scholarly journals A role-game laboratory experiment on the influence of country prospects reports on investment decisions in two artificial organizational settings

2021 ◽  
Author(s):  
Marco Castellani ◽  
Linda Alengoz ◽  
Niccolò Casnici ◽  
Flaminio Squazzoni
Keyword(s):  
Laboratory Experiment ◽  
Investment Decisions ◽  
Cognitive Maps ◽  
Role Expectations ◽  
Decision Makers ◽  
Investment Strategies ◽  
Experimental Setting ◽  
Strategic Decisions ◽  
Organizational Settings

AbstractThis paper investigates how reports concerning a given country’s prospects affect investment decisions in two stylized, artificial organizational settings. We designed a role-game laboratory experiment, where subjects were asked to make investment decisions for two types of fictitious companies from the same country. We found that when available reports included positive country prospects, subjects strategized more on investments regardless of the characteristics of their organization. When reports included negative prospects, however, certain organizational peculiarities influenced the subjects’ interpretations, with decision-makers opting for more prudent plans when managing a more traditional company. Cognitive maps of decision makers showed that subjects considered investment strategies as a means to fulfil a company’s role expectations regarding appropriate decisions. Notwithstanding all caveats due to the artificial and simplified nature of our experimental setting, our findings indicate the need for more research on the effect of reports and prospect analysis on strategic decisions of companies, especially when business prospects are uncertain.

The profitability of algorithmic trading systems based on football sentiment

2020 ◽  
Vol 42 (1) ◽  
pp. 33-46
Author(s):  
Raúl Gómez-Martínez ◽  
Camila Marqués-Bogliani ◽  
Jessica Paule-Vianez
Keyword(s):  
Financial Markets ◽  
Investment Decisions ◽  
Futures Market ◽  
Algorithmic Trading ◽  
Investment Strategies ◽  
Measurable Effect ◽  
Behavioural Finance ◽  
Trading Systems ◽  
European Football

Behavioural finance has shown that investment decisions are the result of not just rational but also emotional brain processes. On the assumption that emotions affect financial markets, it would seem likely that football results might have a measurable effect on financial markets. To test this, this study describes three algorithmic trading systems based exclusively on the results of three top European football teams (Juventus, Bayern München and Paris St Germain) opening long or short positions in the next market season of the futures market of the index of each country (MIB (Milano Italia Borsa), DAX (Deutscher Aktien Index) and CAC (Cotation Assistée en Continu). Depending on the outcome of the last game played a long position was taken after a victory and a short position after a draw or defeat. The results showed that the algorithmic systems were profitable in the case of Juventus and Bayern whereas in the case of PSG, the system was profitable, but in an inverse way. This study shows that investment strategies that take account of sports sentiment could have a profitable outcome.

Following momentum and avoiding the “Minsky Moment” evidence from investors on the Financial Instability Hypothesis

2016 ◽  
Vol 8 (3) ◽  
pp. 205-217 ◽  
Author(s):  
Scott Pirie ◽  
Ronald King To Chan
Keyword(s):  
Investment Decisions ◽  
Practical Experience ◽  
Financial Instability ◽  
Investment Strategies ◽  
Momentum Strategies ◽  
Content Type ◽  
Hyman Minsky ◽  
Quantitative Studies ◽  
Regional Markets ◽  
Unstable States

Purpose This study aims to find out how institutional investors use momentum in making investment decisions, and whether their actions are consistent with the Financial Instability Hypothesis of Hyman Minsky. Design/methodology/approach The study discusses the findings of interviews with 25 professional investors from the Hong Kong offices of five global financial institutions. All of the participants have several years of practical experience in global and regional markets. Findings Nearly all the managers interviewed said they use momentum in making investment decisions, and they do this in ways that are consistent with the Financial Instability Hypothesis, in which markets alternate between stable and unstable states. The participants are aware they may contribute to this, but they cannot avoid doing it because of short-term constraints in the present financial system. Originality/value This study adds to our knowledge of how professional investors use momentum in their investment strategies. It complements findings of quantitative studies that show momentum strategies have been profitable in many market settings. It also adds evidence that supports the Financial Instability Hypothesis.

How “The Three Rules” guide strategy and investment decisions at Deloitte Consulting LLP

2015 ◽  
Vol 43 (3) ◽  
pp. 7-14 ◽  
Author(s):  
Jim Moffatt
Keyword(s):  
Design Methodology ◽  
Large Scale ◽  
Investment Decisions ◽  
Decision Makers ◽  
Research Project ◽  
Content Type ◽  
First Case ◽  
Practical Implications ◽  
Thought Leadership

Purpose – This case example looks at how Deloitte Consulting applies the Three Rules synthesized by Michael Raynor and Mumtaz Ahmed based on their large-scale research project that identified patterns in the way exceptional companies think. Design/methodology/approach – The Three Rules concept is a key piece of Deloitte Consulting’s thought leadership program. So how are the three rules helping the organization perform? Now that research has shown how exceptional companies think, CEO Jim Moffatt could address the question, “Does Deloitte think like an exceptional company?” Findings – Deloitte has had success with an approach that promotes a bias towards non-price value over price and revenue over costs. Practical implications – It’s critical that all decision makers in an organization understand how decisions that are consistent with the three rules have contributed to past success as well as how they can apply the rules to difficult challenges they face today. Originality/value – This is the first case study written from a CEO’s perspective that looks at how the Three Rules approach of Michael Raynor and Mumtaz Ahmed can foster a firm’s growth and exceptional performance.

scholarly journals Venture Capital Firms’ Specialization, Differences and Complementarities

2016 ◽  
Vol 11 (7) ◽  
pp. 83 ◽  
Author(s):  
Asif Siddiqui ◽  
Dora Marinova ◽  
Amzad Hossain
Keyword(s):  
Venture Capital ◽  
Investment Decisions ◽  
Organizational Form ◽  
Financial Viability ◽  
Investment Strategies ◽  
Firm Resources ◽  
Market Data ◽  
Venture Capital Firms ◽  
Investment Behaviour

<p>The paper analyses the differences in venture capital (VC) firms, proposes a classification of the firms and<br />empirically investigates their investment and co-investment behaviour. The VC firms are not homogeneous and beside funds they possess a diverse set of nonfinancial resources which they optimize. A classification is developed based on VC firm resources and specialization represented by organizational form and affiliation. Based on Australian market data, we classify the VC firms in three categories, namely strategic, financial and independent using resource based theory, and highlight differences. Then the firms’ specialization is related to their portfolio characteristics to identify and analyse differences and complementarities in terms of investment strategies. The influence of specialization in investment and co-investment strategies is also analysed. This study shows that specialization influences investment decisions and co-investor selection. Implications of such investment practices on resource efficiency, financial viability and transition to sustainability are also discussed.</p>

scholarly journals Risk of Snake Entanglement Is Affected by Installation Method of Erosion Control Blankets

2020 ◽  
Vol 11 (1) ◽  
pp. 273-278 ◽  
Author(s):  
Krista J. Ward ◽  
Kasey L. Jobe ◽  
Nicholas C. Schiwitz ◽  
Daniel Saenz ◽  
Christopher M. Schalk
Keyword(s):  
Soil Loss ◽  
Construction Projects ◽  
Road Construction ◽  
Erosion Control ◽  
Decision Makers ◽  
Experimental Setting ◽  
Control Product ◽  
Promote Plant Growth ◽  
Edge Treatment ◽  
Pass Through

Abstract At the conclusion of road construction projects, an erosion control product (e.g., blankets, spray mulch) is installed to reduce soil loss and promote plant growth. Wildlife, such as snakes (suborder Serpentes), are prone to entanglement in erosion control blankets (ECBs) that contain polypropylene mesh with fused apertures. Previous reports have noted that the occurrences of entanglements are not uniform in their distribution across an ECB, but primarily occur where the edge of the mesh is exposed. We conducted an experiment to determine if modification to the installation methods of ECBs affects the likelihood of snake entanglement. We conducted entanglement trials to compare the likelihood of snake entanglement between two treatments: 1) exposed ECB edge (i.e., perimeter) and 2) buried ECB edge. Snakes were less likely to attempt to pass through the mesh on the buried edge treatment and all entanglements occurred on the exposed edge treatment. These results provide support that modification to the installation methods reduces snake entanglement in ECBs in some settings. However, we conducted our study in an experimental setting, and it should be evaluated under natural field conditions. This research can be used to inform several parties including contractors, habitat managers, and agency decision makers on additional steps that can be taken for products that fit their application needs to minimize risks to wildlife.

scholarly journals Bayesian Belief Networks for Integrating Scientific and Stakeholders’ Knowledge to Support Nature-Based Solution Implementation

2021 ◽  
Vol 9 ◽  
Author(s):  
Albert Scrieciu ◽  
Alessandro Pagano ◽  
Virginia Rosa Coletta ◽  
Umberto Fratino ◽  
Raffaele Giordano
Keyword(s):  
Knowledge Integration ◽  
Cognitive Maps ◽  
Bayesian Belief Networks ◽  
Hydraulic Modeling ◽  
Fuzzy Cognitive Maps ◽  
Decision Makers ◽  
Belief Networks ◽  
Integration Process ◽  
Problem Structuring ◽  
Risk Reduction Measures

There is a growing interest worldwide on the potential of nature-based solutions (NBSs) as measures for dealing with water-related risks while producing multiple co-benefits that can contribute to several societal challenges and many of the sustainable development goals. However, several barriers still hamper their wider implementation, such as mainly the lack of stakeholders’ engagement and the limited integration of stakeholders’ knowledge throughout the phases of NBS design and implementation. This is a crucial aspect to guarantee that the multidimensional implications of NBSs are adequately understood and considered by decision-makers. Innovative methods and tools for improving NBS design and supporting decision-makers in overcoming the main barriers to implementation, ultimately enhancing their effectiveness, are therefore needed. The present work proposes a combined approach based on the integration of fuzzy cognitive maps, hydraulic modeling, and participatory Bayesian belief networks aiming to facilitate the stakeholders’ engagement and the knowledge integration process in NBS design and assessment. The approach was developed and implemented within the NAIAD project in the Lower Danube demo site, specifically oriented to support the process of the Potelu Wetland restoration. First, fuzzy cognitive maps are adopted as a problem structuring method for eliciting stakeholders’ risk perception and problem understanding, and for constructing a causal model describing the system as a whole, with specific attention to the expected role of the NBS in reducing flood risk and addressing the key local challenges. Second, hydraulic modeling is used to analyze the effect of extreme floods starting from the retrospective analysis of a specific event and to model the potential benefits of risk reduction measures. Last, a Bayesian belief network is used to support the model integration process and a scenario analysis with a user-friendly tool. The whole process can be replicated in other areas and is particularly suitable to support an active engagement of stakeholders (both institutional and not) in the process of NBS design and assessment.

D Minus Months: Strategic Planning for Weather-Sensitive Decisions

2021 ◽  
Author(s):  
Eva D. Regnier ◽  
Joel W. Feldmeier
Keyword(s):  
Decision Making ◽  
Decision Analysis ◽  
Weather Forecasting ◽  
Decision Makers ◽  
Strategic Decisions ◽  
Sequential Decisions ◽  
Weather Forecasts ◽  
Current State ◽  
Set Up ◽  
Made In

General Eisenhower’s decisions to postpone and, one day later, to launch the “D-Day” invasion of Normandy are a gripping illustration of sequential decisions under uncertainty, suitable for any introductory decision analysis class. They’re also the archetypal example of weather-sensitive decision making using a forecast. This paper develops a framework for analyzing weather-sensitive decisions with a focus on the less-familiar strategic decisions that determine how forecasts are produced and what operational alternatives are available so that decision makers can extract value from forecasts. We tell the story of the decisions made in the months before D-Day regarding how to set up the forecasting process and the myriad decisions implicating nation-level resources that prepared Allied forces not just to invade, but to hold open that decision until the last possible hour so that Eisenhower and his staff could use the critical forecasts. Finally, we overview the current state of the weather-forecasting enterprise, the current challenges of interest to decision analysts, and what this means for decision analysts seeking opportunities to help the weather enterprise improve forecasts and to help operational decision makers extract more value from modern weather forecasts.

Cost-Effectiveness of Security Measures

2014 ◽  
pp. 139-156 ◽  
Author(s):  
Wolter Pieters ◽  
Christian W. Probst ◽  
Zofia Lukszo ◽  
Lorena Montoya
Keyword(s):  
Complex System ◽  
Cost Effectiveness ◽  
Cyber Security ◽  
Investment Decisions ◽  
Decision Makers ◽  
Future Research ◽  
Security Measures ◽  
Qualitative Approaches ◽  
Security Context

Recently, cyber security has become an important topic on the agenda of many organisations. It is already widely acknowledged that attacks do happen, and decision makers face the problem of how to respond. As it is almost impossible to secure a complex system completely, it is important to have an adequate estimate of the effectiveness of security measures when making investment decisions. Risk concepts are known in principle, but estimating the effectiveness of countermeasure proves to be difficult and cannot be achieved by qualitative approaches only. In this chapter, the authors consider the question of how to guarantee cost-effectiveness of security measures. They investigate the possibility of using existing frameworks and tools, the challenges in a security context as opposed to a safety context, and directions for future research.

Analysis and Intuition in Strategic Decision Making

2011 ◽  
pp. 1531-1542
Author(s):  
Zita Zoltay Paprika
Keyword(s):  
Decision Making ◽  
Decision Makers ◽  
Strategic Decision ◽  
Strategic Decision Making ◽  
Decision Making Process ◽  
Strategic Decisions ◽  
Managerial Skills ◽  
Research Scholarship ◽  
Empirical Tests

Many management scholars believe that the process used to make strategic decisions affects the quality of those decisions. However, several authors have observed a lack of research on the strategic decision-making process. Empirical tests of factors that have been hypothesized to affect the way strategic decisions are made are notably absent (Fredrickson, 1985). This article reports the results of a study that attempts to assess the effects of decision-making circumstances, focusing mainly on the approaches applied and the managerial skills and capabilities the decision makers built on during concrete strategic decisionmaking procedures. The study was conducted in California between September 2005 and June 2006 and it was sponsored by a Fulbright research scholarship grant.

Inclusion of Social Subsystem Issues in IT Investment Decisions

2011 ◽  
pp. 164-183
Author(s):  
Sherry D. Ryan ◽  
Michael S. Gates
Keyword(s):  
Survey Data ◽  
Decision Process ◽  
Cost Benefit Analysis ◽  
Investment Decisions ◽  
Cost Benefit ◽  
Decision Makers ◽  
Benefit Analysis ◽  
Analysis Model ◽  
Decision Criteria ◽  
The Social

Researchers have attempted to augment the traditional cost/benefit analysis model used in the IT decision process. However, frequently social subsystem issues are inadequately considered. Survey data, collected from a U.S. sample of 200 executives, provides an empirical assessment of how these issues compare with other IT decision criteria given differing decision types. The social subsystem issues considered most important by decision makers are also identified and the manner by which they consider these issues is investigated.

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