Effects of mental accounting on intertemporal choice

Two experiments with undergraduates as subjects were carried out with the aim of replicating and extending previous results showing that the implication of the behavioral life-cycle hypothesis (H. M. Shefrin & R. H. Thaler, 1988) that people classify assets in different mental accounts (current income, current assets, and future income) may explain how consumption choices are influenced by temporary income changes. In both experiments subjects made fictitious choices between paying for a good in cash or according to a more expensive installment plan after they had received an income which was either less, the same, or larger than usual. In Experiment 1 subjects were supposed to have savings so that the total assets were equal, whereas in Experiment 2 the total assets varied. The results of both experiments supported the role of mental accounts in demonstrating that subjects were unwilling to pay in cash after an income decrease even though they had access to saved money. Thus, in effect they chose to pay more for the good than they had to. Indicating a need for further refinement of the concept of mental account, choices to pay in cash after an income decrease tended to be more frequent when the consumption and savings motives were compatible than when they were incompatible. Furthermore, increasing the total assets made subjects more willing to pay in cash after an income decrease

Book Review T. Rothengatter & R.D. Huguenin (Eds.) Traffic and transport psychology: Theory and applications. Amsterdam, Elsevier

The book is the selected proceedings of the second international conference of traffic and transport psychology (TTP) held in Bern, Switzerland, in 2000. The first conference took place 1996 in Valencia, Spain, the third 2004 in Nottingham, UK (Rothengatter & CarbobellVaja, 1997; Underwood, 2005). A casual look at the three volumes from the conferences indicates that their structure and contents are similar. In the volume under review, keynote lectures, selected papers and poster presentations are included. A first part contains an introduction by the editors and three chapters addressing the general issue of theory in a field of applied research such as TTP. The remaining parts are dominated by reported empirical studies with some interspersed overview, conceptual, or discussion chapters. Truthfully representing current TTP research, these include road user characteristics (cognition and performance, social and differential psychology, and impairment), road safety (driver information and support systems, enforcement and training, and selection and rehabilitation), and mobility and the environmen

Preferences for Short-Term Versus Long-Term Bonuses for Stock Investments

Performance-related bonuses in the finance sector are considered important tools to provide incentives. An example is that stock portfolio managers are awarded bonuses conditionally on their portfolios producing superior returns either relative to an index or equivalent funds. Concerns are however expressed that bonuses to portfolio managers are based on too short time intervals, which may impact negatively on the degree to which environmental and social factors are taken into account in investment decisions. The question addressed in this article is how bonus schemes can be designed so that delayed payouts will be equally motivating as short-term payouts. We have conducted two experiments to investigate preference for bonus payments that are paid out either frequently of infrequently. In Experiment 1 employing 27 undergraduates, preferences were measured for one certain long-term bonus versus four certain bonuses evenly distributed across time. A majority chose the short-term bonuses, and in order for a long-term bonus to be equally preferred the results showed that it needs to be approximately 40 percent higher than the four combined short-term bonuses. Experiment 2 employing another 36 undergraduates introduced uncertainty of outcomes which more accurately reflects the setting faced by stock investors. A four-year bonus is compared to four one-year bonuses. Uncertainty was the same, decreasing or increasing over the four years. The results showed that decreasing uncertainty made a majority prefer the four-year bonus to the added one-year bonuses. In conclusion, introducing uncertainty in choices concerning future outcomes is shown to reduce the extent to which future bonus outcomes are discounted relative to immediate bonus outcomes.Portfolio management; Performance-related bonus; Time discounting

La metáfora del mapa cartográfico en los estudios sobre los mapas cognitivos urbanos.

Sin resume

Portfolio managers’ attitudes towards policy regulations of environmental reporting

Attitudes towards policy regulations of environmental reporting were examined in a survey of 15 portfolio managers of stock funds lacking an explicit environmental strategy. The managers’ evaluated three regulative measures. They were most positive toward requirements for companies to report their environmental impacts in a standardized way, a measure that also was perceived to have the largest impact on social responsible investment. They were less positive toward a requirement for the funds to display in which way they themselves take environmental criteria into account in their investments. They were least positive to announce the proportion of companies in their portfolios that in a standardized way reports environmental performance.Socially; Responsible; Investments