Enjoying the Quiet Life: Corporate Decision-Making by Entrenched Managers

Enjoying the Quiet Life: Corporate Decision-Making by Entrenched Managers. Naoshi Ikeda, Kotaro Inoue, and Sho Watanabe. NBER Working Paper No. 23804, doi 10.3386/w23804

Abstract: In this study, we empirically test “quiet life hypothesis,” which predicts that managers who are subject to weak monitoring from the shareholders avoid making difficult decisions such as risky investment and business restructuring with Japanese firm data. We employ cross-shareholder and stable shareholder ownership as the proxy variables of the strength of a manager’s defense against market disciplinary power. We examine the effect of the proxy variables on manager-enacted corporate behaviors and the results indicate that entrenched managers who are insulated from disciplinary power of stock market avoid making difficult decisions such as large investments and business restructures. However, when managers are closely monitored by institutional investors and independent directors, they tend to be active in making difficult decisions. Taken together, our results are consistent with managerial quiet life hypothesis.

My comment: We all try to work less, and we all are risk-averse...

Using Tax Data to Measure Long-Term Trends in U.S. Income Inequality

Using Tax Data to Measure Long-Term Trends in U.S. Income Inequality. Gerald Auten and David Splinter. Draft Paper, Annual Conference, ASSA Annual Meeting, 2017. https://www.aeaweb.org/conference/2017/preliminary/paper/NkfkQ2a

Abstract: Previous studies using U.S. tax return data conclude that the top one percent income share
increased substantially since 1960. This study re-estimates the long-term trend in inequality after
accounting for changes in the tax base, income sources missing from individual tax returns and
changes in marriage rates. This more consistent estimate suggests that top one percent income
shares increased by only about a quarter as much as unadjusted shares. Further, accounting for
government transfers suggests that top one percent shares increased a tenth as much. These
results show that unadjusted tax return based measures present a distorted view of inequality
trends, as incomes reported on tax returns are sensitive to changes in tax laws and ignore income
sources outside the individual tax system.

Land-Use Restrictions -- deregulating to 1980 levels would raise labor productivity by about 10 pct, & consumption by about 9 pct

Tarnishing the Golden and Empire States: Land-Use Restrictions and the U.S. Economic Slowdown. Kyle F. Herkenhoff, Lee E. Ohanian, Edward C. Prescott. NBER Working Paper No. 23790, http://www.nber.org/papers/w23790

This paper studies the impact of state-level land-use restrictions on U.S. economic activity, focusing on how these restrictions have depressed macroeconomic activity since 2000. We use a variety of state-level data sources, together with a general equilibrium spatial model of the United States to systematically construct a panel dataset of state-level land-use restrictions between 1950 and 2014. We show that these restrictions have generally tightened over time, particularly in California and New York. We use the model to analyze how these restrictions affect economic activity and the allocation of workers and capital across states. Counterfactual experiments show that deregulating existing urban land from 2014 regulation levels back to 1980 levels would have increased US GDP and productivity roughly to their current trend levels. California, New York, and the Mid-Atlantic region expand the most in these counterfactuals, drawing population out of the South and the Rustbelt. General equilibrium effects, particularly the reallocation of capital across states, accounts for much of these gains.

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Knowing this:

"...deregulating [land use in] all of the regions to 1980 levels would raise labor productivity by about 10 percent, and consumption by about 9 percent in the neoclassical economy, and would raise labor productivity by about 16 percent, and consumption by about 11 percent in the economy with the externality."

, we keep shooting ourselves in the foot.

Love Death—A Retrospective and Prospective Follow-Up Mortality Study Over 45 Years

Lange L, Zedler B, Verhoff MA, Parzeller M. Love Death—A Retrospective and Prospective Follow-Up Mortality Study Over 45 Years. The Journal of Sexual Medicine, https://doi.org/10.1016/j.jsxm.2017.08.007

Abstract

Background: Although sexual activity can cause moderate stress, it can cause natural death in individuals with pre-existing illness. The aim of this study was to identify additional pre-existing health problems, sexual practices, and potential circumstances that may trigger fatal events.

Methods: This medicolegal postmortem, retrospective, and prospective study is based on data of autopsies performed at the Institute of Legal Medicine of the University hospital, Goethe-University, Frankfurt/Main, Germany.

Outcomes: Identification of pre-existing health problems, sexual practices, and potential circumstances than could trigger fatal events.

Results: From 1972 to 2016 (45 years) approximately 38,000 medicolegal autopsies were performed, of which 99 cases of natural death were connected to sexual activities (0.26%). Except for eight women, men represented most cases. The women’s mean age was 45 years (median = 45) and the men’s mean age was 57.2 years (median = 57). Causes of death were coronary heart disease (n = 28), myocardial infarction (n = 21) and reinfarction (n = 17), cerebral hemorrhage (n = 12), rupture of aortic aneurysms (n = 8), cardiomyopathy (n = 8), acute heart failure (n = 2), sudden cardiac arrest (n = 1), myocarditis (n = 1), and a combination of post myocardial infarction and cocaine intoxication (n = 1). Most cases showed increased heart weights and body mass indices. Death occurred mainly during the summer and spring and in the home of the deceased. If sexual partners were identified, 34 men died during or after sexual contact with a female prostitute, two cases at least two female prostitutes. Nine men died during or after sexual intercourse with their wife, in seven cases the sexual partner was a mistress, and in four cases the life partner. Five men died during homosexual contacts. Based on the situation 30 men were found in, death occurred during masturbation. Of the women, five died during intercourse with the life partner, two died during intercourse with a lover or friend, and in one case no information was provided.

Clinical Translation: Natural deaths connected with sexual activity appear to be associated with male sex and pre-existing cardiovascular disorders. Most cases recorded occurred with mistresses, prostitutes, or during masturbation. If death occurs, the spouse or life partner might need psychological support.

Strength and Limitations: To our knowledge, the present study contains the largest collection of postmortem data on natural deaths connected with sexual activities. However, the cases presented were of forensic interest; a larger number of undetected cases especially in the marital or stable relationship sector must be assumed.

Conclusion: Patients should be informed about the circumstances that could trigger the “love death.”

Key Words: Sudden Natural Death; Sexual Activity; Autopsy; Myocardial Infarction; Cerebral Hemorrhage; Circumstances of Death

Are Ideas Getting Harder to Find?

Are Ideas Getting Harder to Find? Nicholas Bloom, Charles I. Jones, John Van Reenen, and Michael Webb. NBER Working Paper No. 23782. www.nber.org/papers/w23782

In many growth models, economic growth arises from people creating ideas, and the long-run growth rate is the product of two terms: the effective number of researchers and their research productivity. We present a wide range of evidence from various industries, products, and firms showing that research effort is rising substantially while research productivity is declining sharply. A good example is Moore's Law. The number of researchers required today to achieve the famous doubling every two years of the density of computer chips is more than 18 times larger than the number required in the early 1970s. Across a broad range of case studies at various levels of (dis)aggregation, we find that ideas — and in particular the exponential growth they imply — are getting harder and harder to find. Exponential growth results from the large increases in research effort that offset its declining productivity.

When Will Negotiation Agents Be Able to Represent Us? The Challenges and Opportunities for Autonomous Negotiators

When Will Negotiation Agents Be Able to Represent Us? The Challenges and Opportunities for Autonomous Negotiators. Tim Baarslag, Michael Kaisers, Enrico H. Gerding, Catholijn M. Jonker, and Jonathan Gratch. Proceedings of the Twenty-Sixth International Joint Conference on Artificial Intelligence. AI and autonomy track. Pages 4684-4690. https://doi.org/10.24963/ijcai.2017/653

Abstract: Computers that negotiate on our behalf hold great promise for the future and will even become indispensable in emerging application domains such as the smart grid and the Internet of Things. Much research has thus been expended to create agents that are able to negotiate in an abundance of circumstances. However, up until now, truly autonomous negotiators have rarely been deployed in real-world applications. This paper sizes up current negotiating agents and explores a number of technological, societal and ethical challenges that autonomous negotiation systems have brought about. The questions we address are: in what sense are these systems autonomous, what has been holding back their further proliferation, and is their spread something we should encourage? We relate the automated negotiation research agenda to dimensions of autonomy and distill three major themes that we believe will propel autonomous negotiation forward: accurate representation, long-term perspective, and user trust. We argue these orthogonal research directions need to be aligned and advanced in unison to sustain tangible progress in the field.

The Role of a "Common Is Moral" Heuristic in the Stability and Change of Moral Norms

The Role of a "Common Is Moral" Heuristic in the Stability and Change of Moral Norms. Lindström B, Jangard S, Selbing I, and Olsson A. J Exp Psychol Gen. 2017, Sep 11, https://doi.org/10.1037/xge0000365

Abstract: Moral norms are fundamental for virtually all social interactions, including cooperation. Moral norms develop and change, but the mechanisms underlying when, and how, such changes occur are not well-described by theories of moral psychology. We tested, and confirmed, the hypothesis that the commonness of an observed behavior consistently influences its moral status, which we refer to as the common is moral (CIM) heuristic. In 9 experiments, we used an experimental model of dynamic social interaction that manipulated the commonness of altruistic and selfish behaviors to examine the change of peoples' moral judgments. We found that both altruistic and selfish behaviors were judged as more moral, and less deserving of punishment, when common than when rare, which could be explained by a classical formal model (social impact theory) of behavioral conformity. Furthermore, judgments of common versus rare behaviors were faster, indicating that they were computationally more efficient. Finally, we used agent-based computer simulations to investigate the endogenous population dynamics predicted to emerge if individuals use the CIM heuristic, and found that the CIM heuristic is sufficient for producing 2 hallmarks of real moral norms; stability and sudden changes. Our results demonstrate that commonness shapes our moral psychology through mechanisms similar to behavioral conformity with wide implications for understanding the stability and change of moral norms.

Our moral balance sheet: Compensating our bad and good deeds

An experimental analysis of moral self-regulation. Erdem Seçilmiş.  Applied Economics Letters, http://dx.doi.org/10.1080/13504851.2017.1374530

ABSTRACT: This article examines the validity of the moral self-regulation hypothesis in a laboratory setting. The experiment is comprised of a public good game preceded or followed by a matrix task. The data show that the recall of an immoral action (cheating in the matrix task) motivates the individual to do morally right thing (contributing to group account) and the recall of a moral action (contributing to group account) motivates the individual to act out self-interest (cheating in the matrix task). Both moral licensing and moral cleansing hypotheses are confirmed by the results of the experiment. Additionally, the findings indicate that the subjects who had been given a chance to cheat ‘at first’ allocated more funds to the group account; and the subjects who had been given a chance to voluntarily contribute ‘at first’ cheated more in the matrix task.

KEYWORDS: Moral self-regulation, moral cleansing, moral licensing, public good game, matrix task
JEL CLASSIFICATION: C90, C91, D03

Homosexual acts may help impair reproduction by rivals --- for example, a male imitating a female

Male reproductive suppression: not a social affair- Z. Valentina Zizzari, Andrea Jessen, and Joris M. Koene. Current Zoology, Volume 63, Issue 5, 1 October 2017, Pages 573–579, https://doi.org/10.1093/cz/zow089

Abstract: In the animal kingdom there are countless strategies via which males optimize their reproductive success when faced with male–male competition. These male strategies typically fall into two main categories: pre- and post-copulatory competition. Within these 2 categories, a set of behaviors, referred to as reproductive suppression, is known to cause inhibition of reproductive physiology and/or reproductive behavior in an otherwise fertile individual. What becomes evident when considering examples of reproductive suppression is that these strategies conventionally encompass reproductive interference strategies that occur between members of a hierarchical social group. However, mechanisms aimed at impairing a competitor’s reproductive output are also present in non-social animals. Yet, current thinking emphasizes the importance of sociality as the primary driving force of reproductive suppression. Therefore, the question arises as to whether there is an actual difference between reproductive suppression strategies in social animals and equivalent pre-copulatory competition strategies in non-social animals. In this perspective paper we explore a broad taxonomic range of species whose individuals do not repeatedly interact with the same individuals in networks and yet, depress the fitness of rivals. Examples like alteration of male reproductive physiology, female mimicry, rival spermatophore destruction, and cementing the rival’s genital region in non-social animals, highlight that male pre-copulatory reproductive suppression and male pre-copulatory competition overlap. Finally, we highlight that a distinction between male reproductive interference in animals with and without a social hierarchy might obscure important similarities and does not help to elucidate why different proximate mechanisms evolved. We therefore emphasize that male reproductive suppression need not be restricted to social animals.

Keywords: indirect sperm transfer, offensive strategies, male pre-copulatory competition, male reproductive suppression, reproductive strategies

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The examples of reproductive interference in Table 1 show that males of non-social animals are able to depress the fitness of a rival, though some behaviors are more harmful than others. For instance, nematodes of the genus Steinernema remove a rival from the reproductive population by killing him (Zenner et al. 2014). Less extreme examples are provided by males of acanthocephalans and some nematodes, whose males have been observed to perform a homosexual rape or place a cement plug on the rivals’ reproductive organ making them incapable of reproducing at least temporarily (Hassanine and Al-Jahdali 2008; Gems and Riddle 2000; Coomans et al. 1988). Although several instances of same-sex sexual behaviour are suspected of being related to male dominance in vertebrates, such behaviours are often attributed to cases of mistaken identity in invertebrates (see review by Bailey and Zuk 2009). Yet, Preston-Mafham (2006) excluded that the homosexual mounting behaviour he observed in the scatophagid fly Hydromyza livens occurred through mistaken identity. Male-male sexual behaviour is a widespread phenomenon that needs certainly a more accurate analysis because there might be species where this represents a strategy to increase male reproductive success, as suggested in the hemipteran Xylocoris maculipennis (Carayon 1974) and in the flour beetle Tribolium castaneum (Levan et al. 2009). Males of X. maculipennis have been reported to traumatically inseminate other males and it has been hypothesized that the injected ejaculate (i.e., seminal fluid plus sperm) mixes up with the ejaculate of the inseminated male (Carayon 1974), although this remains to be demonstrated. So, while it remains unknown whether sperm from both males actually inseminate the female in the latter case, the transferred seminal fluid proteins could also act on the reproductive physiology of the inseminated male, similarly to what was discovered in L. stagnalis (Nakadera et al. 2014). More information is available for T. castaneum. Levan et al. (2009) showed that male homosexual copulatory behaviour may lead to indirect sperm transfer to females through a male intermediary. Although the male’s homosexual partner contributed only 0.5% to each female’s total progeny (Levan et al. 2009), the transfer of a small quantity of non-self sperm might decrease a males’ reproductive success. Alternatively, albeit speculatively, a male might be induced to perform a same-sex encounter by female mimicry of a rival to make the mounting male temporary unable to inseminate a female, which has been described in salamanders (Arnold 1976). In this case the indirect sperm translocation would represent a male counter-adaption. However, this line of thought has not been taken into account and the homosexual copulation was explained by Levan et al. 2009 as a way to discard older sperm, indicating that more work is required to understand this in full.

The Facilitating Effect of Schadenfreude on Creativity

A Route to Insight via Another’s Pain: The Facilitating Effect of Schadenfreude on Creativity. Sara L. Wheeler-Smith, Amir Erez, and Elisabeth Kristin Gilbert. Organizational Behavior, http://proceedings.aom.org/content/2017/1/10464.short

Abstract: The present research investigates whether experiencing schadenfreude – the malicious pleasure felt at another’s misfortune – enhances creativity. Across four studies (n = 632), we found that incidental schadenfreude enhanced individuals’ performance on insight creativity tasks. These effects are present both when schadenfreude is elicited in situ (Experiments 1, 2, and 3) and when participants recall experiencing schadenfreude (Experiment 4), and across multiple behavioral measures of creativity. In Experiment 3, we found that the facilitating effect of schadenfreude could be partially explained by schadenfreude freeing attentional resources. In Experiment 4, we found that the relationship between schadenfreude and creativity was moderated by trait approach motivation, such that the creativity-facilitating effect of schadenfreude was significantly stronger for those low (versus high) in approach motivation. Theoretical contributions to the literatures on schadenfreude and creativity are discussed.

Are We Jumping to Unfounded Conclusions About the Causes of Sexual Offending?

“I Know Correlation Doesn’t Prove Causation, but . . .”: Are We Jumping to Unfounded Conclusions About the Causes of Sexual Offending? Kevin L. Nunes et al. Sexual Abuse: A Journal of Research and Treatment, https://doi.org/10.1177/1079063217729156

Abstract: Identifying causes of sexual offending is the foundation of effective and efficient assessment, intervention, and policy aimed at reducing sexual offending. However, studies vary in methodological rigor and the inferences they support, and there are differences of opinion about the conclusions that can be drawn from ambiguous evidence. To explore how researchers in this area interpret the available empirical evidence, we asked authors of articles published in relevant specialized journals to identify (a) an important factor that may lead to sexual offending, (b) a study providing evidence of a relationship between that factor and sexual offending, and (c) the inferences supported by that study. Many participants seemed to endorse causal interpretations and conclusions that went beyond the methodological rigor of the study they identified. Our findings suggest that some researchers may not be adequately considering methodological issues when making inferences about the causes of sexual offending. Although it is difficult to conduct research in this area and all research designs can provide valuable information, sensitivity to the limits methodology places on inferences is important for the sake of accuracy and integrity, and to stimulate more informative research. We propose that increasing attention to methodology in the research community through better training and standards will advance scientific knowledge about the causes of sexual offending, and improve the effectiveness and efficiency of practice and policy.

Robot Rejection Lowers Self-Esteem

The Bionic Blues: Robot Rejection Lowers Self-Esteem. Kyle Nash et al. Computers in Human Behavior, https://doi.org/10.1016/j.chb.2017.09.018

Highlights
•    Examines influence of robot rejection and acceptance on human self-esteem
•    Robot rejection decreased self-esteem, while acceptance had no effect on self-esteem
•    Demonstrates that robot rejection can cause psychological harm

Abstract: Humans can fulfill their social needs with fictional and non-living entities that act as social surrogates. Though recent research demonstrates that social surrogates have beneficial effects on the individual similar to human relations, it is unclear whether surrogates can also cause similar harm to humans through social rejection. After playing a game of connect-4 with a human-sized robot, participants were informed by the robot that it would like to see them again (acceptance), would not like to see them again (rejection), or told nothing regarding a future interaction (control). Data revealed that social rejection from a robot significantly reduced self-esteem relative to receiving no-feedback and social acceptance (the latter two did not differ from each other). However, robot rejection had no impact on negative attitudes and opposition to the use of robots in everyday life. These findings demonstrate that social surrogates have the potential to cause psychological harm.

KEYWORDS: Robots; Self-Esteem; Social Rejection; Social Acceptance; Social Surrogacy

Placebo can enhance creativity

Placebo can enhance creativity. Liron Rozenkrantz, Avraham E. Mayo, Tomer Ilan, Yuval Hart, Lior Noy, and Uri Alon. PLOS One, https://doi.org/10.1371/journal.pone.0182466

Abstract

Background: The placebo effect is usually studied in clinical settings for decreasing negative symptoms such as pain, depression and anxiety. There is interest in exploring the placebo effect also outside the clinic, for enhancing positive aspects of performance or cognition. Several studies indicate that placebo can enhance cognitive abilities including memory, implicit learning and general knowledge. Here, we ask whether placebo can enhance creativity, an important aspect of human cognition.

Methods: Subjects were randomly assigned to a control group who smelled and rated an odorant (n = 45), and a placebo group who were treated identically but were also told that the odorant increases creativity and reduces inhibitions (n = 45). Subjects completed a recently developed automated test for creativity, the creative foraging game (CFG), and a randomly chosen subset (n = 57) also completed two manual standardized creativity tests, the alternate uses test (AUT) and the Torrance test (TTCT). In all three tests, participants were asked to create as many original solutions and were scored for originality, flexibility and fluency.

Results: The placebo group showed higher originality than the control group both in the CFG ... and in the AUT ..., but not in the Torrance test. The placebo group also found more shapes outside of the standard categories found by a set of 100 CFG players in a previous study, a feature termed out-of-the-boxness...

Conclusions: The findings indicate that placebo can enhance the originality aspect of creativity. This strengthens the view that placebo can be used not only to reduce negative clinical symptoms, but also to enhance positive aspects of cognition. Furthermore, we find that the impact of placebo on creativity can be tested by CFG, which can quantify multiple aspects of creative search without need for manual coding. This approach opens the way to explore the behavioral and neural mechanisms by which placebo might amplify creativity.


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What are the psychological mechanisms that allow placebo to increase the originality aspect of creativity? There are at least two possibilities. The first mechanism is based on extensive research by Amabile and Deci and Ryan[25, 33, 34, 51–53], that suggests that creativity is modulated by motivation. Extrinsic motivators were shown to be mostly detrimental to creativity, whereas intrinsic motivation is conductive to and strongly associated with creative abilities[25, 32, 33, 51, 54–56]. A key factor in intrinsic motivation, according to self-determination theory [34, 35], is the belief in one’s competence. For example subjects who practiced encouraging statements (related to self-confidence, releasing anxieties etc.) and omitted self-incapacitating statements showed improved creativity scores[57]. This is in line with the verbal suggestion in our study that the odorant increases creativity, which may have made subjects feel more competent. Additional components of intrinsic motivation, such as social relatedness, may also have been increased by experimenter effects in the present study, by the experimenter’s perceived interest in the effects of the odorant.

A second possible psychological mechanism of placebo, as suggested by Weger et al., is to weaken inhibitory mechanisms that normally impair performance[24]. Creativity was found to increase in several studies that tested conditions with reduced inhibitions, such as alcohol consumption[36–38]. Wieth and Zacks showed that creative problem solving was improved when participants were tested during non-optimal times of day, and suggested that this is due to reduced inhibitory control[39]. Moreover, studies which used non-invasive brain stimulation by means of transcranial direct current stimulation (tDCS) found enhanced creativity, and attributed it to reduced inhibitions and diminished cognitive control[49, 58]. This effect was suggested to be in line with paradoxical functional facilitation theory, which attributes improved performance of damaged nervous system to release from inhibition[59]. Informal notions in improvisation theatre suggest that the inner critic is a source of inhibition that limits creativity[60]. The verbal suggestion made in our study that the odorant increases creativity and reduces inhibitions may thus work through a reduced-inhibition mechanism and/or by increasing belief in one’s competence. Future work can test which of these mechanisms is at play.

Brain indices of disagreement with one’s social values predict EU referendum voting behavior

Brain indices of disagreement with one’s social values predict EU referendum voting behavior. Giulia Galli, Miroslav Sirota, Maurizio Materassi, Francesca Zaninotto, and Philip Terry. Social Cognitive and Affective Neuroscience, nsx105, https://doi.org/10.1093/scan/nsx105

Abstract: Pre-electoral surveys typically attempt, and sometimes fail, to predict voting behavior on the basis of explicit measures of agreement or disagreement with a candidate or political position. Here, we assessed whether a specific brain signature of disagreement with one’s social values, the event-related potential component N400, could be predictive of voting behavior. We examined this possibility in the context of the EU referendum in the United Kingdom. In the five weeks preceding the referendum, we recorded the N400 while participants with different vote intentions expressed their agreement or disagreement with pro- and against-EU statements. We showed that the N400 responded to statements incongruent with one’s view regarding the EU. Crucially, this effect predicted actual voting behavior in decided as well as undecided voters. The N400 was a better predictor of voting choice than an explicit index of preference based on the behavioral responses. Our findings demonstrate that well-defined patterns of brain activity can forecast future voting behavior.

Keywords: Event-related potentials, N400, voting behaviour, social beliefs

Differences in home advantage between sports

Differences in home advantage between sports. Marshall B. Jones. Psychology of Sport and Exercise, https://doi.org/10.1016/j.psychsport.2017.07.012

Highlights
•    Home advantage is not associated with the number of positions.
•    Home advantage is strongly associated with distance covered by the entire team.
•    Especially so in relation to the number of positions over the course of a game.

"The most compelling evidence that the home effect is minor or nonexistent in individual sports is embedded, oddly enough, in team sports. Many team sports include passages that can be described as “individual efforts.” Free throws in basketball are a good example. When a player attempts a free throw, he or she plays as an individual; teammates and opposing players are sidelined or otherwise idled. In samples from the NBA numbering 95,494 (home) and 90,875 (away) Jones (2013) reported a difference in conversion rates of 0.2%, 75.2% (home) to 75.0% (away), not significant at the .05 level (critical ratio = 0.71, p > .4), despite the enormous sample sizes and despite, too, the efforts of hometown fans behind the backboard to distract the away shooters."