scholarly journals Comment on Schosser (2018) “Incentive Systems for Risky Investment Decisions under Unknown Preferences: Ortner et al. Revisited”

Games ◽  
2018 ◽  
Vol 9 (4) ◽  
pp. 93 ◽  
Author(s):  
Julia Ortner
Keyword(s):  
Performance Measures ◽  
Cost Allocation ◽  
Investment Decisions ◽  
The State ◽  
Alternative Solution ◽  
Incentive Systems ◽  
Relative Benefit ◽  
Specific Subset ◽  
Risky Investment ◽  
Benefit Cost

Schosser (Games 2018, 9, 26) claims to have found an alternative solution to design appropriate performance measures than the State-Contingent Relative Benefit Cost Allocation (RBCA) introduced by Ortner et al. (Management Accounting Research 2017, 36, 43–50), which he states is simpler and more powerful. However, this note reveals that the performance measures proposed by Schosser are, in fact, a specific subset of State-Contingent Robust RBCA performance measures and thus do not represent a new solution.

scholarly journals Incentive systems for risky investment decisions under unknown preferences

2017 ◽  
Vol 36 ◽  
pp. 43-50 ◽  
Author(s):  
Julia Ortner ◽  
Louis Velthuis ◽  
David Wollscheid
Keyword(s):  
Investment Decisions ◽  
Incentive Systems ◽  
Risky Investment

scholarly journals Reply to Ortner

Games ◽  
2018 ◽  
Vol 9 (4) ◽  
pp. 94
Author(s):  
Josef Schosser
Keyword(s):  
Investment Decisions ◽  
Incentive Systems ◽  
Risky Investment

I address the comments made by Ortner (Games 9(4): 93, 2018) in relation to my note “Incentive Systems for Risky Investment Decisions Under Unknown Preferences: Ortner et al. Revisited” (Games 9(2): 26, 2018).

scholarly journals EFEK INTERAKSI LITERASI KEUANGAN DALAM KEPUTUSAN INVESTASI: PENGUJIAN BIAS-BIAS PSIKOLOGI

2021 ◽  
Vol 10 (1) ◽  
pp. 36
Author(s):  
Wendy Wendy
Keyword(s):  
Financial Literacy ◽  
Investment Decisions ◽  
Interaction Model ◽  
Investor Behavior ◽  
Disposition Effect ◽  
Herding Behavior ◽  
Risky Investment ◽  
Managerial Implications ◽  
Comprehensive Manner ◽  
Positive Effect

                                                        ABSTRACTThis research aims to analyze psychological biases that occur when investors make risky investment decisions. There are five behavioral factors analyzed (herding, overconfidence, disposition effect, conservatism, and availability). Financial literacy is used as moderator in analyzing the effect of those bahaviors towards risky investment decisions. This research examines four econometric equations in explaining financial literacy as a moderator. Interaction effect testing is carried out using moderating variable regression. The results show that psychological biases occur in making risky investment decisions. Herding behavior, overconfidence, disposition effect, and conservatism show a positive effect, while availability does not show a significant effect. Testing on the interaction model finds that financial literacy is able to reduce these psychological biases. This finding also explains the managerial implications that investors with high levels of financial literacy have the potential to experience relatively low psychological biases compared to investors with limited levels of financial literacy. In terms of limitations, this research uses a questionnaire survey that has not been able to reveal aspects of investor behavior in a comprehensive manner. In addition, the number of respondents who are more dominated by beginner investors also adds to the limitations in carrying out the generalization.                                                    ABSTRAKRiset ini bertujuan untuk menganalisis bias-bias psikologi yang terjadi ketika pemodal mengambil keputusan investasi berisiko. Terdapat lima faktor perilaku yang dianalisis, yaitu perilaku herding, overconfidence, disposition effect, conservatism, dan availability. Literasi keuangan digunakan sebagai pemoderasi dalam menganalisis pengaruh faktor-faktor keperilakuan tersebut terhadap keputusan investasi berisiko. Riset ini menguji empat persamaan ekonometrika dalam menjelaskan peran literasi keuangan sebagai pemoderasi. Pengujian efek interaksi dilakukan dengan menggunakan regresi variabel moderasi. Hasil analisis menunjukkan bahwa bias-bias psikologi terjadi dalam pengambilan keputusan investasi berisiko. Perilaku herding, overconfidence, disposition effect, dan conservatism menunjukkan pengaruh positif terhadap pengambilan keputusan investasi berisiko, sementara bias availability tidak menunjukkan pengaruh yang bermakna dalam riset ini. Pengujian pada model interaksi menemukan bahwa literasi keuangan mampu mereduksi bias-bias psikologi tersebut. Temuan ini sekaligus menjelaskan implikasi manajerial bahwa pemodal dengan tingkat literasi keuangan yang baik berpotensi mengalami bias-bias psikologi yang relatif lebih rendah dibandingkan pemodal dengan tingkat lietrasi keuangan yang terbatas. Dari sisi keterbatasan, riset ini menggunakan survei kuesioner yang belum mampu mengungkap aspek perilaku pemodal secara komprehensif. Selain itu, jumlah responden yang lebih didominasi oleh pemodal pemula juga menambah keterbatasan dalam melakukan generalisasi hasil penelitian.

scholarly journals Can longer gaze duration determine risky investment decisions? An interactive perspective

2021 ◽  
Vol 14 (4) ◽  
Author(s):  
Yiheng Wang ◽  
Yanping Liu
Keyword(s):  
Diffusion Model ◽  
Investment Decisions ◽  
Expected Value ◽  
Current Experiment ◽  
Choice Process ◽  
The Gaze ◽  
Risky Investment ◽  
Underlying Mechanisms ◽  
Computational Difficulty ◽  
Decision Difficulty

Can longer gaze duration determine risky investment decisions? Recent studies have tested how gaze influences people’s decisions and the boundary of the gaze effect. The current experiment used adaptive gaze-contingent manipulation by adding a self-determined option to test whether longer gaze duration can determine risky investment decisions. The results showed that both the expected value of each option and the gaze duration influenced people’s decisions. This result was consistent with the attentional diffusion model (aDDM) proposed by Krajbich et al. (2010), which suggests that gaze can influence the choice process by amplify the value of the choice. Therefore, the gaze duration would influence the decision when people do not have clear preference.The result also showed that the similarity between options and the computational difficulty would also influence the gaze effect. This result was inconsistent with prior research that used option similarities to represent difficulty, suggesting that both similarity between options and computational difficulty induce different underlying mechanisms of decision difficulty.

Regional cost sharing in expansions of electricity transmission grids

2014 ◽  
Vol 8 (3) ◽  
pp. 283-300 ◽  
Author(s):  
Hans Nylund
Keyword(s):  
International Cooperation ◽  
Electricity Market ◽  
Cost Sharing ◽  
Cost Allocation ◽  
Electricity Transmission ◽  
Content Type ◽  
Transmission Investment ◽  
Benefit Cost ◽  
Partition Function Form ◽  
Voluntary Cooperation

Purpose – The purpose of this paper is to analyse how the regional effects of expansion can be managed under the constraints of voluntary cooperation. This paper studies international cooperation on electricity transmission expansions in a region of countries that shares a joint electricity infrastructure. Design/methodology/approach – Cooperative game theory and the partition-function form were applied in combination with benefit–cost ratios to model and analyse the incentives to cooperate under different cost allocation rules. Empirical background was provided by a case study of a transmission investment agreement made on the Nordic electricity market. Findings – Both cost sharing and the composition of expansion plans were identified as ways of reaching regional agreements. It was found that agreements based on proportional division of costs in relation to benefits were the best choice for voluntary cooperation. Research limitations/implications – The study did not analyse the effects or relevance of surplus sharing in addition to that implied by cost sharing, nor has it studied the regulatory and legal requirements for implementing side-payments between countries in grid expansions. These issues could benefit from more study. Practical implications – The results are relevant for the development of international cooperation on grid expansions and as an input to regulations and policies aimed at promoting regional perspectives, in particular for the case of a single internal energy market in Europe. Originality/value – The paper contributes with an analysis of incentives for transmission expansions in a multinational environment subject to voluntary provision and a lack of supranational authorities with decision power.

Who Gains from and who Pays for Channel Deepening?

2005 ◽  
Vol 1909 (1) ◽  
pp. 62-69 ◽  
Author(s):  
Thomas A. Grigalunas ◽  
James J. Opaluch ◽  
Young Tae Chang
Keyword(s):  
Net Present Value ◽  
Cost Savings ◽  
Economic Benefits ◽  
The State ◽  
Sensitivity Analyses ◽  
Cost Ratio ◽  
Benefit Cost Ratio ◽  
Net Benefits ◽  
Benefit Cost ◽  
Benefits And Costs

Port dredging to accommodate larger vessels can create substantial national economic benefits. However, how affected individual states fare economically with dredging is often unclear and can be an important issue. The benefits and the costs to Delaware residents of dredging—with the recent proposed deepening of the Delaware Bay and River main federal channel as a case study—are examined. Benefits include ( a) lower transportation costs that residents might receive on imported goods, ( b) profits that residents would realize if cost savings (e.g., on refinery products) were not passed forward to Delaware users, ( c) project costs that residents would bear as federal taxpayers, and ( d) benefits that residents would realize if the use of dredged sediments for planned beach renourishment created savings to the state. Sensitivity analyses are used to reflect uncertainty in outcomes. The estimated net present value to Delaware today of all future annual quantifiable benefits and costs ranges between $15,528,393 and $14,195,700 over 50 years at 5.875%. Stated another way, the quantified net benefits for Delaware imply a benefit-cost ratio between 2.07 and 1.89. Hence, for every dollar of the $7.5 million that Delaware would pay as a nonfederal cosponsor, estimated quantifiable net benefits to the state are $2.07 to $1.89. Some benefit and cost estimates are vehemently debated between interested parties, and not all benefits and costs can be quantified.

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