Do Investment Risk Tolerance Attitudes Predict Portfolio Risk?

We investigated a new instrument designed to assess investment risk tolerance, the Risk Tolerance Questionnaire (RTQ). RTQ scores were positively correlated with scores on two other investment risk measures, but were not correlated with a measure of sensation-seeking (Zuckerman, 1994), suggesting that investment risk tolerance is not explainable by a general cross-domain appetite for risk. Importantly, RTQ scores were positively correlated with the riskiness of respondents’ actual investment portfolios, meaning that investors with high risk-tolerance score tend to have higher-risk portfolios. Finally, respondents with relatively more investment experience had more risk-tolerant responses and higher-risk portfolios than less experienced investors.

Extended similarity trees

Proximity data can be represented by an extended tree, which generalizes traditional trees by including marked segments that correspond to overlapping clusters. An extended tree is a graphical representation of the distinctive features model. A computer program (EXTREE) that constructs extended trees is described and applied to several sets of conceptual and perceptual proximity data.This research was supported in part by a National Science Foundation Pre-doctoral Fellowship to the first author.A magnetic tape containing both the EXTREE program described in the article and ADDTREE/P program for fitting additive trees can also be obtained from the above address. Requests for the program should be accompanied by a check for $25 made out to Teachers College, to cover the costs of the tape and postage.     

Cognitive tools shape thought: diagrams in design

Thinking often entails interacting with cognitive tools. In many cases, notably design, the predominant tool is the page. The page allows externalizing, organizing, and reorganizing thought. Yet, the page has its own properties that by expressing thought affect it: path, proximity, place, and permanence. The effects of these properties were evident in designs of information systems created by students Paths were interpreted as routes through components. Proximity was used to group subsystems. Horizontal position on the page was used to express temporal sequence and vertical position to reflect real-world spatial position. The permanence of designs on the page guided but also constrained generation of alternative designs. Cognitive tools both reflect and affect thought.     

The effect of culture and self‐construals on predispositions toward verbal communication

This study tested the effects of culture and self‐construals (i.e., independence and interdependence) on predispositions toward verbal communication. For the purpose of this study, we focused on two main areas of verbal communication predispositions: (a) communication apprehension and (b) argumentativeness. In our path model, we expected that culture‐level individualism increases one's construal of self as independent, which, in turn, leads to a higher degree of argumentativeness and a lower level of communication apprehension. We also expected that culture‐level individualism decreases one's construal of self as interdependent, which, in turn, leads to a lower degree of argumentativeness and a higher level of communication apprehension. Data to test the model were drawn from undergraduates (N=539) studying in Korea, Hawaii, and mainland U.S. The data were partially consistent with the theoretical predictions made. The implications of the results for theory and practice are discussed.     

Observed attention allocation processes in category learning

In two empirical studies of attention allocation during category learning, we investigate the idea that category learners learn to allocate attention optimally across stimulus dimensions. We argue that "optimal" patterns of attention allocation are model or process specific, that human learners do not always optimize attention, and that one reason they fail to do so is that under certain conditions the cost of information retrieval or use may affect the attentional strategy adopted by learners. We empirically investigate these issues using a computer interface incorporating an "information-board" display that collects detailed information on participants' patterns of attention allocation and information search during learning trials. Experiment 1 investigated the effects on attention allocation of distributing perfectly diagnostic features across stimulus dimensions versus within one dimension. The overall pattern of viewing times supported the optimal attention allocation hypothesis, but a more detailed analysis produced evidence of instance- or category-specific attention allocation, a phenomenon not predicted by prominent computational models of category learning. Experiment 2 investigated the strategies adopted by category learners encountering redundant perfectly predictive cues. Here, the majority of participants learned to distribute attention optimally in a cost-benefit sense, allocating attention primarily to only one of the two perfectly predictive dimensions. These results suggest that learners may take situational costs and benefits into account, and they present challenges for computational models of learning that allocate attention by weighting stimulus dimensions.     

Flexibility training with educable retarded children

This experiment was designed to test the hypothesis that training in perceptual and cognitive shifts would improve the performance of EMR children on flexibility measures and on the Binet and WISC scales. Twenty-eight children received 42 exercises in cognitive flexibility and were compared to a control group that was matched on mental age. Instruction facilitated performance on variables measuring verbal fluency and concept formation; however, significant improvement was generally limited to those variables which shared content with the training exercises.     

When mixed options are preferred in multiple‐trial decisions

We report three studies showing that in prospective multiple‐trial decisions people often select a mix of sure and risky options over pure bundles of either option. Such a preference is not ‘rational’ because a mixed option cannot be the EV‐maximizing choice. Experiment 1 confirmed a mixed‐option preference for gains but not for losses. Showing a graph of the multiple‐trial outcome distribution reduced but did not eliminate this effect, suggesting that it is not due purely to a failure to aggregate correctly over the multiple trials. Experiment 2 replicated the mixed option preference using a wider range of problems. Experiment 3 compared choices in the trinary choice conditions used in Experiments 1 and 2 with binary choices between pairs of the multiple‐trial sure, mixed, and risky options. In the binary choice condition the mixed option was no longer the modal choice, suggesting that the strong mixed option preference found in the trinary choice conditions is mainly due to a compromise effect. However, the binary choice probabilities did show violations of strong stochastic transitivity in a pattern that suggested a slight bias toward the mixed option. Copyright © 2006 John Wiley & Sons, Ltd.     

Similarity, confusability, and the density hypothesis

Results from several letter- and digit-identification studies have been interpreted (Appelman & Mayzner, 1982; Krumhansl, 1982) as providing support for the hypothesis that psychological similarity is influenced by the local density of items in the stimulus space. This conclusion is questioned on the grounds that density was not directly manipulated in the studies, thus alternative explanations based on other stimulus characteristics cannot be excluded. In the present article six experiments are reported in which stimulus density was manipulated. In three experiments using similarity ratings and two using discrimination confusions, no effect of stimulus density was found. However, the identification counterpart of one of the discrimination studies did provide evidence of an effect of density on response probabilities. It is concluded that stimulus density can affect identification performance through its influence on the choice process implicit in any identification task, but is not an important determinant of psychological similarity.