Essays on Financial Decision Making

Individuals make financial decisions daily, yet the literature on the mechanisms that drive financial decisions is limited. This dissertation looks to examine how physical characteristics, and personality subconsciously influence financial decision making by conducting an experiment. Furthermore, this dissertation examines biased decision making in the betting market by using data from covers.com. First, this dissertation finds that the cognitive impairments associated with having a higher body mass index is positively related to poor financial decision making and being more likely to commit the present bias, and distorting probabilities. Second, this dissertation finds that business students are more apt to fit the prototypical psychopath compared to non-business students. The higher scores of psychopathy in business students help explain why they are more likely to deceive others. Finally, this dissertation finds that bettors make biased decisions and are more likely to bet on the favorite team and the over. Furthermore, bettors are biased by betting against line movement and preferring teams with the hot hand. The results show that these biased decisions cause bettors to lose more money as the sportsbook takes advantage of the biased decisions

Deconstructing the Corporate Psychopath: An Examination of Deceptive Behavior

This paper examines whether business students deceive others more often than non-business students. A cheap talk experiment and an ethics questionnaire are employed to examine the subject’s behavior. Fundamental differences, such as psychopathic personality, are used to examine their role in deceptive and unethical behavior. The results show that business students deceive others for personal gain more often than non-business students when there is the most to gain; however, business students find deception committed by others as unethical. Business students exhibit more psychopathic tendencies compared to non-business students, including being more likely to fit the prototypical psychopath profile. This fundamental difference in psychopathy can help explain why individuals deceive others and behave unethically. These results have important implications for the business industry and the design of policies. Thus, this study endeavors to advance the literature on fundamental distinctions between those who work in high levels of organizations and how this fundamental difference impacts decision making

Are US-Dollar-Hedged-ETF Investors Aggressive on Exchange Rates? A Panel VAR Approach

Exchange traded funds (ETFs) are a multi-trillion dollar market that epitomizes financialization due to its recent growth. This study examines the behavior of U.S. listed currency hedged ETF investors towards changes in the underlying benchmark and foreign exchange rate from July 2011 to November 2015 using a panel VAR approach. We find that investors are able to anticipate changes in future exchange rates and invest in currency hedged ETFs prior to changes. Granger-causality tests confirm that these investors proactively trade before large real exchange rate movements. These results suggest that the use of financial instruments such as ETFs to hedge against exchange rate volatility may have itself become a source of volatility, which have implications for the further financialization of the ETF industry

Expression and Putative Function of Innate Immunity Genes under in situ Conditions in the Symbiotic Hydrothermal Vent Tubeworm Ridgeia piscesae

The relationships between hydrothermal vent tubeworms and sulfide-oxidizing bacteria have served as model associations for understanding chemoautotrophy and endosymbiosis. Numerous studies have focused on the physiological and biochemical adaptations that enable these symbioses to sustain some of the highest recorded carbon fixation rates ever measured. However, far fewer studies have explored the molecular mechanisms underlying the regulation of host and symbiont interactions, specifically those mediated by the innate immune system of the host. To that end, we conducted a series of studies where we maintained the tubeworm, Ridgeia piscesae, in high-pressure aquaria and examined global and quantitative changes in gene expression via high-throughput transcriptomics and quantitative real-time PCR (qPCR). We analyzed over 32,000 full-length expressed sequence tags as well as 26 Mb of transcript sequences from the trophosome (the organ that houses the endosymbiotic bacteria) and the plume (the gas exchange organ in contact with the free-living microbial community). R. piscesae maintained under conditions that promote chemoautotrophy expressed a number of putative cell signaling and innate immunity genes, including pattern recognition receptors (PRRs), often associated with recognizing microbe-associated molecular patterns (MAMPs). Eighteen genes involved with innate immunity, cell signaling, cell stress and metabolite exchange were further analyzed using qPCR. PRRs, including five peptidoglycan recognition proteins and a Toll-like receptor, were expressed significantly higher in the trophosome compared to the plume. Although PRRs are often associated with mediating host responses to infection by pathogens, the differences in expression between the plume and trophosome also implicate similar mechanisms of microbial recognition in interactions between the host and symbiont. We posit that regulation of this association involves a molecular “dialogue” between the partners that includes interactions between the host’s innate immune system and the symbiont