Transition and Opportunity

This book is open access under a CC BY-NC-ND 4.0 license. Multinational corporations (MNCs) have long played a crucial role in the Chinese economy. This role is one that is set to continue in the post-pandemic era as China works to transit to a high-quality growth model that is more sustainable and innovation-driven. With global experience and front-line involvement in some of the most pressing economic, technological, and environmental issues of our day, leading figures in MNCs and chambers of commerce are well placed to share insights that could potentially contribute to policymaking and development strategies so that everyone can “make the most” of China’s future. This collection of essay aims to share these invaluable insights with a wider audience, offering balanced and diverse perspectives from companies and advocacy groups working on a range of issues related to China’s domestic development, international economic cooperation, and China-US competition. These insights are useful not only for the wider business community, but also for academics, policymakers, students, and anyone trying to deepen their understanding of this exciting period of “transition and opportunity,” and make the most of China’s bright future

Investment Games

Popular zero-commission stock trading apps like Robinhood innovate in user-experience design, featuring “gamification” practices—flashy graphics, leaderboards, and the like—that make it attractive, easy, and fun to trade stocks. Regulators are increasingly scrutinizing gamification and other digital engagement practices, with efforts underway at the SEC to adopt rules in broker-dealer and investment-advisor regulation. This attention reflects considerable skepticism about gamification in securities markets. At best, these practices encourage motivation and engagement, and democratize access to financial markets. But at worst, these practices encourage people to trade habitually and unreflectively, and more than they might want. This can lead to undesirable market-wide effects, like distorting the process by which markets allocate investment capital to firms and projects that will grow the real economy, as well as socially wasteful (and individually harmful) excessive trading. And given that interventions in retail investor choice have significant implications for market quality and wealth inequality, regulatory responses here are a high stakes matter for society broadly. Calls to regulate gamification highlight a tension at the core of securities markets. Securities law has largely ceded the field of market structure to the interests of sophisticated financial intermediaries in producing liquidity and price discovery. By permitting gamification practices that encourage active trading for the primary benefit of financial intermediaries, securities law subordinates its investor protection function to encourage wasteful investment in achieving eversmaller improvements in liquidity and price discovery. Regulatory intervention would be socially desirable, I argue, not just given what we know about retail trader behavior and its effects on personal finance and markets—but because it is an opportunity for securities law to recalibrate away from an all-out arms race in arbitrage. This Article takes up the problem of gamification and related digital engagement practices. It considers how gamification is the nearly inevitable consequence of the rise of retail investors who trade without superior information about a stock’s fundamental value, competition on brokerage commissions, and a fragmented market structure. Yet calls for regulatory interventions often elide important distinctions between how securities law should treat active traders who prefer risk, and those with preferences distorted by gamification. This Article explains how we got here; examines the social-welfare case for regulating gamification and related digital engagement practices; offers a typology of techniques that securities regulators can adopt in response; and assesses these interventions against existing securities law doctrine and policy. This Article also considers how the securities laws’ tenuous relationship with innovative stock-market technology shapes how retail investors engage with financial markets

TOWARDS AN INTEGRATIVE THEORETICAL FRAMEWORK OF INTERACTIVE MACHINE LEARNING SYSTEMS

Interactive machine learning (IML) is a learning process in which a user interacts with a system to iteratively define and optimise a model. Although recent years have illustrated the proliferation of IML systems in the fields of Human-Computer Interaction (HCI), Information Systems (IS), and Computer Science (CS), current research results are scattered leading to a lack of integration of existing work on IML. Furthermore, due to diverging functionalities and purposes IML systems can refer to, an uncertainty exists regarding the underlying distinct capabilities that constitute this class of systems. By reviewing extensive IML literature, this paper suggests an integrative theoretical framework for IML systems to address these current impediments. Reviewing 2,879 studies in leading journals and conferences during the years 1966-2018, we found an extensive range of applications areas that have implemented IML systems and the necessity to standardise the evaluation of those systems. Our framework offers an essential step to provide a theoretical foundation to integrate concepts and findings across different fields of research. The main contribution of this paper is organising and structuring the body of knowledge in IML for the advancement of the field. Furthermore, we suggest three opportunities for future IML research. From a practical point of view, our integrative theoretical framework can serve as a reference guide to inform the design and implementation of IML systems

Transition and Opportunity

This book is open access under a CC BY-NC-ND 4.0 license. Multinational corporations (MNCs) have long played a crucial role in the Chinese economy. This role is one that is set to continue in the post-pandemic era as China works to transit to a high-quality growth model that is more sustainable and innovation-driven. With global experience and front-line involvement in some of the most pressing economic, technological, and environmental issues of our day, leading figures in MNCs and chambers of commerce are well placed to share insights that could potentially contribute to policymaking and development strategies so that everyone can “make the most” of China’s future. This collection of essay aims to share these invaluable insights with a wider audience, offering balanced and diverse perspectives from companies and advocacy groups working on a range of issues related to China’s domestic development, international economic cooperation, and China-US competition. These insights are useful not only for the wider business community, but also for academics, policymakers, students, and anyone trying to deepen their understanding of this exciting period of “transition and opportunity,” and make the most of China’s bright future

Cognitive finance: Behavioural strategies of spending, saving, and investing.

Research in economics is increasingly open to empirical results. The advances in behavioural approaches are expanded here by applying cognitive methods to financial questions. The field of "cognitive finance" is approached by the exploration of decision strategies in the financial settings of spending, saving, and investing. Individual strategies in these different domains are searched for and elaborated to derive explanations for observed irregularities in financial decision making. Strong context-dependency and adaptive learning form the basis for this cognition-based approach to finance. Experiments, ratings, and real world data analysis are carried out in specific financial settings, combining different research methods to improve the understanding of natural financial behaviour. People use various strategies in the domains of spending, saving, and investing. Specific spending profiles can be elaborated for a better understanding of individual spending differences. It was found that people differ along four dimensions of spending, which can be labelled: General Leisure, Regular Maintenance, Risk Orientation, and Future Orientation. Saving behaviour is strongly dependent on how people mentally structure their finance and on their self-control attitude towards decision space restrictions, environmental cues, and contingency structures. Investment strategies depend on how companies, in which investments are placed, are evaluated on factors such as Honesty, Prestige, Innovation, and Power. Further on, different information integration strategies can be learned in decision situations with direct feedback. The mapping of cognitive processes in financial decision making is discussed and adaptive learning mechanisms are proposed for the observed behavioural differences. The construal of a "financial personality" is proposed in accordance with other dimensions of personality measures, to better acknowledge and predict variations in financial behaviour. This perspective enriches economic theories and provides a useful ground for improving individual financial services

Engineering Adaptive Interfaces – Enhancement of Comprehension and Decision-Making

The role of information systems is growing steadily and permeating more and more all levels of our society. Meanwhile, information systems have to support different user groups in various decision situations simultaneously. Hence, the existing design approach to creat- ing a unified user interface is reaching its limits. This work examines adaptive information system design by investigating user-adaptive information visualization and situation-aware nudging. An exploratory eye-tracking study investigates participants’ perception and comprehension of different financial visualizations and shows that none of them can be preferred across the board. Moreover, it reveals expertise knowledge as the research direction for visualization recommendations. Afterward, two empirical studies are conducted to relate different visualizations to participants’ domain-specific knowledge. The first study, conducted with a broad sample of the population, shows that financial and graphical literacy increases participants’ financial decision-making competency with certain visualizations. The second study, conducted with a more specific sample and an additional visualization, underlines a large part of the first study’s results. Additionally, it identifies statistical literacy as an increasing factor in financial decision-making. Both studies are demonstrating that different visualizations cause different cognitive loads despite the same amount of information. After all, the results are used to derive visualization recommendations based on domain-specific knowledge and cognitive load. This work also investigates the situation-aware effectiveness of nudging with the example of decision inertia. In a preliminary study, an experimental task is systematically transferred to different situational contexts by observing situational user characteristics. The identified contexts are examined in a subsequent large-scale empirical study with different nudges to reduce decision inertia. The results show gender-specific differences in decision inertia across the context. Hence, information system design has to adapt to gender and situational user characteristics to support users in their decision-making. Moreover, the study delivers empirical evidence for the contextual effectiveness of nudg- ing. Future nudging research has to incorporate situational user characteristics to provide effective nudges in different situational contexts. Especially, further fundamental research is needed to understand the situational effectiveness of nudging. The study identifies in- dividual situational preferences as one promising research stream