveness and behavioural effectiveness), providing a new approach based on the analysis of consumers' unconscious responses to advertising. We conducted an experiment with 113 participants whose neurophysiological responses were evaluated through electroencephalogram (EEG) and eye tracking (ET) while they watched NPO advertisements with a randomly assigned emotional appeal (positive or negative). In addition, a survey revealed behavioural responses. The results showed that considering the psychological or attitudinal effectiveness, positively framed ads are more effective, as there is a positive effect on attitudes towards the ad and a higher positive emotional valence. On the other hand, in perceptual effectiveness, where attention is considered an important variable, the negatively framed ads showed more significant time in the area of interest (AOI) of the image area of the ad, and longer time in the AOI text was observed for positively framed ads. Furthermore, regarding behavioural effectiveness, negatively framed ads seem more effective in eliciting actual donations. The results suggest that a positive appeal is more effective in generating a more positive attitude and a positive emotional valence towards the advertisement, which could benefit the NPO in the long term. But a negative appeal is more effective if the goal is to achieve immediate donations.     

The neural bases of sport fan reactions to teams: Evidence from a neuroimaging study

This study uses neuroimaging methods to identify patterns of brain activation among sport fans in reaction to team stimuli. In a whole-brain analysis without selected regions in advance, the purposes were to identify the structures involved when fans are exposed to positive, neutral, and negative events and to learn what events activate more limbic networks. A total of 53 individuals participated in and functional magnetic resonance imaging experiment involving the presentation of videos in various situations. Findings indicate the activation of the cingulate gyrus and other structures of the limbic system, as the hippocampus and parahippocampus. We also found involvement of the ventral tegmental area of the reward system. Additionally, brain activity in emotional regulation and memory areas were more influenced by positive than neutral and negative videos. It was also found the involvement of other areas not directly included in the limbic or reward systems. This study provides the neural basis of fan reactions to team-related stimuli. Sport clubs should be aware that negative content seems to be suppressed from emotional memory and positive videos trigger more emotion and memory areas than neutral and negative videos.     

Playful defensive responses in adult male rats depend on the status of the unfamiliar opponent

Adult male rats reared as pairmates from weaning were tested in a neutral arena with both members of another pair (one at a time). The unfamiliar pairs were found to engage in play fighting, although they were more likely to escalate the encounter into serious fighting than were pairs of familiar rats. Based on their within‐home pair behavior, each pairmate was designated as a dominant or a subordinate. When the test encounters between unfamiliar males were analyzed with regard to whether the pairings consisted of two dominants, two subordinates, or a mixed pair, the pattern of play fighting was found to be attenuated. Both dominants and subordinates were more likely to initiate playful encounters, to respond defensively during these encounters, and to do so using adult‐typical tactics of defense when paired with an unfamiliar rat that was dominant in its home cage. The mechanisms by which the home status of unfamiliar male rats can be identified by another male are discussed, particularly with regard to the role that play fighting may serve for this function. It is concluded that the data support the hypothesis that play fighting can be used by adult rats for social testing, which in this case seems to involve ascertaining the opponent's fighting capability. Aggr. Behav. 25:141–152, 1999. © 1999 Wiley‐Liss, Inc.     

Effect of body size on aggression in the ant,Cataglyphis niger (Hymenoptera; Formicidae)

In polymorphic ants, such as Cataglyphis niger, sterile individual workers from the same nest show some degree of variation in size and/or morphology. We studied whether worker size and size difference between opponents had an effect on aggression during conspecific encounters. Although the capacity to recognize nestmates was shared by all individuals, some patterns of agonistic behaviors were size related. Escape was mostly displayed by the small workers, and threat, associated with ritualized fights, by the large workers. As game theory predicted, ants of C. niger adjusted their level of aggression as a function of the size of the opponent. However, only large individuals used such assessment strategies, responding with escalation of aggression towards small workers and reduction of aggression towards large ones. On the contrary, small individuals behaved in the same manner whatever the opponent's size. Differences between both morphological castes were discussed with reference to the resource holding assessment models. Aggr. Behav. 25:369–379, 1999. © 1999 Wiley‐Liss, Inc.