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1 – 10 of 75Weiting Wang, Yi Liao and Jiacan Li
The purpose of this study to improve the efficiency of customer acquisition and retention through the design of salary information disclosure mechanism.
Abstract
Purpose
The purpose of this study to improve the efficiency of customer acquisition and retention through the design of salary information disclosure mechanism.
Design/methodology/approach
This study develops a stylized game-theoretic model of delegating customer acquisition and retention, focusing on how firms choose delegation and wage information disclosure strategy.
Findings
The results confirm the necessity for enterprises to disclose salary information. When sales agents are risk neutral, firms should choose multi-agent (MA) delegation and disclose their wages. However, when agents are risk averse, firms may disclose the wages of acquisition agents or both agents in MA delegation, depending on the uncertainty of the retention market.
Originality/value
This paper contributes to the literature on delegation of customer acquisition and retention and demonstrates that salary disclosure can be used as a supplement to the incentive mechanism.
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Jia Jia Chang, Zhi Jun Hu and Changxiu Liu
In this study, a dynamic contracting model is developed between a venture capitalist (VC) and an entrepreneur (EN) to explore the influence of asymmetric beliefs regarding…
Abstract
Purpose
In this study, a dynamic contracting model is developed between a venture capitalist (VC) and an entrepreneur (EN) to explore the influence of asymmetric beliefs regarding output-relevant parameters, agency conflicts and complementarity on the VC's posterior beliefs through the EN's unobservable effort choices to influence the optimal dynamic contract.
Design/methodology/approach
The authors construct the contracting model by incorporating the VC's effort, which is ignored in most studies. Using backward induction and a discrete-time approximation approach, the authors solve the continuous-time contract design problem, which evolves into a nonlinear ordinary differential equation (ODE).
Findings
The optimal equity share that the VC provides to the EN decreases over time. In accordance with the empirical evidence, the EN's optimistic beliefs regarding the project's profitability positively affect its equity share. However, the interactions between the optimal equity share, project risk and both partners' degrees of risk aversion are not monotonic. Moreover, the authors find that the optimal equity share increases with the degree of complementarity, which indicates that the EN is willing to cooperate with the VC. This study’s results also show that the optimal equity shares at each time are interdependent if the VC is risk-averse and independent if the VC is risk-neutral.
Research limitations/implications
In conclusion, the authors highlight two potential directions for future research. First, the authors only considered a single VC, whereas in practice, a risk project may be carried out by multiple VCs, and it is interesting to discuss how the degree of complementarity affects the number of VCs that ENs contract. Second, the authors may introduce jumps and consider more general multivariate stochastic volatility models for output dynamics and analyze the characteristics of the optimal contracts. Third, further research can deal with other forms of discretionary output functions concerning complementarity, such as Cobb–Douglas and constant elasticity of substitution (See Varian, 1992).
Social implications
The results of this study have several implications. First, it offers a novel approach to designing dynamic contracts that are specific and easy to operate. To improve the complicated venture investment situation and abate conflict between contractual parties, this study plays a good reference role. Second, the synergy effect proposed in this study provides a theoretical explanation for the executive compensation puzzle in economics, in which managers are often “rewarded for luck” (Bertrand and Mullainathan, 2001; Wu et al., 2018). This result indicates a realistic perspective on financing and establishing cooperative relationships, which enhances the efficiency of venture investment. Third, from an empirical standpoint, one can apply this framework to study research and development (R&D) problems.
Originality/value
First, the authors introduce asymmetric beliefs and Bayesian learning to study the dynamic contract design problem and discuss their effects on equity share. Second, the authors incorporate the VC's effort into the contracting problem, and analyze the synergistic effect of effort complementarity on the optimal dynamic contract.
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Hui Zhao, Yuanyuan Ge and Weihan Wang
This study aims to improve the offshore wind farm (OWF) site selection evaluation index system and establishes a decision-making model for OWF site selection. It is expected to…
Abstract
Purpose
This study aims to improve the offshore wind farm (OWF) site selection evaluation index system and establishes a decision-making model for OWF site selection. It is expected to provide helpful references for the progress of offshore wind power.
Design/methodology/approach
Firstly, this paper establishes an evaluation criteria system for OWF site selection, considering six criteria (wind resource, environment, economic, technical, social and risk) and related subcriteria. Then, the Criteria Importance Though Intercrieria Correlation (CRITIC) method is introduced to figure out the weights of evaluation indexes. In addition, the cumulative prospect theory and technique for order preference by similarity to an ideal solution (CPT-TOPSIS) method are employed to construct the OWF site selection decision-making model. Finally, taking the OWF site selection in China as an example, the effectiveness and robustness of the framework are verified by sensitivity analysis and comparative analysis.
Findings
This study establishes the OWF site selection evaluation system and constructs a decision-making model under the spherical fuzzy environment. A case of China is employed to verify the effectiveness and feasibility of the model.
Originality/value
In this paper, a new decision-making model is proposed for the first time, considering the ambiguity and uncertainty of information and the risk attitudes of decision-makers (DMs) in the decision-making process.
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Vasanthi Mamidala, Pooja Kumari and Dakshita Singh
The purpose of this study is to examine the behaviour of retail investors while making an investment decision and how it gets affected by the behavioural biases of the investors…
Abstract
Purpose
The purpose of this study is to examine the behaviour of retail investors while making an investment decision and how it gets affected by the behavioural biases of the investors using a moderated-mediation framework.
Design/methodology/approach
A mixed method approach has been used to fulfil the objectives of the study. In the first study, a qualitative analysis of the interviews with 15 retail investors was conducted. As part of the quantitative study, a total of 201 responses from Indian retail investors were collected using systematic sampling and analysed using structural equation modelling and Process Macro.
Findings
The results indicate that anchoring bias, availability bias, herding bias, switching cost, sunk cost, regret avoidance and perceived threat have a significant effect on retail investors’ investing intention. The attitude of the investors towards investing decisions mediates the effects of behavioural bias and the status quo on investment intention. The results of the moderated-mediation analysis indicate that mediating effect of attitude varied at the low and high-risk aversion of investors.
Practical implications
The findings of this study will help regulators and retail investors to understand the critical behavioural biases which affect the investors’ investing intention.
Originality/value
The paper contributes to the literature on investors’ behaviour, status quo bias theory (SQB) and behavioural bias. This study uniquely proposes a moderated-mediation framework to understand the effects of biases on retail investors’ investment intention.
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Anu Mohta and V. Shunmugasundaram
This study aims to assess the risk profile of millennial investors residing in the Delhi NCR region. In addition, the relationship between the risk profile and demographic traits…
Abstract
Purpose
This study aims to assess the risk profile of millennial investors residing in the Delhi NCR region. In addition, the relationship between the risk profile and demographic traits of millennial investors was also analyzed.
Design/methodology/approach
Data was collected using a structured questionnaire segregated into two sections. In the first section, millennials were asked questions on socio-demographic factors, and the second section contained ten Likert-type statements to cover the multidimensionality of financial risk. Factor analysis and one-way ANOVA were used to analyze the primary data collected for this study.
Findings
The findings indicate that the risk profile of millennials is mainly affected by three factors: risk-taking capacity, risk attitude and risk propensity. Except for educational qualification and occupation, all other demographic features, such as age, gender, marital status, income and family size, seem to significantly influence the factors defining millennials' risk profile.
Originality/value
Uncertainty is inherent in any financial decision, and an investor’s willingness to deal with these variations determines their investment risk profile. To make sound financial decisions, it is mandatory to understand one’s risk profile. The awareness of millennials' distinctive risk profile will come in handy to financial stakeholders because they account for one-third of India’s population, and their financial decisions will shape the financial world for the decades to come.
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Bahadur Ali Soomro, Nadia A. Abdelmegeed Abdelwahed and Naimatullah Shah
The current environment is unhelpful to female entrepreneurs, and they need to overcome numerous barriers when starting their own businesses. In this study, the researchers…
Abstract
Purpose
The current environment is unhelpful to female entrepreneurs, and they need to overcome numerous barriers when starting their own businesses. In this study, the researchers investigated the significant barriers that Pakistani female entrepreneurs require to overcome in this respect.
Design/methodology/approach
In this study, the researchers used a quantitative study and they used a questionnaire to survey the respondents and collect cross-sectional data. The researchers targeted female students who were undertaking bachelor’s and master’s degree programs in different Pakistani public and private sector universities. Accordingly, the researchers based this study’s findings on the usable samples received from 498 Pakistani female students.
Findings
The researchers used a structural equation model (SEM) in this study and its findings highlight that aversion to risk (ATR) has an insignificant impact on entrepreneurial inclinations (EI). In addition, fear of failure (FoF), lack of resources (LoR), aversion to hard work and stress (ASH) and the lack of social networking (LSN) have negative and insignificant effects on EI. The ATR factor has an insignificant effect on entrepreneurial success (ES), whereas FoF, LoR, ASH and LSN are negative and insignificant predictors of Pakistani female students’ ES.
Practical implications
This study’s findings may help Pakistani women to overcome the barriers to ES. In this respect, the researchers recommend that the Pakistan Government and policymakers develop significant strategies to provide the conducive business environment and to financially support Pakistani women to start their own businesses. Furthermore, this study’s findings contribute greatly to the vast amount of current literature and help to overcome the entrepreneurial conditions and barriers that potential entrepreneurs from advanced and developing countries experience frequently.
Originality/value
This study’s findings provide empirical evidence of EI and ES in Pakistan.
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This study aims to investigate the relationship between boardroom gender diversity (BoGD) and risk-taking by property-liability (P-L) stock insurers from an analytical framework…
Abstract
Purpose
This study aims to investigate the relationship between boardroom gender diversity (BoGD) and risk-taking by property-liability (P-L) stock insurers from an analytical framework that control for organizational form and ownership structure. It relies on the behavioral agency model, the resource dependency theory and the concept of socioemotional wealth (SEW).
Design/methodology/approach
This study builds on an unbalanced panel of 2,285 firm-year observations from 232 European and US P-L stock insurers covering the period 2010–2019 and measure risk-taking by using four proxies: total risk (TR), upside risk (UpR), downside risk (DwR) and default risk (DR). Reverse causality and endogeneity concerns are treated by applying different approaches.
Findings
Findings suggest that BoGD mitigates the TR, DwR and DR but does not interfere with the UpR, which conceptualizes firm expectations to enhance patrimony and safeguard SEW for heirs, especially in family-owned insurers. The findings hold in various robustness checks including endogeneity and alternative specifications of BoGD and risk-taking.
Practical implications
This study contributes to practice by contrasting the role of female directors’ bevahior when assuming risk, which seems significantly different depending on the risk-taking specification and the organizational form. The author advises policyholders and policymakers to look at closely on BoGD and ownership structure as they affect insurance company risk-taking.
Originality/value
This study takes a more direct approach to highlight the BoGD’s effect on corporate risk-taking by focusing on the insurance sector which is characterized by risk and uncertainty bearing. To the best of the author’s knowledge, this is the first study to consider the full range of the stock organizational forms and the degree of family control in displaying this effect in both widely traded and closely traded insurers and to assess risk-taking from both market-based and accounting-based aspects.
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Managers must make numerous strategic decisions in order to initiate and implement a business model innovation (BMI). This paper examines how managers perceive the management team…
Abstract
Purpose
Managers must make numerous strategic decisions in order to initiate and implement a business model innovation (BMI). This paper examines how managers perceive the management team interacts when making BMI decisions. The paper also investigates how group biases and board members’ risk willingness affect this process.
Design/methodology/approach
Empirical data were collected through 26 in-depth interviews with German managing directors from 13 companies in four industries (mobility, manufacturing, healthcare and energy) to explore three research questions: (1) What group effects are prevalent in BMI group decision-making? (2) What are the key characteristics of BMI group decisions? And (3) what are the potential relationships between BMI group decision-making and managers' risk willingness? A thematic analysis based on Gioia's guidelines was conducted to identify themes in the comprehensive dataset.
Findings
First, the results show four typical group biases in BMI group decisions: Groupthink, social influence, hidden profile and group polarization. Findings show that the hidden profile paradigm and groupthink theory are essential in the context of BMI decisions. Second, we developed a BMI decision matrix, including the following key characteristics of BMI group decision-making managerial cohesion, conflict readiness and information- and emotion-based decision behavior. Third, in contrast to previous literature, we found that individual risk aversion can improve the quality of BMI decisions.
Practical implications
This paper provides managers with an opportunity to become aware of group biases that may impede their strategic BMI decisions. Specifically, it points out that managers should consider the key cognitive constraints due to their interactions when making BMI decisions. This work also highlights the importance of risk-averse decision-makers on boards.
Originality/value
This qualitative study contributes to the literature on decision-making by revealing key cognitive group biases in strategic decision-making. This study also enriches the behavioral science research stream of the BMI literature by attributing a critical influence on the quality of BMI decisions to managers' group interactions. In addition, this article provides new perspectives on managers' risk aversion in strategic decision-making.
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Tauqeer Saleem, Ussama Yaqub and Salma Zaman
The present study distinguishes itself by pioneering an innovative framework that integrates key elements of prospect theory and the fundamental principles of electronic word of…
Abstract
Purpose
The present study distinguishes itself by pioneering an innovative framework that integrates key elements of prospect theory and the fundamental principles of electronic word of mouth (EWOM) to forecast Bitcoin/USD price fluctuations using Twitter sentiment analysis.
Design/methodology/approach
We utilized Twitter data as our primary data source. We meticulously collected a dataset consisting of over 3 million tweets spanning a nine-year period, from 2013 to 2022, covering a total of 3,215 days with an average daily tweet count of 1,000. The tweets were identified by utilizing the “bitcoin” and/or “btc” keywords through the snscrape python library. Diverging from conventional approaches, we introduce four distinct variables, encompassing normalized positive and negative sentiment scores as well as sentiment variance. These refinements markedly enhance sentiment analysis within the sphere of financial risk management.
Findings
Our findings highlight the substantial impact of negative sentiments in driving Bitcoin price declines, in contrast to the role of positive sentiments in facilitating price upswings. These results underscore the critical importance of continuous, real-time monitoring of negative sentiment shifts within the cryptocurrency market.
Practical implications
Our study holds substantial significance for both risk managers and investors, providing a crucial tool for well-informed decision-making in the cryptocurrency market. The implications drawn from our study hold notable relevance for financial risk management.
Originality/value
We present an innovative framework combining prospect theory and core principles of EWOM to predict Bitcoin price fluctuations through analysis of Twitter sentiment. Unlike conventional methods, we incorporate distinct positive and negative sentiment scores instead of relying solely on a single compound score. Notably, our pioneering sentiment analysis framework dissects sentiment into separate positive and negative components, advancing our comprehension of market sentiment dynamics. Furthermore, it equips financial institutions and investors with a more detailed and actionable insight into the risks associated not only with Bitcoin but also with other assets influenced by sentiment-driven market dynamics.
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This paper aims to explain the unwillingness to exchange export knowledge by members of exporters’ networks and provides potential solutions to this problem.
Abstract
Purpose
This paper aims to explain the unwillingness to exchange export knowledge by members of exporters’ networks and provides potential solutions to this problem.
Design/methodology/approach
This study uses data from a survey of 301 members of a French exporter’s network to test a set of hypotheses with partial least squares structural equation modeling.
Findings
Network participants’ export experience and age have a negative influence on their willingness to exchange knowledge. However, positive attitudes toward the network (perception of network quality, commitment) can mitigate those negative links.
Practical implications
Network members’ unwillingness to exchange knowledge represents a major challenge that threatens the existence of knowledge networks. The findings suggest solutions to this issue for network managers.
Originality/value
This study views knowledge exchange in a network as a risky behavior. It explains why members do not participate in networks. The model shows how contrary forces work and interact to deter or foster knowledge exchange.
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