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Tuesday, November 11, 2014

Caricature

A Superhumanization Bias in Whites’ Perceptions of Blacks

Adam Waytz, Kelly Marie Hoffman & Sophie Trawalter
Social Psychological and Personality Science, forthcoming

Abstract:
The present research provides the first systematic empirical investigation into superhumanization, the attribution of supernatural, extrasensory, and magical mental and physical qualities to humans. Five studies test and support the hypothesis that White Americans superhumanize Black people relative to White people. Studies 1–2b demonstrate this phenomenon at an implicit level, showing that Whites preferentially associate Blacks versus Whites with superhuman versus human words on an implicit association test and on a categorization task. Studies 3–4 demonstrate this phenomenon at an explicit level, showing that Whites preferentially attribute superhuman capacities to Blacks versus Whites, and Study 4 specifically shows that superhumanization of Blacks predicts denial of pain to Black versus White targets. Together, these studies demonstrate a novel and potentially detrimental process through which Whites perceive Blacks.

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A rose by any other name?: The consequences of subtyping “African-Americans” from “Blacks”

Erika Hall, Katherine Phillips & Sarah Townsend
Journal of Experimental Social Psychology, January 2015, Pages 183–190

Abstract:
Racial labels often define how social groups are perceived. The current research utilized both archival and experimental methods to explore the consequences of the “Black” vs. “African-American” racial labels on Whites' evaluations of racial minorities. We argue that the racial label Black evokes a mental representation of a person with lower socioeconomic status than the racial label African-American, and that Whites will react more negatively toward Blacks (vs. African-Americans). In Study 1, we show that the stereotype content for Blacks (vs. African-Americans) is lower in status, positivity, competence, and warmth. In Study 2, Whites view a target as lower status when he is identified as Black vs. African-American. In Study 3, we demonstrate that the use of the label Black vs. African-American in a US Newspaper crime report article is associated with a negative emotional tone in that respective article. Finally, in Study 4, we show that Whites view a criminal suspect more negatively when he is identified as Black vs. African-American. The results establish how racial labels can have material consequences for a group.

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Gendered Race Prototypes: Evidence for the non-prototypicality of Asian men and Black women

Joanna Schug, Nicholas Alt & Karl Christoph Klauer
Journal of Experimental Social Psychology, January 2015, Pages 121–125

Abstract:
Previous research from the perspective of gendered race theory has demonstrated that stereotypes about race often contain a gendered component, whereby certain racial and ethnic groups are stereotyped as more masculine or feminine. In particular, in North American contexts, Blacks tend to be associated with masculinity, while Asians tend to be associated with femininity. In this paper we present the hypothesis that Asian men and Black women are deemed less prototypical of their overarching racial groups due to the mismatch between their identities and gendered race stereotypes. First, we show evidence demonstrating that Asian men face invisibility at the cognitive level, consistent with previous theory and research related to Black women (Study 1). Second, we present direct evidence that participants are more likely to imagine a man when thinking of a Black individual and less likely to think of a man when imagining an Asian individual, relative to the frequency of Whites (Study 2). Overall, our results support the hypothesis that Asian men and Black women are viewed as less prototypical of their race categories. We discuss implications and future directions for work on intersectionality and gendered race theory.

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Just Skin Deep? The Impact of Interviewer Race on the Assessment of African American Respondent Skin Tone

Lance Hannon & Robert DeFina
Race and Social Problems, December 2014, Pages 356-364

Abstract:
Over the last decade, the Equal Employment Opportunity Commission has seen a significant increase in the number of discrimination claims based on skin shade. However, in some ways, substantiating colorism has proven to be more difficult than documenting racism, as skin tone data are rarely collected and few existing skin tone measures have been validated. The present study examines an increasingly popular skin tone scale that includes a professionally designed color guide to enhance rater consistency. Logistic regression analysis of data from the National Longitudinal Survey of Youth and General Social Survey indicates that despite the addition of the color guide, the race of the interviewer matters for the assessment of respondent skin tone. On average, African American respondents with a white interviewer were about 3 times more likely to be classified as dark than those with an African American interviewer. We argue that failing to appropriately account for this race-of-interviewer effect can significantly impact colorism findings.

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Secrets and Misperceptions: The Creation of Self-Fulfilling Illusions

Sarah Cowan
Sociological Science, November 2014, Pages 466-492

Abstract:
This study examines who hears what secrets, comparing two similar secrets-one which is highly stigmatized and one which is less so. Using a unique survey representative of American adults and intake forms from a medical clinic, I document marked differences in who hears these secrets. People who are sympathetic to the stigmatizing secret are more likely to hear of it than those who may react negatively. This is a consequence not just of people selectively disclosing their own secrets but selectively sharing others’ as well. As a result, people in the same social network will be exposed to and influenced by different information about those they know and hence experience that network differently. When people effectively exist in networks tailored by others to not offend then the information they hear tends to be that of which they already approve. Were they to hear secrets they disapprove of then their attitudes might change but they are less likely to hear those secrets. As such, the patterns of secret-hearing contribute to a stasis in public opinion.

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The White Ceiling Heuristic and the Underestimation of Asian-American Income

Chris Martin & John Nezlek
PLoS ONE, September 2014

Abstract:
The belief that ethnic majorities dominate ethnic minorities informs research on intergroup processes. This belief can lead to the social heuristic that the ethnic majority sets an upper limit that minority groups cannot surpass, but this possibility has not received much attention. In three studies of perceived income, we examined how this heuristic, which we term the White ceiling heuristic leads people to inaccurately estimate the income of a minority group that surpasses the majority. We found that Asian Americans, whose median income has surpassed White median income for nearly three decades, are still perceived as making less than Whites, with the least accurate estimations being made by people who strongly believe that Whites are privileged. In contrast, income estimates for other minorities were fairly accurate. Thus, perceptions of minorities are shaped both by stereotype content and a heuristic.

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Do You Really Understand? Achieving Accuracy in Interracial Relationships

Deborah Son Holoien et al.
Journal of Personality and Social Psychology, forthcoming

Abstract:
Accurately perceiving whether interaction partners feel understood is important for developing intimate relationships and maintaining smooth interpersonal exchanges. During interracial interactions, when are Whites and racial minorities likely to accurately perceive how understood cross-race partners feel? We propose that participant race, desire to affiliate, and racial salience moderate accuracy in interracial interactions. Examination of cross-race roommates (Study 1) and interracial interactions with strangers (Study 2) revealed that when race is salient, Whites higher in desire to affiliate with racial minorities failed to accurately perceive the extent to which racial minority partners felt understood. Thus, although the desire to affiliate may appear beneficial, it may interfere with Whites’ ability to accurately perceive how understood racial minorities feel. By contrast, racial minorities higher in desire to affiliate with Whites accurately perceived how understood White partners felt. Furthermore, participants’ overestimation of how well they understood partners correlated negatively with partners’ reports of relationship quality. Collectively, these findings indicate that racial salience and desire to affiliate moderate accurate perceptions of cross-race partners — even in the context of sustained interracial relationships — yielding divergent outcomes for Whites and racial minorities.

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Beauty is in the in-group of the beholded: Intergroup differences in the perceived attractiveness of leaders

Kevin Kniffin et al.
Leadership Quarterly, forthcoming

Abstract:
Physical attractiveness is most commonly presumed to be an exogenous characteristic that influences people's feelings, perceptions, and behavior across myriad types of relationships. We investigate the opposite prediction in which feelings toward other people influence the perceptions of others' attractiveness. Focusing specifically on subordinates' perceptions of leaders of in-groups and out-groups, we examine whether group membership moderates familiarity in relation to ratings of physical attractiveness. Studies 1 and 2 show that subordinates rate the leaders of their in-groups as significantly more physically attractive than comparably familiar out-group leaders. Our findings have relevance for understanding the interactive roles of physical attractiveness within contemporary organizational environments and help to account for variance in interpersonal perceptions on the basis of group membership. In contrast with research traditions that treat physical attractiveness as a static trait, our findings highlight the importance of group membership as a lens for perceiving familiar leaders' physical attractiveness.

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Sexualized Avatars Lead to Women’s Self-Objectification and Acceptance of Rape Myths

Jesse Fox et al.
Psychology of Women Quarterly, forthcoming

Abstract:
Research has indicated that many video games and virtual worlds are populated by unrealistic, hypersexualized representations of women, but the effects of using these representations remain understudied. Objectification theory suggests that women’s exposure to sexualized media representations leads to self-objectification. Further, we anticipated this process would lead to increases in rape myth acceptance (RMA). Two experiments (Study 1, N = 87; Study 2, N = 81) examined the effects of avatar features on women’s experiences of self-objectification. In both studies, college women exposed to sexualized avatars experienced higher levels of self-objectification after the virtual experience than those exposed to nonsexualized avatars. Furthermore, in Study 2, self-objectification mediated the relationship between controlling a sexualized avatar and subsequent levels of RMA. We discuss the implications of women using sexualized avatars in video games and virtual environments, which may lead to negative attitudes about the self and other women off-line due to heightened self-objectification.

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Sexual objectification pushes women away: The role of decreased likability

Fei Teng et al.
European Journal of Social Psychology, forthcoming

Abstract:
The present investigation examined the effect of sexual objectification on women's intention to affiliate with men. We predicted that women would perceive an objectifier as less likable following sexual objectification and thus would distance themselves from the perpetrator. Study 1 found that objectification led female participants to perceive their male partner as less likable and to be less willing to affiliate with the partner. Study 2 replicated Study 1 in a concurrent interpersonal interaction and extended these effects to a man having a similar background with the perpetrator. Study 3 showed that power moderated the effect of sexual objectification on women's interaction intention such that only women with equal or low power (as compared to the objectifier) decreased their affiliation intention toward the objectifier, whereas high-power women did not show this effect. Implications of these findings were discussed.

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“I Thought You Were Japanese”: Ethnic Miscategorization and Identity Assertion

Matthew Trujillo, Randi Garcia & Nicole Shelton
Cultural Diversity and Ethnic Minority Psychology, forthcoming

Abstract:
Across 2 studies we examined how ethnic minorities respond to ethnic miscategorization. Using a 21-day experience sampling procedure (Study 1), we found that ethnic minorities exhibited greater ethnic identity assertion when they had reported being ethnically miscategorized the previous day. Similarly, we found that ethnic minorities who were ethnically miscategorized (vs. not) by a White partner in the laboratory exhibited greater ethnic identity assertion and expressed greater dislike of their partner (Study 2). In both studies, these effects were stronger for individuals whose ethnic identity was central to their self-concept. The implications of these findings for ethnic identity development and intergroup relations are discussed.

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Anxiety perseverance in intergroup interaction: When incidental explanations backfire

Tessa West, Adam Pearson & Chadly Stern
Journal of Personality and Social Psychology, November 2014, Pages 825-843

Abstract:
Intergroup interactions are often anxiety provoking, and this can lead members of both majority and minority groups to avoid contact. Whereas negative consequences of experiencing intergroup anxiety are well documented, the role of perceived anxiety has received substantially less theoretical and empirical attention. We demonstrate in 3 experiments that the perception of anxiety in others can undermine intergroup interactions even when the anxiety can be attributed to a source that is unrelated to the interaction. Participants who learned that a cross-race partner’s anxiety could be attributed to an upcoming evaluation (Study 1) or a stimulant (i.e., caffeine, Studies 2 and 3) expressed less interest in continuing an interaction (Studies 1 and 2), showed less self-disclosure (Study 2), and increased physical distance between themselves and their partner (Study 3) than did those given no source information and participants who interacted with a same-race partner. Moreover, compared to control participants, perceivers who were given an incidental explanation for their partner’s anxiety perceived outgroup, but not ingroup, partners as more anxious (Studies 1 and 3) and showed heightened accessibility of anxiety words (Study 3), indicating that incidental source information enhanced accessibility of intergroup (but not intragroup) anxiety at early stages of information processing. Theoretical and practical implications for combating paradoxical effects of perceived anxiety in intergroup interactions are considered.

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Positive Expectations Encourage Generalization From a Positive Intergroup Interaction to Outgroup Attitudes

Matthew Deegan et al.
Personality and Social Psychology Bulletin, forthcoming

Abstract:
The current research reveals that while positive expectations about an anticipated intergroup interaction encourage generalization of positive contact to outgroup attitudes, negative expectations restrict the effects of contact on outgroup attitudes. In Study 1, when Blacks and Whites interacted with positive expectations, interaction quality predicted outgroup attitudes to a greater degree than when groups interacted with negative expectations. When expectations (Studies 2 and 3) and the actual interaction quality (Study 4) were manipulated orthogonally, negative expectations about the interaction predicted negative outgroup attitudes, regardless of actual interaction quality. By contrast, participants holding positive expectations who experienced a positive interaction expressed positive outgroup attitudes, whereas when they experienced a negative interaction, they expressed outgroup attitudes as negative as those with negative expectations. Across all four studies, positive expectations encouraged developing outgroup attitudes consistent with interaction quality.

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Do natural kind beliefs about social groups contribute to prejudice? Distinguishing bio-somatic essentialism from bio-behavioral essentialism, and both of these from entitativity

Michael Andreychik & Michael Gill
Group Processes & Intergroup Relations, forthcoming

Abstract:
Do essentialist conceptions of racial groups foster prejudice and negative attitudes? Existing literature provides mixed results. We propose that relations between essentialism and negative attitudes will become clearer in light of a new conceptualization of essentialism derived from literature on how laypersons reason about biological inheritance. Accordingly, we propose a distinction between two types of essentialism: Bio-somatic essentialism and bio-behavioral essentialism. Further, we distinguish both of these types of essentialism from entitativity, and argue that essentialism and entitativity exert independent effects on prejudice and negative attitudes. Study 1 shows that bio-behavioral essentialism — but not bio-somatic essentialism — contributes to prejudice, and that bio-behavioral essentialism and perceived entitativity exert independent effects on prejudice. In Study 2, we manipulate whether participants hold a bio-somatic essentialist, bio-behavioral essentialist, or antiessentialist theory about a novel group and show that bio-behavioral essentialism is uniquely facilitative of negative attitudes toward a negatively behaving outgroup. Finally, in Study 3 we manipulate both essentialist theories and entitativity and show that bio-behavioral essentialism and strong perceptions of entitativity independently increase negative attitudes. Because both bio-somatic essentialism and bio-behavioral essentialism involve seeing a group as a “natural kind,” our work suggests that only particular types of natural kind beliefs are related to negative attitudes.

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Individuation training with other-race faces reduces preschoolers’ implicit racial bias: A link between perceptual and social representation of faces in children

Wen Xiao et al.
Developmental Science, forthcoming

Abstract:
The present study examined whether perceptual individuation training with other-race faces could reduce preschool children's implicit racial bias. We used an ‘angry = outgroup’ paradigm to measure Chinese children's implicit racial bias against African individuals before and after training. In Experiment 1, children between 4 and 6 years were presented with angry or happy racially ambiguous faces that were morphed between Chinese and African faces. Initially, Chinese children demonstrated implicit racial bias: they categorized happy racially ambiguous faces as own-race (Chinese) and angry racially ambiguous faces as other-race (African). Then, the children participated in a training session where they learned to individuate African faces. Children's implicit racial bias was significantly reduced after training relative to that before training. Experiment 2 used the same procedure as Experiment 1, except that Chinese children were trained with own-race Chinese faces. These children did not display a significant reduction in implicit racial bias. Our results demonstrate that early implicit racial bias can be reduced by presenting children with other-race face individuation training, and support a linkage between perceptual and social representations of face information in children.

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The Effects of Avatar Stereotypes and Cognitive Load on Virtual Interpersonal Attraction: Mediation Effects of Perceived Trust and Reversed Perceptions Under Cognitive Load

Jorge Peña & Seung-Chul Yoo
Communication Research, forthcoming

Abstract:
This study examined the effects of avatar visual stereotypes and cognitive load on interpersonal attraction in virtual interactions. Avatars dressed in black were perceived as less attractive relative to identical avatars in white. The assumption that cognitively busy perceivers develop more stereotypical perceptions was rejected. Instead, cognitively non-busy participants developed more stereotypical impressions. Remarkably, cognitive load reversed avatar perceptions. Cognitively busy participants rated avatars in black as more attractive but avatars in white as less attractive. Perceived trust mediated the link between avatar appearance and task attraction. In addition, cognitive load moderated the strength of the indirect relationship between avatar appearance and task attraction through trust. The findings have important implications for virtual perceptions and misperceptions.

By KEVIN LEWIS | 09:00:00 AM

Monday, November 10, 2014

Walking down Wall Street

The People in Your Neighborhood: Social Interactions and Mutual Fund Portfolios

Veronika Pool, Noah Stoffman & Scott Yonker
Journal of Finance, forthcoming

Abstract:
We find that socially connected fund managers have more similar holdings and trades. The overlap of funds whose managers reside in the same neighborhood is considerably higher than that of funds whose managers live in the same city but in different neighborhoods. These effects are larger when managers share a similar ethnic background, and are not explained by preferences. Valuable information is transmitted through these peer networks: a long-short strategy composed of stocks purchased minus sold by neighboring managers delivers positive risk-adjusted returns. Unlike prior empirical work, our tests disentangle the effects of social interactions from community effects.

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Weather-Induced Mood, Institutional Investors, and Stock Returns

William Goetzmann et al.
Review of Financial Studies, forthcoming

Abstract:
This study shows that weather-based indicators of mood impact perceptions of mispricing and trading decisions of institutional investors. Using survey and disaggregated trade data, we show that relatively cloudier days increase perceived overpricing in individual stocks and the Dow Jones Industrial Index and increase selling propensities of institutions. We introduce stock-level measures of investor mood; investor optimism positively impacts stock returns among stocks with higher arbitrage costs, and stocks experiencing similar investor mood exhibit return comovement. These findings complement existing studies on how weather impacts stock index returns and identify another channel through which it can manifest.

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Trading as Gambling

Anne Jones Dorn, Daniel Dorn & Paul Sengmueller
Management Science, forthcoming

Abstract:
This paper offers evidence from three different samples consistent with investors substituting between playing the lottery and gambling in financial markets. In the United States, increases in the jackpots of the multistate lotteries Powerball and Mega Millions are associated with significant reductions in small trade participation in the stock market. California-based discount brokerage clients and German discount brokerage clients are significantly less likely to trade during weeks with larger lottery prizes in the California and German lotteries, respectively. Variation in lottery prizes affects speculative trading in more lottery-like securities such as individual stocks and options, but not trading in bonds and mutual funds. Trading that is likely associated with long-term savings motives, such as trading in retirement accounts, does not respond to lottery jackpots, either. The negative relation between trading activity and jackpots is stronger for individuals who are more likely to play the lottery.

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Impact of the Dodd-Frank Act on Credit Ratings

Valentin Dimitrov, Darius Palia & Leo Tang
Journal of Financial Economics, forthcoming

Abstract:
We analyze the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) on corporate bond ratings issued by credit rating agencies (CRAs). We find no evidence that Dodd-Frank disciplines CRAs to provide more accurate and informative credit ratings. Instead, following Dodd-Frank, CRAs issue lower ratings, give more false warnings, and issue downgrades that are less informative. These results are consistent with the reputation model of Morris (2001), and suggest that CRAs become more protective of their reputation following the passage of Dodd-Frank. Consistent with Morris (2001), we find that our results are stronger for industries with low Fitch market share, where Moody's and Standard & Poor's have stronger incentives to protect their reputation (Becker and Milbourn, 2011). Our results are not driven by business cycle effects or firm characteristics, and strengthen as the uncertainty regarding the passage of Dodd-Frank gets resolved. We conclude that increasing the legal and regulatory costs to CRAs might have an adverse effect on the quality of credit ratings.

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The potential effect of US baby-boom retirees on stock returns

Haim Kedar-Levy
North American Journal of Economics and Finance, November 2014, Pages 106–121

Abstract:
Empirical studies demonstrated that US baby boomers consumption and savings patterns have affected economic aggregates over the past decades, among them equity returns. Boomers’ retirement is expected to mitigate the demand for equities until 2050, but its impact varies with the specific population age structure along decades. This paper employs a dynamic asset pricing model with optimum consumption and portfolio rules to estimate aging effects on S&P500 returns between 1950 and 2050. Calibration for demographic and economic data between 1950 and 2005 yields model estimates that significantly explain the moving average of S&P500 returns. Further, taking into account the present value of expected demographic effects until 2050 suggests that the S&P500 was fairly priced at the heart of the financial crisis, on April 2009, but overpriced thereafter.

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Presidential Elections and the Market Pricing of Future Earnings

Michael Drake, Michael Mayberry & Jaron Wilde
BYU Working Paper, October 2014

Abstract:
We examine whether presidential elections influence the market pricing of future earnings. We predict that uncertainty surrounding presidential election outcomes, and the associated policy changes that impact future firm operations, reduces the extent to which current prices reflect information about future earnings. We estimate future earnings response coefficients (FERCs) for the years 1981-2009, a period that covers seven presidential elections, and find that FERCs are significantly lower (by approximately 7.2 percent) during presidential election years compared to other years. Additional analyses using pseudo election years, ex-ante polls and ex-post margins of victory, and cross-sectional firm characteristics confirm that the lower FERCs during election years are related to political election uncertainty. We also investigate potential explanations for the lower FERCs during election years and find that it is related to increased forecasting uncertainty, and not to changes in discount rates or noise trading. Overall, we contribute to the literature by providing the first empirical evidence on whether and how political election uncertainty influences the pricing of future earnings.

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The Worst, the Best, Ignoring All the Rest: The Rank Effect and Trading Behavior

Samuel Hartzmark
Review of Financial Studies, forthcoming

Abstract:
I document a new stylized fact about how investors trade assets: individuals are more likely to sell the extreme winning and extreme losing positions in their portfolio (“the rank effect”). This effect is not driven by firm-specific information, holding period or the level of returns itself, but is associated with the salience of extreme portfolio positions. The rank effect is exhibited by both retail traders and mutual fund managers. The effect indicates that trades in a given stock depend on how the stock compares to other positions in an investor's portfolio.

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The Costs and Benefits of Mandatory Securities Regulation: Evidence from Market Reactions to the JOBS Act of 2012

Dhammika Dharmapala & Vikramaditya Khanna
University of Chicago Working Paper, August 2014

Abstract:
The effect of mandatory securities regulation on firm value has been a longstanding concern across law, economics and finance. In 2012, Congress enacted the Jumpstart Our Business Startups (“JOBS”) Act, relaxing disclosure and compliance obligations for a new category of firms known as “emerging growth companies” (EGCs) that satisfied certain criteria (such as having less than $1 billion of annual revenue). The JOBS Act’s definition of an EGC involved a limited degree of retroactivity, extending its application to firms that conducted initial public offerings (IPOs) between December 8, 2011 and April 5, 2012 (the day the bill became law). The December 8 cutoff date was publicly known prior to the JOBS bill’s key legislative events, notably those of March 15, 2012, when Senate consideration began and the Senate Majority Leader expressed strong support for the bill. We analyze market reactions for EGCs that conducted IPOs after the cutoff date, relative to a control group of otherwise similar firms that conducted IPOs in the months preceding the cutoff date. We find positive and statistically significant abnormal returns for EGCs around March 15, relative to the control firms. This suggests that the value to investors of the disclosure and compliance obligations relaxed under the JOBS Act is outweighed by the associated compliance costs. The baseline results imply a positive abnormal return of between 3% and 4%, and the implied increase in firm value is at least $20 million for an EGC with the median market value in our sample.

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Predatory Short Selling

Markus Brunnermeier & Martin Oehmke
Review of Finance, October 2014, Pages 2153-2195

Abstract:
Financial institutions may be vulnerable to predatory short selling. When the stock of a financial institution is shorted aggressively, leverage constraints imposed by short-term creditors can force the institution to liquidate long-term investments at fire sale prices. For financial institutions that are sufficiently close to their leverage constraints, predatory short-selling equilibria coexist with no-liquidation equilibria (the vulnerability region) or may even be the unique equilibrium outcome (the doomed region). Increased coordination among short sellers expands the doomed region, where liquidation is the unique equilibrium. Our model provides a potential justification for temporary restrictions on short selling of vulnerable institutions and can be used to assess recent empirical evidence on short-sale bans.

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Culture and R2

Cheol Eun, Lingling Wang & Steven Xiao
Journal of Financial Economics, forthcoming

Abstract:
Consistent with predictions from the psychology literature, we find that stock prices co-move more (less) in culturally tight (loose) and collectivistic (individualistic) countries. Culture influences stock price synchronicity by affecting correlations in investors' trading activities and a country's information environment. Both market-wide and firm-specific variations are lower in tighter cultures. Individualism is mostly associated with higher firm-specific variations. Trade and financial openness weakens the effect of domestic culture on stock price comovements. These results hold for various robustness checks. Our study suggests that culture is an important omitted variable in the literature that investigates cross-country differences in stock price comovements.

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Does Media Coverage of Stocks Affect Mutual Funds' Trading and Performance?

Lily Fang, Joel Peress & Lu Zheng
Review of Financial Studies, forthcoming

Abstract:
We study the relation between mutual fund trades and mass media coverage of stocks. We find that funds exhibit persistent differences in their propensity to buy media-covered stocks. Moreover, this propensity is negatively related to their future performance. Funds in the highest propensity decile underperform funds in the lowest propensity decile by 1.1% to 2.8% per year. These results do not extend to fund sells, likely because of funds' inability to sell short. Overall, the findings suggest that professional investors are subject to limited attention.

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Counterparty Risk and the Establishment of the New York Stock Exchange Clearinghouse

Asaf Bernstein, Eric Hughson & Marc Weidenmier
NBER Working Paper, September 2014

Abstract:
Heightened counterparty risk during the recent financial crisis has raised questions about the role clearinghouses play in global financial stability. Empirical identification of the effect of centralized clearing on counterparty risk is challenging because of the co-incidence of macro-economic turbulence and the introduction of clearinghouses. We overcome these concerns by examining a novel historical experiment, the establishment of a clearinghouse on the New York Stock Exchange (NYSE) in 1892. During this period the largest NYSE stocks were also listed on the Consolidated Stock Exchange (CSE), which already had a clearinghouse. Using identical securities on the CSE as a control, we find that the introduction of clearing reduced annualized volatility of NYSE returns by 90-173bps and increased asset values. Prior to clearing, shocks to overnight lending rates reduced the value of stocks on the NYSE, relative to identical stocks on the CSE, but this was no longer true after the establishment of clearing. We also show that at least ½ of the average reduction in counterparty risk on the NYSE is driven by a reduction in contagion risk – the risk of a cascade of broker defaults. Our results indicate that clearing can cause a significant improvement in market stability and value through a reduction in network contagion and counterparty risk.

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Are Stars’ Opinions Worth More? The Relation Between Analyst Reputation and Recommendation Values

Lily Fang & Ayako Yasuda
Journal of Financial Services Research, December 2014, Pages 235-269

Abstract:
Using 1994–2009 data, we find that All-American (AA) analysts’ buy and sell portfolio alphas significantly exceed those of non-AAs by up to 0.6 % per month after risk-adjustments for investors with advance access to analyst recommendations. For investors without such access, top-rank AAs still earn significantly higher (by 0.3 %) monthly alphas in buy recommendations than others. AAs’ superior performance exists before (as well as after) they are elected, is not explained by market overreactions to stars, and is not significantly eroded after Reg-FD. Election to top-AA ranks predicts future performance in buy recommendations above and beyond other previously observable analyst characteristics. Institutional investors actively evaluate analysts and update the AA roster accordingly. Collectively, these results suggest that skill differences among analysts exist and AA election reflects institutional investors’ ability to evaluate and benefit from elected analysts’ superior skills. Other investors’ opportunity to profit from the stars’ opinions exists, but is limited due to their timing disadvantage.

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Can Analysts Predict Rallies Better Than Crashes?

Ivan Medovikov
Finance Research Letters, forthcoming

Abstract:
We use the copula approach to study the structure of dependence between sell-side analysts’ consensus recommendations and subsequent security returns, with a focus on asymmetric tail dependence. We match monthly vintages of I/B/E/S recommendations for the period January to December 2011 with excess security returns during six months following recommendation issue. Using a mixed Gaussian-symmetrized Joe-Clayton copula model we find evidence to suggest that analysts can identify stocks that will substantially outperform, but not underperform relative to the market, and that their predictive ability is conditional on recommendation changes.

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Media Makes Momentum

Alexander Hillert, Heiko Jacobs & Sebastian Müller
Review of Financial Studies, forthcoming

Abstract:
Relying on 2.2 million articles from forty-five national and local U.S. newspapers between 1989 and 2010, we find that firms particularly covered by the media exhibit, ceteris paribus, significantly stronger momentum. The effect depends on article tone, reverses in the long run, is more pronounced for stocks with high uncertainty, and is stronger in states with high investor individualism. Our findings suggest that media coverage can exacerbate investor biases, leading return predictability to be strongest for firms in the spotlight of public attention. These results collectively lend credibility to an overreaction-based explanation for the momentum effect.

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Crowdfunding, cascades and informed investors

Simon Parker
Economics Letters, forthcoming

Abstract:
Do higher proportions of (a) informed investors and (b) high-quality projects increase the number of good projects that are ultimately financed via crowdfunding? A simple model and simulation reveals the answers to both questions to be: ‘not necessarily’.

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Uncommon Value: The Characteristics and Investment Performance of Contrarian Funds

Kelsey Wei, Russ Wermers & Tong Yao
Management Science, forthcoming

Abstract:
Motivated by extant theories of herding behavior, this paper empirically identifies contrarian mutual funds as those trading most frequently against the crowd. We find that contrarian funds generate superior performance both when they trade against and with the herd, indicating that they possess superior private information. Furthermore, contrarians do not trade in a particularly correlated fashion with each other, consistent with these funds having disparate information. Our fund-level contrarian measure is largely unrelated to existing measures of fund strategy uniqueness, as both contrarian and herding funds score highly on such measures. Building on our finding of superior alphas for contrarian funds, we construct a stock-level contrarian score that reflects the aggregate stock selection information possessed by contrarian managers. This stock-level contrarian score significantly predicts stock returns after controlling for measures of stock-level herding, as well as a battery of return-predictive investment signals documented in prior studies.

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Do individual currency traders make money?

Boris Abbey & John Doukas
Journal of International Money and Finance, forthcoming

Abstract:
Using a unique online currency transactions dataset, we examine the performance, trading activity, drawdown, and timing abilities of individual currency traders. Evidence from 428 accounts during the 2004-2009 period shows that currency traders earn positive abnormal returns, even after accounting for transaction costs. Additionally, the results reveal that day traders not only trade more frequently than non-day traders, but also outperform them in terms of raw, a passive benchmark and risk-adjusted returns. Finally, sorts on trade activity, measured as the mean number of trades per day per account, and account turnover, show a positive association between performance and trade activity.

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Fooling Some of the People All of the Time: The Inefficient Performance and Persistence of Commodity Trading Advisors

Geetesh Bhardwaj, Gary Gorton & Geert Rouwenhorst
Review of Financial Studies, November 2014, Pages 3099-3132

Abstract:
Investors face significant barriers in evaluating the performance of investment advisors. We focus on commodity trading advisors (CTAs) and show that from 1994 to 2012, CTA excess returns to investors (i.e., net of fees) were insignificantly different from zero while gross excess returns (i.e., before fees) were 6.1%, which implies that managers captured the performance in fees. Moreover, we find that CTAs display no alpha relative to simple future strategies in the public domain. Our results have implications for all hedge fund studies in that we find the typical adjustments for biases in the hedge fund databases still leave upward bias in fund performance.

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Information Networks: Evidence from Illegal Insider Trading Tips

Kenneth Ahern
University of Southern California Working Paper, October 2014

Abstract:
This paper exploits a novel hand collected dataset to provide a comprehensive analysis of the demographics and social relationships behind illegal insider trading networks. I find that the majority of inside traders are connected through family and friendship links and a minority are connected through professional relationships. Traders cluster by age, occupation, gender, and location. Traders earn prodigious returns of about 35% over 21 days, where traders farther from the original source earn lower percentage returns, but higher dollar gains. More broadly, this paper provides some of the first evidence on information networks using direct observations of person-to-person communication.

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Rational Information Leakage

Raffi Indjejikian, Hai Lu & Liyan Yang
Management Science, November 2014, Pages 2762-2775

Abstract:
Empirical evidence suggests that information leakage in capital markets is common. We present a trading model to study the incentives of an informed trader (e.g., a well-informed insider) to voluntarily leak information about an asset’s value to one or more independent traders. Our model shows that, although leaking information dissipates the insider’s information advantage about the asset’s value, it enhances his information advantage about the asset’s execution price relative to other informed traders. The profit impact of these two effects are countervailing. When there are a sufficient number of other informed traders, the profit impact from enhanced information dominates. Hence, the insider has incentives to leak some of his private information. We label this rational information leakage and discuss its implications for the regulation of insider trading.

By KEVIN LEWIS | 09:00:00 AM

Sunday, November 9, 2014

Brainy

The Adult Brain Makes New Neurons, and Effortful Learning Keeps Them Alive

Tracey Shors
Current Directions in Psychological Science, October 2014, Pages 311-318

Abstract:
The brain continues to produce new neurons throughout life. For instance, the hippocampus (a brain region necessary for select learning processes) produces thousands of new neurons each day. However, a significant number of them die and do so within just a few weeks of their birth. Laboratory animals that are trained to learn a new skill between one and two weeks after the new cells are generated retain most cells that would have otherwise died. The types of skills that keep new cells alive are not limited to those that depend on the hippocampus but rather include those that are effortful to learn, requiring more training trials or time spent training. Importantly, training alone is not sufficient to increase cell survival; animals that are trained but do not learn do not retain more cells than animals that are not trained. Therefore, learning increases the survival of newly generated cells in the hippocampus as long as the learning experience is new, effortful, and successful. Once rescued, the vast majority of these cells differentiate into neurons, thereby forming synapses and generating action potentials as they become incorporated into the existing architecture and functional circuitry of the adult brain.

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Spatial cognition, mobility, and reproductive success in northwestern Namibia

Layne Vashro & Elizabeth Cashdan
Evolution and Human Behavior, forthcoming

Abstract:
Males occupy a larger range than females in many mammal populations including humans, and show an advantage in certain spatial-cognitive laboratory tasks. Evolutionary psychologists have explained these patterns by arguing that an increase in spatial ability facilitated navigation, which allowed range expansion in pursuit of additional mating and hunting opportunities. This study evaluates this hypothesis in a population with navigational demands similar to those that faced many of our ancestors, the Twe and Tjimba of northwestern Namibia. Twe and Tjimba men have larger visiting ranges than women and are more accurate in both spatial (mental rotations) and navigational (accuracy pointing to distant locations) tasks. Men who perform better on the spatial task not only travel farther than other men, but also have children with more women. These findings offer strong support for the relationship between sex differences in spatial ability and ranging behavior, and identify male mating competition as a possible selective pressure shaping this pattern.

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Morningness–eveningness and intelligence among high-achieving US students: Night owls have higher GMAT scores than early morning types in a top-ranked MBA program

Davide Piffer et al.
Intelligence, November–December 2014, Pages 107–112

Abstract:
Individuals with a propensity to wake up early in the morning (“early-morning” types) and those who like to stay up late at night (“night owls”) often exhibit distinctive psychological and physiological profiles. Previous research has shown that night owls score higher than early-morning people on different measures of cognitive ability and academic achievement. Baseline cortisol is one of the physiological variables associated with variation in chronotype and cognitive function. In this study we investigated whether a relationship between chronotype and performance is present also in the high range of intellectual ability and academic achievement, namely, among graduate students in a top-ranked MBA program in the US. In addition, we measured baseline cortisol levels in saliva samples collected in the early afternoon and analyzed them in relation to chronotype and GMAT scores. As predicted, GMAT scores were significantly higher among night owls than among early-morning types, regardless of sex. GMAT scores were also significantly higher among men than women, regardless of chronotype. Morningness/eveningness was not significantly associated with variation in sleep amount or in undergraduate or graduate GPA scores, suggesting that the association between eveningness and high GMAT scores was not due to differences in study effort or skills. Sex, chronotype and baseline cortisol jointly accounted for 14% of the total variance in GMAT scores; baseline cortisol, however, did not mediate the effect of chronotype on GMAT scores. Consistent with the results of previous research, our study shows that the effects of chronotype on cognitive ability and academic performance are relatively small but detectable even among high-achieving individuals. The mechanism linking eveningness and high cognitive function remains unclear but the role of personality traits and neuroendocrine function warrants further investigation.

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Short-Term Second Language and Music Training Induces Lasting Functional Brain Changes in Early Childhood

Sylvain Moreno et al.
Child Development, forthcoming

Abstract:
Immediate and lasting effects of music or second-language training were examined in early childhood using event-related potentials. Event-related potentials were recorded for French vowels and musical notes in a passive oddball paradigm in thirty-six 4- to 6-year-old children who received either French or music training. Following training, both groups showed enhanced late discriminative negativity (LDN) in their trained condition (music group–musical notes; French group–French vowels) and reduced LDN in the untrained condition. These changes reflect improved processing of relevant (trained) sounds, and an increased capacity to suppress irrelevant (untrained) sounds. After 1 year, training-induced brain changes persisted and new hemispheric changes appeared. Such results provide evidence for the lasting benefit of early intervention in young children.

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Musical Training, Bilingualism, and Executive Function: A Closer Look at Task Switching and Dual-Task Performance

Linda Moradzadeh, Galit Blumenthal & Melody Wiseheart
Cognitive Science, forthcoming

Abstract:
This study investigated whether musical training and bilingualism are associated with enhancements in specific components of executive function, namely, task switching and dual-task performance. Participants (n = 153) belonging to one of four groups (monolingual musician, bilingual musician, bilingual non-musician, or monolingual non-musician) were matched on age and socioeconomic status and administered task switching and dual-task paradigms. Results demonstrated reduced global and local switch costs in musicians compared with non-musicians, suggesting that musical training can contribute to increased efficiency in the ability to shift flexibly between mental sets. On dual-task performance, musicians also outperformed non-musicians. There was neither a cognitive advantage for bilinguals relative to monolinguals, nor an interaction between music and language to suggest additive effects of both types of experience. These findings demonstrate that long-term musical training is associated with improvements in task switching and dual-task performance.

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Effects of the FITKids Randomized Controlled Trial on Executive Control and Brain Function

Charles Hillman et al.
Pediatrics, October 2014, Pages e1063-e1071

Objective: To assess the effect of a physical activity (PA) intervention on brain and behavioral indices of executive control in preadolescent children.

Methods: Two hundred twenty-one children (7–9 years) were randomly assigned to a 9-month afterschool PA program or a wait-list control. In addition to changes in fitness (maximal oxygen consumption), electrical activity in the brain (P3-ERP) and behavioral measures (accuracy, reaction time) of executive control were collected by using tasks that modulated attentional inhibition and cognitive flexibility.

Results: Fitness improved more among intervention participants from pretest to posttest compared with the wait-list control (1.3 mL/kg per minute, 95% confidence interval [CI]: 0.3 to 2.4; d = 0.34 for group difference in pre-to-post change score). Intervention participants exhibited greater improvements from pretest to posttest in inhibition (3.2%, 95% CI: 0.0 to 6.5; d = 0.27) and cognitive flexibility (4.8%, 95% CI: 1.1 to 8.4; d = 0.35 for group difference in pre-to-post change score) compared with control. Only the intervention group increased attentional resources from pretest to posttest during tasks requiring increased inhibition (1.4 µV, 95% CI: 0.3 to 2.6; d = 0.34) and cognitive flexibility (1.5 µV, 95% CI: 0.6 to 2.5; d = 0.43). Finally, improvements in brain function on the inhibition task (r = 0.22) and performance on the flexibility task correlated with intervention attendance (r = 0.24).

Conclusions: The intervention enhanced cognitive performance and brain function during tasks requiring greater executive control. These findings demonstrate a causal effect of a PA program on executive control, and provide support for PA for improving childhood cognition and brain health.

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Enhancing dentate gyrus function with dietary flavanols improves cognition in older adults

Adam Brickman et al.
Nature Neuroscience, forthcoming

Abstract:
The dentate gyrus (DG) is a region in the hippocampal formation whose function declines in association with human aging and is therefore considered to be a possible source of age-related memory decline. Causal evidence is needed, however, to show that DG-associated memory decline in otherwise healthy elders can be improved by interventions that enhance DG function. We addressed this issue by first using a high-resolution variant of functional magnetic resonance imaging (fMRI) to map the precise site of age-related DG dysfunction and to develop a cognitive task whose function localized to this anatomical site. Then, in a controlled randomized trial, we applied these tools to study healthy 50–69-year-old subjects who consumed either a high or low cocoa–containing diet for 3 months. A high-flavanol intervention was found to enhance DG function, as measured by fMRI and by cognitive testing. Our findings establish that DG dysfunction is a driver of age-related cognitive decline and suggest non-pharmacological means for its amelioration.

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An equal start: Absence of group differences in cognitive, social, and neural measures prior to music or sports training in children

Assal Habibi et al.
Frontiers in Human Neuroscience, September 2014

Abstract:
Several studies comparing adult musicians and non-musicians have provided compelling evidence for functional and anatomical differences in the brain systems engaged by musical training. It is not known, however, whether those differences result from long-term musical training or from pre-existing traits favoring musicality. In an attempt to begin addressing this question, we have launched a longitudinal investigation of the effects of childhood music training on cognitive, social and neural development. We compared a group of 6- to 7-year old children at the start of intense after-school musical training, with two groups of children: one involved in high intensity sports training but not musical training, another not involved in any systematic training. All children were tested with a comprehensive battery of cognitive, motor, musical, emotional, and social assessments and underwent magnetic resonance imaging and electroencephalography. Our first objective was to determine whether children who participate in musical training were different, prior to training, from children in the control groups in terms of cognitive, motor, musical, emotional, and social behavior measures as well as in structural and functional brain measures. Our second objective was to determine whether musical skills, as measured by a music perception assessment prior to training, correlates with emotional and social outcome measures that have been shown to be associated with musical training. We found no neural, cognitive, motor, emotional, or social differences among the three groups. In addition, there was no correlation between music perception skills and any of the social or emotional measures. These results provide a baseline for an ongoing longitudinal investigation of the effects of music training.

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High intelligence prevents the negative impact of anxiety on working memory

Adam Chuderski
Cognition and Emotion, forthcoming

Abstract:
Using a large sample and the confirmatory factor analysis, the study investigated the relationships between anxiety, working memory (WM) and (fluid) intelligence. The study showed that the negative impact of anxiety on WM functioning diminishes with increasing intelligence, and that anxiety can significantly affect WM only in people below average intelligence. This effect could not be fully explained by the sheer differences in WM capacity (WMC), suggesting the importance of higher-level cognition in coping with anxiety. Although intelligence moderated the impact of anxiety on WM, it was only weakly related to anxiety. In contrast to previous studies, anxiety explained the substantial amount of WMC variance (17.8%) in less intelligent participants, but none of the variance in more intelligent ones. These results can be explained in terms of either increased motivation of intelligent but anxious people to cope with a WM task, or their ability to compensate decrements in WM.

By KEVIN LEWIS | 09:00:00 AM

Saturday, November 8, 2014

Get control

The Origins of Savings Behavior

Henrik Cronqvist & Stephan Siegel
Journal of Political Economy, forthcoming

Abstract:
Analyzing the savings behavior of a large sample of identical and fraternal twins, we find that genetic differences explain about 33 percent of the variation in savings propensities across individuals. Individuals are born with a persistent genetic predisposition to a specific savings behavior. Parenting contributes to the variation in savings rates among younger individuals, but its effect decays over time. The environment when growing up (e.g., parents’ wealth) moderates genetic effects. Finally, savings behavior is genetically correlated with income growth, smoking, and obesity, suggesting that the genetic component of savings behavior reflects genetic variation in time preferences or self-control.

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The Decimal Effect: Behavioral and Neural Bases for a Novel Influence on Intertemporal Choice in Healthy Individuals and in ADHD

Catherine Fassbender et al.
Journal of Cognitive Neuroscience, November 2014, Pages 2455-2468

Abstract:
We identify a novel contextual variable that alters the evaluation of delayed rewards in healthy participants and those diagnosed with attention deficit/hyperactivity disorder (ADHD). When intertemporal choices are constructed of monetary outcomes with rounded values (e.g., $25.00), discount rates are greater than when the rewards have nonzero decimal values (e.g., $25.12). This finding is well explained within a dual system framework for temporal discounting in which preferences are constructed from separate affective and deliberative processes. Specifically, we find that round dollar values produce greater positive affect than do nonzero decimal values. This suggests that relative involvement of affective processes may underlie our observed difference in intertemporal preferences. Furthermore, we demonstrate that intertemporal choices with rounded values recruit greater brain responses in the nucleus accumbens to a degree that correlates with the size of the behavioral effect across participants. Our demonstration that a simple contextual manipulation can alter self-control in ADHD has implications for treatment of individuals with disorders of impulsivity. Overall, the decimal effect highlights mechanisms by which the properties of a reward bias perceived value and consequent preferences.

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The slow and fast life histories of early birds and night owls: Their future- or present-orientation accounts for their sexually monogamous or promiscuous tendencies

Davide Ponzi et al.
Evolution and Human Behavior, forthcoming

Abstract:
In this study we tested the hypothesis that inter-individual variation in morningness-eveningness (i.e., chronotype) is associated with variation in a composite measure of life history (the mini-K) such that morning-types (i.e., early birds) exhibit traits typically associated with slow life histories while evening-types (i.e., night owls) exhibit traits typically associated with fast life histories. In addition, we tested the hypothesis that time perspective may be one of the psychological mechanisms mediating the relationship between chronotype and socio-sexuality. Study participants were 95 heterosexual young men, most of whom were university students. Chronotype, life-history traits, socio-sexuality, and time perspective were assessed with well-established self-report measures. Variations in chronotype and in life-history traits were significantly associated in the direction predicted by our hypothesis. Consistent with our second hypothesis, time perspective emerged as a significant mediator of the association between chronotype and socio-sexuality so that the future orientation of morning-types was associated with their long-term mating orientation and relatively low sexual experience, while the present orientation of evening-types was associated with their short-term mating orientation and greater sexual experience. Our study provides the first evidence that variation in chronotype may be adaptive and elucidates one of the psychological mechanisms underlying the life history and reproductive strategies of male early birds and night owls.

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The Benefits of Simply Observing: Mindful Attention Modulates the Link Between Motivation and Behavior

Esther Papies et al.
Journal of Personality and Social Psychology, forthcoming

Abstract:
Mindful attention, a central component of mindfulness meditation, can be conceived as becoming aware of one’s thoughts and experiences and being able to observe them as transient mental events. Here, we present a series of studies demonstrating the effects of applying this metacognitive perspective to one’s spontaneous reward responses when encountering attractive stimuli. Taking a grounded cognition perspective, we argue that reward simulations in response to attractive stimuli contribute to appetitive behavior and that motivational states and traits enhance these simulations. Directing mindful attention at these thoughts and seeing them as mere mental events should break this link, such that motivational states and traits no longer affect reward simulations and appetitive behavior. To test this account, we trained participants to observe their thoughts in reaction to appetitive stimuli as mental events, using a brief procedure designed for nonmeditators. Across 3 experiments, we found that adopting the mindful attention perspective reduced the effects of motivational states and traits on appetitive behavior in 2 domains, in both the laboratory and the field. Specifically, after applying mindful attention, participants’ sexual motivation no longer made opposite-sex others seem more attractive and thus desirable as partners. Similarly, participants’ levels of hunger no longer boosted the attractiveness of unhealthy foods, resulting in healthier eating choices. We discuss these results in the context of mechanisms and applications of mindful attention and explore how mindfulness and mindful attention can be conceptualized in psychological research more generally.

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Video racing games increase actual health-related risk-taking behavior

Andreas Kastenmüller, Andreas, Peter Fischer & Julia Fischer
Psychology of Popular Media Culture, October 2014, Pages 190-194

Abstract:
The present study investigated whether the consumption of risk-glorifying video games increases health-related risk-taking in real life. Participants were assigned to 1 of 2 conditions, whereby they either played a risk-glorifying video racing game or a risk-neutral video game for 25 minutes. Afterward, they were given the option of a saliva test in the context of a medical checkup. Our data showed that exposure to risk-glorifying video games (video racing games) increases actual general health-related risk-taking behavior. That is, players of risk-glorifying video games were significantly less likely to participate in the health checkup test than players of risk-neutral games. The potentially negative effect of risk-glorifying media on public health needs to be considered by science and politics. This is the first study showing that exposure to risk-glorifying video games actually increases real-life health-related risk-taking behavior. In addition, it is the first study showing that the impact of risk-glorifying video games is not content-specific, as it carries over from one risk-taking domain (i.e., risky driving in video games) to another completely unrelated risk-outcome domain (health-related risk-taking).

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“Latent” infection with Toxoplasma gondii: Association with trait aggression and impulsivity in healthy adults

Thomas Cook et al.
Journal of Psychiatric Research, forthcoming

Background: Latent chronic infection with Toxoplasma gondii (T. gondii), a common neurotropic pathogen, has been previously linked with suicidal self-directed violence (SSDV). We sought to determine if latent infection with T. gondii is associated with trait aggression and impulsivity, intermediate phenotypes for suicidal behavior, in psychiatrically healthy adults.

Methods: Traits of aggression and impulsivity were analyzed in relationship to IgG antibody seropositivity for T. gondii and two other latent neurotropic infections, herpes simplex virus 1 (HSV1) and cytomegalovirus (CMV. One thousand community-residing adults residing in the Munich metropolitan area with no Axis I or II conditions by SCID for DSM-IV (510 men, 490 women, mean age 53.6 ± 15.8, range 20-74). Plasma samples were tested for IgG antibodies to T. gondii, HSV-1 and CMV by ELISA. Self-reported ratings of trait aggression scores (Questionnaire for Measuring Factors of Aggression [FAF]) and trait impulsivity (Sensation-Seeking Scale-V [SSS-V]) were analyzed using linear multivariate methods.

Results: T. gondii IgG seropositivity was significantly associated with higher trait reactive aggression scores among women (p<.01), but not among men. T. gondii-positivity was also associated with higher impulsive sensation-seeking (SSS-V Disinhibition) among younger men (p < .01) aged 20-59 years old (median age = 60). All associations with HSV-1 and CMV were not significant.

Conclusions: Aggression and impulsivity, personality traits considered as endophenotypes for SSDV, are associated with latent T.gondii infection in a gender and age-specific manner, and could be further investigated as prognostic and treatment targets in T.gondii-positive individuals at risk for SSDV.

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The effect of construal level on risk-taking

Eva Lermer et al.
European Journal of Social Psychology, forthcoming

Abstract:
In a series of studies, we examined the influence of people's mind-set (construal level (CL): abstract versus concrete) on their risk-taking behavior. We measured differences in CL (study 1, CL as trait) and manipulated CL (studies 1–5, CL as state) with different priming methods, which were unrelated to the dependent variable of risk-taking behavior (studies 1, 3, 4, and 5: Balloon Analog Risk Task; study 2: Angling Risk Task). In all studies, abstract CL resulted in greater risk-taking compared with concrete CL, which led to lower risk-taking. Risky and safe game strategies mediated the CL effect on risk-taking. A concrete mind-set increased the safe game strategy, whereas an abstract mind-set increased the risky game strategy. Furthermore, different potential mediators were explored (i.e., focus on payoffs and probabilities, prevention versus promotion focus, attention to pros versus cons, and mood). A concrete mind-set increased prevention strategies and a negative mood when compared with an abstract mind-set. In turn, an abstract mind-set increased attention to pros (of an action).

By KEVIN LEWIS | 09:00:00 AM

Friday, November 7, 2014

Strife

Assisting Uncertainty: How Humanitarian Aid can Inadvertently Prolong Civil War

Neil Narang
International Studies Quarterly, forthcoming

Abstract:
Humanitarian aid has rapidly emerged as a core component of modern peacebuilding and post-conflict reconstruction. However, some practitioners and policymakers claim that humanitarian assistance may actually prolong conflict. The current debate about the effect of humanitarian aid on conflict underspecifies causal mechanisms and takes place largely through case studies. I use a bargaining framework to argue that aid can inadvertently increase each combatant's uncertainty about the other side's relative strength, thereby prolonging civil war. I test my argument using panel data on cross-national humanitarian aid expenditures. From 1989 to 2008, increased levels of humanitarian assistance lengthen civil wars, particularly those involving rebels on the outskirts of a state. This result suggests that policymakers need to carefully consider whether the specific benefits provided by humanitarian aid outweigh the risk of prolonging civil conflicts, and to look for methods of disbursement that reduce that risk.

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Workers of the World, Unite! Franchise Extensions and the Threat of Revolution in Europe, 1820–1938

Toke Aidt & Peter Jensen
European Economic Review, November 2014, Pages 52–75

Abstract:
We test the hypothesis that the extension of the voting franchise in Europe was related to the threat of revolution. We contend that international diffusion of regime contention and information about revolutionary events happening in neighboring countries generate the necessary variation in the perceived threat of revolution. Using two samples of European countries covering the period from 1820 to 1938, we find robust evidence which is consistent with the ‘threat of revolution hypothesis’. We also find some evidence that war triggered suffrage reform.

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Predicting Winners in Civil Wars

Stephen Haber et al.
Stanford Working Paper, August 2014

Abstract:
We develop a method to estimate which side will win a civil war. The key insight we deliver is that, for typical sovereign debt contracts, the probability of debt repayment will equal the probability of victory in a civil war. We test our predictor for standard outcomes in civil wars, including when the incumbent government loses (the Chinese Nationalists), when a new government is installed by a foreign power and decides to repudiate debt (the restoration of Ferdinand VII of Spain), and when there is a secession (the U.S. Confederacy). For China, markets were predicting a Communist victory three years before it happened. For the U.S., markets never gave the South much more than a 40 percent chance of maintaining the Confederacy. For Spain, markets considered the restoration of Ferdinand VII as likely (probabilities above 50%) as soon as France declared its intention to send military forces to the area.

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Why Europe Avoided Hegemony: A Historical Perspective on the Balance of Power

Jørgen Møller
International Studies Quarterly, forthcoming

Abstract:
Recent work demonstrates that the European state system — which, since the Middle Ages, saw the recurrent formation of balances of power — constitutes a historical exception rather than the rule among anarchic international systems. In this study, I set out to explain why Europe avoided hegemony. I argue that the character of state–society relations at the time of intensified geopolitical competition leads to different systemwide outcomes with respect to balancing and hegemony. Where multiple privileged groups already exist, rulers must negotiate with a range of societal actors to extract revenue and resources for warfare. This further entrenches institutional constraints on rulers and the privileges enjoyed by societal groups, which in turn make it difficult for rulers to convert conquest into further expansion. In the absence of preexisting multiple privileged groups, however, geopolitical competition instead further weakens the ability of societal actors to check their rulers. This dynamic creates a return-to-scale logic that facilitates systemwide conquest. My argument accounts for the diverging trajectories of, on the one hand, medieval and early modern Europe and, on the other hand, ancient China — where the state of Qin eliminated its rivals and established universal domination.

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On Malaria and the Duration of Civil War

Benjamin Bagozzi
Journal of Conflict Resolution, forthcoming

Abstract:
Geographic factors such as rugged terrain and distance from capital cities are widely believed to prolong civil wars by enabling rebel groups to resist total defeat. This article argues that prevalence of malaria can similarly serve to asymmetrically enhance rebels’ defensive capabilities and thus prolong civil war. Malaria prevalence does so in three complementary ways. First, while malaria can inflict costs on both government and rebel troops, these costs are magnified for larger and denser human groups; thereby ensuring that the costs of malaria will often be higher among government troop deployments. Second, because government soldiers are rotated in and out of conflict zones whereas insurgents typically are not, the former are likely to have a higher nonimmune exposure rate than the latter, which further ensures that government forces will be more susceptible to contracting and spreading malaria. Third, malaria can also indirectly prolong civil war by helping to maintain a socio-geographic environment that is conducive to insurgency. These three complementary factors advantage rebel forces’ abilities to resist defeat by government forces and prolong civil conflicts. I empirically test these arguments by examining the duration of civil wars and find strong support for a prolonging effect of malaria on civil conflict.

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What’s the Bandwidth for Democracy? Deconstructing Internet Penetration and Citizen Attitudes About Governance

Elizabeth Stoycheff & Erik Nisbet
Political Communication, Fall 2014, Pages 628-646

Abstract:
Recent world events have highlighted the democratic potential of information and communication technologies. This article draws upon the democracy literature to develop a multilevel conceptual framework that links country-level Internet penetration and individual-level Internet use to citizen attitudes about governance in 34 developing countries. In doing so, it deconstructs “Internet penetration” into three dimensions — hardware (e.g., computers), users, and broadband — to provide greater theoretical specificity about how Internet diffusion leads citizens to adopt democratic attitudes. Results from multilevel analyses indicate that individual Internet use and the diffusion of Internet hardware shape citizens’ perceptions of the supply of democracy in their countries, and individual Internet use and diffusion of broadband lead citizens to adopt stronger democratic preferences. Theoretical and normative implications are discussed.

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Alternative framing: The effect of the Internet on political support in authoritarian China

Min Tang & Narisong Huhe
International Political Science Review, November 2014, Pages 559-576

Abstract:
This study seeks to identify and test a mechanism through which the Internet influences public support in an authoritarian environment in which alternative information is strictly censored by the state. Through online discussions, web users often interpret sanctioned news information in directions different from or even opposite to the intention of the authoritarian state. This alternative framing on the Internet can strongly affect the political views of web users. Through an experimental study conducted in China, we find that subjects exposed to alternative online framing generally hold lower levels of policy support and evaluate government performance more negatively. This finding implies that even though the access to information on sensitive topics is effectively controlled by the government, the diffusion capabilities of the Internet can still undermine the support basis of the seemingly stable authoritarian regime.

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Internally Displaced Populations and Suicide Terrorism

Seung-Whan Choi & James Piazza
Journal of Conflict Resolution, forthcoming

Abstract:
This study asserts that countries with large internally displaced populations (IDPs) are more likely to experience a higher rate of suicide terrorism. After demonstrating this, the study tests four intervening factors hypothesized to drive the relationship between IDPs and suicide attacks: IDPs are expected (1) to increase the pool of potential suicide recruits, thereby lowering the labor costs for suicide terrorist groups; (2) to increase local ethnic conflicts that foster a favorable environment for suicide terrorism; (3) to worsen the human rights conditions in countries, prompting aggrieved people to support suicide terrorist tactics; and (4) to raise the counterterrorism and policing costs of the state, enabling terrorists to plan and execute suicide attacks. Results from negative binomial regression and Tobit models show evidence for the IDPs-suicide terrorism connection. When recursive models are employed to evaluate the effects of four intervening variables, the results most consistently support human rights violations as a significant and substantive mediator between IDPs and suicide attacks.

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Climate Shocks, State Capacity and Peasant Uprisings in North China during 25–1911 CE

Qiang Chen
Economica, forthcoming

Abstract:
China provides an interesting case study of civil conflict because of her long history and rich records. Using a unique dynastic panel dataset for north China during 25–1911 ce, this study finds that severe famines and dynastic age were positively correlated with peasant uprisings, whereas government disaster relief as a proxy for state capacity played a significant mitigating role. Negative climate shocks (e.g. severe drought, locust plagues) affected peasant uprisings primarily through the channel of severe famines. The effects of population density, temperature and other climate shocks (e.g. flood, levee breaches, snow disasters) were either not robust or insignificant.

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How Do Target Leaders Survive Economic Sanctions? The Adverse Effect of Sanctions on Private Property and Wealth

Dursun Peksen
Foreign Policy Analysis, forthcoming

Abstract:
What domestic policies do targeted regimes pursue to survive economic sanctions? Despite an abundance of research on the use and effectiveness of sanctions, scant research has been conducted on the domestic sources of the target's defiance to foreign pressure. This study explores the extent to which sanctions prompt the target regime to manipulate the domestic economic conditions through arbitrary confiscation and redistribution of private property and wealth. It is argued that economic coercion as a direct threat to political survival and coercive capacity of the target government creates incentives for politically insecure elites to engage in the policy of predation to counter the negative economic effects of the coercion on themselves and their constituency. Using time-series cross-national data from 1960 to 2005, the results indicate that as sanctions exact significant economic damage on the economy, the target government is more likely to pursue predatory policies. Further, the suggested impact of sanctions on property rights abuses does not appear to be conditioned by political regime type of the target and the involvement of the United States or multiple countries in the imposition of sanctions. Focusing on the government use of predatory policies to evade foreign pressure, this study expands the current understanding of sanction ineffectiveness in pressuring the government to acquiesce to external demands. It also shows that one major inadvertent consequence of sanctions is the deterioration of the economic security and private property rights of citizens in target countries.

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Anti-Poverty Programs Can Reduce Violence: India's Rural Employment Guarantee and Maoist Conflict

Aditya Dasgupta, Kishore Gawande & Devesh Kapur
Harvard Working Paper, September 2014

Abstract:
We estimate the effects of the National Rural Employment Guarantee Scheme (NREGS), one of the world’s largest anti-poverty programs, on the Maoist conflict in India. Difference in differences analyses, based on the phased roll-out of NREGS across districts between 2006 and 2008 and a new panel dataset on Maoist conflict violence based on local language press sources, show that NREGS adoption caused a roughly 80% reduction in violent incidents and deaths. This effect was not driven by pre-adoption trends and emerged after three quarter-years of program adoption. We provide evidence for an opportunity cost channel by showing that NREGS’ violence reducing effects impacted all targets of violence and were larger in districts experiencing negative rainfall shocks. The results provide new evidence that large-scale anti-poverty programs represent an important policy tool for mitigating violent civil conflict.

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Cues to Coup Plotters: Elections as Coup Triggers in Dictatorships

Tore Wig & Espen Geelmuyden Rød
Journal of Conflict Resolution, forthcoming

Abstract:
A large proportion of coup attempts in autocracies occur in the aftermath of elections, yet little systematic research exists on the topic. Drawing on recent literature on elections in autocracies, we present an argument to explain postelection coups. While we recognize that electoral institutions have the potential to stabilize autocracies, we illustrate that the election event can spark instability when incumbents reveal electoral weakness. Electoral outcomes — in the form of vote shares and opposition reactions — are signals containing information about the strength of the opposition, and indirectly about the likelihood of a successful full-scale revolution that would compromise the privileged positions of regime elites. In these situations, coups are likely to be initiated to avoid a revolution, either by serving as concessions to the opposition or by facilitating increased repression. We perform a large-N study that supports our argument, significantly nuancing the claim that elections stabilize autocracies.

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Transnational Ethnic Kin and Civil War Outcomes

Mehmet Gurses
Political Research Quarterly, forthcoming

Abstract:
The literature on the transnational dimension of civil wars points to transnational ethnic kin as an important catalyst that initiates and sustains civil wars. Ethnic ties that transcend national boundaries, these studies argue, intensify the conflict by providing sanctuaries as well as human and material resources to the rebels. In this study, I argue that the same transborder ethnic ties make it more difficult for the government to achieve a decisive victory and contribute to outcomes more favorable to rebels. These networks can help create a more balanced relationship between an ethnic group and a previously antagonistic state by increasing the political, economic, and military costs of repression for the government. An analysis of ethnic civil wars starting and ending between 1950 and 2006 demonstrates that civil wars fought by ethnically mobilized rebel groups are more likely to be negotiated and settled in favor of rebels who have ethnic kin in a neighboring country.

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Corruption and Ideology in Autocracies

James Hollyer & Leonard Wantchekon
Journal of Law, Economics, and Organization, forthcoming

Abstract:
Corruption is usually depicted in one of two ways: as stemming from a lack of government accountability, or from a lack of capacity. Neither depiction predicts that the structure of institutions meant to control corruption should vary across autocratic regimes. If corruption results from moral hazard between politicians and citizens, then all unaccountable governments should eschew anticorruption bodies. If rent-seeking stems from moral hazard between politicians and bureaucrats, all governments should create anticorruption bodies. We offer an explanation for why unaccountable governments vary in their willingness to create anticorruption institutions. Autocrats create such bodies to deter ideologically disaffected members of the populace from entering the bureaucracy. Anticorruption institutions act as a commitment by the elite to restrict the monetary benefits from bureaucratic office, thus ensuring that only zealous supporters of the elite will pursue bureaucratic posts. We illustrate these arguments with case studies of South Korea and Rwanda.

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Tyrants and Terrorism: Why Some Autocrats are Terrorized While Others are Not

Courtenay Conrad, Justin Conrad & Joseph Young
International Studies Quarterly, September 2014, Pages 539–549

Abstract:
Conventional wisdom suggests that reports of terrorism should be sparse in dictatorships, both because such violence is unlikely to result in policy change and because it is difficult to get reliable information on attacks. Yet, there is variance in the number of terrorist attacks reported in autocracies. Why? We argue that differences in the audience costs produced by dictatorships explain why some nondemocracies experience more terrorism than others. Terrorists are more likely to expect a response in dictatorships that generate high domestic audience costs. Using data from multiple terrorism databases, we find empirical evidence that dictatorships generating higher audience costs — military dictatorships, single-party dictatorships, and dynastic monarchies — experience as much terrorism as democracies, while autocracies generating lower audience costs — personalist dictatorships and non-dynastic monarchies — face fewer attacks than their democratic counterparts.

By KEVIN LEWIS | 09:00:00 AM

Thursday, November 6, 2014

Getting it right

Do I Think BLS Data are BS? The Consequences of Conspiracy Theories

Katherine Levine Einstein & David Glick
Political Behavior, forthcoming

Abstract:
While the willingness of people to believe unfounded and conspiratorial explanations of events is fascinating and troubling, few have addressed the broader impacts of the dissemination of conspiracy claims. We use survey experiments to assess whether realistic exposure to a conspiracy claim affects conspiracy beliefs and trust in government. These experiments yield interesting and potentially surprising results. We discover that respondents who are asked whether they believe in a conspiracy claim after reading a specific allegation actually report lower beliefs than those not exposed to the specific claim. Turning to trust in government, we find that exposure to a conspiracy claim has a potent negative effect on trust in government services and institutions including those unconnected to the allegations. Moreover, and consistent with our belief experiment, we find that first asking whether people believe in the conspiracy mitigates the negative trust effects. Combining these findings suggests that conspiracy exposure increases conspiracy beliefs and reduces trust, but that asking about beliefs prompts additional thinking about the claims which softens and/or reverses the exposure’s effect on beliefs and trust.

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Finding a Needle in a Haystack: Toward a Psychologically Informed Method for Aviation Security Screening

Thomas Ormerod & Coral Dando
Journal of Experimental Psychology: General, forthcoming

Abstract:
Current aviation security systems identify behavioral indicators of deception to assess risks to flights, but they lack a strong psychological basis or empirical validation. We present a new method that tests the veracity of passenger accounts. In an in vivo double-blind randomized-control trial conducted in international airports, security agents detected 66% of deceptive passengers using the veracity test method compared with less than 5% using behavioral indicator recognition. As well as revealing advantages of veracity testing over behavioral indicator identification, the study provides the highest levels to date of deception detection in a realistic setting where the known base rate of deceptive individuals is low.

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Lies, Damn Lies, and Expectations: How Base Rates Inform Lie–Truth Judgments

Chris Street & Daniel Richardson
Applied Cognitive Psychology, forthcoming

Abstract:
We are biased towards thinking that people are telling the truth. Our study represents the first test of how beliefs about the base rate of truths and lies affect this truth bias. Raters were told either 20, 50 or 80% of the speakers would be telling the truth. As the speaker delivered their statement, participants indicated moment by moment whether they thought the speaker was lying or being truthful. At the end of the statement, they made a final lie–truth judgment and indicated their confidence. While viewing the statement, base rate beliefs had an early influence, but as time progressed, all conditions showed a truth bias. In the final judgment at the end of the statement, raters were truth biased when expecting mostly truths but did not show a lie bias when expecting mostly lies. We conclude base rate beliefs have an early influence, but over time, a truth bias dominates.

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The Effects of Subtle Misinformation in News Headlines

Ullrich Ecker et al.
Journal of Experimental Psychology: Applied, forthcoming

Abstract:
Information presented in news articles can be misleading without being blatantly false. Experiment 1 examined the effects of misleading headlines that emphasize secondary content rather than the article’s primary gist. We investigated how headlines affect readers’ processing of factual news articles and opinion pieces, using both direct memory measures and more indirect reasoning measures. Experiment 2 examined an even more subtle type of misdirection. We presented articles featuring a facial image of one of the protagonists, and examined whether the headline and opening paragraph of an article affected the impressions formed of that face even when the person referred to in the headline was not the person portrayed. We demonstrate that misleading headlines affect readers’ memory, their inferential reasoning and behavioral intentions, as well as the impressions people form of faces. On a theoretical level, we argue that these effects arise not only because headlines constrain further information processing, biasing readers toward a specific interpretation, but also because readers struggle to update their memory in order to correct initial misconceptions. Practical implications for news consumers and media literacy are discussed.

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An Episodic Specificity Induction Enhances Means-End Problem Solving in Young and Older Adults

Kevin Madore & Daniel Schacter
Psychology and Aging, forthcoming

Abstract:
Episodic memory plays an important role not only in remembering past experiences, but also in constructing simulations of future experiences and solving means-end social problems. We recently found that an episodic specificity induction — brief training in recollecting details of past experiences — enhances performance of young and older adults on memory and imagination tasks. Here we tested the hypothesis that this specificity induction would also positively impact a means-end problem-solving task on which age-related changes have been linked to impaired episodic memory. Young and older adults received the specificity induction or a control induction before completing a means-end problem-solving task, as well as memory and imagination tasks. Consistent with previous findings, older adults provided fewer relevant steps on problem solving than did young adults, and their responses also contained fewer internal (i.e., episodic) details across the 3 tasks. There was no difference in the number of other (e.g., irrelevant) steps on problem solving or external (i.e., semantic) details generated on the 3 tasks as a function of age. Critically, the specificity induction increased the number of relevant steps and internal details (but not other steps or external details) that both young and older adults generated in problem solving compared with the control induction, as well as the number of internal details (but not external details) generated for memory and imagination. Our findings support the idea that episodic retrieval processes are involved in means-end problem solving, extend the range of tasks on which a specificity induction targets these processes, and show that the problem-solving performance of older adults can benefit from a specificity induction as much as that of young adults.

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Reasoning ability and ideology: Inaccuracies in hierarchical category relations (but not numerical ability) are associated with right-wing authoritarianism

Becky Choma et al.
Journal of Individual Differences, Summer 2014, Pages 177-183

Abstract:
Although much is known about the motivational underpinnings of authoritarian ideologies, less is known about the underlying mental abilities. In the present study, the relations between right-wing authoritarianism (RWA), social dominance orientation (SDO), and reasoning abilities were investigated. Participants (n = 198) completed measures of reasoning ability (Necessary Arithmetic Operations task, Diagramming Relationships task), RWA, and SDO. Greater RWA was only associated with lower ability to recognize hierarchical relationships; neither RWA nor SDO were associated with general arithmetic reasoning ability. Implications for understanding ideology are discussed.

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Food for creativity: Tyrosine promotes deep thinking

Lorenza Colzato, Annelies de Haan & Bernhard Hommel
Psychological Research, forthcoming

Abstract:
Anecdotal evidence suggests that creative people sometimes use food to overcome mental blocks and lack of inspiration, but empirical support for this possibility is still lacking. In this study, we investigated whether creativity in convergent- and divergent-thinking tasks is promoted by the food supplement L-Tyrosine (TYR) — a biochemical precursor of dopamine, which is assumed to drive cognitive control and creativity. We found no evidence for an impact of TYR on divergent thinking (“brainstorming”) but it did promote convergent (“deep”) thinking. As convergent thinking arguably requires more cognitive top-down control, this finding suggests that TYR can facilitate control-hungry creative operations. Hence, the food we eat may affect the way we think.

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Beating Irrationality: Does Delegating to IT Alleviate the Sunk Cost Effect?

Philipp Herrmann, Dennis Kundisch & Mohammad Rahman
Management Science, forthcoming

Abstract:
We investigate the impact of delegating decision making to information technology (IT) on an important human decision bias — the sunk cost effect. To address our research question, we use a unique data set containing actual market transaction data for approximately 7,000 pay-per-bid auctions. In contrast with the laboratory experiments of previous related studies, our research presents the unique advantage of investigating the effects of IT-enabled automated bidding agents on the occurrence of a decision bias in real market transactions. We identify normatively irrational decision scenarios and analyze consumer behavior in these situations. Our findings show that participants with a higher behavioral investment are more likely to violate the assumption of normative economic rationality because of the sunk cost effect. More importantly, we observe that the delegation of auction participation, i.e., actual bidding, to IT significantly reduces the occurrence of the sunk cost effect in subsequent decisions made by the same individual. We can attribute this reduction to the comparably lower behavioral investments incurred by auction participants who delegate their bidding to IT. In particular, by mitigating different contributors of behavioral investments, delegating to IT reduces the likelihood of the occurrence of the sunk cost effect by more than 50%.

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“While You Still Think, I Already Type”: Experienced Social Power Reduces Deliberation During E-Mail Communication

Annika Scholl & Kai Sassenberg
Cyberpsychology, Behavior, and Social Networking, forthcoming

Abstract:
E-mail allows individuals to deliberate on their communication before sending it off. For instance, communication partners can easily take their time to ponder how best to frame a request before they actually send a message. Individuals at times strategically exploit this opportunity to deliberate in order to tailor messages to their communication partner, such as when communicating with a relatively more powerful person. As social power reduces concerns about impression management, we predicted that individuals deliberate more while composing e-mail messages under low (vs. high) power. This assumption was tested with well-established power priming. As such, we expected that experienced power in one context would diminish deliberation times during a subsequent e-mail communication. An experiment manipulating the experience of (low vs. high) power and measuring deliberation times during e-mail composition supported this hypothesis. The findings thus indicate how social power alters deliberation times. More importantly, the results show that individuals not only strategically deliberate during e-mail communication in line with their current situation, but also in line with their social standing in a previous situation (here, their experience of power).

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'Don't Tell Me What to Do!' People Rely Less on Consumer Reviews for Experiential than Material Purchases

Hengchen Dai, Cindy Chan & Cassie Mogilner
University of Pennsylvania Working Paper, September 2014

Abstract:
Do people rely on consumer reviews differently when making experiential purchases (events to live through) than when making material purchases (objects to keep)? Six experiments reveal that people perceive consumer reviews to be less useful and are less likely to seek consumer reviews for experiential purchases than for material purchases. This effect was found among participants contemplating an experiential or material purchase (Studies 1A, 2-5), and among participants contemplating the experiential or material aspects of the same purchase (Study 1B). Importantly, it is not that all information is discounted more for experiential purchases than material purchases, because participants perceived company provided information to be no less useful for experiential purchases (Study 2). Rather, the effect seems specific to consumer reviews. People believe that others’ evaluations will be less representative of their own evaluations for experiential purchases than for material purchases, and this drives the value people place on other consumers’ reviews (Studies 3-5). Although a growing body of work has shown the range of outcomes that follow from consuming experiential versus material purchases, this is the first examination of the decision processes leading into these two purchase types.

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The Tongue-Tied Chameleon: The Role of Nonconscious Mimicry in the Behavioral Confirmation Process

Rachelle Smith et al.
Journal of Experimental Social Psychology, January 2015, Pages 179–182

Abstract:
The current study examines whether mimicry of negative behaviors occurs in ongoing social interactions, and whether mimicry may be a process through which one person’s negative expectations lead to another person’s expectancy-consistent behaviors. Using a simulated phone interview, applicant participants heard questions from an interviewer in either a neutral or negative tone of voice. Audio-recordings of applicant responses were transcribed to remove all tone information, and coders assessed applicant performance. Audio-recordings were subjected to a low-pass filter to remove recognizable words but retain vocal tone, and different coders assessed applicant tone of voice. Evidence of both behavioral mimicry and expectancy-consistent performance was found. Importantly, interviewer tone had a significant indirect effect on applicant performance through its influence on applicant tone. Nonconscious behavioral mimicry of negative behaviors occurs in social interactions, is not always associated with positive outcomes, and serves as a process through which behavioral confirmation can occur.

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The Dynamic Nature of Risk Perceptions After a Fatal Transit Accident

Kris Wernstedt & Pamela Murray-Tuite
Risk Analysis, forthcoming

Abstract:
In 2009, two trains of Washington, DC's Metrorail system collided, resulting in nine deaths and 50 serious injuries. Based on a multiwave survey of Metrorail users in the months after the crash, this article reports how the accident appears to have (1) changed over time the tradeoffs among safety, speed, frequency of service, cost, and reliability that the transit users stated they were willing to make in the postaccident period and (2) altered transit users’ concerns about safety as a function of time and distance from the accident site. We employ conditional logit models to examine tradeoffs among stated preferences for system performance measures after the accident, as well as the influence that respondent characteristics of transit use, location, income, age, and gender have on these preference tradeoffs. As expected, respondents appear averse to longer headways between trains, longer travel durations, higher travel costs, a higher number of late trains, and a higher number of fatalities. The models also show evidence of higher aversion to fatalities from transit system operation among females compared to males. In addition, respondents less experienced with Metrorail travel and those with lower household incomes show higher aversion to fatalities, and this aversion increases as a subject's psychological distance from the accident site decreases. Contrary to expectations shaped by previous studies, aversion to fatalities appears to have increased between the early months after the accident and the end of the survey period, and the expected relationship between age and aversion to fatalities is not statistically significant.

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The Power of Social Influence on Estimation Accuracy

Burcu Gürçay, Barbara Mellers & Jonathan Baron
Journal of Behavioral Decision Making, forthcoming

Abstract:
Research shows that crowds can provide more accurate estimates of uncertain quantities than individuals (Surowiecki, 2004). But little is known about how to organize crowd members to maximize accuracy. When should crowd members work independently, and when should they work collaboratively? We examined the effects of social influence on estimation accuracy, consensus, and confidence. Participants first made independent estimates of uncertain quantities, such as the percentage of U.S. deaths due to heart attacks or the height of the tallest building. Then, in some conditions, they interacted with others online. After the discussion, they made second independent estimates. Social interaction improved accuracy. Despite well-known problems with groups, such as herding and free riding, discussion resulted in more accurate estimates and greater consensus relative to independent estimates. We offer a simple model that describes the process by which group discussion improves the estimates of uncertain quantities.

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What Happens When We Switch Tasks: Pupil Dilation in Multitasking

Ioanna Katidioti, Jelmer Borst & Niels Taatgen
Journal of Experimental Psychology: Applied, forthcoming

Abstract:
Interruption studies typically focus on external interruptions, even though self-interruptions occur at least as often in real work environments. In this article, we therefore contrast external interruptions with self-interruptions. Three multitasking experiments were conducted, in which we examined changes in pupil size when participants switched from a primary to a secondary task. Results showed an increase in pupil dilation several seconds before a self-interruption, which we could attribute to the decision to switch. This indicates that the decision takes a relatively large amount of time. This was supported by the fact that in Experiment 2, participants were significantly slower on the self-interruption blocks than on the external interruption blocks. These findings suggest that the decision to switch is costly, but may also be open for modification through appropriate training. In addition, we propose that if one must switch tasks, it can be more efficient to implement a forced switch after the completion of a subtask instead of leaving the decision to the user.

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Characterizing the Genetic Influences on Risk Aversion

Amal Harrati
Biodemography and Social Biology, Fall 2014, Pages 185-198

Abstract:
Risk aversion has long been cited as an important factor in retirement decisions, investment behavior, and health. Some of the heterogeneity in individual risk tolerance is well understood, reflecting age gradients, wealth gradients, and similar effects, but much remains unexplained. This study explores genetic contributions to heterogeneity in risk aversion among older Americans. Using over 2 million genetic markers per individual from the U.S. Health and Retirement Study, I report results from a genome-wide association study (GWAS) on risk preferences using a sample of 10,455 adults. None of the single-nucleotide polymorphisms (SNPs) are found to be statistically significant determinants of risk preferences at levels stricter than 5 × 10−8. These results suggest that risk aversion is a complex trait that is highly polygenic. The analysis leads to upper bounds on the number of genetic effects that could exceed certain thresholds of significance and still remain undetected at the current sample size. The findings suggest that the known heritability in risk aversion is likely to be driven by large numbers of genetic variants, each with a small effect size.

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High Construal Level Reduces Overoptimistic Performance Prediction

Jin Yan, Songhui Hou & Alexander Unger
Social Behavior and Personality, Fall 2014, Pages 1303-1313

Abstract:
Overoptimistic performance prediction is a very common feature of people's goal-directed behavior. In this study we examined overoptimistic prediction as a function of construal level. In construal level theory an explanation is set out with regard to how people make predictions through the abstract connections between past and future events, with high-level construal bridging near and distant events. We conducted 2 experiments to confirm our hypothesis that, compared with people with local, concrete construals, people with global, abstract construals would make predictions that were less overoptimistic. In Study 1 we manipulated construal level by priming mindset, and participants (n = 81) predicted the level of their productivity in an anagram task. The results supported our hypothesis. In Study 2, in order to improve the generalizability of the conclusion, we varied the manipulation of the construal level by priming a scenario, and measured performance prediction by having the participants (n = 119) estimate task duration. The results showed that high-level construal consistently decreased overoptimistic prediction, supporting our hypothesis. The theoretical implications of our findings are discussed.

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Rational Versus Experiential Processing of Negative Feedback Reduces Defensiveness but Induces Ego Depletion

Brandon Schmeichel, Ryan Caskey & Joshua Hicks
Self and Identity, January/February 2015, Pages 75-89

Abstract:
Three experiments compared the effects of engaging a more rational versus more experiential processing mode following self-relevant negative feedback. Participants in each experiment were encouraged to process negative feedback about their social skills in a more rational versus more experiential mode before completing a mood measure (Experiment 1), a disguised measure of self-enhancement tendencies (Experiment 2), and a behavioral test of self-control (Experiment 3), respectively. Compared to experiential processing, more rational processing of negative feedback reduced negative mood and self-enhancement tendencies but increased the likelihood of self-control failure. Together, these findings suggest that processing negative feedback in a more rational processing mode helps to dispel threats to self-regard but exacts a cost in the form of a temporary depletion of self-control strength.

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The Perils of Marketing Weight Management Remedies and the Role of Health Literacy

Lisa Bolton, Amit Bhattacharjee & Americus Reed
Journal of Public Policy & Marketing, forthcoming

Abstract:
This research explores the impact of weight management remedy marketing on healthy lifestyle behaviors. Three studies demonstrate that exposure to drug (but not supplement) marketing for weight management encourages unhealthy consumer behavior, due to consumers' reliance on erroneous beliefs about health remedies. The authors explore the possible mitigating role of two dimensions of healthy literacy: nutrition knowledge and remedy knowledge. Whether measured or manipulated, remedy knowledge is shown to be more effective than nutrition knowledge at lessening the effect of weight management drug marketing on unhealthy behavior. The theoretical and substantive implications of this research for consumer welfare are discussed.

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Self-Affirmations Provide a Broader Perspective on Self-Threat

Clayton Critcher & David Dunning
Personality and Social Psychology Bulletin, forthcoming

Abstract:
We present an “affirmation as perspective” model of how self-affirmations alleviate threat and defensiveness. Self-threats dominate the working self-concept, leading to a constricted self disproportionately influenced by the threat. Self-affirmations expand the size of the working self-concept, offering a broader perspective in which the threat appears more narrow and self-worth realigns with broader dispositional self-views (Experiment 1). Self-affirmed participants, relative to those not affirmed, indicated that threatened self-aspects were less all-defining of the self (although just as important), and this broader perspective on the threat mediated self-affirmation’s reduction of defensiveness (Experiment 2). Finally, having participants complete a simple perspective exercise, which offered a broader perspective on the self without prompting affirmational thinking (Experiment 3a), reduced defensiveness in a manner equivalent to and redundant with a standard self-affirmation manipulation (Experiment 3b). The present model offers a unifying account for a wide variety of seemingly unrelated findings and mysteries in the self-affirmation literature.

By KEVIN LEWIS | 09:00:00 AM

Wednesday, November 5, 2014

Tough day at the office

Moral Suspicion Trickles Down

Takuya Sawaoka & Benoît Monin
Social Psychological and Personality Science, forthcoming

Abstract:
In social hierarchies, moral stigma spreads down more than up. Across four vignette studies, exposure to the immoral behaviors of higher (vs. lower) ranking group members led online participants to report greater moral suspicion toward other group members (moral spillover). A higher ranking organization member’s deceptive practices were perceived as more prototypical, resulting in more negative moral impressions of the organization (Study 1). This more negative moral impression led people to rate ambiguous behavior by another organization member as more suspicious — even when the prior transgression was purely self-serving (Study 2). These effects generalized across several types of moral transgressions (Study 3). Finally, a higher ranking organization member’s unethical behavior led other organization members to receive more negative job-hiring recommendations (Study 4). Thus, a higher ranking group member’s ethical violations result in greater moral spillover, affecting not only other group members’ moral reputations but their career prospects as well.

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Self-Control at Work

Supreet Kaur, Michael Kremer & Sendhil Mullainathan
Journal of Political Economy, forthcoming

Abstract:
Workers with self-control problems do not work as hard as they would like. This changes the logic of agency theory by partly aligning the interests of the firm and worker: both now value contracts that elicit more effort in the future. Three findings from a year-long field experiment with data entry workers suggest the quantitative importance of self control at work. First, workers choose dominated contracts — which penalize low output but provide no greater reward for high output — 36% of the time to motivate their future selves; use of these contracts increases output by the same amount as an 18% increase in the piece-rate. Second, effort increases as the (randomly assigned) payday gets closer: output rises 8% over the pay week; calibrations show that justifying this would require a 4% daily exponential discount rate. Third, for both findings there is significant and correlated heterogeneity: workers with larger payday effects are both more likely to choose dominated contracts and show greater output increases under them. This correlation grows with experience, consistent with the hypothesis that workers learn about their self-control problems over time. Self-control problems among workers could potentially lead firms to either adopt high-powered incentives or impose work rules to allow monitoring of worker effort.

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Bargaining Ability and Competitive Advantage: Empirical Evidence from Medical Devices

Matthew Grennan
Management Science, forthcoming

Abstract:
In markets where buyers and suppliers negotiate, supplier costs, buyer willingness to pay, and competition determine only a range of potential prices, leaving the final price dependent on other factors (e.g., negotiating skill), which I call bargaining ability. I use a model of buyer demand and buyer–supplier bargaining, combined with detailed data on prices and quantities at the buyer–supplier relationship level, to estimate firm-bargaining abilities in the context of the coronary stent industry where different hospitals (buyers) pay different prices for the exact same product from the same supplier. I estimate that (1) variation in bargaining abilities explains 79% of this price variation, (2) bargaining ability has a large firm-specific component, and (3) changes in the distribution of bargaining abilities over time suggest learning as an important channel influencing bargaining ability.

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Imprint–environment Fit and Performance: How Organizational Munificence at the Time of Hire Affects Subsequent Job Performance

András Tilcsik
Administrative Science Quarterly, December 2014, Pages 639-668

Abstract:
Using a longitudinal study of professionals in two information technology services firms, as well as interview data, this paper illuminates how organizational fortunes influence individual performance over time, examining how the economic situation of an organization leaves a lasting imprint on new employees and how that imprint affects subsequent job performance. The core hypothesis, supported by the results, is that the more similar the initially experienced level of organizational munificence is to the level of munificence in a subsequent period, the higher an individual’s job performance. This relationship between what I call “imprint–environment fit” and performance is contingent on the individual’s career stage when entering the organization and the influence of secondhand imprinting resulting from the social transmission of others’ imprints. A possible implication of the core hypothesis may be a “curse of extremes,” whereby both very high and very low levels of initial munificence are associated with lower average performance during a person’s subsequent tenure. One mechanism underlying these patterns is that employees socialized in different resource environments develop distinct approaches to problem solving and client interactions, which then lead to varying levels of imprint–environment fit in subsequent resource environments.

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Expert leaders in a fast-moving environment

Amanda Goodall & Ganna Pogrebna
Leadership Quarterly, forthcoming

Abstract:
This longitudinal study explores the influence of leaders on performance in the iconic, high-technology, turbulent industry of Formula One. The evidence is evaluated through the emerging theory of expert leadership which proposes the existence of a first-order requirement: it is that leaders should have expert knowledge in the core-business of the organizations they are to lead (holding constant management and leadership experience). The study's findings provide strong support for the ‘expert leader’ hypothesis. The most successful F1 principals are disproportionately those who started their careers as drivers. Moreover, within the sub-sample of former drivers, it is those who had the longest driving careers who went on to become the most effective leaders. The study's expert-leader findings are consistent with the hypothesis that longitudinal performance improves when a leader's knowledge and expertise correlate with an organization's core-business activity.

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Do Star Performers Produce More Stars? Peer Effects and Learning in Elite Teams

Casey Ichniowski & Anne Preston
NBER Working Paper, September 2014

Abstract:
This study investigates the professional soccer industry to ask whether the talent of an individual’s co-workers helps explain differences in the rate of human capital accumulation on the job. Data tracking national soccer team performance and the professional leagues their members play for are particularly well suited for developing convincing non-experimental evidence about these kinds of peer effects. The empirical results consistently show that performance improves more after an individual has been a member of an elite team than when he has been a member of lower level teams. The conclusion is borne out by a rich set of complementary data on: national team performance, player-level performance, performance of foreign players who joined elite teams after an exogenous shift in the number of foreign players participating on top club teams, performance of players on national teams in the year just before and the year just after they join an elite club team, and experiences of several national team players obtained through personal interviews.

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Who's In Charge Here? Co-CEOs, Power Gaps, And Firm Performance

Ryan Krause, Richard Priem & Leonard Love
Strategic Management Journal, forthcoming

Abstract:
At the pinnacles of organizations, comparative tests of unity of command and shared command are nearly impossible because only one individual sits atop most organizations. In organizations led by co-CEOs, however, such a test is possible because co-CEOs can truly share power. But do they? Our research pits the unity-of-command principle against the shared-command principle and finds overall support for the former, even within the co-CEO context. Our sample of 71 co-CEO pairs at publicly traded U.S. firms shows that increasing power gaps between co-CEOs are positively associated with firm performance. This positive association wanes and turns negative, however, as power gaps become very large. We conclude that whatever benefits the co-CEO structure might offer likely lie outside the shared command paradigm.

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Selecting the Best? Spillover and Shadows in Elimination Tournaments

Jennifer Brown & Dylan Minor
Management Science, forthcoming

Abstract:
We consider how past, current, and future competition within an elimination tournament affect the probability that the stronger player wins. We present a two-stage model that yields the following main results: (1) a shadow effect wherein the stronger the expected future competitor, the lower the probability that the stronger player wins in the current stage; and (2) an effort spillover effect wherein previous effort reduces the probability that the stronger player wins in the current stage. We test our theory predictions using data from high-stakes tournaments. Empirical results suggest that shadow and spillover effects influence match outcomes and have already been priced into betting markets.

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“Give us your social networking site passwords”: Implications for personnel selection and personality

Travis Schneider, Richard Goffin & Kabir Daljeet
Personality and Individual Differences, January 2015, Pages 78–83

Abstract:
Recently, employers have begun asking applicants for their social networking site (SNS) password to access private information that could be job-relevant. However, the effect that this request can have on an organization’s selection process and its selection of individual applicant traits has not been previously examined. Findings from the current study of 892 employed or previously-employed participants suggested that 57.87% of the sample would refuse the password request, thereby removing themselves from the applicant pool. Such a large reduction in the applicant pool could necessitate a drastic decrease in cutoff scores on subsequent pre-employment tests, which would lower workforce productivity and personnel selection utility. In addition, the SNS password request caused adverse impact for several minority groups, and affected the personality scores of the remaining applicant pool.

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Trust and Financial Reporting Quality

Jace Garrett, Rani Hoitash & Douglas Prawitt
Journal of Accounting Research, forthcoming

Abstract:
Using unique survey data from Great Place to Work® Institute, we investigate the association of intra-organizational trust (i.e., employees’ trust in management) with three aspects of financial reporting: accruals quality, misstatements, and internal control quality. We find that trust is associated with better accrual quality, lower likelihood of financial statement misstatements, and lower likelihood of internal control material weakness disclosures. However, these effects are not uniform across all companies. Consistent with trust improving financial reporting quality through improved information production and information sharing, we find that trust is significantly associated with financial reporting quality in relatively decentralized firms, but not in firms that are relatively centralized. Our results are robust to several analyses that attempt to control for potential alternative explanations.

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Paradoxical Leader Behavior in People Management: Antecedents and Consequences

Yan Zhang et al.
Academy of Management Journal, forthcoming

Abstract:
As organizational environments become increasingly dynamic, complex, and competitive, leaders are likely to face intensified contradictory or seemingly paradoxical demands. We develop the construct of paradoxical leader behavior in people management, which refers to seemingly competing yet interrelated behaviors to simultaneously and over time meet structural and follower demands. In Study 1, we develop a measure of paradoxical leader behavior using five samples from China. Confirmatory factor analyses support a multidimensional measure of paradoxical leader behavior with five dimensions: combining self-centeredness with other-centeredness, maintaining both distance and closeness, treating subordinates uniformly while allowing individualization, enforcing work requirements while allowing flexibility, and maintaining decision control while allowing autonomy. In Study 2, we examine the antecedents and consequences of such leader behavior with a field sample of 76 supervisors and 516 subordinates from six firms. We find that the extent to which supervisors engage in holistic thinking and have integrative complexity is positively related to their paradoxical behavior in managing people, which in turn, is associated with increased proficiency, adaptivity, and proactivity in subordinates. Implications for theory, research, and practice are discussed.

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Expert Workers, Performance Standards, and On-the-Job Training: Evaluating Major League Baseball Umpires

Brian Mills
University of Florida Working Paper, August 2014

Abstract:
This paper examines the role of changes in monitoring, technological innovation, performance standards, and collective bargaining as they relate to performance improvements among Major League Baseball umpires from 1988 through 2013. I find structural changes in performance concurrent with known bargaining struggles, and substantial improvements in performance after implementation of incentive pay and new technological monitoring and training. Not only do umpires improve performance in expected ways, but the variability in umpire performance has also decreased substantially. These changes have reduced offensive output often attributed to a crackdown on performance enhancing drug use in MLB.

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Superstar Salaries and Soccer Success: The Impact of Designated Players in Major League Soccer

Dennis Coates, Bernd Frick & Todd Jewell
Journal of Sports Economics, forthcoming

Abstract:
This study estimates the relationship between production and salary structure in Major League Soccer (MLS), the highest level of professional soccer (association football) in North America. Soccer production, measured as league points per game, is modeled as a function of a team’s total wage bill, the distribution of the team’s wage bill, and goals per game. Both the Gini coefficient and the coefficient of variation are utilized to measure salary inequality. The results indicate that production in MLS is negatively responsive to increases in the salary inequality; the estimation model with the best fit uses the coefficient of variation to measure dispersion. Furthermore, MLS teams appear to be constrained in their choices of salary inequality by the salary cap and other regulations.

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Talent Recruitment and Firm Performance: The Business of Major League Sports

Daniel Weinberg
Journal of Sports Economics, forthcoming

Abstract:
Firms rely heavily on their investments in human capital to achieve profits. This research takes advantage of detailed information on worker performance and confidential information on firm revenue and operating costs to investigate the relationship between talent migration and firm profitability in major league sports, one of the few industries in which detailed information about the past performance of each individual worker (athlete) is known to all potential employers. I use confidential microdata from the 2007 Economic Censuses, and from the 2007 and 2008 Service Annual Surveys to investigate the link between individual worker performance and team profitability, controlling for many other aspects of the sports business, specifically taking account of the mobility of athletic “stars” and “superstars” from one team to another. The investigations in this article provide limited support for the hypothesis that hiring talented individuals (stars) will increase a firm’s profit. However, there is no convincing support for the incremental benefit of hiring superstars. The peculiar characteristics of major league sports suggest that these results are probably not generalizable.

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You Wouldn't Like Me When I'm Sleepy: Leader Sleep, Daily Abusive Supervision, and Work Unit Engagement

Christopher Barnes et al.
Academy of Management Journal, forthcoming

Abstract:
We examine daily leader sleep as an antecedent to daily abusive supervisory behavior and work unit engagement. Drawing from ego depletion theory, our theoretical extension includes a serial mediation model of nightly sleep quantity and quality as predictors of abusive supervision. We argue that poor nightly sleep influences leaders to enact daily abusive behaviors via ego depletion, and these abusive behaviors ultimately result in decreased daily subordinate unit work engagement. We test this model through an experience sampling study spread over ten work days with data from both supervisors and their subordinates. Our study supports the role of the indirect effects of sleep quality (but not sleep quantity) via leader ego depletion and daily abusive supervisor behavior on daily subordinate unit work engagement.

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Organizational Constraints to Adaptation: Intrafirm Asymmetry in the Locus of Coordination

Vikas Aggarwal & Brian Wu
Organization Science, forthcoming

Abstract:
We assemble a panel data set of firms in the U.S. defense industry between 1996 and 2006 to examine the drivers of heterogeneous incumbent firm adaptation following the industry-wide demand shock of September 11, 2001. This shock entailed not only an increase in aggregate demand but, more importantly, a shift in the relative attractiveness of individual product areas, resulting in the need for firms to reshuffle their product portfolios in response to changing demand conditions. The exogenous nature of the shock allows us to empirically identify the effect of preshock interdependence structures on postshock adaptation outcomes. We find that the locus of coordination inside a firm can explain differential postshock adaptation performance: because interdependencies spanning organizational boundaries are more difficult to manage than those contained within such boundaries, coordination across product areas creates greater adaptation challenges compared with coordination within product areas. We further investigate the moderating effects of product complementarity and organizational grouping, finding results consistent with our hypothesized mechanisms. As one of the first studies to empirically link a firm’s locus of coordination with its adaptation performance, this study contributes to our understanding of the role of interdependence and organization design in dynamic environments.

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Brokerage Professions and Implementing Reform in an Age of Experts

Katherine Kellogg
American Sociological Review, October 2014, Pages 912-941

Abstract:
In this comparative ethnographic case study of the implementation of a reform related to the Affordable Care Act in two community health centers, I find that professionals may not compete to claim new tasks (and thereby not implement reform) if these tasks require them to acquire information unrelated to their professional expertise, use work practices that conflict with their professional identity, or do impure or low-value tasks that threaten their professional interests. In such cases, reform may be implemented if lower-status workers fill in the gaps in the division of labor between the professions targeted by the reform, playing a brokerage role by protecting each profession’s information, meanings, and tasks in everyday work. When the new tasks represent professionally ill-defined problems, brokers can be more effective if they use buffering practices rather than connecting practices — managing information rather than transferring it, matching meanings rather than translating them, and maintaining interests rather than transforming them — to accomplish reform. By playing a buffering role in the interstices between existing professional jurisdictions, lower-status workers can carve out their own jurisdiction, becoming a brokerage profession between existing professions that need to collaborate with one another for reform to occur.

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The octopus approach in time management: Polychronicity and creativity

Alper Kayaalp
Military Psychology, March 2014, Pages 67-76

Abstract:
The current study examined the associations among polychronicity, creativity and perceived time pressure in a military context. Polychronicity refers to an individual’s preference for working on many tasks simultaneously as opposed to 1 at a time. As hypothesized, polychronicity was negatively related to creativity. In addition, perceived time pressure moderated this relationship. Specifically, polychronic individuals exhibited less creativity when their perceived time pressure was high. The results underscore that, although today’s work environment encourages polychronic approach, it, when reinforced with perceived high time pressure, runs the risk of reducing creativity, which is a critical driver for the survival of organizations.

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Urban Vibrancy and Corporate Growth

Casey Dougal, Christopher Parsons & Sheridan Titman
Journal of Finance, forthcoming

Abstract:
We find that a firm's investment is highly sensitive to the investments of other firms headquartered nearby, even those in very different industries. A firm's investment also responds to fluctuations in the cash flows and stock prices (q) of local firms outside its sector. These patterns do not appear to reflect exogenous area shocks such as local shocks to labor or real estate values, but rather suggest that local agglomeration economies are important determinants of firm investment and growth.

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Money Left on the Table: An Analysis of Participation in Employee Stock Purchase Plans

Ilona Babenko & Rik Sen
Review of Financial Studies, forthcoming

Abstract:
We analyze participation decisions in employee stock purchase plans. These plans allow employees to buy company stock at a discount from the market price and resell it immediately for a sure profit. Although an average employee stands to gain $3,079 annually, only 30% of individuals take advantage of this risk-free opportunity. Participation is more likely among employees who are familiar with stocks, are more educated, are less financially unconstrained, and make fewer errors in valuing financial securities. Our results suggest that compensation plans requiring active decisions by individuals can result in poor financial outcomes for employees of lower socioeconomic status.

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Crowdsourcing contest dilemma

Victor Naroditskiy et al.
Journal of the Royal Society: Interface, October 2014

Abstract:
Crowdsourcing offers unprecedented potential for solving tasks efficiently by tapping into the skills of large groups of people. A salient feature of crowdsourcing — its openness of entry — makes it vulnerable to malicious behaviour. Such behaviour took place in a number of recent popular crowdsourcing competitions. We provide game-theoretic analysis of a fundamental trade-off between the potential for increased productivity and the possibility of being set back by malicious behaviour. Our results show that in crowdsourcing competitions malicious behaviour is the norm, not the anomaly — a result contrary to the conventional wisdom in the area. Counterintuitively, making the attacks more costly does not deter them but leads to a less desirable outcome. These findings have cautionary implications for the design of crowdsourcing competitions.

By KEVIN LEWIS | 09:00:00 AM

Tuesday, November 4, 2014

Family planner

Short- and long-term effects of unemployment on fertility

Janet Currie & Hannes Schwandt
Proceedings of the National Academy of Sciences, 14 October 2014, Pages 14734–14739

Abstract:
Scholars have been examining the relationship between fertility and unemployment for more than a century. Most studies find that fertility falls with unemployment in the short run, but it is not known whether these negative effects persist, because women simply may postpone childbearing to better economic times. Using more than 140 million US birth records for the period 1975–2010, we analyze both the short- and long-run effects of unemployment on fertility. We follow fixed cohorts of US-born women defined by their own state and year of birth, and relate their fertility to the unemployment rate experienced by each cohort at different ages. We focus on conceptions that result in a live birth. We find that women in their early 20s are most affected by high unemployment rates in the short run and that the negative effects on fertility grow over time. A one percentage point increase in the average unemployment rate experienced between the ages of 20 and 24 reduces the short-run fertility of women in this age range by six conceptions per 1,000 women. When we follow these women to age 40, we find that a one percentage point increase in the unemployment rate experienced at ages 20–24 leads to an overall loss of 14.2 conceptions. This long-run effect is driven largely by women who remain childless and thus do not have either first births or higher-order births.

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Sex differences in the relationship between status and number of offspring in the contemporary U.S.

Rosemary Hopcroft
Evolution and Human Behavior, forthcoming

Abstract:
Sociobiology predicts that among social species individual social status will be positively correlated with reproductive success, yet in modern societies the opposite appears to be true. However, in the last five to ten years, a sex difference in the association between some measures of personal status on number of children has been documented in many countries, such that status is positively associated with number of children for men only. Much of this research utilizes European data and there has been little use of data from the U.S. In this paper, analysis of U.S. data from the 1979 National Longitudinal Survey of Youth shows that personal income is positively associated with number of offspring for men, and this is true for men at all levels of education. This is mostly because of increased childlessness among low income men. For women, personal income is negatively associated with number of offspring, and this is true for women at all levels of education. Other measures of status (intelligence and education) are negatively associated with number of offspring for men and women, although the negative association is less for men.

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Fertility Transitions Along the Extensive and Intensive Margins

Daniel Aaronson, Fabian Lange & Bhashkar Mazumder
American Economic Review, forthcoming

Abstract:
By allowing for an extensive margin in the standard quantity-quality model, we generate new insights into fertility transitions. We test the model on Southern black women affected by a large-scale school construction program. Consistent with our model, women facing improved schooling opportunities for their children were more likely to have at least one child but chose to have smaller families overall. By contrast, women who themselves obtained more schooling due to the program delayed childbearing along both the extensive and intensive margins and entered higher quality occupations, consistent with education raising opportunity costs of child rearing.

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Childbearing Postponement and Child Well-being: A Complex and Varied Relationship?

Alice Goisis & Wendy Sigle-Rushton
Demography, October 2014, Pages 1821-1841

Abstract:
Over the past several decades, U.S. fertility has followed a trend toward the postponement of motherhood. The socioeconomic causes and consequences of this trend have been the focus of attention in the demographic literature. Given the socioeconomic advantages of those who postpone having children, some authors have argued that the disadvantage experienced by certain groups would be reduced if they postponed their births. The weathering hypothesis literature, by integrating a biosocial perspective, complicates this argument and posits that the costs and benefits of postponement may vary systematically across population subgroups. In particular, the literature on the weathering hypothesis argues that, as a consequence of their unique experiences of racism and disadvantage, African American women may experience a more rapid deterioration of their health which could offset or eventually reverse any socioeconomic benefit of postponement. But because very few African American women postpone motherhood, efforts to find compelling evidence to support the arguments of this perspective rely on a strategy of comparison that is problematic because a potentially selected group of older black mothers are used to represent the costs of postponement. This might explain why the weathering hypothesis has played a rather limited role in the way demographers conceptualize postponement and its consequences for well-being. In order to explore the potential utility of this perspective, we turn our attention to the UK context. Because first-birth fertility schedules are similar for black and white women, we can observe (rather than assume) whether the meaning and consequences of postponement vary across these population subgroups. The results, obtained using linked UK census and birth record data, reveal evidence consistent with the weathering hypothesis in the United Kingdom and lend support to the arguments that the demographic literature would benefit from integrating insights from this biosocial perspective.

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Paternal age predicts offspring chances of marriage and reproduction

Martin Fieder & Susanne Huber
American Journal of Human Biology, forthcoming

Objectives: Mutation-selection balance theory proposes that a balance of forces between constantly arising mildly harmful mutations and selection causes variation in genetic configuration and phenotypic condition. As mutations are predominantly deleterious, the entry of variation due to mutations is kept at low frequencies by selection. It has recently been demonstrated that nearly all de novo mutation are caused by paternal age.

Methods: We examined on basis of the Wisconsin Longitudinal Study (n = 6,182) whether a subject's probability of having ever married as well as having ever reproduced is associated with that subject's father's age at subject's birth.

Results: We find that advanced paternal but not maternal age at subject's birth predicts a lower chance of ever being married and a higher chance of childlessness, even controlling for various confounders.

Conclusions: As marriage is a prerequisite of reproduction in this sample, we discuss that mate choice may provide a mechanism to prevent too high mutation load in the progeny.

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Association between Increased Emergency Contraception Availability and Risky Sexual Practices

Danielle Atkins & David Bradford
Health Services Research, forthcoming

Objective: We studied whether increased emergency contraception availability for women over age 18 was associated with a higher probability of risky sexual practices.

Data: A total of 34,030 individual/year observations on 3,786 women aged 18 and older were extracted from the National Longitudinal Survey of Youth, 1997 from October 1999 through November 2009.

Study Design: We modeled three binary outcome variables: any sexual activity; sexual activity with more than one partner; and any sex without a condom for women with multiple partners for women in states with state-level policy changes (prior to the 2006 FDA ruling) and for women in states subject to only the national policy change both jointly and separately.

Findings: We found different results when estimating the state and federal changes separately. The national change was associated with a reduction in the probability of sexual activity, a reduction in the likelihood of reporting multiple partnerships, and there was no relationship between the national policy change and unprotected sexual activity. There was no relationship between the probability of sexual activity or multiple partnerships for women in states with their own policy changes, but we did find that women in these states were more likely to report unprotected sex.

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Does abortion reduce self-esteem and life satisfaction?

M.A. Biggs et al.
Quality of Life Research, November 2014, Pages 2505-2513

Purpose: This study aims to assess the effects of obtaining an abortion versus being denied an abortion on self-esteem and life satisfaction.

Methods: We present the first 2.5 years of a 5-year longitudinal telephone-interview study that follows 956 women who sought an abortion from 30 facilities across the USA. We examine the self-esteem and life satisfaction trajectories of women who sought and received abortions just under the facility’s gestational age limit, of women who sought and received abortions in their first trimester of pregnancy, and of women who sought abortions just beyond the facility gestational limit and were denied an abortion. We use adjusted mixed effects linear regression analyses to assess whether the trajectories of women who sought and obtained an abortion differ from those who were denied one.

Results: Women denied an abortion initially reported lower self-esteem and life satisfaction than women who sought and obtained an abortion. For all study groups, except those who obtained first trimester abortions, self-esteem and life satisfaction improved over time. The initially lower levels of self-esteem and life satisfaction among women denied an abortion improved more rapidly reaching similar levels as those obtaining abortions at 6 months to one year after abortion seeking. For women obtaining first trimester abortions, initially higher levels of life satisfaction remained steady over time.

Conclusions: There is no evidence that abortion harms women’s self-esteem or life satisfaction in the short term.

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“It just happens”: A qualitative study exploring low-income women’s perspectives on pregnancy intention and planning

Sonya Borrero et al.
Contraception, forthcoming

Objective: Unintended pregnancy is common and disproportionately occurs among low-income women. We conducted a qualitative study with low-income women to better typologize pregnancy intention, understand the relationship between pregnancy intention and contraceptive use, and identify the contextual factors that shape pregnancy intention and contraceptive behavior.

Study design: Semi-structured interviews were conducted with low-income, African-American and white women aged 18-45 recruited from reproductive health clinics in Pittsburgh, Pennsylvania to explore factors that influence women’s pregnancy-related behaviors. Narratives were analyzed using content analysis and the constant comparison method.

Results: Among the 66 participants (36 African-American and 30 white), we identified several factors that may impede our public health goal of increasing the proportion of pregnancies that are consciously desired and planned. First, women do not always perceive that they have reproductive control and therefore do not necessarily formulate clear pregnancy intentions. Second, the benefits of a planned pregnancy may not be evident. Third, because preconception intention and planning do not necessarily occur, decisions about the acceptability of a pregnancy are often determined after the pregnancy has already occurred. Finally, even when women express a desire to avoid pregnancy, their contraceptive behaviors are not necessarily congruent with their desires. We also identified several clinically relevant and potentially modifiable factors that help to explain this intention-behavior discrepancy, including women’s perceptions of low fecundity and their experiences with male partner contraceptive sabotage.

Conclusion: Our findings suggest that the current conceptual framework that views pregnancy-related behaviors from a strict planned behavior perspective may be limited, particularly among low-income populations.

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Is low fertility really a problem? Population aging, dependency, and consumption

Ronald Lee, Andrew Mason & members of the NTA Network
Science, 10 October 2014, Pages 229-234

Abstract:
Longer lives and fertility far below the replacement level of 2.1 births per woman are leading to rapid population aging in many countries. Many observers are concerned that aging will adversely affect public finances and standards of living. Analysis of newly available National Transfer Accounts data for 40 countries shows that fertility well above replacement would typically be most beneficial for government budgets. However, fertility near replacement would be most beneficial for standards of living when the analysis includes the effects of age structure on families as well as governments. And fertility below replacement would maximize per capita consumption when the cost of providing capital for a growing labor force is taken into account. Although low fertility will indeed challenge government programs and very low fertility undermines living standards, we find that moderately low fertility and population decline favor the broader material standard of living.

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Intergenerational Transfers And The Fertility-Income Relationship

Juan Carlos Córdoba & Marla Ripoll
Economic Journal, forthcoming

Abstract:
Evidence from cross-sectional data reveals a negative relationship between family income and fertility. This paper argues that constraints to intergenerational transfers are crucial for understanding this relationship. If parents could legally impose debt obligations on their children to recover the costs incurred in raising them, then fertility would be independent of parental income. A relationship between fertility and income arises when parents are unable to leave debts because of legal, enforcement, or moral constraints. This relationship is negative when the intergenerational elasticity of substitution is larger than one, case in which parental consumption is a good substitute for children's consumption.

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Babies in waiting: Why increasing the IVF age cut-off might lead to fewer wanted pregnancies in the presence of procrastination

Paul Dolan & Caroline Rudisill
Health Policy, forthcoming

Abstract:
Despite the best of intentions, we often act at the last minute when we are faced with a deadline. A recent recommendation by the English National Institute for Health and Clinical Excellence (NICE) to make In-Vitro Fertilisation (IVF) available to women up to 42 years of age instead of 39 intends to offer more women the chance of pregnancy. Given what we know about behavioural responses to what is, in essence, a deadline, the policy could lead to procrastination and fewer wanted pregnancies. We examine how many women it would take to delay trying for a baby for this policy to result in fewer pregnancies. We take a cohort of 1,000 women from age 34. If no women delay trying, the increased age on access to IVF results in 31 more pregnancies. Because of declining fertility with age, it would take only about a third of these women to delay trying for a baby until age 35 for there to be zero net benefits of increased IVF availability. If all women delayed by a year, the new policy will lead to 59 fewer pregnancies. We also estimate the implications for IVF treatment numbers as this has psychological and personal consequences. Our findings highlight how no policy sits in a behavioural vacuum and all policy decisions should consider the likely behavioural responses and incorporate them into their design and evaluation.

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The expression and adaptive significance of pregnancy-related nausea, vomiting, and aversions on Yasawa Island, Fiji

Luseadra Mckerracher, Mark Collard & Joseph Henrich
Evolution and Human Behavior, forthcoming

Abstract:
We report a study on nausea and vomiting of pregnancy (NVP) and pregnancy-related food aversions in a small-scale society from Yasawa Island, Fiji. Because NVP has rarely been studied quantitatively in small-scale populations, we begin with a detailed description of its expression among the women of Yasawa. We found that 66% of these women experience nausea and/or vomiting in tandem with the development of aversions to certain foods. This pattern of expression is similar to what has been documented for industrialized populations, and the prevalence of 66% is close to the industrialized mean prevalence of 69%. We then use the data from the women of Yasawa to evaluate the three main hypotheses that have been put forward to explain the evolution and ecological function of NVP. We show that food aversions of pregnancy focus preferentially on food types that are more likely to carry pathogens or contain chemical toxins. Such aversions do not focus on nutrient-dense foods or on frequently encountered foods. These findings are most consistent with a hypothesis that NVP, along with pregnancy-related aversions, evolved to motivate women to avoid exposure to diseases and other toxins when they are immune-compromised by pregnancy and during a critical period of embryo development. These findings contribute to a growing body of theoretical and empirical literature that suggests that NVP symptoms represent a series of adaptations rather than pathological responses to the physiological demands of pregnancy.

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Ecological variation in wealth–fertility relationships in Mongolia: The ‘central theoretical problem of sociobiology’ not a problem after all?

Alexandra Alvergne & Virpi Lummaa
Proceedings of the Royal Society: Biological Sciences, 7 December 2014

Abstract:
The negative wealth–fertility relationship brought about by market integration remains a puzzle to classic evolutionary models. Evolutionary ecologists have argued that this phenomenon results from both stronger trade-offs between reproductive and socioeconomic success in the highest social classes and the comparison of groups rather than individuals. Indeed, studies in contemporary low fertility settings have typically used aggregated samples that may mask positive wealth–fertility relationships. Furthermore, while much evidence attests to trade-offs between reproductive and socioeconomic success, few studies have explicitly tested the idea that such constraints are intensified by market integration. Using data from Mongolia, a post-socialist nation that underwent mass privatization, we examine wealth–fertility relationships over time and across a rural–urban gradient. Among post-reproductive women, reproductive fitness is the lowest in urban areas, but increases with wealth in all regions. After liberalization, a demographic–economic paradox emerges in urban areas: while educational attainment negatively impacts female fertility in all regions, education uniquely provides socioeconomic benefits in urban contexts. As market integration progresses, socio-economic returns to education increase and women who limit their reproduction to pursue education get wealthier. The results support the view that selection favoured mechanisms that respond to opportunities for status enhancement rather than fertility maximization.

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Perinatal Complications and Aging Indicators by Midlife

Idan Shalev et al.
Pediatrics, forthcoming

Background: Perinatal complications predict increased risk for morbidity and early mortality. Evidence of perinatal programming of adult mortality raises the question of what mechanisms embed this long-term effect. We tested a hypothesis related to the theory of developmental origins of health and disease: that perinatal complications assessed at birth predict indicators of accelerated aging by midlife.

Methods: Perinatal complications, including both maternal and neonatal complications, were assessed in the Dunedin Multidisciplinary Health and Development Study cohort (N = 1037), a 38-year, prospective longitudinal study of a representative birth cohort. Two aging indicators were assessed at age 38 years, objectively by leukocyte telomere length (TL) and subjectively by perceived facial age.

Results: Perinatal complications predicted both leukocyte TL (β = −0.101; 95% confidence interval, −0.169 to −0.033; P = .004) and perceived age (β = 0.097; 95% confidence interval, 0.029 to 0.165; P = .005) by midlife. We repeated analyses with controls for measures of family history and social risk that could predispose to perinatal complications and accelerated aging, and for measures of poor health taken in between birth and the age-38 follow-up. These covariates attenuated, but did not fully explain the associations observed between perinatal complications and aging indicators.

Conclusions: Our findings provide support for early-life developmental programming by linking newborns’ perinatal complications to accelerated aging at midlife. We observed indications of accelerated aging “inside,” as measured by leukocyte TL, an indicator of cellular aging, and “outside,” as measured by perceived age, an indicator of declining tissue integrity. A better understanding of mechanisms underlying perinatal programming of adult aging is needed.

By KEVIN LEWIS | 09:00:00 AM

Monday, November 3, 2014

Affordable caring

National Health Expenditure Projections, 2013–23: Faster Growth Expected With Expanded Coverage And Improving Economy

Andrea Sisko et al.
Health Affairs, October 2014, Pages 1841-1850

Abstract:
In 2013 health spending growth is expected to have remained slow, at 3.6 percent, as a result of the sluggish economic recovery, the effects of sequestration, and continued increases in private health insurance cost-sharing requirements. The combined effects of the Affordable Care Act’s coverage expansions, faster economic growth, and population aging are expected to fuel health spending growth this year and thereafter (5.6 percent in 2014 and 6.0 percent per year for 2015–23). However, the average rate of increase through 2023 is projected to be slower than the 7.2 percent average growth experienced during 1990–2008. Because health spending is projected to grow 1.1 percentage points faster than the average economic growth during 2013–23, the health share of the gross domestic product is expected to rise from 17.2 percent in 2012 to 19.3 percent in 2023.

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The Effect of Malpractice Reform on Emergency Department Care

Daniel Waxman et al.
New England Journal of Medicine, 16 October 2014, Pages 1518-1525

Background: Many believe that fear of malpractice lawsuits drives physicians to order otherwise unnecessary care and that legal reforms could reduce such wasteful spending. Emergency physicians practice in an information-poor, resource-rich environment that may lend itself to costly defensive practice. Three states, Texas (in 2003), Georgia (in 2005), and South Carolina (in 2005), enacted legislation that changed the malpractice standard for emergency care to gross negligence. We investigated whether these substantial reforms changed practice.

Methods: Using a 5% random sample of Medicare fee-for-service beneficiaries, we identified all emergency department visits to hospitals in the three reform states and in neighboring (control) states from 1997 through 2011. Using a quasi-experimental design, we compared patient-level outcomes, before and after legislation, in reform states and control states. We controlled for characteristics of the patients, time-invariant hospital characteristics, and temporal trends. Outcomes were policy-attributable changes in the use of computed tomography (CT) or magnetic resonance imaging (MRI), per-visit emergency department charges, and the rate of hospital admissions.

Results: For eight of the nine state–outcome combinations tested, no policy-attributable reduction in the intensity of care was detected. We found no reduction in the rates of CT or MRI utilization or hospital admission in any of the three reform states and no reduction in charges in Texas or South Carolina. In Georgia, reform was associated with a 3.6% reduction (95% confidence interval, 0.9 to 6.2) in per-visit emergency department charges.

Conclusions: Legislation that substantially changed the malpractice standard for emergency physicians in three states had little effect on the intensity of practice, as measured by imaging rates, average charges, or hospital admission rates.

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Sharing in Childhood as a Precursor to Support for National Health Insurance

Curtis Dunkel
Basic and Applied Social Psychology, forthcoming

Abstract:
The relationship between sharing in childhood and political identity and opinions on national health insurance in adulthood were examined. It was found that sharing at age 5 was positively associated with a liberal political identity and endorsement of national health insurance at ages 23 and 32. These results remained after controlling for sex, ethnicity, socioeconomic status, ego-control, ego-resiliency, maternal egalitarian parenting attitudes, and paternal egalitarian parenting attitudes. In addition, analyses showed that the relationship between sharing and endorsement of national health insurance was independent of political identity.

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Is Medicaid Crowding Out Other State Government Expenditure? Internal Financing and Cross-Program Substitution

Steven Craig & Larry Howard
Regional Science and Urban Economics, November 2014, Pages 164–178

Abstract:
We examine whether state government responses to rising Medicaid costs cause reduced low income assistance, overall state budget cuts, or higher taxes. We segment Medicaid recipient groups into families, the disabled, and the elderly. Using GMM estimation, we instrument for endogenous program participation using federally directed program recipients in a panel of 47 states from 1976-2004. We find half of cost increases for elderly recipients are financed by own benefit decreases. We find that the disabled increase Medicaid for all through cuts in other government expenditure, family recipients erode Medicaid benefits and cash assistance, Medicaid only for families is increased because of AFDC matching elimination, and taxpayers fund no cost increases.

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Health Benefits In 2014: Stability In Premiums And Coverage For Employer-Sponsored Plans

Gary Claxton et al.
Health Affairs, October 2014, Pages 1851-1860

Abstract:
The annual Kaiser Family Foundation/Health Research and Educational Trust Employer Health Benefits Survey found that in 2014 the average annual premium (employer and worker contributions combined) for single coverage was $6,025, similar to 2013. The premium for family coverage was $16,834—3 percent higher than a year ago. Average deductibles and most other cost-sharing amounts were similar to those in 2013. On average, in 2014 covered workers paid nearly $5,000 per year for family health insurance premiums, and 18 percent of covered workers were in a plan with an annual single coverage deductible of $2,000 or more. Fifty-five percent of employers offered health benefits in 2014, similar to 2013. The Affordable Care Act has not yet led to substantial changes in the employer-based market. However, the next few years could present a different picture as delayed provisions and other changes take effect. This year’s survey included new questions on firms’ policies related to enrolling spouses and dependents, enrollment in private exchanges, and the use of narrow networks and financial incentives for wellness programs.

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The Early Impact of the Affordable Care Act State-By-State

Amanda Kowalski
NBER Working Paper, October 2014

Abstract:
I examine the impact of state policy decisions on the early impact of the ACA using data through the first half of 2014. I focus on the individual health insurance market, which includes plans purchased through exchanges as well as plans purchased directly from insurers. In this market, at least 13.2 million people were covered in the second quarter of 2014, representing an increase of at least 4.2 million beyond pre-ACA state-level trends. I use data on coverage, premiums, and costs and a model developed by Hackmann, Kolstad, and Kowalski (2013) to calculate changes in selection and markups, which allow me to estimate the welfare impact of the ACA on participants in the individual health insurance market in each state. I then focus on comparisons across groups of states. The estimates from my model imply that market participants in the five “direct enforcement” states that ceded all enforcement of the ACA to the federal government are experiencing welfare losses of approximately $245 per participant on an annualized basis, relative to participants in all other states. They also imply that the impact of setting up a state exchange depends meaningfully on how well it functions. Market participants in the six states that had severe exchange glitches are experiencing welfare losses of approximately $750 per participant on an annualized basis, relative to participants in other states with their own exchanges. Although the national impact of the ACA is likely to change over the course of 2014 as coverage, costs, and premiums evolve, I expect that the differential impacts that we observe across states will persist through the rest of 2014.

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Measuring Returns to Hospital Care: Evidence from Ambulance Referral Patterns

Joseph Doyle et al.
Journal of Political Economy, forthcoming

Abstract:
We consider whether hospitals that receive higher payments from Medicare improve patient outcomes, using exogenous variation in ambulance-company assignment among patients who live near one another. Using Medicare data from 2002-2010 on assignment across ambulance companies and New York State date from 2002-2006 on assignment across area boundaries, we find that patients who are brought to higher cost hospitals achieve better outcomes. Our estimates imply that a one standard deviation increase in Medicare reimbursement leads to a 4 percentage point (or 10 percent) reduction in mortality; the implied cost per at least one year of life saved is approximately $80,000.

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Medicare Part D: Are Insurers Gaming the Low Income Subsidy Design?

Francesco Decarolis
American Economic Review, forthcoming

Abstract:
This paper shows how in Medicare Part D insurers’ gaming of the subsidy paid to low income enrollees distorts premiums and raises the program cost. Using plan level data from the first five years of the program, I find multiple instances of pricing strategy distortions for the largest insurers. Instrumental variable estimates indicate that the changes in a concentration index measuring the manipulability of the subsidy can explain a large share of the premium growth observed between 2006 and 2011. Removing this distortion could reduce the cost of the program without worsening consumer welfare.

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The Empirics of Learning from Failure

Victor Bennett & Jason Snyder
University of Southern California Working Paper, October 2014

Abstract:
The ability to learn from experience is central to an organization’s performance. A recent literature has attempted to disentangle organizations’ and individuals’ learning from success and from failure. Using the strategy literature’s standard empirical approach to identifying learning from failure, we find strong evidence of learning from failure on randomly generated placebo data sets where there should be none, implying that the results in the literature may be driven mechanically by the specification rather than by real effects. We explain why the standard specification produces these results and propose alternate specifications for testing the effects of past failure on future performance that do not generate results mechanically. We implement our improved specifications using data on liver transplantation and find no direct evidence of learning from failure, though we do find evidence of administrative response to failure, in the form of delaying future procedures, and patterns consistent with failure increasing a transplant center’s risk-aversion.

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Persistent Medication Affordability Problems Among Disabled Medicare Beneficiaries After Part D, 2006–2011

Huseyin Naci et al.
Medical Care, November 2014, Pages 951-956

Background: Disabled Americans who qualify for Medicare coverage typically have multiple chronic conditions, are highly dependent on effective drug therapy, and have limited financial resources, putting them at risk for cost-related medication nonadherence (CRN). Since 2006, the Part D benefit has helped Medicare beneficiaries afford medications.

Design and Subjects: We estimated annual rates of medication affordability among nonelderly disabled participants in a nationally representative survey (2006–2011, n=14,091 person-years) using multivariate logistic regression analyses.

Results: In the 6 years following Part D implementation, the proportion of disabled Medicare beneficiaries reporting CRN ranged from 31.6% to 35.6%, while the reported prevalence of spending less on other basic needs to afford medicines ranged from 17.7% to 21.8%. Across study years, those with multiple chronic conditions had consistently worse affordability problems. In 2011, the prevalence of CRN was 37.3% among disabled beneficiaries with ≥3 morbidities as compared with 28.1% among those with fewer morbidities; for spending less on basic needs, the prevalence was 25.4% versus 15.7%, respectively. There were no statistically detectable changes in either measure when comparing 2011 with 2007.

Conclusions: Disabled Medicare beneficiaries continue to struggle to afford prescription medications. There is an urgent need for focused policy attention on this vulnerable population, which has inadequate financial access to drug treatments, despite having drug coverage under Medicare Part D.

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Physician Practice Competition and Prices Paid by Private Insurers for Office Visits

Laurence Baker et al.
Journal of the American Medical Association, 22/29 October 2014, Pages 1653-1662

Objective: To assess the relationship between physician competition and prices paid by private preferred provider organizations (PPOs) for 10 types of office visits in 10 prominent specialties.

Design and Setting: Retrospective study in 1058 US counties in urbanized areas, representing all 50 states, examining the relationship between measured physician competition and prices paid for office visits in 2010 and the relationship between changes in competition and prices between 2003 and 2010, using regression analysis to control for possible confounding factors.

Exposures: Variation in the mean Hirschman-Herfindahl Index (HHI) of physician practices within a county by specialty (HHIs range from 0, representing maximally competitive markets, to 10 000 in markets served by a single [monopoly] practice).

Main Outcomes and Measures: Mean price paid by county to physicians in each specialty by private PPOs for intermediate office visits with established patients (Current Procedural Terminology [CPT] code 99213) and a price index measuring the county-weighted mean price for 10 types of office visits with new and established patients (CPT codes 99201-99205, 99211-99215) relative to national mean prices.

Results: In 2010, across all specialties studied, HHIs were 3 to 4 times higher in the 90th-percentile county than the 10th-percentile county (eg, for family practice: 10th percentile HHI = 1023 and 90th percentile HHI = 3629). Depending on specialty, mean price for a CPT code 99213 visit was between $70 and $75. After adjustment for potential confounders, depending on specialty, prices at the 90th-percentile HHI were between $5.85 (orthopedics; 95% CI, $3.46-$8.24) and $11.67 (internal medicine; 95% CI, $9.13-$14.21) higher than at the 10th percentile. Including all types of office visits, price indexes at the 90th-percentile HHI were 8.3% (orthopedics; 95% CI, 5.0%-11.6%) to 16.1% (internal medicine; 95% CI, 12.8%-19.5%) higher. Between 2003 and 2010, there were larger price increases in areas that were less competitive in 2002 than in initially more competitive areas.

Conclusions and Relevance: More competition among physicians is related to lower prices paid by private PPOs for office visits. These results may inform work on policies that influence practice competition.

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Saving Patient Ryan — Can Advanced Electronic Medical Records Make Patient Care Safer?

Muhammad Zia Hydari, Rahul Telang & William Marella
Carnegie Mellon University Working Paper, September 2014

Abstract:
Patient safety is one of the foremost problems in US healthcare, affecting hundreds of thousands of patients and costing tens of billions of dollars every year. Advanced electronic medical records (EMRs) are widely expected to improve patient safety, but the evidence of advanced EMRs' impact on patient safety is inconclusive. A key challenge to evaluating EMRs' impact on safety has been the lack of reliable and comprehensive data. We overcome this challenge by constructing a panel of Pennsylvania hospitals over 2005-2012 using data from several sources. In particular, we source confidential patient safety data from the Pennsylvania Patient Safety Authority (PSA). Since mid-2004, Pennsylvania state law has mandated that hospitals report a broad range of patient safety events to the PSA. Using a differences-in-differences identification strategy, we find that advanced EMRs lead to a 27 percent decline in patient safety events. This overall decline is driven by declines in several important subcategories — 30 percent decline in events due to medication errors and 25 percent decline in events due to complications. Our results hold against a number of robustness checks, including, but not limited to, falsification test with non-clinical IT and falsification test with a subcategory of events that is not expected to benefit from advanced EMRs. Overall, we provide evidence to policy makers, hospital administrators, and other stakeholders that hospitals' adoption of advanced EMRs improves patient safety.

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Does the Market for Ideas Influence the Rate and Direction of Innovative Activity? Evidence from the Medical Device Industry

Aaron Chatterji & Kira Fabrizio
Strategic Management Journal, forthcoming

Abstract:
Prior work argues that the “market for ideas” supports an open system of innovation, allowing for efficient development of technology across firms. Although this literature has described important features of this market, how it influences the rate and direction of innovation remains an open question. We exploit an exogenous shock to a subset of U.S. medical device firms to study this question. We first document the breakdown in the market for ideas after a federal investigation made it more difficult for the leading orthopedic firms to work with physician-inventors. We then present evidence of a dramatic decline in the rate of innovation for these firms. Further, a marked shift in direction occurs toward lower-quality inventions and away from product categories where physician knowledge is critical.

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Investment Subsidies and the Adoption of Electronic Medical Records in Hospitals

David Dranove et al.
NBER Working Paper, October 2014

Abstract:
In February 2009 the U.S. Congress unexpectedly passed the Health Information Technology for Economic and Clinical Health Act (HITECH). HITECH provides up to $27 billion to promote adoption and appropriate use of Electronic Medical Records (EMR) by hospitals. We measure the extent to which HITECH incentive payments spurred EMR adoption by independent hospitals. Adoption rates for all independent hospitals grew from 48 percent in 2008 to 77 percent by 2011. Absent HITECH incentives, we estimate that the adoption rate would have instead been 67 percent in 2011. When we consider that HITECH funds were available for all hospitals and not just marginal adopters, we estimate that the cost of generating an additional adoption was $48 million. We also estimate that in the absence of HITECH incentives, the 77 percent adoption rate would have been realized by 2013, just 2 years after the date achieved due to HITECH.

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Association Between Availability of Health Service Prices and Payments for These Services

Christopher Whaley et al.
Journal of the American Medical Association, 22/29 October 2014, Pages 1670-1676

Objective: To determine whether the use of an employer-sponsored private price transparency platform was associated with lower claims payments for 3 common medical services.

Design: Payments for clinical services provided were compared between patients who searched a pricing website before using the service with patients who had not researched prior to receiving this service. Multivariable generalized linear model regressions with propensity score adjustment controlled for demographic, geographic, and procedure differences. To test for selection bias, payments for individuals who used the platform to search for services (searchers) were compared with those who did not use the platform to search for services (nonsearchers) in the period before the platform was available. The exposure was the use of the price transparency platform to search for laboratory tests, advanced imaging services, or clinician office visits before receiving care for that service.

Setting and Participants: Medical claims from 2010-2013 of 502 949 patients who were insured in the United States by 18 employers who provided a price transparency platform to their employees.

Main Outcomes and Measures: The primary outcome was total claims payments (the sum of employer and employee spending for each claim) for laboratory tests, advanced imaging services, and clinician office visits.

Results: Following access to the platform, 5.9% of 2 988 663 laboratory test claims, 6.9% of 76 768 advanced imaging claims, and 26.8% of 2 653 227 clinician office visit claims were associated with a prior search on the price transparency platform. Before having access to the price transparency platform, searchers had higher claims payments than nonsearchers for laboratory tests (4.11%; 95% CI, 1.87%-6.41%), higher payments for advanced imaging services (5.57%; 95% CI, 1.83%-9.44%), and no difference in payments for clinician office visits (0.26%; 95% CI; 0.53%-0.005%). Following access to the price transparency platform, relative claim payments for searchers were lower for searchers than nonsearchers by 13.93% (95% CI, 10.28%-17.43%) for laboratory tests, 13.15% (95% CI, 9.49%-16.66%) for advanced imaging, and 1.02% (95% CI, 0.57%-1.47%) for clinician office visits. The absolute payment differences were $3.45 (95% CI, $1.78-$5.12) for laboratory tests, $124.74 (95% CI, $83.06-$166.42) for advanced imaging services, and $1.18 (95% CI, $0.66-$1.70) for clinician office visits.

Conclusions and Relevance: Use of price transparency information was associated with lower total claims payments for common medical services. The magnitude of the difference was largest for advanced imaging services and smallest for clinical office visits. Patient access to pricing information before obtaining clinical services may result in lower overall payments made for clinical care.

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Talking About Health Care: News Framing of Who Is Responsible for Rising Health Care Costs in the United States

Sei-Hill Kim et al.
Journal of Health Communication, forthcoming

Abstract:
This content analysis examines how the American news media have presented the problem of high and rising health care costs, looking particularly at the question of who is responsible. More specifically, the authors examine how often the media have discussed the 5 major causes of the problem: (a) patients, (b) health care providers, (c) insurance companies, (d) the government, and (d) pharmaceutical companies. Results revealed that patients were most often mentioned as the cause of increasing health care costs. The authors also found that the media's attribution of responsibility to patients has increased over the years. Overall, media coverage of rising health care costs peaked in 1993, 2004, and 2009, suggesting that coverage was influenced by newsworthy events (e.g., the president endorsing legislation or signing a bill into law) that draw the public's attention.

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Expanding Patients' Property Rights In Their Medical Records

Laurence Baker, Kate Bundorf & Daniel Kessler
NBER Working Paper, October 2014

Abstract:
Although doctors and hospitals own their patients' medical records, state and federal laws require that they provide patients with a copy at "reasonable cost." We examine the effects of state laws that cap the fees that doctors and hospitals are allowed to charge patients for a copy of their records. We test whether these laws affected patients' propensity to switch doctors and the prices of new- and existing-patient visits. We also examine the effect of laws on hospitals' adoption of electronic medical record (EMR) systems. We find that patients from states adopting caps on copy fees were significantly more likely to switch doctors, and that hospitals in states adopting caps were significantly more likely to install an EMR. We also find that laws did not have a systematic, significant effect on prices.

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The Effects of Price Transparency Regulation on Prices in the Healthcare Industry

Hans Bonde Christensen, Eric Floyd & Mark Maffett
University of Chicago Working Paper, August 2014

Abstract:
We provide empirical evidence on the causal effects of price transparency regulation (PTR) in the healthcare industry. Using micro data on actual healthcare purchases, and exploiting both between- and within-state variation to address endogeneity concerns, we find that PTR reduces the price charged for common, elective medical procedures by approximately 5% and increases the sensitivity of demand to a 1% change in charge prices by 0.5%. However, the effect of PTR on the actual prices paid by insured patients is limited to the relatively small fraction of patients that have the greatest incentives to directly consider the costs of care.

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Total Expenditures per Patient in Hospital-Owned and Physician-Owned Physician Organizations in California

James Robinson & Kelly Miller
Journal of the American Medical Association, 22/29 October 2014, Pages 1663-1669

Objective: To determine whether total expenditures per patient were higher in physician organizations (integrated medical groups and independent practice associations) owned by local hospitals or multihospital systems compared with groups owned by participating physicians.

Design and Setting: Data were obtained on total expenditures for the care provided to 4.5 million patients treated by integrated medical groups and independent practice associations in California between 2009 and 2012. The patients were covered by commercial health maintenance organization (HMO) insurance and the data did not include patients covered by commercial preferred provider organization (PPO) insurance, Medicare, or Medicaid.

Main Outcomes and Measures: Total expenditures per patient annually, measured in terms of what insurers paid to the physician organizations for professional services, to hospitals for inpatient and outpatient procedures, to clinical laboratories for diagnostic tests, and to pharmaceutical manufacturers for drugs and biologics.

Exposures: Annual expenditures per patient were compared after adjusting for patient illness burden, geographic input costs, and organizational characteristics.

Results: Of the 158 organizations, 118 physician organizations (75%) were physician-owned and provided care for 3 065 551 patients, 19 organizations (12%) were owned by local hospitals and provided care for 728 608 patients, and 21 organizations (13%) were owned by multihospital systems and provided care for 693 254 patients. In 2012, physician-owned physician organizations had mean expenditures of $3066 per patient (95% CI, $2892 to $3240), hospital-owned physician organizations had mean expenditures of $4312 per patient (95% CI, $3768 to $4857), and physician organizations owned by multihospital systems had mean expenditures of $4776 (95% CI, $4349 to $5202) per patient. After adjusting for patient severity and other factors over the period, local hospital–owned physician organizations incurred expenditures per patient 10.3% (95% CI, 1.7% to 19.7%) higher than did physician-owned organizations (adjusted difference, $435 [95% CI, $105 to $766], P = .02). Organizations owned by multihospital systems incurred expenditures 19.8% (95% CI, 13.9% to 26.0%) higher (adjusted difference, $704 [95% CI,$512 to $895], P < .001) than physician-owned organizations. The largest physician organizations incurred expenditures per patient 9.2% (95% CI, 3.8% to 15.0%, P = .001) higher than the smallest organizations (adjusted difference, $130 [95% CI, $−32 to $292]).

Conclusions and Relevance: From the perspective of the insurers and patients, between 2009 and 2012, hospital-owned physician organizations in California incurred higher expenditures for commercial HMO enrollees for professional, hospital, laboratory, pharmaceutical, and ancillary services than physician-owned organizations. Although organizational consolidation may increase some forms of care coordination, it may be associated with higher total expenditures.

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Value Based Purchasing and Hospital Acquired Conditions: Are We Seeing Improvement?

Aaron Spaulding, Rob Haley & Mei Zhao
Health Policy, forthcoming

Objective: To determine if the Value-Based Purchasing Performance Scoring system correlates with hospital acquired condition quality indicators.

Data Sources/Study Setting: This study utilizes the following secondary data sources: the American Hospital Association (AHA) annual survey, and the Centers for Medicare and Medicaid (CMS) Value-Based Purchasing and Hospital Acquired Conditions databases.

Study Design: Zero-inflated negative binomial regression was used to examine the effect of CMS total performance score on counts of hospital acquired conditions. Hospital structure variables including size, ownership, teaching status, payer mix, case mix, and location were utilized as control variables.

Principal Findings: Total performance scores, which are used to determine if hospitals should receive incentive money, do not correlate well with quality outcome in the form of hospital acquired conditions.

Conclusions: Value-based purchasing does not appear to correlate with improved quality and patient safety as indicated by Hospital Acquired Condition (HAC) scores. This leads us to believe that either the total performance score does not measure what it should, or the quality outcome measurements do not reflect the quality the total performance scores measure.

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Improvement in Preventive Care of Young Adults After the Affordable Care Act: The Affordable Care Act Is Helping

Josephine Lau et al.
JAMA Pediatrics, forthcoming

Objective: To examine the ACA’s initial effects on young adults’ receipt of preventive care.

Design, Setting, and Participants: Secondary data analysis using a pre-post design that compared health care use by young adults (aged 18 to 25 years) from 2009 and 2011 Medical Expenditure Panel Surveys. Data were collected through computer-assisted personal interviews of a nationally representative sample of the noninstitutionalized US population.

Main Outcomes and Measures: Differences by year in rates of receiving a routine examination in the past year, blood pressure screening, cholesterol screening, influenza vaccination, and annual dental visit. Three logistic regression models were developed to (1) compare pre-ACA (2009) and post-ACA (2011) rates of receiving preventive care and (2) determine if post-ACA increases in insurance coverage accounted for changes in preventive care rates. Model 1 was a bivariate model to determine differences in preventive care rates by year; model 2, a multivariable model adding insurance status (full-year private, full-year public, partial-year uninsured, and full-year uninsured) to determine whether insurance accounted for survey year differences; and model 3, a multivariable model adding covariates (usual source of care and sociodemographic variables) to determine whether they further accounted for differences by survey year or insurance status.

Results: After ACA, young adults had significantly higher rates of receiving a routine examination (47.8% vs 44.1%; P < .05), blood pressure screening (68.3% vs 65.2%; P < .05), cholesterol screening (29.1% vs 24.3%; P < .001), and annual dental visit (60.9% vs 55.2%; P < .001) but not an influenza vaccination (22.1% vs 21.5%; P = .70). Full-year private insurance coverage increased (50.1% vs 43.4%; P < .001), and rates of lacking insurance decreased (partial-year uninsured, 18.4% vs 20.7%; P = .03; and full-year uninsured, 22.2% vs 27.1%; P < .001). Full-year public insurance rates remained stable (9.4% vs 8.8%; P = .53). Insurance status fully accounted for the pre- and post-ACA differences in routine examination and blood pressure screening and partially accounted for year differences for cholesterol screening and annual dental visits. Covariate adjustment did not affect year differences.

Conclusions and Relevance: The ACA provisions appear to increase insurance coverage and receipt of preventive services among young adults. Further studies are needed to replicate these findings as other ACA provisions are implemented.

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Population-Level Cost-Effectiveness of Implementing Evidence-Based Practices into Routine Care

John Fortney, Jeffrey Pyne & James Burgess
Health Services Research, forthcoming

Objective: The objective of this research was to apply a new methodology (population-level cost-effectiveness analysis) to determine the value of implementing an evidence-based practice in routine care.

Data Sources/Study Setting: Data are from sequentially conducted studies: a randomized controlled trial and an implementation trial of collaborative care for depression. Both trials were conducted in the same practice setting and population (primary care patients prescribed antidepressants).

Data Collection/Extraction Methods: The randomized controlled trial collected quality-adjusted life years (QALYs) from survey and medication possession ratios (MPRs) from administrative data. The implementation trial collected MPRs and intervention costs from administrative data and implementation costs from survey.

Principal Findings: In the randomized controlled trial, MPRs were significantly correlated with QALYs (p = .03). In the implementation trial, patients at implementation sites had significantly higher MPRs (p = .01) than patients at control sites, and by extrapolation higher QALYs (0.00188). Total costs (implementation, intervention) were nonsignificantly higher ($63.76) at implementation sites. The incremental population-level cost-effectiveness ratio was $33,905.92/QALY (bootstrap interquartile range −$45,343.10/QALY to $99,260.90/QALY).

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The Effect of Employer Health Insurance Offering on the Growth and Survival of Small Business Prior to the Affordable Care Act

C.J. Krizan, Adela Luque & Alice Zawacki
U.S. Census Bureau Working Paper, April 2014

Abstract:
Whether or not small businesses offer health insurance to their employees is a critical factor in the health care coverage of many Americans, yet many entrepreneurs and decision makers fear that the cost of offering health care coverage to their employees will diminish the growth and survival of small firms. While there is an emerging consensus among economists that small businesses both create and destroy a disproportionately large number of jobs, less is known about the relationship between health care costs and business growth. We examine this latter issue prior to the passage of the Affordable Care Act in 2010. We first review information on the relationship between small employers’ decisions to offer health insurance prior to 2010 and i) financial factors (including premium variability and tax advantages), ii) labor markets with a focus on employee characteristics and the demand for employer's health insurance, iii) insurance markets and products, discussing access and insurance options with lower premium costs, and iv) the health insurance regulatory environment with an examination of state-level reform and health insurance mandates. We then discuss employer reactions to rising health care costs, followed by a review of factors other than rising health care costs that often affect the growth and survival of a small business. In the remaining sections, we describe our longitudinal analysis of how health insurance offering (HIO) affected the expansion and survival of small businesses. Using 2001-05 linked data from the Longitudinal Business Database (LBD) and the Insurance Component of the Medical Expenditure Panel Survey (MEPS-IC), we look at how HIO affected four measures of business performance (growth in employment, growth in payroll, growth in average wage, and survival) – after controlling for business characteristics and relevant state-level variables. We employ instrumental variable two-stage least squares estimation to address the endogeneity that permeates the question at hand. We find that young businesses (both large and small) that offer health insurance grow at not significantly different rates as those that do not, possibly due to selection effects. Older businesses offering health insurance – both small and large – seem to have higher employment and payroll growth. Survival is strongly and positively correlated with HIO for older establishments at both large and small firms. However, these results should be interpreted with extreme caution due the concerns we raise about the available testing methodology for our context.

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The Impact of Continuous Medicaid Enrollment on Diagnosis, Treatment, and Survival in Six Surgical Cancers

Aaron Dawes et al.
Health Services Research, forthcoming

Objective: To examine the effect of Medicaid enrollment on the diagnosis, treatment, and survival of six surgically relevant cancers among poor and underserved Californians.

Data Sources: California Cancer Registry (CCR), California's Patient Discharge Database (PDD), and state Medicaid enrollment files between 2002 and 2008.

Study Design: We linked clinical and administrative records to differentiate patients continuously enrolled in Medicaid from those receiving coverage at the time of their cancer diagnosis. We developed multivariate logistic regression models to predict death within 1 year for each cancer after controlling for sociodemographic and clinical variables.

Data Collection/Extraction Methods: All incident cases of six cancers (colon, esophageal, lung, pancreas, stomach, and ovarian) were identified from CCR. CCR records were linked to hospitalizations (PDD) and monthly Medicaid enrollment.

Principal Findings: Continuous enrollment in Medicaid for at least 6 months prior to diagnosis improves survival in three surgically relevant cancers. Discontinuous Medicaid patients have higher stage tumors, undergo fewer definitive operations, and are more likely to die even after risk adjustment.

Conclusions: Expansion of continuous insurance coverage under the Affordable Care Act is likely to improve both access and clinical outcomes for cancer patients in California.

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Estimating the Value Added of Attending Physicians on Patient Outcomes

Jason Fletcher, Leora Horwitz & Elizabeth Bradley
NBER Working Paper, October 2014

Abstract:
Despite increasing calls for value-based payments, existing methodologies for determining physicians’ “value added” to patient health outcomes have important limitations. We incorporate methods from the value added literature in education research into a health care setting to present the first value added estimates of health care providers in the literature. Like teacher value added measures that calculate student test score gains, we estimate physician value added based on changes in health status during the course of a hospitalization. We then tie our measures of physician value added to patient outcomes, including length of hospital stay, total charges, health status at discharge, and readmission. The estimated value added varied substantially across physicians and was highly stable for individual physicians. Patients of physicians in the 75th versus 25th percentile of value added had, on average, shorter length of stay (4.76 vs 5.08 days), lower total costs ($17,811 vs $19,822) and higher discharge health status (8% of a standard deviation). Our findings provide evidence to support a new method of determining physician value added in the context of inpatient care that could have wide applicability across health care setting and in estimating value added of other health care providers (nurses, staff, etc).

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Exposing Physicians To Reduced Residency Work Hours Did Not Adversely Affect Patient Outcomes After Residency

Anupam Jena, Lena Schoemaker & Jay Bhattacharya
Health Affairs, October 2014, Pages 1832-1840

Abstract:
In 2003, work hours for physicians-in-training (residents) were capped by regulation at eighty hours per week, leading to the hotly debated but unexplored issue of whether physicians today are less well trained as a result of these work-hour reforms. Using a unique database of nearly all hospitalizations in Florida during 2000–09 that were linked to detailed information on the medical training history of the physician of record for each hospitalization, we studied whether hospital mortality and patients’ length-of-stay varied according to the number of years a physician was exposed to the 2003 duty-hour regulations during his or her residency. We examined this database of practicing Florida physicians, using a difference-in-differences analysis that compared trends in outcomes of junior physicians (those with one-year post-residency experience) pre- and post-2003 to a control group of senior physicians (those with ten or more years of post-residency experience) who were not exposed to these reforms during their residency. We found that the duty-hour reforms did not adversely affect hospital mortality and length-of-stay of patients cared for by new attending physicians who were partly or fully exposed to reduced duty hours during their own residency. However, assessment of the impact of the duty-hour reforms on other clinical outcomes is needed.

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Nurse Value-Added and Patient Outcomes in Acute Care

Olga Yakusheva, Richard Lindrooth & Marianne Weiss
Health Services Research, forthcoming

Objective: The aims of the study were to (1) estimate the relative nurse effectiveness, or individual nurse value-added (NVA), to patients’ clinical condition change during hospitalization; (2) examine nurse characteristics contributing to NVA; and (3) estimate the contribution of value-added nursing care to patient outcomes.

Data Sources/Study Setting: Electronic data on 1,203 staff nurses matched with 7,318 adult medical–surgical patients discharged between July 1, 2011 and December 31, 2011 from an urban Magnet-designated, 854-bed teaching hospital.

Study Design: Retrospective observational longitudinal analysis using a covariate-adjustment value-added model with nurse fixed effects.

Principal Findings: Nurse effects were jointly significant and explained 7.9 percent of variance in patient clinical condition change during hospitalization. NVA was positively associated with having a baccalaureate degree or higher (0.55, p = .04) and expertise level (0.66, p = .03). NVA contributed to patient outcomes of shorter length of stay and lower costs.

Conclusions: Nurses differ in their value-added to patient outcomes. The ability to measure individual nurse relative value-added opens the possibility for development of performance metrics, performance-based rankings, and merit-based salary schemes to improve patient outcomes and reduce costs.

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Association Between Hospital Conversions to For-Profit Status and Clinical and Economic Outcomes

Karen Joynt, John Orav & Ashish Jha
Journal of the American Medical Association, 22/29 October 2014, Pages 1644-1652

Objective: To examine characteristics of US acute care hospitals associated with conversion to for-profit status and changes following conversion.

Design, Setting, and Participants: Retrospective cohort study conducted among 237 converting hospitals and 631 matched control hospitals. Participants were 1 843 764 Medicare fee-for-service beneficiaries at converting hospitals and 4 828 138 at control hospitals.

Exposures: Conversion to for-profit status, 2003-2010.

Main Outcomes and Measures: Financial performance measures, quality process measures, mortality rates, Medicare volume, and patient population for the 2 years prior and the 2 years after conversion, excluding the conversion year, assessed using difference-in-difference models.

Results: Hospitals that converted to for-profit status were more often small or medium in size, located in the south, in an urban or suburban location, and were less often teaching institutions. Converting hospitals improved their total margins (ratio of net income to net revenue plus other income) more than controls (2.2% vs 0.4% improvement; difference in differences, 1.8% [ 95% CI, 0.5% to 3.1%]; P = .007). Converting hospitals and controls both improved their process quality metrics (6.0% vs 5.6%; difference in differences, 0.4% [95% CI, −1.1% to 2.0%]; P = .59). Mortality rates did not change at converting hospitals relative to controls for Medicare patients overall (increase of 0.1% vs 0.2%; difference in differences, −0.2% [95% CI, −0.5% to 0.2%], P = .42) or for dual-eligible or disabled patients. There was no change in converting hospitals relative to controls in annual Medicare volume (−111 vs −74 patients; difference in differences, −37 [95% CI, −224 to 150]; P = .70), Disproportionate Share Hospital Index (1.7% vs 0.4%; difference in differences, 1.3% [95% CI, −0.9% to 3.4%], P = .26), the proportion of patients with Medicaid (−0.2% vs 0.4%; difference in differences, −0.6% [95% CI, −2.0% to 0.8%]; P = .38) or the proportion of patients who were black (−0.4% vs −0.1%; difference in differences, −0.3% [95% CI, −1.9% to 1.3%]; P = .72) or Hispanic (0.1% vs −0.1%; difference in differences, 0.2% [95% CI, −0.3% to 0.7%]; P = .50).

Conclusions and Relevance: Hospital conversion to for-profit status was associated with improvements in financial margins but not associated with differences in quality or mortality rates or with the proportion of poor or minority patients receiving care.

By KEVIN LEWIS | 09:00:00 AM

Sunday, November 2, 2014

We can do it

Sartorial Symbols of Social Class Elicit Class-Consistent Behavioral and Physiological Responses: A Dyadic Approach

Michael Kraus & Wendy Berry Mendes
Journal of Experimental Psychology: General, forthcoming

Abstract:
Social rank in human and nonhuman animals is signaled by a variety of behaviors and phenotypes. In this research, we examined whether a sartorial manipulation of social class would engender class-consistent behavior and physiology during dyadic interactions. Male participants donned clothing that signaled either upper-class (business-suit) or lower-class (sweatpants) rank prior to engaging in a modified negotiation task with another participant unaware of the clothing manipulation. Wearing upper-class, compared to lower-class, clothing induced dominance - measured in terms of negotiation profits and concessions, and testosterone levels - in participants. Upper-class clothing also elicited increased vigilance in perceivers of these symbols: Relative to perceiving lower-class symbols, perceiving upper-class symbols increased vagal withdrawal, reduced perceptions of social power, and catalyzed physiological contagion such that perceivers' sympathetic nervous system activation followed that of the upper-class target. Discussion focuses on the dyadic process of social class signaling within social interactions.

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Gender differences in trust dynamics: Women trust more than men following a trust violation

Michael Haselhuhn et al.
Journal of Experimental Social Psychology, January 2015, Pages 104-109

Abstract:
Despite the importance of trust for efficient social and organizational functioning, transgressions that betray trust are common. We know little about the personal characteristics that affect the extent to which transgressions actually harm trust. In this research, we examine how gender moderates responses to trust violations. Across three studies, we demonstrate that following a violation, women are both less likely to lose trust and more likely to restore trust in a transgressor than men. Women care more about maintaining relationships than men, and this greater relational investment mediates the relationship between gender and trust dynamics.

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Positive, Proactive, and Committed: The Surprising Connection Between Good Citizens and Expressed (vs. Suppressed) Anger at Work

Lisa Stickney & Deanna Geddes
Negotiation and Conflict Management Research, November 2014, Pages 243-264

Abstract:
In two studies, we examine the relationship of positive and negative trait affectivity (PA/NA), organizational commitment, and emotional exhaustion with organizational member anger. Utilizing the dual threshold model (DTM) constructs of expressed and suppressed anger (Geddes & Callister, 2007), we find employees with high organizational commitment express anger to relevant others, that is, to management or to those responsible for the anger-provoking situation. In contrast, emotionally exhausted employees and those with high NA tend to suppress their anger, venting only to uninvolved parties or remaining silent. Findings also indicate a positive relationship with PA and anger expression - a connection rarely considered or examined in anger research. Further, expressed anger was predictive of perceived improvement with problematic situations, while suppressed anger forms led to perceptions that the situation at work deteriorated.

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Humorous Complaining

Peter McGraw, Caleb Warren & Christina Kan
Journal of Consumer Research, forthcoming

Abstract:
Although complaints document dissatisfaction, some are also humorous. The article introduces the concept of humorous complaining and draws on the benign violation theory - which proposes that humor arises from things that seem simultaneously wrong yet okay - to examine how being humorous helps and hinders complainers. Six studies, which use social media and online reviews as stimuli, show that humorous complaints benefit people who want to warn, entertain, and make a favorable impression on others. Further, in contrast to the belief that humor is beneficial but consistent with the benign violation theory, humor makes complaints seem more positive (by making an expression of dissatisfaction seem okay), but makes praise seem more negative (by making an expression of satisfaction seem wrong in some way). Finally, a benign violation approach perspective also reveals that complaining humorously has costs. Because being humorous suggests that a dissatisfying situation is okay, humorous complaints are less likely to elicit redress or sympathy from others than nonhumorous complaints.

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A Field Experiment on Search Costs and the Formation of Scientific Collaborations

Kevin Boudreau et al.
Harvard Working Paper, August 2014

Abstract:
Scientists typically self-organize into teams, matching with others to collaborate in the production of new knowledge. We present the results of a field experiment conducted at Harvard Medical School to understand the extent to which search costs affect matching among scientific collaborators. We generated exogenous variation in search costs for pairs of potential collaborators by randomly assigning individuals to 90-minute structured information-sharing sessions as part of a grant funding opportunity for biomedical researchers. We estimate that the treatment increases the baseline probability of grant co-application of a given pair of researchers by 75% (increasing the likelihood of a pair collaborating from 0.16 percent to 0.28 percent), with effects higher among those in the same specialization. The findings indicate that matching between scientists is subject to considerable frictions, even in the case of geographically-proximate scientists working in the same institutional context with ample access to common information and funding opportunities.

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Competition vs. Communication: An Experimental Study on Restoring Trust

Vivian Lei, David Masclet & Filip Vesely
Journal of Economic Behavior & Organization, forthcoming

Abstract:
Trust is fragile. It is hard to build but easy to destroy. In this paper, we explore the fragility of trust in a stylized laboratory environment. We ask whether transgression outside a direct send-and-return relationship destroys trust and, if so, whether a competition against outsiders or an apology for misdeeds helps restore it. We find that transgression significantly reduces trust and that the broken trust can be greatly restored by group competition. Communication via an apology, impersonal or not, has an insignificant impact. By contrast, offering explanations for misbehavior is as effective as group competition.

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The primacy of agency over competence in status perception

Antonin Carrier et al.
Social Psychology, Fall 2014, Pages 347-356

Abstract:
A great deal of recent work has found that two fundamental dimensions underlie social judgment. The most common labels used to denote these dimensions are agency versus communion, and competence versus warmth. The present work aimed to disentangle agency understood as the motivation to promote the self from competence understood as ability, and to address their distinctive role in status perception. In Studies 1 and 2, participants were presented with a high- versus low-status target and asked to rate this target on agency, competence and warmth. In Study 3, participants were presented with an agentic, competent, and warm target and asked to rate their social status. Overall, our findings indicated that agency and competence operate as distinct dimensions in social judgment, and that agency is more related to social status than competence.

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Time Pressure Increases Cooperation in Competitively Framed Social Dilemmas: A Successful Replication

Jeremy Cone & David Rand
Yale Working Paper, October 2014

Abstract:
What makes people willing to pay costs to benefit others? Does such cooperation require effortful self-control, or do automatic, intuitive processes favor cooperation? Time pressure has been shown to increase cooperative behavior in Public Goods Games, implying a predisposition towards cooperation. Consistent with the hypothesis that this predisposition results from the fact that cooperation is typically advantageous outside the lab, it has further been shown that the time pressure effect is undermined by prior experience playing lab games (where selfishness is the more advantageous strategy). Furthermore, a recent study (Rand, Newman, & Wurzbacher, 2014) has found that time pressure increases cooperation even in a game framed as a competition, suggesting that the time pressure effect is not the result of social norm compliance. Here, we successfully replicate this study's findings, again observing a positive effect of time pressure on cooperation in a competitively framed game, but not when using the standard cooperative framing. These results suggest that participants' intuitions favor cooperation rather than norm compliance, and also that simply changing the framing of the Public Goods Game is enough to make it appear novel to participants and thus to restore the time pressure effect.

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Social Context and the Dynamics of Cooperative Choice

David Rand, George Newman & Owen Wurzbacher
Journal of Behavioral Decision Making, forthcoming

Abstract:
Recent work using decontextualized economic games suggests that cooperation is a dynamic decision-making process: Automatic responses typically support cooperation on average, while deliberation leads to increased selfishness. Here, we performed two studies examining how these temporal effects generalize to games with richer social context cues. Study 1 found that time pressure increased cooperation to a similar extent in games played with in-group members and out-group members. Study 2 found that time pressure increased cooperation to a similar extent in games described as competitions and games described as collaborations. These results show that previous positive effects of time pressure on cooperation are not unique to neutrally framed games devoid of social context and are not driven by implicit assumptions of shared group membership or cooperative norms. In doing so, our findings provide further insight into the cognitive underpinnings of cooperative decision making.

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Epistemic motivation and perpetuation of group culture: Effects of need for cognitive closure on trans-generational norm transmission

Stefano Livi et al.
Organizational Behavior and Human Decision Processes, forthcoming

Abstract:
The role of need for cognitive closure (NFCC, Kruglanski, 2004) in the transmission of a group norm is examined in three studies carried out in both experimental and natural settings. It was hypothesized that for persons high in NFCC a greater resistance to change is produced both via the urgency tendency of newcomers and the permanence tendency of old-timers; accordingly, groups composed of high need for closure individuals should exhibit greater cultural stability than groups composed of low NFCC. The first study investigated that hypothesis in a natural setting where young adults rated their health behavior and that of their parents. Consistent with our hypothesis, results of a moderated regression analysis showed that for participants high (vs. low) in dispositional NFCC the relation between parents' and offspring behavior is stronger, implying normative continuity. The remaining two studies applied Jacobs and Campbell's (1961) paradigm wherein group norms are induced and transmitted across generations of a laboratory microculture. In the first study, NFCC was induced by means of environmental noise whereas in the second study it was varied via group composition, consisting of participants with High vs. Low scores on the NFCC Scale. Results of both studies confirmed the hypothesis that cultures under high need for closure show a greater normative stability across generations. Moreover, the experimental studies clarify that the observed, need for closure based, stability was promoted by newcomers' greater tendency to seize to the group norms in condition of high (versus low) NFCC.

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Punishment and the potency of group selection

Richard Povey
Journal of Evolutionary Economics, September 2014, Pages 799-816

Abstract:
It is known that altruism can be sustained in an evolving population by a process of group selection. There is also existing research on the role that punishment can play in inducing selfish agents to behave more co-operatively or in preventing selfish agents from evolving, and the limitations upon this mechanism. This paper embeds a simple model of a punishment system within an indirect cultural evolution framework. The use of punishment is shown to reduce the potency of the group selection mechanism, and thus the level of evolved altruism. This presents a novel reason why the use of punishment may have negative dynamic welfare implications.

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Reputation based on punishment rather than generosity allows for evolution of cooperation in sizable groups

Miguel Dos Santos & Claus Wedekind
Evolution and Human Behavior, forthcoming

Abstract:
Cooperation among unrelated individuals can arise if decisions to help others can be based on reputation. While working for dyadic interactions, reputation-use in social dilemmas involving many individuals (e.g. public goods games) becomes increasingly difficult as groups become larger and errors more frequent. Reputation is therefore believed to have played a minor role for the evolution of cooperation in collective action dilemmas such as those faced by early humans. Here, we show in computer simulations that a reputation system based on punitive actions can overcome these problems and, compared to reputation system based on generous actions, (i) is more likely to lead to the evolution of cooperation in sizable groups, (ii) more effectively sustains cooperation within larger groups, and (iii) is more robust to errors in reputation assessment. Punishment and punishment reputation could therefore have played crucial roles in the evolution of cooperation within larger groups of humans.

By KEVIN LEWIS | 09:00:00 AM


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