Psychological biases represent new paradigms that complement traditional behavioral finance theory while introducing “behaviorist” aspects to the decision-making process. The aim of this paper is to examine the mental models of actors in Tunisian firms with respect to the behavioral approach to corporate governance. We use a cognitive map to observe these mental diagrams and to visualize ways to conceptualize the behavioral approach. The objective of this study is to understand the concept of “mental models” through the presentation and analysis of the cognitive maps of the actors in Tunisian firms. The paper uses a corporate governance perspective to examine the mental models. Each actor’s systematic exploration grid shows a balance of concepts that expresses their cognitive orientation. Thus, we visualize the concepts (variables) that structure the cognitive universe of the actors, which is projected in terms of influences and dependencies. We can distinguish four major categories of variables through the distribution of the scatter plot variables in the grids, particularly in relation to different quadrants.
{"title":"Corporate Governance: Behavioral Approach and Cognitive Mapping Technique","authors":"Garoui Nassreddine, Anis Jarboui","doi":"10.2139/SSRN.2144670","DOIUrl":"https://doi.org/10.2139/SSRN.2144670","url":null,"abstract":"Psychological biases represent new paradigms that complement traditional behavioral finance theory while introducing “behaviorist” aspects to the decision-making process. The aim of this paper is to examine the mental models of actors in Tunisian firms with respect to the behavioral approach to corporate governance. We use a cognitive map to observe these mental diagrams and to visualize ways to conceptualize the behavioral approach. The objective of this study is to understand the concept of “mental models” through the presentation and analysis of the cognitive maps of the actors in Tunisian firms. The paper uses a corporate governance perspective to examine the mental models. Each actor’s systematic exploration grid shows a balance of concepts that expresses their cognitive orientation. Thus, we visualize the concepts (variables) that structure the cognitive universe of the actors, which is projected in terms of influences and dependencies. We can distinguish four major categories of variables through the distribution of the scatter plot variables in the grids, particularly in relation to different quadrants.","PeriodicalId":376768,"journal":{"name":"CGN: Psychology (Topic)","volume":"122 34","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-06-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131746393","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Firms often make mistakes, from simple manufacturing overruns all the way to catastrophic blunders. However, there is considerable heterogeneity in the nature of corporate responses when faced with evidence that an error has taken place, and, therefore, in the likelihood that such errors will reoccur in the future. In this paper, we explore an important but understudied influence on firms’ responses to corrective feedback – a CEO’s level of overconfidence. Using multiple distinct measures of overconfidence and the empirical context of voluntary corporate earnings forecasts, we find strong, robust evidence that firms led by overconfident CEOs are less responsive to corrective feedback in improving management forecast accuracy. We further show that this relationship is moderated by prior forecast error valence, time horizon, and managerial discretion.
{"title":"Making the Same Mistake All Over Again: CEO Overconfidence and Corporate Resistance to Corrective Feedback","authors":"Guoli Chen, Craig Crossland, S. Luo","doi":"10.1002/SMJ.2291","DOIUrl":"https://doi.org/10.1002/SMJ.2291","url":null,"abstract":"Firms often make mistakes, from simple manufacturing overruns all the way to catastrophic blunders. However, there is considerable heterogeneity in the nature of corporate responses when faced with evidence that an error has taken place, and, therefore, in the likelihood that such errors will reoccur in the future. In this paper, we explore an important but understudied influence on firms’ responses to corrective feedback – a CEO’s level of overconfidence. Using multiple distinct measures of overconfidence and the empirical context of voluntary corporate earnings forecasts, we find strong, robust evidence that firms led by overconfident CEOs are less responsive to corrective feedback in improving management forecast accuracy. We further show that this relationship is moderated by prior forecast error valence, time horizon, and managerial discretion.","PeriodicalId":376768,"journal":{"name":"CGN: Psychology (Topic)","volume":"114 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-06-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132387848","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Based on understanding accounting as a social construct we aim to raise research questions in context of trust and accounting regulation. While not providing a comprehensive literature overview, we identify opportunities for research which we mainly see in understanding what trust in accounting constitutes. Regulation theory and issues surrounding the communication between organizations and stakeholders qualify for both theoretical and empirical research. In all contexts we fi nd application of interdisciplinary approaches to offer fruitful perspectives, not only within business economics but beyond. We argue that the proposed agenda has implications for practice and policy as it may inform companies as well as regulators on how to adequately deal with trust when reporting fi nancial information.
{"title":"Trust and Accounting Regulation: Towards an Interdisciplinary Research Agenda","authors":"S. Hoffmann, Henning Zülch","doi":"10.2139/ssrn.2229080","DOIUrl":"https://doi.org/10.2139/ssrn.2229080","url":null,"abstract":"Based on understanding accounting as a social construct we aim to raise research questions in context of trust and accounting regulation. While not providing a comprehensive literature overview, we identify opportunities for research which we mainly see in understanding what trust in accounting constitutes. Regulation theory and issues surrounding the communication between organizations and stakeholders qualify for both theoretical and empirical research. In all contexts we fi nd application of interdisciplinary approaches to offer fruitful perspectives, not only within business economics but beyond. We argue that the proposed agenda has implications for practice and policy as it may inform companies as well as regulators on how to adequately deal with trust when reporting fi nancial information.","PeriodicalId":376768,"journal":{"name":"CGN: Psychology (Topic)","volume":"364 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2013-03-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121733823","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We examine how investor preferences and beliefs affect trading in relation to past gains and losses. The probability of selling as a function of profit is V-shaped; at short holding periods, investors are more likely to sell big losers than small ones. There is little evidence of an upward jump in selling at zero profits. These findings provide no clear indication that realization preference explains trading. Furthermore, the disposition effect is not driven by a simple direct preference for selling a stock by virtue of having a gain versus a loss. Trading based on belief revisions can potentially explain these findings. The Author 2012. Published by Oxford University Press on behalf of The Society for Financial Studies. All rights reserved. For Permissions, please e-mail: journals.permissions@oup.com., Oxford University Press.
{"title":"Are Investors Really Reluctant to Realize their Losses? Trading Responses to Past Returns and the Disposition Effect","authors":"Itzhak Ben-David, D. Hirshleifer","doi":"10.2139/ssrn.1876594","DOIUrl":"https://doi.org/10.2139/ssrn.1876594","url":null,"abstract":"We examine how investor preferences and beliefs affect trading in relation to past gains and losses. The probability of selling as a function of profit is V-shaped; at short holding periods, investors are more likely to sell big losers than small ones. There is little evidence of an upward jump in selling at zero profits. These findings provide no clear indication that realization preference explains trading. Furthermore, the disposition effect is not driven by a simple direct preference for selling a stock by virtue of having a gain versus a loss. Trading based on belief revisions can potentially explain these findings. The Author 2012. Published by Oxford University Press on behalf of The Society for Financial Studies. All rights reserved. For Permissions, please e-mail: journals.permissions@oup.com., Oxford University Press.","PeriodicalId":376768,"journal":{"name":"CGN: Psychology (Topic)","volume":"16 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-10-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116637718","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Jeffrey R. Cohen, Lisa Milici Gaynor, G. Krishnamoorthy, A. Wright
SUMMARY: Despite the importance of audit committee independence in ensuring the integrity of the financial reporting process, recent research suggests that even when audit committees meet regulato...
{"title":"The Impact on Auditor Judgments of CEO Influence on Audit Committee Independence and Management Incentives","authors":"Jeffrey R. Cohen, Lisa Milici Gaynor, G. Krishnamoorthy, A. Wright","doi":"10.2308/AJPT-10146","DOIUrl":"https://doi.org/10.2308/AJPT-10146","url":null,"abstract":"SUMMARY: Despite the importance of audit committee independence in ensuring the integrity of the financial reporting process, recent research suggests that even when audit committees meet regulato...","PeriodicalId":376768,"journal":{"name":"CGN: Psychology (Topic)","volume":"52 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2011-07-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"117080734","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The 2011 Chairmanship report published by Yale’s Millstein Center for Corporate Governance and Performance examines the question of how the non-executive Chair and the CEO, both important roles in the corporate governance, can work together effectively toward the corporate best interest. Based on interviews with dozens of CEOs, non-executive Chairs, and stakeholders, the report paints a picture of how the effective relationship works.The report identifies three major areas that characterize an effective working relationship: chemistry, a clear framework, and a supportive context. Most commonly mentioned in interviews was good Chair-CEO chemistry – that is, the direct interpersonal relationship between the two. Expanding on the chemistry concept, Chairs and CEOs identified effective communications as underlying factor. Effective communications included frequent contact, open, ongoing dialogue, and a mix of formal and informal venues. Also supporting good chemistry was reciprocity and consideration – keeping each other well informed, avoiding surprises, and assuming good intent.Communications should be purposeful – and while the relationship might be close, it should not become a personal friendship. Chairs and CEOs alike felt their good communications created an overall environment conducive to sharing, learning, and confidence.Other areas, such as a clear framework and a supportive context were also identified. A clear framework also meant having the right processes, usually around key areas of board responsibilities such as managing the board agenda, material financial decisions, major transactions such as acquisitions, compensation, C-suite personnel, and succession planning. Three elements of board context also effected the Chair-CEO relationship – a talented executive team, a strong supportive board and a culture of transparency promoted an effective working relationship between the Chair and CEO.As this leadership structure becomes more prevalent, these insights and guidelines should be useful to those working together in these interdependent roles. Effective working Chair-CEO relationships may create value for shareholders in ways that neither leader could do alone.
耶鲁大学米尔斯坦公司治理与绩效中心(Millstein Center for Corporate Governance and Performance)发布的《2011年董事长报告》探讨了非执行董事长和首席执行官这两个在公司治理中都很重要的角色如何有效地合作，以实现公司的最佳利益。基于对数十位首席执行官、非执行董事长和利益相关者的采访，该报告描绘了一幅有效关系如何运作的图景。该报告确定了有效工作关系的三个主要特征:化学反应、清晰的框架和支持性的环境。采访中最常提到的是董事长与ceo之间的良好化学反应——即两者之间的直接人际关系。在化学概念的基础上，董事长和首席执行官们认为有效的沟通是潜在的因素。有效的沟通包括频繁的接触、公开的、持续的对话，以及正式和非正式场合的结合。同样支持良好化学反应的是互惠和考虑——让对方充分了解情况，避免意外，并假设有良好的意图。沟通应该是有目的的——虽然关系可能很亲密，但不应该变成私人友谊。主席和首席执行官们都认为，良好的沟通创造了一个有利于分享、学习和自信的整体环境。还确定了其他领域，例如明确的框架和支持性环境。一个清晰的框架还意味着有正确的流程，通常围绕董事会职责的关键领域，如管理董事会议程、重大财务决策、重大交易(如收购)、薪酬、高管人员和继任计划。董事会背景的三个因素也影响了主席与首席执行官的关系——优秀的执行团队、强有力的董事会支持和透明的文化促进了主席与首席执行官之间有效的工作关系。随着这种领导结构变得越来越普遍，这些见解和指导方针应该对那些在这些相互依赖的角色中一起工作的人有用。有效的主席- ceo关系可能会为股东创造价值，这是任何一位领导人都无法单独做到的。
{"title":"Chairmanship: The Effective Chair-CEO Relationship - Insight from the Boardroom","authors":"A. Walton","doi":"10.2139/SSRN.2579311","DOIUrl":"https://doi.org/10.2139/SSRN.2579311","url":null,"abstract":"The 2011 Chairmanship report published by Yale’s Millstein Center for Corporate Governance and Performance examines the question of how the non-executive Chair and the CEO, both important roles in the corporate governance, can work together effectively toward the corporate best interest. Based on interviews with dozens of CEOs, non-executive Chairs, and stakeholders, the report paints a picture of how the effective relationship works.The report identifies three major areas that characterize an effective working relationship: chemistry, a clear framework, and a supportive context. Most commonly mentioned in interviews was good Chair-CEO chemistry – that is, the direct interpersonal relationship between the two. Expanding on the chemistry concept, Chairs and CEOs identified effective communications as underlying factor. Effective communications included frequent contact, open, ongoing dialogue, and a mix of formal and informal venues. Also supporting good chemistry was reciprocity and consideration – keeping each other well informed, avoiding surprises, and assuming good intent.Communications should be purposeful – and while the relationship might be close, it should not become a personal friendship. Chairs and CEOs alike felt their good communications created an overall environment conducive to sharing, learning, and confidence.Other areas, such as a clear framework and a supportive context were also identified. A clear framework also meant having the right processes, usually around key areas of board responsibilities such as managing the board agenda, material financial decisions, major transactions such as acquisitions, compensation, C-suite personnel, and succession planning. Three elements of board context also effected the Chair-CEO relationship – a talented executive team, a strong supportive board and a culture of transparency promoted an effective working relationship between the Chair and CEO.As this leadership structure becomes more prevalent, these insights and guidelines should be useful to those working together in these interdependent roles. Effective working Chair-CEO relationships may create value for shareholders in ways that neither leader could do alone.","PeriodicalId":376768,"journal":{"name":"CGN: Psychology (Topic)","volume":"26 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2011-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126000594","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
I analyze the accuracy of firms’ forecasts of their own future sales (and workforce numbers), which German companies provided secretly to the IAB Establishment Panel. Previous empirical evidence, using forecasts from public disclosures, revealed that managers’ earnings or sales forecasts on average show a bias towards overoptimism. However, in the present study the average firm is found to be very well able to correctly forecast its own future key figures. I suggest that public disclosed forecasts are on average overoptimistic because they serve as a signal to investors, while the ones in this dataset do not. Although I also find a large fraction of firms to be persistently overoptimistic over time, the share of steadily overpessimistic firms is even slightly larger.
{"title":"Firms’ Forecast Errors Regarding Their Own Future Key Figures: The Disappearance of the Overoptimism Bias","authors":"H. C. Müller","doi":"10.2139/ssrn.1728402","DOIUrl":"https://doi.org/10.2139/ssrn.1728402","url":null,"abstract":"I analyze the accuracy of firms’ forecasts of their own future sales (and workforce numbers), which German companies provided secretly to the IAB Establishment Panel. Previous empirical evidence, using forecasts from public disclosures, revealed that managers’ earnings or sales forecasts on average show a bias towards overoptimism. However, in the present study the average firm is found to be very well able to correctly forecast its own future key figures. I suggest that public disclosed forecasts are on average overoptimistic because they serve as a signal to investors, while the ones in this dataset do not. Although I also find a large fraction of firms to be persistently overoptimistic over time, the share of steadily overpessimistic firms is even slightly larger.","PeriodicalId":376768,"journal":{"name":"CGN: Psychology (Topic)","volume":"12 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-12-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125387628","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper explores the problem of the global financial crisis of 2008-9, using a behavioral perspective to examine in some detail the issues of market and institutional failure. These failures are evident in the inadequate oversight/regulation provided by financial market regulators (especially the Federal Reserve and the SEC), as well as the inability of financial market participants to adequately judge and assign risk measures to key financial instruments, particularly collateralized debt obligations. The paper shows how specific adjustments in government policy (dealing with market structural imperfections) and company strategy (dealing with risk management) can respond to the key elements of the crisis.Four categories of behavioral element are identified in the crisis: irrational exuberance of home lenders and borrowers; market structural imperfections, especially the lack of short-term financing available to investment banks in 2008; lack of adequate regulatory oversight; lack of adequate financial institution internal oversight. Each of these elements falls into a category of behavioral finance, from psychological aspects such as overconfidence and anchoring to lack of arbitrage possibilities. Government policy interventions are recommended for each of these failings, which fundamentally will allow the market to function with new safeguards on the overall financial system.
{"title":"The Global Financial Crisis – A Behavioral View","authors":"R. Grosse","doi":"10.2139/SSRN.1537744","DOIUrl":"https://doi.org/10.2139/SSRN.1537744","url":null,"abstract":"This paper explores the problem of the global financial crisis of 2008-9, using a behavioral perspective to examine in some detail the issues of market and institutional failure. These failures are evident in the inadequate oversight/regulation provided by financial market regulators (especially the Federal Reserve and the SEC), as well as the inability of financial market participants to adequately judge and assign risk measures to key financial instruments, particularly collateralized debt obligations. The paper shows how specific adjustments in government policy (dealing with market structural imperfections) and company strategy (dealing with risk management) can respond to the key elements of the crisis.Four categories of behavioral element are identified in the crisis: irrational exuberance of home lenders and borrowers; market structural imperfections, especially the lack of short-term financing available to investment banks in 2008; lack of adequate regulatory oversight; lack of adequate financial institution internal oversight. Each of these elements falls into a category of behavioral finance, from psychological aspects such as overconfidence and anchoring to lack of arbitrage possibilities. Government policy interventions are recommended for each of these failings, which fundamentally will allow the market to function with new safeguards on the overall financial system.","PeriodicalId":376768,"journal":{"name":"CGN: Psychology (Topic)","volume":"34 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-01-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133125708","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
京公网安备 11010802042870号
京ICP备2023020795号-1
扫码关注我们
求助内容：
应助结果提醒方式：