Numbers Game
Is There a Relationship Benefit in Credit Ratings?
Thomas Mählmann
Review of Finance, July 2011, Pages 475-510
Abstract:
This paper shows that firms with longer rating agency relationships have better credit ratings, conditional on observables. The paper also finds that (1) controlling for observables, firms with longer relationships, while having higher average ratings, do not have lower default rates, (2) relationship benefits are larger among firms with a greater incentive to game their information supplied to agencies or to pressure agencies into giving higher ratings, and (3) investors demand a (price) discount on bonds sold by relationship firms and the correlation between bond yield spreads and ratings is decreasing with relationship length. In sum, the evidence is inconsistent with first-order credit quality explanations but rather supports a "learning-to-gaming" and an "adverse incentives" story.
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Is the Bowl Championship Series a Cartel? Some Evidence
Woodrow Eckard
Journal of Sports Economics, forthcoming
Abstract:
The cartel view of the Bowl Championship Series (BCS) implies that it creates an advantage for automatic qualifying (AQ) member schools relative to other Division IA/FBS schools in recruiting the best players and hiring other inputs. The resulting playing-field advantage should produce more wins over "outsiders." Weaker AQ schools benefit relatively more because previously they had competed more closely with outsiders for players. The evidence generally supports the cartel view. The AQ BCS schools and conferences have significantly increased their win percentage against outsiders. Also, the weaker AQ schools have performed better against the top tier, and have shown the greatest improvement against outsiders.
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Penny Wise, Dollar Foolish: Buy-Sell Imbalances On and Around Round Numbers
Utpal Bhattacharya, Craig Holden & Stacey Jacobsen
Management Science, forthcoming
Abstract:
This paper provides evidence that stock traders focus on round numbers as cognitive reference points for value. Using a random sample of more than 100 million stock transactions, we find excess buying (selling) by liquidity demanders at all price points one penny below (above) round numbers. Further, the size of the buy-sell imbalance is monotonic in the roundness of the adjacent round number (i.e., largest adjacent to integers, second-largest adjacent to half-dollars, etc.). Conditioning on the price path, we find much stronger excess buying (selling) by liquidity demanders when the ask falls (bid rises) to reach the integer than when it crosses the integer. We discuss and test three explanations for these results. Finally, 24-hour returns also vary by price point, and buy-sell imbalances are a major determinant of that variation across price points. Buying (selling) by liquidity demanders below (above) round numbers yield losses approaching $1 billion per year.
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James Wilkie & Galen Bodenhausen
Journal of Experimental Psychology: General, forthcoming
Abstract:
We examined the possibility that nonsocial, highly generic concepts are gendered. Specifically, we investigated the gender connotations of Arabic numerals. Across several experiments, we show that the number 1 and other odd numbers are associated with masculinity, whereas the number 2 and other even numbers are associated with femininity, in ways that influence judgments of stimuli arbitrarily paired with numerical cues; specifically, babies' faces and foreign names were more likely to be judged as "male" when paired with odd versus even numbers. The power of logically irrelevant numerical stimuli to connote masculinity or femininity reflects the pervasiveness of gender as a social scaffolding for generating understandings of abstract concepts.
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Top Prospects and Minor League Baseball Attendance
Seth Gitter & Thomas Rhoads
Journal of Sports Economics, June 2011, Pages 341-351
Abstract:
Minor League Baseball attracts over 40 million fans a year. One potentially important attendance draw is the ability for a fan to see a future major league baseball star. Each year Baseball America, a leading industry publication, ranks 100 top prospects that have yet to play substantially in the major leagues. Many of these top prospects continue to develop for a year or more in the minor leagues, which gives fans an opportunity to see potential future Major League Baseball (MLB) stars at their local minor league club. The authors use a data set encompassing all AA and AAA minor league baseball teams from 1992 to 2009 to estimate the impact of having a top 100 Baseball America prospect on a minor league team's attendance. Their results suggest that only those prospects ranked in the top 5 and at the highest level (AAA) have an impact on their team's attendance and their impact on attendance is small.
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The impact of recruiting on NCAA basketball success
J. Treme, R. Burrus & B. Sherrick
Applied Economics Letters, Summer 2011, Pages 795-798
Abstract:
This study examines whether highly ranked recruiting classes significantly impact the number of games won by an NCAA men's basketball team the following year. The results suggest that highly regarded freshman guards increase the number of wins whereas freshman players at other positions do not have a significant impact. Although both experience and incoming talent significantly affect regular season wins, the results imply that experience trumps freshman talent in post-season play in the NCAA tournament.
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Gender Differences in Students' Mathematics Game Playing
Tom Lowrie & Robyn Jorgensen
Computers & Education, forthcoming
Abstract:
The investigation monitored the digital game-playing behaviours of 428 primary-aged students (aged 10-12 years). Chi square analysis revealed that boys tend to spend more time playing digital games than girls while boys and girls play quite different game genres. Subsequent analysis revealed statistically significant gender differences in terms of the types of mathematics-rich games students prefer to play. Girls preferred to play games that required problem solving, quantitative computations and the interpretation of graphs. Boys preferred games that required visual/spatial engagement. Given the fact that boys outperform girls of spatial tasks and mathematics assessment items that contain graphics, this study has implications for the development of students mathematics sense making.
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Are Surveys of Experts Unbiased? Evidence from College Football Rankings
Justin Ross, Sarah Larson & Chad Wall
Contemporary Economic Policy, forthcoming
Abstract:
Policymakers are frequently interested in soliciting unbiased information regarding alternative policies, and expert surveys can be influential. As ranking policies is an often subjective process, there is always the concern of bias, both intentional and not. Expert bias is difficult to discern in the policy world, but surveys of expert opinion are compiled and "tested" for accuracy weekly in college football, allowing for hypothesis testing. Although previous research has used college football rankings to determine the ability of surveys to incorporate relevant information, this article examines the Associated Press and American Football Coaches' Association rankings for evidence of systematic bias. Specifically, more than 1,300 games from the 2003 to 2008 regular seasons are tested for factors that are systematically correlated with upsets. Both polls predict the winner nearly 80% of the time, and although there is evidence of systematic conference bias, correcting the rankings would only improve the accuracy of the polls by about 1%. There is no evidence of a bias favoring "big market" teams, nor teams that have strong journalism programs or are from the East Coast.
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Athletic Scholarships in Intercollegiate Football
Joshua Pitts & Jon Paul Rezek
Journal of Sports Economics, forthcoming
Abstract:
Despite the financial and cultural importance of intercollegiate athletics in the United States, there is a paucity of research into how athletic scholarships are awarded. In this article, the authors empirically examine the factors that universities use in their decision to offer athletic scholarships to high school football players. Using a Zero-Inflated Negative Binomial (ZINB) model, the authors find a player's weight, height, body mass index (BMI), race, speed, on-the-field performance, and his high school team's success often have large and significant impacts on the number of scholarship offers he receives. There is also evidence of a negative relationship between academic performance and scholarship offers. In addition, the authors find evidence of a scholarship premium for players from Florida and Texas. The results also show that running backs, wide receivers, and defensive backs appear to generate the most attention from college football coaches, other things equal.
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Do low-numeracy people avoid shared decision making?
Mirta Galesic & Rocio Garcia-Retamero
Health Psychology, May 2011, Pages 336-341
Objectives: Doctors have been increasingly encouraged to involve patients in decision making rather than pursuing the paternalistic model in which they make the decisions for their patients. But do patients want to participate in making decisions about their health? Is there a relationship between their preferences for shared decision making and numeracy skills? Are those preferences different in countries with different medical systems, and for different age groups? Extant studies cannot answer these questions because most are based on nonprobabilistic, highly selective patient samples that prevent generalizations to a broader population.
Design: In a survey on probabilistic national samples in the United States and Germany, we interviewed participants with low numeracy skills (Germany: n = 127, mean numeracy = 37; United States: n = 117, mean numeracy = 36) and high numeracy skills (Germany: n = 133, mean numeracy = 96; U.S.: n = 121, mean numeracy = 91).
Main Outcome Measures: Usual and preferred role in medical decision making.
Results: A significant number of people with low numeracy in both the United States (35%, SE = 8.2) and Germany (30%, SE = 6.1) preferred to be more passive than they currently were. High-numeracy people, in contrast, were mostly satisfied with their current role. On average, Americans were more active than Germans. Middle-aged participants preferred to be more active compared to both younger and older ones.
Conclusions: Shared decision-making preferences are related to numeracy skills, country, and age. Education efforts to increase numeracy, as well as using nonquantitative communication formats, may foster involvement of low-numeracy patients in decisions about their health.