Gender-related variability in information processing of disclosure documents

Disclosure is used worldwide as a tool to increase transparency and help investors to make their decisions, thus partially overcoming asymmetric information in financial markets. This research seeks to explore gender–related variability in visual attention allocation to the Key Investor Information Document, and in the evaluation of product financial attractiveness. We exploited the eye–tracking methodology to collect neural data, responding to the call for considering new data sources. The analysis shows that men tend to dedicate more attention to the sections Objectives and Past performance while women spend more time to scan the sections Risk–reward profile and Costs and charges; when evaluating product financial attractiveness, women, with respect to men, tend to evaluate more often products as poorly financially attractive. Results reveal the existence of gender–related variability in the visual search strategy for relevant information, which, in turn, can impact on the phase of product evaluation. These findings highlight the professional responsibility of regulators and supervisors to monitor sellers’ and marketers’ behaviours when they interact with consumers. Moreover, this study could provide support to develop financial disclosure documents considering individual differences and ensuring that adequate attention is allocated by investors to all financial information sources, thus raising the level of investor protection. Eventually, the study stimulates innovations to be embedded in the world–wide ongoing regulatory developments that aim at increasing transparency requirements

Neural Correlates of Direct Access Trading in a Real Stock Market: An fMRI Investigation

Background: While financial decision making has been barely explored, no study has previously investigated the neural correlates of individual decisions made by professional traders involved in real stock market negotiations, using their own financial resources. Aim: We sought to detect how different brain areas are modulated by factors like age, expertise, psychological profile (speculative risk seeking or aversion) and, eventually, size and type (Buy/Sell) of stock negotiations, made through Direct Access Trading (DAT) platforms. Subjects and methods: Twenty male traders underwent fMRI while negotiating in the Italian stock market using their own preferred trading platform. Results: At least 20 decision events were collected during each fMRI session. Risk averse traders performed a lower number of financial transactions with respect to risk seekers, with a lower average economic value, but with a higher rate of filled proposals. Activations were observed in cortical and subcortical areas traditionally involved in decision processes, including the ventrolateral and dorsolateral prefrontal cortex (vlPFC, dlPFC), the posterior parietal cortex (PPC), the nucleus accumbens (NAcc), and dorsal striatum. Regression analysis indicated an important role of age in modulating activation of left NAcc, while traders' expertise was negatively related to activation of vlPFC. High value transactions were associated with a stronger activation of the right PPC when subjects' buy rather than sell. The success of the trading activity, based on a large number of filled transactions, was related with higher activation of vlPFC and dlPFC. Independent of chronological and professional age, traders differed in their attitude to DAT, with distinct brain activity profiles being detectable during fMRI sessions. Those subjects who described themselves as very self-confident, showed a lower or absent activation of both the caudate nucleus and the dlPFC, while more reflexive traders showed greater activation of areas involved in strategic decision making. Discussion: The neural correlates in DAT are similar to those observed in other decision making contexts. Trading is handled as a well-learned automatic behavior by expert traders; for those who mostly rely on heuristics, cognitive effort decreases, and transaction speed increases, but decision efficiency lowers following a poor involvement of the dlPFC

Anchoring effect in visual information processing during financial decisions: an eye-tracking study

When reading a financial disclosure document, subjects are faced with multiple information cues and might simplify decisional complexity by relying on heuristics. This study explores whether, in an attempt to filter information from the Payment Account Fees Information Document (FID), subjects anchor their evaluation to a specific item, leading to biased financial choices. By detecting the visual search strategy in 70 subjects through eye tracking, we observed that people exhibited systematic visual anchoring to the top of the document, which corresponds to the Liquidity section that displays the Annual Fee. Moreover, data revealed that subjects sometimes fail to recognize the most advantageous products. This mainly occurs when the Annual Fee is high, even if the other charges compensate for that amount, clarifying the link between visual search strategy and financial decisions. Data also showed the role of financial literacy in modulating attention, as poorly financially literate subjects are more prone to anchoring bias. The findings contribute to the neuroeconomics literature on anchoring effect and highlight practical implications for financial regulators and managers involved in the ergonomics of documents

Sustainable Chromium Encapsulation: Alkali Activation Route

This article highlights recent experimental advances in the use of inorganic substances in the encapsulation of pollutants and, in particular, discusses the potential applicability and constraints of the geopolymerization process for the treatment of wastewater containing chromium. A great percentage of waste containing chromium salts is produced by the leather industry during the tannery process. Such industrial waste is in the form of liquor containing almost 40% of the initial chromium combined with many other pollutants. The stabilization/solidification (S/S) treatment of this type of waste must be combined with chromium encapsulation in an economic, environmentally friendly and efficient process to be industrially feasible. Here we present a novel process in which the wastewater is used as a component of the formulation together with a clay by-product and with the addition of NaOH pellets with the goal of a no-water plus no-waste technology approach. The final solidified “ceramic-like” material successfully immobilized the heavy metal cations as well as anions and macromolecules of surfactants, avoiding environmental damages to soil and groundwater. The article is completed by mentioning other S/S processes where wastewater has been treated and the resulting sludge encapsulated. The future of the S/S technologies in the tannery industry should progress in the direction of significantly reducing the amount of wastewater directed to the treatment plants, with associated reductions in transport and their CO2 emissions. This article intends to be a contribution in the direction of preventing waste, aligning circular economy and waste management objectives

Sitting on the Board or Sitting on the Throne? Evidence of Boards{'} Overconfidence from the Italian Market

Between things we know with certainty and things we do not know absolutely there is a continuum spectrum of things we know something about: but how much do we know? People think they know more than they actually do: this tendency is defined as overconfidence. We explore the phenomenon with respect to mergers and acquisitions (M&As) and we introduce a new proxy for overconfidence: interlocking directorship (ID). We review different factors at the origin of this decision making (DM) bias and we theoretically justify why directors may be affected by it. Using event-study methodology, an empirical analysis is conducted on a multi-sector sample of Italian listed companies, which includes 296 M&A deals realized over the period 2000–2013. We analyse the impact of these extraordinary operations using cumulative abnormal returns (CARs) adding in the model control variables and measures of overconfidence. Results show negative and statistically significant average CARs around the date of announcement of the operations, suggesting that M&As are value destructive in the short term, and sitting on more than one board even increases this result, corroborating the hypothesis of managerial overconfident evaluations

Gli incarichi multipli nel CdA: la prospettiva degli investitori

Questo articolo analizza la percezione degli investitori degli incarichi multipli nel Cda attraverso le notizie diffuse dai mass media. Si vuole osservare se l’impatto dei mass media viene ampli- ficato (in senso positivo o negativo) quando le news menzionano amministratori che rivestono più cariche nello stesso CdA (ad esempio che sono allo stesso tempo Presidente e Ammini- stratore delegato). I risultati rivelano che gli investitori reagiscono in maniera più decisa alle no- tizie che si riferiscono ad amministratori che sono contemporaneamente Presidente e Ad, mentre il cumulo generale di altri ruoli, benché sconsigliato da best practice internazionali e co- dici di autodisciplina, non genera reazioni dei prezzi di mercato sostanziali

Interlocking Directorship across Italian listed companies: Evidence from a natural experiment

The financial crisis of 2008 and the introduction of the Interlocking Ban in 2011 (for financial firms) deeply influenced the Italian corporate governance system. The aim of the present study is to investigate to what extent personal ties among the directors of Italian listed companies have changed after these two events. We describe the evolution and dimension of the phenomenon of interlocking directorship (ID) for all the Italian listed companies over the period 1998–2013 using different methodologies. Social network analysis discloses the existence of clusters of companies whose links remain dense after the crisis, while connections to the peripheral units of the system decrease, reducing the overall connectedness. Results reveal that, over the period, there is a reduction in the cumulation ratio which still remains high and mainly due to a high number of directorships for multiple directors. This reduction is more severe after 2008 when both the financial crisis and the Interlocking Ban occur. In disentangling the two effects we observe ID reduction during and after the crisis, also for non-financial firms, confirming the general tendency of a decline in national board interlocking networks

Gender-Related Variability in Information Processing of Disclosure Documents

Disclosure is used worldwide as a tool to increase transparency and help investors to make their decisions, thus partially overcoming asymmetric information in financial markets. This research seeks to explore gender-related variability in visual attention allocation to the Key Investor Information Document, and in the evaluation of product financial attractiveness. The study exploits the eye-tracking methodology to collect neural data, responding to the call for considering new data sources. The analysis shows that men tend to dedicate more attention to the sections Objectives and Past performance while women spend more time to scan the sections Risk-reward profile and Costs and charges; When evaluating product financial attractiveness, women tend to evaluate them as poorly financially attractive more often than men. Results reveal the existence of gender-related variability in the visual search strategy for relevant information, which, in turn, can impact on the phase of product evaluation. These findings highlight the professional responsibility of regulators and supervisors to monitor sellers and marketers' behaviours when they interact with consumers. Moreover, this study could provide support to develop financial disclosure documents considering individual differences and ensuring that adequate attention is allocated by investors to all financial information sources, thus raising the level of investor protection. Eventually, the study stimulates innovations to be embedded in the world-wide ongoing regulatory developments that aim at increasing transparency requirements