Prospect theory is a descriptive model of individual decision-making under risk (Kahneman and Tversky 1979). The central tenet of prospect theory posits that the risk orientation of decision-makers is affected by the gains vs. losses domains in which they are situated. Individuals are predicted to be risk-averse in the domain of gains and risk seeking in the domain of losses. Although prospect theory made significant contributions to decision theory, it has important limitations. Foremost, as noted by Levy (1997a), prospect theory is not a complete theory of decision-making. Like rational choice theory, prospect theory attempts to explain choices or outcomes, not the processes through which those choices come about (Abelson and Levi 1985, 235). In response to this limitation of prospect theory, this dissertation intends to address the following set of puzzles: Do gains vs. losses domains affect the decision processes in foreign policy decision making? If so, in what way will decision strategies change? That is, what strategies are most likely to be employed when the decision maker is in the domain of gains? And, in contrast, what strategies are the most likely to be utilized when the decision maker is in the domain of losses? To address these questions, I develop and extend prospect theory to account for the impact of gains vs. losses domains on decision strategy selections by decision makers under risk. A set of testable hypotheses are then derived. To render a robust test of these hypotheses, I employ a cross-national experimental research design, utilizing American subjects first and then replicating the same experiment with subjects in mainland China. In terms of research instrument, I utilize the computerized decision process tracer – the Decision Board Platform. Specifically, the “moves” of decision makers are recorded by the Decision Board and then used to identify choices and to infer specific decision strategies. Statistical analysis of the experimental results demonstrates support for the major hypotheses. A decision maker in the domain of gains is more likely to employ a holistic, alternative-based, compensatory, and maximizing decision strategy than is a decision maker in the domain of losses.

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The notion that corporations would voluntarily devote resources to serve non-shareholder interests seems to contradict the purpose of commerce. Yet, corporate social responsibility ranks among the most prominent aspects of contemporary capitalism, reaching – in the words of one author – a point of nearly universal adoption among businesses. Over four decades of empirical testing has provided no incontrovertible evidence to support the belief that businesses benefit, even in the long run, from responsible behaviour. Peculiarly, then, it appears that corporations are defying the logic of competitive markets by investing in CSR en masse without an established business case for doing so. Inspiring the work is a research question rooted in the observation of a counter-intuitive: if not profit, in every circumstance, what is turning the attention of nearly every major corporation away from their bottom line and towards social interests? The thesis explores what other factors may lay behind the business community’s curious adoption of CSR, including a new hypothesis that corporate leaders may be diverging from the normative ideal of rational choice and following boundedly-rational patterns of behaviour. It argues that CSR is a form of risk-averse corporate behaviour from a private sector that has seen tremendous growth and gain since the end of the Second World War.

Denna studie undersöker hur premiepensionssparare tar beslut och vad som ligger till grund för valet att vara aktiv eller passiv i syfte att skapa ökad förståelse och underlätta utformningen av ett ökat beslutsstöd för premiepensionsspararna. Tidigare studier har visat att premiepensionssparare som är kontinuerligt aktiva i sin placering är de som får högst avkastning på sin premiepension, ändå är en stor andel av svenska premiepensionssparare passiva. Studien undersöker några av de faktorer och tankesätt som ligger till grund för att en stor andel av svenska premiepensionssparare inte tar beslut som förväntas enligt teoretiska beslutsteorier som förutsätter rationalitet. Som verktyg för att undersöka och öka förståelsen för premiepensionssparares beslutsfattande används prospect theory som är en alternativ teori till den klassiska ekonomiska teorin om ekonomiskt beslutsfattande. Studien grundar sig i problematiken som uppstår när samhällsutvecklingen allt mer skapar större informationsflöde samtidigt som allt mer beslut och risk läggs på individen. Mängden information ökar samtidigt som det blir allt svårare att filtrera vilken information som är viktig. Genom enkätundersökning visar studien att informationsöverflöd och kunskapsbrist är de främsta orsakerna till valet av passivitet. Studien visar också att en högre kvalitet på den information som ges om fonder och premiepensionsystemet skulle kunna få fler premiepensionssparare att bli aktiva. Studien ger även indikationer om att svenska premiepensionssparare tar beslut enligt prospect theory.

Rich-prospect browsers aid research tasks by providing a meaningful representation of every item in a collection and tools to manipulate the display (Ruecker 2003). A number of rich-prospect browsers have been developed for exploring collections of items that can be represented visually. Several disciplines have recently shown interest in interfaces that attempt to leverage metadata in order to offer superior browsing environments. This thesis examines the potential of applying rich-prospect browsing principles to the exploration of text collections by taking advantage of the metadata-rich text collections that are available through the World Wide Web. It also introduces and assesses the Texttiles browser, an implementation of rich-prospect browsing designed specifically for exploring text collections. Fourteen students participated in a qualitative usability study that evaluated the browser through two different testing approaches in a variety of research tasks: Human-Computer Pragmatics (Anvik 2007) and Affordance Strength Model (Ruecker 2006b). Participants found the Texttiles browser to be a useful tool to explore text collections, understood how rich prospect browsing principles help explore collection, and were satisfied with the browser’s implementation of those principles. Participants also suggested some improvements to the browsers. The results of this study uncovered two new ideas regarding the importance of order and direct manipulation of the data. This thesis reinforces the rich-prospect browsing principles of meaningful representation, display manipulation, and prospect, and provides directions for future research.

Master-Arbeit Univ. St. Gallen, 2007.

Orientador: Mário Augusto Bertella / Banca: Gilberto Tadeu Lima / Banca: Elton Eustaquio Casagrande / Resumo: As Finanças Comportamentais, com base em estudos empíricos, procuram demonstrar que os investidores nem sempre se mantêm racionais ao tomarem decisões que envolvem riscos, conforme argumentava a Teoria Neoclássica de Finanças. Este trabalho tem como objetivo contextualizar o recente campo de estudo e replicar a investigação empírica do artigo seminal de Kahneman e Tversky (1979) que aborda a Teoria do Prospecto e que constitui a base de Finanças Comportamentais. Simultaneamente, serão comparados os resultados da pesquisa com os de Kahneman e Tversky (1979) com os obtidos nesse estudo. Os resultados encontrados nesta população específica mostram similaridade, e que mesmo com populações e períodos diferentes, os indivíduos tendem a se comportar de maneira, na maioria das vezes, contraria ao que argumentava a Teoria Neoclássica de Finanças / Abstract: Basing on empirical studies, Behavioral Finance seek to demonstrate that investors not always have a rational posture when it comes to making decisions that might involve some sort of risk, according to Neoclassical Finance Theory. This paper aims to contextualize recent studies and respond to the empirical investigation on Kahneman and Tversky's (1979) seminal article, which approaches The Prospect Theory and constitutes the basis for Behavioral Finance. The results of the investigation will simultaneously be compared to those of Kahneman and Tversky (1979). The results, which have been specifically found in this population, show that the results of the samples are similar, and even in different populations and different periods, individuals tend to behave, more often than not, just as opposed to the arguments of the Neoclassical Finance Theory / Mestre

Abstract The behavior of investors is often at odds with the assumptions of traditional finance theory. Research conducted over the past half-century or so abounds with examples in which the central axioms of traditional theory are systematically violated. One of the most well-established behavioral patterns in this context is the disproportionate tendency of investors to sell stocks that have appreciated in value since purchase (‘winners’) rather than stocks that have declined in value (‘losers’); this phenomenon is known as the disposition effect and most commonly attributed to Kahneman and Tversky’s (1979) prospect theory. The overall aim of this doctoral thesis is to investigate the robustness of this phenomenon, its underlying mechanisms, and its potential implications for individual investors. The four independent but related essays of this thesis were designed to answer the following research questions: (1) Does the disposition effect ‘survive’ bear markets, in which investors may not be able to realize gains even if they wish to do so? (2) Is there any supporting evidence for prospect theory-based explanation of the disposition effect in the form of other observed behavior consistent with the theory? (3) Is prospect theory the most feasible explanation for the disposition effect? (4) What are the implications of the disposition effect from the point of view of individual investors? Using comprehensive data covering virtually all trades executed in the Finnish stock market during 1995–2003, this thesis demonstrates the following: (1) As robust as the disposition effect appears to be in light of previous studies, the phenomenon is only partially detected in bear markets. (2) The relationship between prospect theoretic preferences and investor behavior is not easily generalizable to other behavioral patterns besides the disposition effect. (3) In fact, even the relationship between prospect theory and the disposition effect is not as strong as is generally believed. Our results instead suggest an explanation based on escalation of commitment, according to which the disposition effect is caused above all by self-justificatory concerns. (4) Finally, although the disposition effect is generally inconsistent with economic rationality, it does not appear to be detrimental to investment performance.

Since the end of the 80s there has been a great and unprecedented proliferation of democracy over the African continent. The first two chapters of the essay are dealing with the analysis of its cause and course. In connection with the first part of the essay the third and longest chapter ensues by the analysis of the prospects of this process, with regard to the initial conditions and actual processes on the continent.

This dissertation is composed of two manuscripts in Production Economics and two manuscripts in International Agricultural Development. The first two manuscripts focus on production economics, and both are an exploration of nitrogen use and its impact on continuous corn production and profitability in Colorado. The first manuscript titled "Switching Regression Stochastic Plateau Production Functions––A Comparison of Alternative Specifications" proposes an alternative approach for estimating crop yield response functions using a frequentist approach. The second manuscript titled "Profitability Effects of Different Tillage Systems in Continuous Corn Rotations" explores the interaction between different tillage systems and nitrogen fertilization in irrigated continuous corn production in northeastern Colorado. We find that strip tillage is better suited for continuous corn production under the agro-climatic conditions in northeastern Colorado. The third and fourth manuscripts focus on international agricultural development and analyze the role of factors that influence the agricultural development of small-holder farmers in Ecuador, namely, markets, food value chains, risk preferences, and risk perceptions. The third manuscript titled "Does the Use of Specialty Varieties and Post-Harvest Practices Benefit Farmers? Cocoa Value Chains in Ecuador" analyzes the impact of the use of specialty cocoa varieties on small-scale farmers' income. It finds that the use of specialty cocoa varieties has a low impact on small-scale cocoa producers' income, and that post-harvest practices may lead to substantial price responses irrespective of the type of cocoa grown. Finally, the fourth manuscript titled "Linking Risk Preferences and Risk Perceptions of Climate Change Using Prospect Theory" explores how farmers' risk preferences correlate with their perceptions of climate risk. It finds that farmers that behave in accordance to the assumptions of prospect theory are more likely to perceive greater risks from climate change, that is, they are more likely to perceive the risks associated with climate change as being more threatening at a personal level. Since risk perception is a necessary prerequisite for adaptation, the results presented in this manuscript, have important policy implications for process of adoption of new technologies aimed at mitigating effects of climate change. / Doctor of Philosophy / This dissertation focuses on Production Economics and International Agricultural Development. The first two manuscripts focus on production economics, and both are an exploration of nitrogen use and its impact on continuous corn production and profitability in Colorado. The first manuscript proposes an alternative approach for estimating crop yield response functions to a single input. The second manuscript explores the interaction between different tillage practices and nitrogen fertilization in irrigated continuous corn production. The third and fourth manuscripts focus on international agricultural development, and they analyze the role of different factors that influence the agricultural development of small-holder farmers in Ecuador. The third manuscript analyzes cocoa markets in Ecuador. It finds that the use of gourmet cocoa varieties has a low impact on small-scale cocoa producers' income, and that post-harvest practices may lead to substantial benefits. Finally, the fourth manuscript explores farmers' risk behavior. It finds that farmers that behave in accordance to the assumptions of prospect theory, are more likely to show a greater risk perception of climate change, that is, they are more likely to perceive the risks associated with climate change as being more threatening at a personal level. Since risk perception is a necessary prerequisite for adaptation, the results presented in this manuscript, have important policy implications for the adoption process of new technologies aimed at mitigating effects of climate change.