Generational differences in work values, work-related outcomes and person-organisation values fit : a thesis presented in fulfilment of the requirements for the degree of Master of Arts in Psychology at Massey University

Values are important constructs in guiding behaviour and enhancing motivation in the workplace. However, more research is required into generational patterns in work values, particularly as much of the information regarding age differences is based on stereotypes. The aim of this research was to investigate differences between the four generational groups currently in the workforce (Matures, Baby Boomers, Generation X and Baby Boom Echo), according to work values and the work-related outcomes of job satisfaction, affective organisational commitment and intention to leave. The study also examined how differing values may contribute to the perception of person-organisation values fit. An overall theoretical model of person-organisation values fit and outcomes was developed and then assessed for invariance across age using structural equation modelling. A sample of 504 Auckland employees completed a questionnaire (either online or via pencil and paper). Results indicated that the youngest generations (the Generation X and Echo group) placed more importance on status-related work values than the oldest generations (the Matures and Baby Boomers). The Echo group also placed more importance on having a social working environment than the Matures and Boomers. Freedom-related work values were also rated as being more important to the Echo group than any other generation. The two youngest generations showed greater intent to leave their organisations in the next 12 months compared with older groups. In terms of perceived fit between individual values and organisational values, Matures and Boomers reported better fit with extrinsic values than Generation X, and better fit with status-related values than the Echo group. The model of overall person-organisation values fit and outcomes was confirmed, and was invariant across groups, suggesting that the overall fit process was consistent across age. The findings from this study offer insight into possible areas for organisational intervention to enhance communication and acceptance between generational groups. Future areas of research are also suggested to improve understanding of this field

Bid-ask spreads in multiple dealer settings: Some experimental evidence

We report the results of an experiment designed to investigate the behavior of quoted spreads in multiple-dealer markets. We manipulate verbal communication (not allowed and allowed) and order preferencing (not allowed, allowed, and allowed with order-flow payment) between eighteen sessions. Without preferencing, spreads are wider when communication is allowed. With preferencing (and no order-flow payments), individuals do not have incentives to narrow the spread and a wide spread may be maintained without a collusive agreement. However, spreads narrow somewhat when individuals are given the opportunity to compete using alternatives to price (that is, payment for order flow).Financial markets

The effects of subject pool and design experience on rationality in experimental asset markets

Empirical evidence suggests that prices do not always reflect fundamental values and individual behavior is often inconsistent with rational expectations theory. We report the results of fourteen experimental markets designed to examine whether the interactive effect of subject pool and design experience tempers price bubbles and improves forecasting ability. Our main findings are: (i) price run-ups are modest and dissipate quickly when traders are knowledgeable about financial markets and have design experience; (ii) price bubbles moderate quickly when only a subset of traders are knowledgeable and experienced; and (iii) individual forecasts of price are not consistent with the predictions of the rational expectations model in any market.Financial markets

Cities, traffic, and CO2: A multidecadal assessment of trends, drivers, and scaling relationships

Emissions of CO2 from road vehicles were 1.57 billion metric tons in 2012, accounting for 28% of US fossil fuel CO2 emissions, but the spatial distributions of these emissions are highly uncertain. We develop a new emissions inventory, the Database of Road Transportation Emissions (DARTE), which estimates CO2 emitted by US road transport at a resolution of 1 km annually for 1980-2012. DARTE reveals that urban areas are responsible for 80% of on-road emissions growth since 1980 and for 63% of total 2012 emissions. We observe nonlinearities between CO2 emissions and population density at broad spatial/temporal scales, with total on-road CO2 increasing nonlinearly with population density, rapidly up to 1,650 persons per square kilometer and slowly thereafter. Per capita emissions decline as density rises, but at markedly varying rates depending on existing densities. We make use of DARTE's bottom-up construction to highlight the biases associated with the common practice of using population as a linear proxy for disaggregating national- or state-scale emissions. Comparing DARTE with existing downscaled inventories, we find biases of 100% or more in the spatial distribution of urban and rural emissions, largely driven by mismatches between inventory downscaling proxies and the actual spatial patterns of vehicle activity at urban scales. Given cities' dual importance as sources of CO2 and an emerging nexus of climate mitigation initiatives, high-resolution estimates such as DARTE are critical both for accurately quantifying surface carbon fluxes and for verifying the effectiveness of emissions mitigation efforts at urban scales.https://doi.org/10.1073/pnas.1421723112Published versio

The effect of forecast bias on market behavior: evidence from experimental asset markets

This paper reports the results of 15 experimental asset markets designed to investigate the effect of optimistic forecast bias on market behavior. Each market is organized as a double oral auction in which participants trade a single-period asset with uncertain value. Traders are informed of the asset value distribution and, prior to trading, given the opportunity to acquire a forecast of the asset's period-end value. The degree of forecast bias is manipulated across experimental sessions so that in some sessions the forecast contains a systematic, upward (low or high) bias. We conduct sessions with inexperienced and experienced traders. The results suggest that market prices are supportive of a full revelation unbiased price in the unbiased markets and the experienced, low-bias markets. The results from the low-bias markets indicate that as long as traders have sufficient experience with such forecasts, asset prices reflect the debiased forecasts. In contrast, we find no evidence that high-bias forecasts are reflected in market prices, regardless of experience. We also find that the demand for forecasted information persists over time, but it is greater in the unbiased and low-bias conditions than in the high-bias condition. Finally, we provide little evidence that the net profit (that is, net of the information cost) of informed and uninformed traders differs, regardless of bias condition or experience level.Forecasting ; Asset pricing

Social Distance and Reciprocity

Contrary to the predictions of non-cooperative game theory, trust and reciprocity are commonly reported in simple games. We conduct a one-shot investment game to examine how social distance affects behavior in two-person exchanges. Two aspects of social distance are examined: ex post revelation of complete information on the second playerâ??s choice set and ex post revelation of information regarding the second playerâ??s identity. The results indicate that reciprocity is not affected by knowledge of the choice set, but depends critically on the possible revelation of the decision makerâ??s identity. That is, the possibility that the second playerâ??s identity (picture) is revealed to his/her counterpart has a profound effect on the degree of reciprocity extended.

Asset prices and informed traders' abilities: evidence from experimental asset markets

This study reports the results of fifteen experimental asset markets designed to investigate the effects of forecasts on market prices, traders' abilities to assess asset value, and the link between the two. Across the fifteen markets, the authors investigate alternative forecast-generating processes. In some markets the process produces an unbiased estimate of asset value and in others a biased estimate. The processes generating the biased forecasts, though, are less variable than the process generating the unbiased forecast. The authors find that, in general, period-end asset price reflects private forecasts, regardless of the forecast-generating process. Subsequently, they investigate whether traders' abilities to use forecasts differ across the forecast-generating processes. The authors find that most are able to properly use unbiased forecasts. They refer to them as smart traders. By comparison, a significant proportion is unable to properly use biased forecasts (typically traders' adjustments for bias are insufficient). Linking market outcomes and traders' abilities, the authors find that asset price appears to properly reflect unbiased forecasts as long as the market includes at least two smart informed traders who have sufficient ability to influence market outcomes. To obtain a comparable result in markets with the biased forecast, at least three smart informed traders with sufficient ability to influence market outcomes are necessary.Forecasting ; Markets ; Financial markets ; Risk

An experimental study of circuit breakers: the effects of mandated market closures and temporary halts on market behavior

This paper analyzes the effect of circuit breakers on price behavior, trading volume, and profit-making ability in a market setting. We conduct nine experimental asset markets to compare behavior across three regulatory regimes: market closure, temporary halt, and no interruption. The presence of a circuit breaker rule does not affect the magnitude of the absolute deviation in price from fundamental value or trading profit. The primary driver of behavior is information asymmetry in the market. By comparison, trading activity is significantly affected by the presence of a circuit breaker. Mandated market closures cause market participants to advance trades.Financial markets ; Flow of funds ; Stock market

Emotion and financial markets

Psychologists and economists hold vastly different views about human behavior. Psychologists contend that economists' models bear little relation to actual behavior. This view is supported by a large body of psychological research that shows that emotional state can significantly affect decision making. ; Economists, on the other hand, argue that psychological studies have no theoretical basis and offer little empirical evidence about people's decision-making processes. The reigning financial economics paradigm-the efficient market hypothesis (EMH)-assumes that individuals make rational investment decisions using the rules of probability and statistics. A newer branch of financial economics called behavioral finance applies lessons from psychology to financial decision making, but most of these studies have focused on cognitive biases rather than emotion. ; The authors of this article argue that emotion has important, and possibly beneficial, influences on financial behavior. After defining the term emotion and describing how emotions can be categorized, the authors consider how emotions influence human behavior. The discussion focuses particularly on three aspects of emotion and financial decision making: emotional disposition and stock market pricing, the feeling of regret, and investors' emotional response to information. ; No new financial economics paradigm that incorporates behavioral influences and better models actual behavior has yet emerged to replace the EMH. Yet the authors believe that emotional behavior's influence on financial decision making should be taken into account in future research.Financial markets

Circuit breakers with uncertainty about the presence of informed agents: I know what you know . . . I think

This study conducts experimental asset markets to examine the effects of circuit breaker rules on market behavior when agents are uncertain about the presence of private information. Our results unequivocally indicate that circuit breakers fail to temper unwarranted price movements in periods without private information. Agents appear to mistakenly infer that others possess private information, causing price to move away from fundamental value. Allocative efficiencies in our markets are high across all regimes. Circuit breakers perform no useful function in our experimental asset markets.Markets ; Financial markets ; Risk