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In this study, we investigate what drives the MAX effect in the South Korean stock market. We find that the MAX effect is significant only for overpriced stocks categorized by the composite mispricing index. Our results suggest that investors' demand for the lottery and the arbitrage risk effect of MAX may overlap and negate each other. Furthermore, MAX itself has independent information apart from idiosyncratic volatility (IVOL), which assures that the high positive correlation between IVOL and MAX does not directly cause our empirical findings. Finally, by analyzing the direct trading behavior of investors, our results suggest that investors' buying pressure for lottery-like stocks is concentrated among overpriced stocks.

Storytelling through virtual reality (VR) combines the strengths of cutting-edge technology with traditional informational campaigns. As a tool for climate change mitigation, VR has been shown to educate individuals and stimulate both emotional and cognitive responses that promote pro-environmental behavior. This paper aims to investigate whether these benefits extend to the field of green investing through an experiment conducted with a sample of small business entrepreneurs.

The experimental design involved making choices between bonds varying in maturity dates, annual interest and environmental classification (regular versus green). To identify potential impacts of the immersive experience on investment decisions, these choices were made both before and after exposure to VR videos illustrating the devastating effects of climate change. A multiple price list was employed to elicit subjects' risk preferences, enabling the joint estimation of the treatment effect and the risk and time preference parameters.

The findings indicate that, when risk and time preference parameters are controlled for, a VR experience can nudge toward green investment choices. This effect is more profound among those who already exhibit a greater propensity to opt for green investments.

Previous research shows that negative emotions, such as guilt, affect pro-environmental intentions, as well as actions, while message vividness through immersive experiences is effective in nudging greener behavior. Since analogous results in the framework of financial investments are not currently available, this paper seeks to test whether VR videos depicting the adverse effects of climate change can generate negative emotions associated with experiencing these effects and make them salient in subsequent investment decisions made by small business entrepreneurs.

Prior studies use two measures of firm-specific return variation (FSRV): idiosyncratic volatility in absolute and relative terms, the latter of which is also termed stock price nonsynchronicity. Whereas most research focuses on investigating the idiosyncratic volatility puzzle, the authors carry out comparison of these two measures and further investigate which of the two constituents of nonsynchronicity explain the association between FSRV and stock returns, emphasising the importance of assessing which component drives stock returns.

The authors use the US individual stock returns from 1925 to 2016 and define the two measures of FRSV based on the Fama and French (1993) model. Specifically, the authors decompose the relative measure into two components: (i) absolute idiosyncratic volatility and (ii) systematic volatility. The authors conduct various tests based on high-minus-low, zero-investment quintile portfolio sorts and perform the Fama–MacBeth analysis by singling out each component.

The authors find a positive return on the portfolio sorted on relative idiosyncratic volatility or on systematic volatility, but find a negative return sorted on absolute idiosyncratic volatility. The results are robust after controlling for size, BM and other risk characteristics using a double-sorting approach. The Fama–MacBeth regression results show that a positive association between the relative measure and stock returns is driven primarily by the low-systematic-volatility anomaly across firms. The findings are robust to controlling for return residual momentum, skewness, jumps and information discreteness.

Extant research posits the idiosyncratic volatility puzzle and the low-volatility anomaly. The authors emphasize the importance of integrating these two streams of research. This study enhances the understanding of the driving force underlying the relationship between FSRV and cross-sectional stock returns.

Research shows that innovation is imperative for business competitiveness and that entrepreneurs are stimulators of innovation. This is particularly true for younger entrepreneurs, who are recognized as having technological savvy, high dependency on the web, low fear of change and high zeal for challenges. However, not all businesses headed by younger entrepreneurs innovate, and research on younger entrepreneurs' innovation is lacking. This study assessed the main drivers of innovation in a sample of young Canadian entrepreneurs leading businesses in the initiation phase.

A sample of young Canadian entrepreneurs leading businesses in the initiation phase has been employed. This study is based on younger entrepreneurs and draws on the definition of generations Y and Z (Taylor and Keeter, 2010). It examines the initial stage of a business, up to 3 years. The sample includes 100 adults (65% female), whose ages ranged from 18 to 34 years. The drivers to innovate included external support (e.g. mentoring, funds, accelerators) and internal factors, including psychological attributes (i.e. risk-taking) and entrepreneurial motivations. Regression and structural equation modeling analyses have been conducted.

The findings revealed that entrepreneurial motivations for achieving self-fulfillment and contributing to the world, which are prevalent among younger generations, fostered innovation both directly and indirectly through the mediating effect of external support and risk-taking. External support fostered innovation not directly but through the mediating effect of risk-taking; in contrast, internal factors directly propelled innovation. This finding demonstrates the significance younger generations attribute to internal factors over external factors in the quest for innovation.

This study can be an intriguing starting point for future studies to examine in more depth the intertwined role of external and internal factors in accelerating innovation among younger entrepreneurs. Studies could examine various psychological attributes and professional and business capabilities (Zahra, 2021) as well as external factors.

Our findings add to this literature in stressing the need to strengthen risk-taking among younger entrepreneurs, which is affected by external support and produces innovation; and reinforce the relevance of the resource-based view in revealing younger entrepreneurs' avenues to develop innovation, pinpointing external support as contingent on motivation and demonstrating the role of risk-taking in the pursuit of innovation.

Consumer-perceived review attitude determines consumer overall information adoption and is a core part of consumer’s online-shopping. This study aims to focus on factors that could influence consumer review attitude and can be used by marketers to shape individual information perception.

The study used the questionnaire method to collect data from online shoppers and the modelling of structural equations as an empirical approach to analyse the data.

The findings demonstrate that both systematic and heuristic cues impact the reviewer’s credibility and perceived website attitude differently, which, in turn, influence review attitude. Review characteristics, such as factuality, consistency and relevancy, have a positive relationship with reviewer credibility, while only review consistency and relevancy appears to have a relationship with review attitude. Website characteristics such as reputation, familiarity and social interactivity positively influence the website attitude, which positively influences review attitude. Apart from this, review skepticism has a significant negative relationship with review attitude.

This study could help to foster a positive attitude towards online reviews. Digital marketers need to motivate trusted reviewers to post consistent, fact-based reviews. Further improving the overall website reputation and interactivity could bring a positive attitude towards the reviews. Also, digital marketers must filter and avoid contradictory reviews or reviews that have a bipolar message and reviews expressing numerous emotions to enhance review relevance and consistency.

The current study addresses the need to understand the formation of consumer review attitude through both review and website characteristics using heuristic – systematic model. The paper captures the complex process undergone by the consumer to decipher review attitude and thereby extend the understanding of consumer information processing.

This paper aims to explore the relationship between prudence in risk attitudes and patience of time preference of Chinese apple growers regarding off-farm cold storage of production and marketing in non-harvest seasons. The authors also consider the effect of farmer participation in cooperative-like organizations known as Farm Bases (FBs).

The authors use multiple list methods and elicitation strategies to measure Chinese apple farmers' risk attitudes and time preferences. Because these farmers can either sell their apples immediately to supermarkets or intermediaries or place them in storage, the authors assess correlations between their storage decisions and their preferences regarding risk and time. The authors also differentiate risks involving gains and losses and empirically examine individual risk attitudes in different scenarios.

Marketing decisions are moderately associated with risk attitudes but not time preference. Farmers with memberships in local farmer cooperatives are likely to speculate more in cold storage. Thus, risk aversion behavioral and psychological motives affect farmers' decision-making of cold storage and intertemporal marketing activities. However, membership in cooperatives does not always result in improved income and welfare for farmers.

The research confirms that behavioral factors may strongly drive vulnerable smallholder farmers to speculate into storage even under seasonal and uncertain marketing volatility. There is the need to think deeper about the rationale of promoting cooperatives and other agricultural forms, because imposing these without careful consideration can have negative impacts.

Do risk and time preferences affect the decision of farmers to utilize storage facilities? This question is important because it is not clear if and how risk preferences affect the tradeoff between consuming today and saving for tomorrow, especially for farmers in developing countries.

Expanding on the real-world financial market framework and considering the current market turmoil, with cryptocurrencies (where contracts for difference (CFDs) are extremely common) (Hasso et al., 2019) displaying unprecedented volatility, the authors aim to test in an online laboratory setting whether displaying a risk warning message is truly effective in reducing the level of risk taken and whether the placement of this method makes a difference.

To explore the impact of risk disclosure framing on risk-taking behavior, the authors conducted an online pair-wise lottery choice experiment. In addition to manipulating risk awareness through the presence or absence of risk warning messages of varying intensity, the authors also considered dynamic inconsistency, cognitive ability and questionnaire-based financial risk tolerance (FRT) scores. The authors aimed to identify potential relationships between these variables and experimentally elicited risk aversion. The authors' study offers valuable insights into the complex nature of risky decision-making and sheds light on the importance of considering dynamic inconsistency in addition to risk awareness and aversion.

The authors' results provide statistical evidence for the efficacy of informative and very salient messages in mitigating risky decision, hinting at several policy implications. The authors also provide some statistical evidence in support of the relationship between cognitive abilities and risk preferences. The authors detect that individual with low cognitive abilities scores display great risk aversion.

This study investigates the impact of risk warning messages on investment decisions in an online laboratory setting – a unique approach. However, the authors go beyond this and also examine the potential influence of dynamic inconsistency on decision-making, adding further value to the literature on this topic. To ensure a comprehensive understanding of the participants, the authors collect data on cognitive ability and FRT using questionnaires. This study provides a simple and cost-effective framework that can be easily replicated in future research – a valuable contribution to the field.

“Poor, Stressed, Drink (alcohol), and Gambling” is one of the campaigns for poverty eradication in Thailand. This study focuses on informal workers—gamblers—who belong to low-income groups and are not covered by the law as an employer. The main objective was to investigate the factors affecting financial stress among informal laborers and determine the factors that drive informal workers to buy lottery tickets (classified by economic, psychological and social motives).

The authors applied binary logistic regression to determine what factors affected financial stress and multinomial logistic regression was applied to examine the factors affecting the motives for buying the lottery.

According to the study's results, factors including education, income, gambling intensity, level of financial literacy, saving and knowledge about finance in general influenced both economic and psychological motives negatively. However, gender, status, age, level of risk tolerance, self-evaluated level of acceptable risk and knowledge about compound interest influenced both economic motives and psychological motives positively. It is worth noting that both the self-evaluation of their level of financial literacy and knowledge about inflation resulted in effects moving in different directions, with self-evaluation of their level of financial literacy and knowledge about inflation negatively affecting economic motives, but positively affecting psychological motives.

The results of this study are expected to help policymakers understand more about this issue since it will illustrate the relationships between financial stress and financial literacy, financial behaviors, financial attitudes and risk tolerance and gambling behaviors. After all, financial stress is a significant problem affecting individuals, their families and the community, and it stems from various complex factors. Therefore, the government and counseling agencies should apply active strategies to mitigate these issues and lessen the resulting financial stress by providing financial literacy projects, as well as financial counseling.

Low financial literacy, especially being inefficient at managing one's finances, unusually comes with unhealthy financial thought patterns, as well as a lack of systematic financial management. Furthermore, the lack of financial literacy can potentially lead to unfavorable circumstances. When one falls into uncontrollable situations, including divorce, becoming unemployed, having health problems, being in toxic relationships, loss of a breadwinner, an unexpected pregnancy, etcetera, they could easily find themselves failing to properly cope with these problems and become stressed. Finally, they are also more at risk to take illicit drugs or begin gambling more frequently.

One of the key elements that reduces financial stress is a person's finances, which is thought to have a significant role in reducing their betting behaviors. The findings of this study can be used to guide policy making intended to deter those who have never gambled from starting. Gambling is considered a risk-taking activity with a higher value reward in return. Money, enjoyment, socialization and excitement were all popular motives for gambling. These findings were consistent with what has been observed in Thai society related to the factors influencing individual to gamble, in other words, economic, psychological and social motives. The study focused on gamblers who were informal laborers. They are laborers without an employer according to the Thai labor law, do not have any social security from the government and, usually, have low incomes.

The case evolves around the Powerball lottery and the rule changes implemented in 2015, which, among other things, changed the chances of winning the jackpot from 1 in 175 million to 1 in 292 million. What is the impact of such rules on lottery revenues? The expected value rule is unable to explain why people play in the first place and fails to give the appropriate weight to the factors that explain the attractiveness of a lottery. This case is ideal to introduce the notion of decision weights as put forward by Kahneman and Tversky's prospect theory. By calculating decision weights, we obtain a reasonable prediction for the willingness to pay for the lottery as a function of different jackpot amounts. Using past data, we can correlate lottery revenues with predicted willingness to pay for a ticket. Quantitative-inclined audiences can then develop a simulation model of how likely it is that the jackpot grows, which, coupled with the prediction of revenues as a function of the jackpot, would give the evolution of the revenues under the new rule. The accompanying spreadsheet provides data for students to work out various scenarios to narrow objectives and maximize revenue from Powerball tickets.

Large-scale farm management in China has developed rapidly in recent years. Large-scale farmers face substantial operating risks, requiring extensive price risk management. However, the agricultural insurance and futures markets in China are incomplete. This study aims to analyze the price-risk-management behaviors of large-scale farmers under incomplete market conditions, with a focus on the interconnections between large scale farmers' subjective preferences (risk preferences, time preferences), liquidity constraints and their price risk management.

The authors construct an analysis framework to reveal the impact of large-scale farmers' risk preferences, time preferences and liquidity conditions on their price-risk-management behaviors under incomplete market conditions. Using data from field surveys and subjective preference experiments involving 409 large-scale grain farmers in China, an empirical analysis was conducted using the bivariate probit model.

The results show that risk-averse farmers will use risk transfer (such as contract farming) and risk diversification (such as multi-period sales) to avoid price risk. However, farmers subject to liquidity constraints and strong time preferences will not choose risk diversification, and the interaction between time preferences and liquidity constraints will strengthen this decision. The larger the farm-management scale, the greater the impact.

The authors focus on rapidly developed large-scale farm management in China. Appropriate price risk management is required by large-scale farmers due to their substantial operating risks. Considering the incomplete conditions of agricultural insurance and futures markets, the results of this study will help identify behavioral characteristics of large-scale farmers and optimize their price-risk-management strategies, further stabilizing large-scale farm management.