Developing a Method to Valuate the Collection of Big Data

Although organizations recognize the potential of “big data,” implementation of data analytics processes can consume a considerable amount of resources. The authors propose that when organizations are considering this costly and often risky investment, they need a systematic method to evaluate the costs of data collection associated with the implementation of a new data and analytics (D & A) strategy or an expansion of an existing effort. Therefore, in this article, a new dimension of big data is proposed which is incorporated into a theoretically justified and systematic method for quantifying the costs and benefits of the data collection process. By estimating the worth of data, organizations can more efficiently focus on streamlining the collection of the most beneficial data and jettisoning less valuable data collection efforts.

Information Asymmetry Among Investors and Strategic Bidding in Peer-to-Peer Lending

Peer-to-peer (P2P) lending became a global phenomenon in recent years. Despite their prominence in the “FinTech” era, P2P platforms remain a risky investment because of the high default rate of unsecured personal loans funded on such platforms. In contrast, the rate of return can be much higher than that of other investments if P2P loans are repaid. Therefore, investors of P2P loans need information about borrowers’ ability to repay. An important channel is to learn from other investors who may have information advantages. We argue that, because collective effort from investors is required in P2P lending, it could be optimal for informed investors to bid early in projects with the purpose of signaling the quality. With a unique data set from Prosper.com, we find that informed investors are indeed more likely to bid in the early stage of a project with a low probability of being funded, whereas uninformed investors will follow. The “squatting” behavior (early bidding) of informed investors facilitates information spillover to uninformed investors, benefitting the investors and borrowers who otherwise may not raise sufficient funding. Our findings also have implications for P2P lending platforms on how to manage the information asymmetry and strategic behaviors of investors.

How Power Influences Decision-Makers’ Investment Behavior in the Domains of Loss and Gain

We present a study (N = 645) investigating how power alters people’s propensity to take investment risks in a changing decision context of gains and losses and the intensity of their reactions to this experience. The results indicate that people in a state of power made more risky investment decisions than the control group regardless of prior gain or loss outcome, whereas people lacking power took less investment risk than the control group, regardless of previous outcomes. Moreover, people with power and those lacking power differed in their reactions to gains and losses, with the former reacting more to gains and the latter to losses.

Exploring the relationship between investment choices, cognitive abilities risk attitudes and financial literacy

PurposeThe main purpose of this study is to investigate the investment choices' relationship with cognitive abilities, risk aversion, risky investment intentions, subjective financial literacy and objective financial literacy.Design/methodology/approachTo examine the relationship, two investment choices were given to 256 subjects from Pakistan. Questionnaire had total 20 questions for measuring five variables. To review this nexus, discriminant analysis was used as to explore the depth of the nexus that is the ability of the variables to predict the investment choices.FindingsThis study establishes the findings that Investment choices are guided by risk aversion, risky investment intentions, financial literacy (subjective and objective) and cognitive abilities. The risk aversion has negative relation to investment choices and other variables depict positive relationship to with investment choices.Practical implicationsThis study provides a new and useful understanding into the existing literature on investment choices. The results are significant as the cognitive abilities show a positive contribution to the investment choices. This is point of significance as the portfolio managers and advisors would get help in regards of advising investments as they are aware what factors impact the investment choices.Originality/valueThis study is novel in its nature to evaluate investment choices using the cognitive ability alongside risk attitudes and financial literacy.

Monetary attitudes of young people in conditions of socioeconomic instability

In modern society, the younger generation is one of the most creative and active parts of its functioning. The constantly changing monetary attitudes of young people act as a driving force that affects the level of competitiveness and dynamic development of the socio-economic sphere. The attitudes of young people towards money and its management determine the vector in the formation of both an economically strong, politically stable state and an entire society. A stable set of attitudes is determined by the attitude to money, preferences in its management, goals, and strategies in the formation of various types of financial behavior, ways to achieve material well-being, orientation to economic values, and other important components. In this article, the author presents partial results of a large-scale study on the behavior of young people in the financial market, which reflect the monetary attitudes of young Muscovites that determine behavior in various areas of financial life: the desire to improve well-being, goals, and methods of achieving financial well-being, attitude to money and ways of managing it, attitude to savings and savings instruments, the investment potential of young people, as well as plans for the use of investment instruments. As a result of the conducted research, the following was revealed: the majority of respondents are characterized by a critical attitude to monetary transactions and financial institutions, lack of inclination to excessive spending, and risky investment. The desire of young people to accumulate and find ways to increase capital indicates far-sightedness, and preferences in financial instruments with the lowest share of risk, indicates caution in matters of capital management. This is an active, not afraid of the new, generation of Muscovites, showing a desire and interest in new forms of financial relationships, young people who form trends, young people whose attitudes, needs, and behavior need to be constantly studied by all participants of the financial eco-system.

Can longer gaze duration determine risky investment decisions? An interactive perspective

Can longer gaze duration determine risky investment decisions? Recent studies have tested how gaze influences people’s decisions and the boundary of the gaze effect. The current experiment used adaptive gaze-contingent manipulation by adding a self-determined option to test whether longer gaze duration can determine risky investment decisions. The results showed that both the expected value of each option and the gaze duration influenced people’s decisions. This result was consistent with the attentional diffusion model (aDDM) proposed by Krajbich et al. (2010), which suggests that gaze can influence the choice process by amplify the value of the choice. Therefore, the gaze duration would influence the decision when people do not have clear preference.The result also showed that the similarity between options and the computational difficulty would also influence the gaze effect. This result was inconsistent with prior research that used option similarities to represent difficulty, suggesting that both similarity between options and computational difficulty induce different underlying mechanisms of decision difficulty.

The effect of individual cultural values and phantasy on risky investment intention

PurposeThis study aims to examine the impact of conscious and unconscious processes on risky investment intention. In this framework, the effect of individual cultural values and phantasy on risky investment intentions was investigated. In addition, the mediating role of phantasy in the relationship between individual cultural values and risky investment intentions was also analyzed.Design/methodology/approachData were collected between May 14, 2020 and June 01, 2020, when our graduate students voluntarily shared the online survey link on their social networks. In this way, 1,934 people in total answered the questionnaire. To test the study model, structural equation modeling (SEM) was performed using the AMOS program. In addition, ANOVA and independent sample t-test analyses were conducted using the SPSS program to analyze whether individual cultural values and risky investment intent differ according to demographic variables.FindingsAccording to the analysis results, power distance, collectivism, masculinity and long-term orientation are seen as antecedents of phantasy. While a positive relationship was found between power distance, collectivism and risky investment intention, a negative relationship was found between uncertainty avoidance and risky investment intention. Statistical findings regarding the mediating effect of phantasy on the relationship between individual cultural values and risky investment intentions were also determined. In addition to these, the differences in individual cultural values and risky investment intentions according to age, education level, sex and marital status were investigated. Individuals with the highest uncertainty avoidance level were in the 41–50 age group. Individuals with the highest long-term orientation level were individuals aged 41 and over. Individuals with the lowest risky investment intentions were in the +51 age group. Collectivism and power distance did not differ according to age. There were no differences in the relevant variables according to the level of education. Males have higher levels of risky investment intention, power distance, masculinity and collectivism than females, and married individuals have higher levels of uncertainty avoidance, masculinity and collectivism than singles.Originality/valueThis study is the first to investigate the impact of conscious and unconscious processes on risky investment intentions together. On the other hand, the number of studies empirically investigating the relationship between phantasy and risky investment intention is quite limited, and the authors have also provided the findings for the existence of a relationship between these two variables.

Dynamic surplus optimization with performance- and index-linked liabilities

The increasing importance of liability-driven investment strategies and the shift towards retirement products with lower guarantees and more performance participation provide challenges for the development of portfolio optimization frameworks which cover these aspects. To this end, we establish a general and flexible terminal surplus optimization framework in continuous time, allowing for dynamic investment strategies and stochastic liabilities, which can be linked to the performance of an index or the asset portfolio of the insurance company. Besides optimality results in a fairly general surplus optimization setting, we obtain closed-form solutions for the optimal investment strategy for various specific liability models, which include the cases of index-linked and performance-linked liabilities and liabilities which are completely or only partially hedgeable. We compare the results in numerical examples and study the impact of the performance participation, unhedgeable risk components, different ways of modeling the liabilities and the relative risk aversion parameter. We find that performance- or index-linked liabilities, which provide a close link between the wealth of the insurance company and its liabilities, allow for a higher allocation in the risky investment. On the other hand, unhedgeable risks reduce the allocation in the risky investment. We conclude that, aiming at a high expected return for the policy holder, insurance companies should try to connect the performance of insurance products closely to the wealth and minimize unhedgeable risks.

Stimulating the development of entrepreneurship in the oil and gas complex: financial and economic support

Taking into account specific entrepreneurial risks, recommendations are given on the formation of the infrastructure of risky investment at the meso-level and the development of investment programs, strategies of territories within the framework of financial and economic assistance to the development of entrepreneurship in the oil and gas complex. Within the limits of the rights, powers and responsibilities granted by the legislation to local governments in the field of socio-economic development of subordinate territories, the characteristics of the means of financial and economic assistance to the development of small and medium-sized businesses in the oil and gas complex are given. From the point of view of supporting the development of entrepreneurship in the oil and gas complex, investment strategies of the territories should be based on both basic economic factors and specialized programs in relation to direct real, strategic and portfolio investors. At the same time, the systematic, integrated use of the cause-and-effect relationships described in this work should contribute to the development of the domestic oil and gas complex in modern conditions.

Multivariate associations between dopamine receptor availability and risky investment decision making across adulthood

Pharmacological manipulations have revealed that enhancing dopamine increases financial risk taking across adulthood. However, it is unclear whether baseline individual differences in dopamine function, assessed using PET imaging, are related to performance on risky financial decision making tasks. Here, thirty-five healthy adults completed an incentive-compatible learning-based risky investment decision task and a PET scan at rest using [11C]FLB457 to assess dopamine D2-like receptor availability. In the task, participants made choices between a safe asset (bond) and a risky asset (stock) with either an expected value less than the bond (bad stock) or expected value greater than the bond (good stock). Five measures of behavioral performance (choice inflexibility, risk seeking, suboptimal investment) and beliefs (absolute error, optimism) were extracted from the task data and average non-displaceable dopamine D2-like binding potential was extracted from four brain regions of interest (midbrain, amygdala, anterior cingulate, insula) from the PET imaging data. Given the presence of multiple independent and dependent variables, we used canonical correlation analysis (CCA) to evaluate multivariate associations between learning-based decision making and dopamine function controlling for age. Decomposition of the first dimension (r = .76) revealed that the strongest associations were between measures of choice inflexibility, incorrect choice, optimism, amygdala binding potential, and age. Follow-up univariate analyses revealed that amygdala binding potential and age were both independently associated with choice inflexibility. The findings reveal latent associations between baseline neural and behavioral measures suggesting that individual differences in dopamine function may be associated with learning-based financial risk taking in healthy adults.