Attention utility: Evidence from individual investors

Attention utility is the hedonic pleasure or pain derived purely from paying attention to information. Using data on brokerage account logins by individual investors, we show that individuals devote disproportionate attention to already-known positive information about the performance of individual stocks within their portfolios. This aversion to paying attention to unfavorable information, through its effect on logins, has consequences for trading activity; it reduces trading after recent losses and increases trading after recent gains. Attention utility is distinct from models of belief-based utility and information aversion (in which information not sought is not fully known), and implies that the pleasure and pain of attending to known information may be important for individual behavior

The red, the black, and the plastic: paying down credit card debt for hotels not sofas

Using transaction data from a sample of 1.8 million credit card accounts, we provide the first field test of a major prediction of Prelec and Loewenstein’s (1998) theory of mental accounting: that consumers will pay off expenditure on transient forms of consumption more quickly than expenditure on durables. According to the theory, this is because the pain of paying can be offset by the future anticipated pleasure of consumption only when money is spent on consumption that endures over time. Consistent with this prediction, we found that repayment of debt incurred for non-durable goods is an absolute 10% more likely than repayment of debt incurred for durable goods. The strength of this relationship is comparable to an increment in 15 percentage points in the credit card APR. Our results have managerial implications not only for the structuring of financial transactions (e.g., that credit card customers should be given the option of paying off specific purchases), but more general implications for exploiting variations in the pain of paying in incentive schemes aimed at customers and employees

Innovative Methodology for Detection of Fracture-Controlled Sweet Spots in the Northern Appalachian Basin

For two consecutive years, 2004 and 2005, the largest natural gas well (in terms of gas flow/day) drilled onshore USA targeted the Ordovician Trenton/Black River (T/BR) play in the Appalachian Basin of New York State (NYS). Yet, little data were available concerning the characteristics of the play, or how to recognize and track T/BR prospects across the region. Traditional exploration techniques for entry into a hot play were of limited use here, since existing deep well logs and public domain seismic were almost non-existent. To help mitigate this problem, this research project was conceived with two objectives: (1) to demonstrate that integrative traditional and innovative techniques could be used as a cost-effective reconnaissance exploration methodology in this, and other, areas where existing data in targeted fracture-play horizons are almost non-existent, and (2) determine critical characteristics of the T/BR fields. The research region between Seneca and Cayuga lakes (in the Finger Lakes of NYS) is on strike and east of the discovery fields, and the southern boundary of the field area is about 8 km north of more recently discovered T/BR fields. Phase I, completed in 2004, consisted of integrating detailed outcrop fracture analyses with detailed soil gas analyses, lineaments, stratigraphy, seismic reflection data, well log data, and aeromagnetics. In the Seneca Lake region, Landsat lineaments (EarthSat, 1997) were coincident with fracture intensification domains (FIDs) and minor faults observed in outcrop and inferred from stratigraphy. Soil gas anomalies corresponded to ENE-trending lineaments and FIDs. N- and ENE-trending lineaments were parallel to aeromagnetic anomalies, whereas E-trending lineaments crossed aeromagnetic trends. 2-D seismic reflection data confirmed that the E-trending lineaments and FIDs occur where shallow level Alleghanian salt-cored thrust-faulted anticlines occur. In contrast, the ENE-trending FIDs and lineaments occur where Iapetan rift faults have been episodically reactivated, and a few of these faults extend through the entire stratigraphic section. The ENE-trending faults and N-striking transfer zones controlled the development of the T/BR grabens. In both the Seneca Lake and Cayuga Lake regions, we found more FIDs than Landsat lineaments, both in terms of individual FIDs and trends of FIDs. Our fused Landsat/ASTER image provided more lineaments, but the structural framework inferred from these lineaments is incomplete even for the fused image. Individual lineaments may not predict surface FIDs (within 500m). However, an individual lineament that has been groundtruthed by outcrop FIDs can be used as a proxy for the trend of intense fracturing. Aeromagnetics and seismic reflection data across the discovery fields west of Keuka Lake demonstrate that the fields terminate on the east against northerly-striking faults that extend from Precambrian basement to, in some cases, the surface; the fields terminate in the west at N- and NW-striking faults. Seismic and well log data show that the fields must be compartmentalized, since different parts of the same field show different histories of development. T/BR fields south of the research area also terminate (on the east) against northerly-trending lineaments which we suggest mark faults. Phase II, completed in 2006, consisted of collection and analysis of an oriented, horizontal core retrieved from one of the T/BR fields in a graben south of the field area. The field is located along ENE-trending EarthSat (1997) lineaments, similar to that hypothesized for the study area. The horizontal core shows much evidence for reactivation along the ENE-trending faults, with multiple events of vein development and both horizontal and vertical stylolite growth. Horizontal veins that post- and pre-date other vein sets indicate that at least two orogenic phases (separated by unloading) affected vein development. Many of the veins and releasing bend features (rhombochasms) are consistent with strike-slip motion (oblique) along ENE-striking faults as a result of Taconic peripheral bulge and later collisional stresses. Later orogenic effects from possibly the Acadian, and certainly the Alleghanian, are also present. Although the core does not exhibit significant zones of high porosity, rubble zones and fault zones observed on an accompanying FMI log were apparently the sources of gas production that resulted in this well being a good producer in spite of the low matrix porosity

The red, the black, and the plastic: paying down credit card debt for hotels not sofas

Using transaction data from a sample of 1.8 million credit card accounts, we provide the first field test of a major prediction of Prelec and Loewenstein’s (1998) theory of mental accounting: that consumers will pay off expenditure on transient forms of consumption more quickly than expenditure on durables. According to the theory, this is because the pain of paying can be offset by the future anticipated pleasure of consumption only when money is spent on consumption that endures over time. Consistent with this prediction, we found that repayment of debt incurred for non-durable goods is an absolute 10% more likely than repayment of debt incurred for durable goods. The strength of this relationship is comparable to an increment in 15 percentage points in the credit card APR. Our results have managerial implications not only for the structuring of financial transactions (e.g., that credit card customers should be given the option of paying off specific purchases), but more general implications for exploiting variations in the pain of paying in incentive schemes aimed at customers and employees

Consumers\u27 Misunderstanding of Health Insurance.

We report results from two surveys of representative samples of Americans with private health insurance. The first examines how well Americans understand, and believe they understand, traditional health insurance coverage. The second examines whether those insured under a simplified all-copay insurance plan will be more likely to engage in cost-reducing behaviors relative to those insured under a traditional plan with deductibles and coinsurance, and measures consumer preferences between the two plans. The surveys provide strong evidence that consumers do not understand traditional plans and would better understand a simplified plan, but weaker evidence that a simplified plan would have strong appeal to consumers or change their healthcare choices

Incentives and children's dietary choices: A field experiment in primary schools

We conduct a field experiment in 31 primary schools in England to test the effectiveness of different temporary incentives on increasing choice and consumption of fruit and vegetables at lunchtime. In each treatment, pupils received a sticker for choosing a fruit or vegetable at lunch. They were eligible for an additional reward at the end of the week depending on the number of stickers accumulated, either individually (individual scheme) or in comparison to others (competition). Overall, we find no significant effect of the individual scheme, but positive effects of competition. For children who had margin to increase their consumption, competition increases choice of fruit and vegetables by 33% and consumption by 48%. These positive effects generally carry over to the week immediately following the treatment, but are not sustained effects six months later. We also find large differences in effectiveness across demographic characteristics such as age and gender

Consumers’ Misunderstanding of Health Insurance

We report results from two surveys of representative samples of Americans with private health insurance. The first examines how well Americans understand, and believe they understand, traditional health insurance coverage. The second examines whether those insured under a simplified all-copay insurance plan will be more likely to engage in cost-reducing behaviors relative to those insured under a traditional plan with deductibles and coinsurance, and measures consumer preferences between the two plans. The surveys provide strong evidence that consumers do not understand traditional plans and would better understand a simplified plan, but weaker evidence that a simplified plan would have strong appeal to consumers or change their healthcare choices.Economic

GeMMA: functional subfamily classification within superfamilies of predicted protein structural domains

GeMMA (Genome Modelling and Model Annotation) is a new approach to automatic functional subfamily classification within families and superfamilies of protein sequences. A major advantage of GeMMA is its ability to subclassify very large and diverse superfamilies with tens of thousands of members, without the need for an initial multiple sequence alignment. Its performance is shown to be comparable to the established high-performance method SCI-PHY. GeMMA follows an agglomerative clustering protocol that uses existing software for sensitive and accurate multiple sequence alignment and profile–profile comparison. The produced subfamilies are shown to be equivalent in quality whether whole protein sequences are used or just the sequences of component predicted structural domains. A faster, heuristic version of GeMMA that also uses distributed computing is shown to maintain the performance levels of the original implementation. The use of GeMMA to increase the functional annotation coverage of functionally diverse Pfam families is demonstrated. It is further shown how GeMMA clusters can help to predict the impact of experimentally determining a protein domain structure on comparative protein modelling coverage, in the context of structural genomics