...who will adopt electric vehicles? a segmentation approach of UK consumers Dr Jillian anable The Centre for Transport Research University of aberdeen St Mary’s, Elphinstone Road aberdeen, UK, ab24 3Uf j.anable@abdn.ac.uk Dr geertje Schuitema Department of Marketing and Statistics aarhus University haslegaardsvej 10 DK-8210 aarhus V, Denmark g.Schuitema@asb.dk Dr Stephen Skippon Shell global Solutions Shell Technology Centre Thornton P.o. box 1 Chester, UK, Ch1 3Sh steve.skippon@shell.com Dr neale Kinnear Transport Research laboratory Crowthorne house, nine Mile Ride wokingham, UK, Rg40 3ga nkinnear@trl.co.uk Keywords electric vehicles, consumer preferences, segmentation two-wave design was aimed at reducing psychological distance, supporting information transfer into long-term memory, and facilitating non-conscious processing, thus better representing consumer choice processes. Applying cluster analysis to the various attitudinal measures, participants are segmented according to their pro-social and technology-oriented inclinations and some conclusions as to the characteristics of EV consumers are presented. Abstract Climate change programmes around the globe are relying heavily on the electrification of transport, especially private battery electric vehicles and plug-in hybrids (‘EVs’). These are novel technologies of which mainstream consumers have very little experience and knowledge, so they are psychologically distant from the category. This presents...
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...Theory (Jensen, Meckling, 1976) • Efficient Markets II (Fama, 1991) • Behavioural Finance (Kahneman & Tversky, 1979, Shiller, 1981, 2000) Portfolio Selection • Investors are rationals and risk averse • Diversification lowers specific risk • Any portfolio is a combination of the market portfolio and the riskless asset The CAPM Capital Asset Pricing Model • Systematic risk of an asset is measured by its beta coefficient • The model calibrates the risk-return relationship • Simple, elegant and linear model => big success • Low explaining power (strong assumptions) • Alternative models are difficult to use 1 The Development of Modern Finance 2 Financial Markets Efficiency "At any given point in time, assets prices on financial markets account for all available information." • Strong assumptions on: – markets organization – investors behaviour • One consequence of EMH is Random Walk Hypothesis • Assumptions are not always true: 3 forms of efficiency (strong, semi-strong, weak) The irrelevance of financing and dividends decisions In a world without taxes and with perfect financial markets, financing and dividends decision are irrelevant (they have no impact on the firm value). • Really strong assumptions (no taxes...) • But yields a formal and rigorous basis for financing decisions study • Gave birth to the literature on Security Design Option pricing theory • Options developed on derivative markets • Options give the right to buy or sell an asset for a given price •...
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...First, it reviews some distinctions that are commonly drawn between the “historical” and the “rational choice” variants of institutionalism and shows that there are more points of tangency than typically assumed. However, differences remain in how scholars in the two traditions approach empirical problems. The contrast of rational choice’s emphasis on institutions as coordination mechanisms that generate or sustain equilibria versus historical institutionalism’s emphasis on how institutions emerge from and are embedded in concrete temporal processes serves as the foundation for the second half of the essay, which assesses our progress in understanding institutional formation and change. Drawing on insights from recent historical institutional work on “critical junctures” and on “policy feedbacks,” the article proposes a way of thinking about institutional evolution and path dependency that provides an alternative to equilibrium and other approaches that separate the analysis of institutional stability from that of institutional change. INTRODUCTION Institutional analysis has a distinguished pedigree in comparative politics, and the “new” institutionalist literature of the past two decades has both sustained this venerable tradition and deepened our understanding of the role of institutions in political life. At the same time, recent work has given rise to new debates. It is now conventional to distinguish three different varieties of institutionalism: rational choice institutionalism...
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...1. Introduction The initial stage of the research project is formulated and clarifies the research topic (Ghauri et al., 1995, cited in Saunders, 2000). Both rational thinking and creative thinking (Saunders, 2000) have been used to generate and refine research ideas. Along with economic development and people’s lifestyle has enhanced. Especially, tourism is most clear. 1. Objective Therefore, the objective of research formulated as: ‘In recent years, the development of tourism which include the development of tourism, management of tourism hotel and tourism team, as well as the tourism destination management. Based on the objectives generated as followed: • To analysis business management theory • To analysis allocation and management of employee in enterprise • To analysis business environment in marketing 2. Literature Review Saunders et al (2003) suggested that the literature review would enhance your subject knowledge and help you to clarify your research questions further. The main purpose of this research is to develop a good understanding and insight into the tourism of development. As the research objectives I mentioned above the main literature I am going to review are: to analysis the management of tourism hotel and the tourism team; the different management model and manager’s style are effect enterprise: the importance of reasonable management in employee; the development of the market; the tourism destine management. 2.1 Tourism Management ...
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...1 EFFICIENT MARKETS HYPOTHESIS Andrew W. Lo To appear in L. Blume and S. Durlauf, The New Palgrave: A Dictionary of Economics, Second Edition, 2007. New York: Palgrave McMillan. The efficient markets hypothesis (EMH) maintains that market prices fully reflect all available information. Developed independently by Paul A. Samuelson and Eugene F. Fama in the 1960s, this idea has been applied extensively to theoretical models and empirical studies of financial securities prices, generating considerable controversy as well as fundamental insights into the price-discovery process. The most enduring critique comes from psychologists and behavioural economists who argue that the EMH is based on counterfactual assumptions regarding human behaviour, that is, rationality. Recent advances in evolutionary psychology and the cognitive neurosciences may be able to reconcile the EMH with behavioural anomalies. There is an old joke, widely told among economists, about an economist strolling down the street with a companion. They come upon a $100 bill lying on the ground, and as the companion reaches down to pick it up, the economist says, ‘Don’t bother – if it were a genuine $100 bill, someone would have already picked it up’. This humorous example of economic logic gone awry is a fairly accurate rendition of the efficient markets hypothesis (EMH), one of the most hotly contested propositions in all the social sciences. It is disarmingly simple to state, has far-reaching consequences...
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...2012-2013 PAWNSHOPS AND BEHAVIORAL ECONOMICS 193 PAWNSHOPS, BEHAVIORAL ECONOMICS, AND SELF-REGULATION SUSAN PAYNE CARTER* AND PAIGE MARTA SKIBA** I. Introduction Pawnbroking is the oldest source of credit.1 There is growing public interest in day-to-day pawnbroking operations, as evidenced by the popularity of reality shows such as “Pawn Stars” and “Hardcore Pawn.”2 Television viewers’ curiosity about an old credit institution may be due to the fact that 7% of all U.S. households have used pawn credit.3 Although pawnshops predate biblical times, researchers know surprisingly little about this ancient form of banking and its customers.4 We fill this gap by documenting detailed information on pawnshop loan repayment and default, and by discussing how pawnshop borrowers’ behavior is consistent with various behavioral economics phenomena. Pawnshop loans are small, short-term, collateralized loans typically used by low-income consumers. The borrower leaves a possession, or “pledge,” as collateral in exchange for a loan, typically of $75–$100.5 Interest rates vary by state and range from 2 Assistant Professor, Office of Economic and Manpower Analysis, United States Military Academy. susan.carter@usma.edu. The views expressed in this paper do not necessarily represent those of the United States Military Academy, the United States Army, or the Department of Defense. ** Associate Professor of Law, Vanderbilt University...
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...Management process, linear and nonlinear management, ordinary and extraordinary management, rational management, chaos theory Management - from rational management to chaos theory Submitted to Dr. D. Coleman By JJ de Klerk In partial fulfillment of the requirement for the Doctorate in Business Administration Swiss Management University March 3, 2012 1 1. Introduction Developments over the last few decades have led to a new way of thinking in economic and management approaches. The scientific approach to management, which emphasizes the basic management functions of planning, organizing, leadership and control, now seems unable to explain the era of change that characterizes economies and organizations alike. This paper will focus on explaining the rational management model, focusing on ordinary management, and go on to discuss the new approaches such as chaos theory – also called complexity theory - and the need for extraordinary management and innovation. 2. Rational management Management and organization science literature have until recently focused on the objective control of agents and worked on the assumption that interactions can be described in linear terms (Webb, 2005). When difficult decisions have to be made, many managers and strategists rely on the economics view in which profit maximization is the guiding principle. Executives will us the rational model tools described above, and believe that precise solutions should be achieved through precise...
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...organization economists. However, until very recently no competition authority that we are aware of has attempted to formulate a coherent and detailed framework for the analysis of barriers to entry, despite the significant degree of effort that has been put into clarifying the related problems of market definition and the measurement of monopoly or market power. While clear and fairly precise statements and indeed, guidelines or procedures on these issues have come from the courts or government authorities charged with the implementation of competition policy, the approach to dealing with questions of entry has tended to remain vague and ad hoc. The interest in entrepreneurship and processes of new firm formation has a long tradition in economic...
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...2012-2013 PAWNSHOPS AND BEHAVIORAL ECONOMICS 193 PAWNSHOPS, BEHAVIORAL ECONOMICS, AND SELF-REGULATION SUSAN PAYNE CARTER* AND PAIGE MARTA SKIBA** I. Introduction Pawnbroking is the oldest source of credit.1 There is growing public interest in day-to-day pawnbroking operations, as evidenced by the popularity of reality shows such as “Pawn Stars” and “Hardcore Pawn.”2 Television viewers’ curiosity about an old credit institution may be due to the fact that 7% of all U.S. households have used pawn credit.3 Although pawnshops predate biblical times, researchers know surprisingly little about this ancient form of banking and its customers.4 We fill this gap by documenting detailed information on pawnshop loan repayment and default, and by discussing how pawnshop borrowers’ behavior is consistent with various behavioral economics phenomena. Pawnshop loans are small, short-term, collateralized loans typically used by low-income consumers. The borrower leaves a possession, or “pledge,” as collateral in exchange for a loan, typically of $75–$100.5 Interest rates vary by state and range from 2 Assistant Professor, Office of Economic and Manpower Analysis, United States Military Academy. susan.carter@usma.edu. The views expressed in this paper do not necessarily represent those of the United States Military Academy, the United States Army, or the Department of Defense. ** Associate Professor of Law, Vanderbilt University...
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...gold price. 3. To determine the relationship between the Malaysian Gross Domestic Product on the Malaysian gold price 4. To determine the relationship between inflation rate on the Malaysian gold price. 5. To determine what are the stronger factors influencing the price of gold in Malaysia LITERATURE REVIEW There are number of group studies literature related with the functions gold has in the economy. The first group includes the literature showing how gold price is affected by macroeconomic news (Dooley et al., 1995; Fortune, 1987; Sherman, 1983; Sjaastad and Scacciallani, 1996; Wang and Lee, 2011). These studies investigate the relation of gold price with economic variables which includes inflation, interest rate, exchange rate etc. Second group includes the literature focusing on the examined the influencing factors in the variations of the gold price (Diba and Grossman, 1984; Pindyck, 1993; Baker and Tassel, 1985). Third group includes the literature aiming on the advantage of using gold in diversifying risk for a long-run portfolio (Chua et al., 1990; Sherman, 1986; Michaud et al., 2006; Ciner, 2011; Jaffe, 1989). Fourth group includes the literature focusing on the inflation hedging effectiveness of gold (Kolluri, 1981; Chappell and Dowd, 1997; Moore, 1990; Ghosh et al., 2004; Mahdavi and Zhou, 1997; Levin and Wright, 2006). These studies explored the long-run and short-run relationship between CPI and price of gold. Gold is used in investment...
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...theory. In order to specify the type of irrationality, researchers have turned to experimental evidence complied by cognitive psychologists on the biases that arise when people form beliefs, and on the people’s preferences, given their beliefs or on how they make decisions, Thaler and Barberis (2002). In this paper, we will concentrate on the extensive literature on the Limits to Arbitrage and explain how the theory was conceived, how it evolved over time and apply a scenario to better explain the research. Limits to Arbitrage Understanding arbitrage opportunities is not the only ingredient needed to make sharp predictions. The level of irrationality need to be specified by behavior finance researchers.This is related to how they deviate from the Subjective Expected Utility theory. In order to specify the type of irrationality, researchers have turned to experimental evidence complied by cognitive psychologists on the biases that arise when people form beliefs, and on the people’s preferences, given their beliefs or on how they make decisions, Thaler and Barberis (2002). In this paper, we will concentrate on the extensive literature on the Limits to Arbitrage and explain how the theory was conceived, how it evolved over time and apply a scenario to better explain the research. Section one Theory In order to examine the limits of arbitrage one must define...
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...ABSTRACT Behavioural finance is part of finance that seeks to understand and explain the systematic financial market implications of psychological decision processes. It utilizes knowledge of cognitive psychology, social sciences and anthropology to explain irrational investor behavior that is not being captured by the traditional rational based models. INTRODUCTION Classical investment theories are based on the assumption that investors always act in a manner that maximizes their return. Yet a number of research show that investors are not always so rational. Human become puzzled when the uncertainty regarding investment decision engulfs them. People are not always rational and markets are not always efficient. Behavioral finance explains why individual do not always make the decisions they are expected to make and why markets do not reliably behave as they are expected to behave. Recent research shows that the average investors make decisions based on emotion, not logic; most investor’s buy high on speculations and sale low on panic mood. Psychological studies reveal that the pain of losing money from investment is really three times greater than the joy of earning money. Emotions such as fear and greed often play a pivotal role in investor’s decision; there are also other causes of irrational behavior. It is observed that stock price moves up and down on a daily basis without any change in fundamental of economies. It is also observed that people in the stock market...
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...NEEDS TO BE DONE? MARTIN ELING MICHAEL KOCHANSKI WORKING PAPERS ON RISK MANAGEMENT AND INSURANCE NO. 126 EDITED BY HATO SCHMEISER CHAIR FOR RISK MANAGEMENT AND INSURANCE DECEMBER 2012 Research on Lapse in Life Insurance—What Has Been Done and What Needs to Be Done? Martin Eling, Michael Kochanski This version: 2012/12/23 _________________________________________________________________________________________ Abstract The intention of this paper is to review research on lapse in life insurance and to outline potential new areas of research in this field. We consider theoretical lapse rate models as well as empirical research on life insurance lapse and provide a classification of these two streams of research. More than 50 theoretical and empirical papers from this important field of research are reviewed. Challenges for lapse rate modeling, lapse risk mitigation techniques, and possible trends in future lapse behavior are discussed. The risks arising from lapse are of high economic importance. As such, lapsation is of interest not only to academics, but is also highly relevant for the industry, regulators, and policymakers. JEL classification: G22; G28 Keywords: Lapse; Surrender; Lapse Modeling; Life Insurance _________________________________________________________________________________________ 1. Introduction Today’s insurance policies allow policyholders to choose among a large number of options that can significantly influence the extent...
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...to inform their buy and sell decisions, which means that understanding analysts’ work can provide crucial insights on the determinants of value in the capital markets. Yet our knowledge of analysts is limited by insufficient attention to Knightian uncertainty. Analysts estimate the value of stocks by calculating their net present value or by folding the future back into the present. In so doing, they are faced with the fundamental challenge identified by Frank Knight, that is, with the difficulty of making decisions that entail a future that is unknown. These decisions, as Knight wrote, are characterized by ‘neither entire ignorance nor complete . . . information, but partial knowledge’ of the world (Knight, [1921] 1971: 199). The finance literature has not examined the Knightian challenge faced by analysts. Indeed, existing treatments circumvent the problem by adopting one of two extreme positions. In the first, put forward by orthodox economists, it is assumed that Knightian uncertainty is non-existent and that calculative decision-making is straightforward. Analysts are presented as mere calculators in a probabilistic world of risk (Cowles, 1933; Lin and McNichols, 1998; Lim, 2001). In the second, put forward by neo-institutional sociologists and behavioural finance scholars, analysts face too much uncertainty to engage in individual calculation. Analysts confront this uncertainty by resorting to a lemming-like imitation of their colleagues’ opinions (see respectively Rao, Greve...
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...THE JOURNAL OF FINANCE • VOL. LVI, NO. 4 • AUGUST 2001 Investor Psychology and Asset Pricing DAVID HIRSHLEIFER* ABSTRACT The basic paradigm of asset pricing is in vibrant f lux. The purely rational approach is being subsumed by a broader approach based upon the psychology of investors. In this approach, security expected returns are determined by both risk and misvaluation. This survey sketches a framework for understanding decision biases, evaluates the a priori arguments and the capital market evidence bearing on the importance of investor psychology for security prices, and reviews recent models. The best plan is . . . to profit by the folly of others. — Pliny the Elder, from John Bartlett, comp. Familiar Quotations, 9th ed. 1901. IN THE MUDDLED DAYS BEFORE THE RISE of modern finance, some otherwisereputable economists, such as Adam Smith, Irving Fisher, John Maynard Keynes, and Harry Markowitz, thought that individual psychology affects prices.1 What if the creators of asset-pricing theory had followed this thread? Picture a school of sociologists at the University of Chicago proposing the Deficient Markets Hypothesis: that prices inaccurately ref lect all available information. A brilliant Stanford psychologist, call him Bill Blunte, invents the Deranged Anticipation and Perception Model ~or DAPM!, in which proxies for market misvaluation are used to predict security returns. Imagine the euphoria when researchers discovered that these mispricing proxies...
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