Negotiation research usually distinguishes between integrative and distributive outcomes. Integrative outcomes satisfy the negotiation parties' most important interests (by trading off less important for more important issues). In contrast, distributive outcomes require negotiators to give up their most important interests (as they make concessions on both less and more important issues). Integrative outcomes are more beneficial, but do they offer greater satisfaction? In this research, we hypothesized that satisfaction with integrative versus distributive outcomes depends on whether people negotiate interest-based or value-based issues. Three experiments consistently revealed that people in interest-based negotiations were more satisfied with integrative outcomes, whereas those in value-based negotiations tended to be more satisfied with distributive outcomes.
Background: The principles of biomedical ethics – autonomy, non-maleficence, beneficence, and justice – are of paradigmatic importance for framing ethical problems in medicine and for teaching ethics to medical students and professionals. In order to underline this significance, Tom L. Beauchamp and James F. Childress base the principles in the common morality, i.e. they claim that the principles represent basic moral values shared by all persons committed to morality and are thus grounded in human moral psychology. We empirically investigated the relationship of the principles to other moral and non-moral values that provide orientations in medicine. By way of comparison, we performed a similar analysis for the business & finance domain.
Methods: We evaluated the perceived degree of "morality" of 14 values relevant to medicine (n1 = 317, students and professionals) and 14 values relevant to business & finance (n2 = 247, students and professionals). Ratings were made along four dimensions intended to characterize different aspects of morality.
Results: We found that compared to other values, the principles-related values received lower ratings across several dimensions that characterize morality. By interpreting our finding using a clustering and a network analysis approach, we suggest that the principles can be understood as "bridge values" that are connected both to moral and non-moral aspects of ethical dilemmas in medicine. We also found that the social domain (medicine vs. business & finance) influences the degree of perceived morality of values.
Conclusions: Our results are in conflict with the common morality hypothesis of Beauchamp and Childress, which would imply domain-independent high morality ratings of the principles. Our findings support the suggestions by other scholars that the principles of biomedical ethics serve primarily as instruments in deliberated justifications, but lack grounding in a universal "common morality". We propose that the specific manner in which the principles are taught and discussed in medicine – namely by referring to conflicts requiring a balancing of principles – may partly explain why the degree of perceived "morality" of the principles is lower compared to other moral values.
We characterize when a convex risk measure associated to a law-invariant acceptance set in L$^∞$ can be extended to L$^p$, 1≤p<∞, preserving finiteness and continuity. This problem is strongly connected to the statistical robustness of the corresponding risk measures. Special attention is paid to concrete examples including risk measures based on expected utility, max-correlation risk measures, and distortion risk measures.
This study provides experimental evidence, using a large sample of 2894 individuals recruited via business media websites, about the impact of demographic attributes within entrepreneurial teams on funding decisions by external capital providers. In previous work the role of diversity with regard to personal characteristics within entrepreneurial teams, such as education, gender and nationality was not clear. Specifically, we focus on task-oriented (e.g., education, experience) and relations-oriented (e.g., age, nationality) dimensions of diversity. The participants of our experiment had to decide on providing early-stage funding to a team of start-up managers whereas the diversity of these teams varied across treatment groups. We find that task-oriented diversity is positively and significantly related to the willingness of respondents to provide capital. Interestingly, the same applies for relations-oriented diversity. This suggests social capital of an entrepreneurial team matters to a greater extent to funding decisions of external investors than the behavioral integration of the team's human capital. Entrepreneurial teams must therefore carefully balance the social costs of non-task-related diversity and the access to financial resources.
Puts and calls on S&P500 futures are bought and sold for various purposes including speculation, hedging and portfolio insurance. We investigate the rate of return from buying or selling these options from the start of options trading in 1985 until 2010. These rates of return are variable and depend upon the trading horizons, the level of the VIX volatility index, whether the options are in or out or near the money and whether the market is rallying or in a crash mode. We specifically study the 2007-9 stock market crash period and various bullish market periods. Our results show that while selling out-of-the-money options is generally profitable, it sometimes generates steep losses. Hence, speculators trying to take advantage of mispriced options are wise to utilize accurate prediction models, devise variable types of hedged strategies and be well capitalized to weather market storms and have strategies in place to deal with
them.
In Arrow’s seminal analysis of optimal risk bearing in which he introduced contingent claim securities, he assumed preferences were representable by a state independent Expected Utility function. Although the classic contingent claim setting assumes agents choose over contingent consumption vectors conditioned on a fixed set of probabilities, later work on information economics suggested that allowing probabilities to change across contingent claim spaces could be an interesting extension. However the set of axioms that are necessary and sufficient for the existence of an Expected Utility representation for the classic contingent claim space with a fixed set of probabilities does not ensure that this form utility extends across multiple contingent claim spaces. In this paper, we derive a set of axioms on preferences which are necessary and sufficient for the existence of an Expected Utility representation when probabilities change. We also consider the incremental axioms which are necessary and sufficient for Expected Utility preferences to extend to the classic lottery setting of von Neumann and Morgenstern, where agents choose not only over consumption vectors but also over probabilities vectors.
We propose a method to compute equilibria in dynamic models with several continuous state variables and occasionally binding constraints. These constraints induce non-differentiabilities in policy functions. We develop an interpolation technique that addresses this problem directly: It locates the non-differentiabilities and adds interpolation nodes there. To handle this flexible grid, it uses Delaunay interpolation, a simplicial interpolation technique. Hence, we call this method Adaptive Simplicial Interpolation (ASI). We embed ASI into a time iteration algorithm to compute recursive equilibria in an infinite horizon endowment economy where heterogeneous agents trade in a bond and a stock subject to various trading constraints. We show that this method computes equilibria accurately and outperforms other grid schemes by far.
Credit Default Swaps (CDS) spreads should reflect default risk of the underlying corporate debt. Actually, it has been recognized that CDS spread time series did not anticipate but only followed the increasing risk of default before the financial crisis. In principle, the network of correlations among CDS spread time series could at least display some form of structural change to be used as an early warning of systemic risk. Here we study a set of 176 CDS time series of financial institutions from 2002 to 2011. Networks are constructed in various ways, some of which display structural change at the onset of the credit crisis of 2008, but never before. By taking these networks as a proxy of interdependencies among financial institutions, we run stress-test based on Group DebtRank. Systemic risk before 2008 increases only when incorporating a macroeconomic indicator reflecting the potential losses of financial assets associated with house prices in the US. This approach indicates a promising way to detect systemic instabilities.
