Investor's increased shareholding due to entrepreneur-manager collusion

This study presents an investor/entrepreneur model in which the entrepreneur has opportunities to manipulate the workings of the project via hidden arrangements. We provide the optimal contracts in the presence and absence of such hidden arrangements. The contracts specify the shareholding arrangement between investor and entrepreneur. Moreover, we render an exact condition necessary for the credit market to form

Better to have a book in the hand than two in the cloud: consumer preferences for physical over digital goods

New technologies have given rise to digital versions of many goods including photographs, books, music, and movies. This dissertation examined whether people ascribe greater value to physical or digital goods with self-report and incentive compatible designs. I report ten experiments that elucidate the preference and identify greater establishment of psychological ownership for physical goods as the mechanism responsible for their greater valuation. I found that participants ascribed a higher value to physical versions of a variety of goods, whether measured in an incentive compatible pay-what-you-want paradigm, willingness to pay, or purchase intention. In Experiment 1, tourists paid more for a printed photograph of themselves with a costumed historical figure at a historical site than a similar digital photograph, even when controlling for the perceived cost of production. Experiment 2 found that this difference in valuation generalizes to other product categories such as books, music, movies, and magazine subscriptions. Experiment 3 suggested that the differences were not due to perceived consumption utility. Although participants ascribed greater value to physical goods, they believed their digital counterparts were more useful on every dimension measured. Experiment 4 ruled out a social signaling motive, as participants exhibited the same greater preference for physical versions of both high and lowbrow goods. Experiment 4 also found that estimates of the retail prices of digital and physical goods does not explain this preference. Experiment 5 identified psychological ownership as a driver of the higher valuation ascribed to physical goods. Psychological ownership and not assessments of permanence or anticipated consumption enjoyment mediated the effect of product format on willingness to pay (WTP). Experiments 6A and 6B provided further evidence for the ownership account. College students reported their WTP for buying or renting a digital or print copy of a course textbook. The WTP gap between physical and digital versions of the textbook was considerably greater in the purchase condition than rent condition. Whereas students were WTP more to buy than rent a physical textbook, they were not WTP more to buy than rent the same digital textbook. The rest of the studies further explored the ownership account and its implications.2018-06-22T00:00:00

Investor's increased shareholding due to entrepreneur-manager collusion

This study presents an investor/entrepreneur model in which the entrepreneur has opportunities to manipulate the workings of the project via hidden arrangements. We provide the optimal contracts in the presence and absence of such hidden arrangements. The contracts specify the shareholding arrangement between investor and entrepreneur. Moreover, we render anexact condition necessary for the credit market to form

Preferential attraction effects with visual stimuli : the role of quantitative versus qualitative visual attributes

Offering an inferior and rarely chosen third (decoy) option to decision makers choosing between two options has a paradoxical effect: It increases the choice share of the option most similar to the decoy. This attraction effect is robust when options are numeric but rarely occurs in humans when options are visual, even though it occurs in animals. Building on psychophysics, we examined two types of visual attributes: quantitative and qualitative. Quantitative visual attributes (e.g., different bottle volumes) can be perceived as magnitudes. Qualitative visual attributes (e.g., different colors), however, do not fall onto a magnitude scale. One can perceive that a bottle’s volume is twice that of another bottle but not that a green bottle’s color is twice that of a red bottle. We observed robust attraction effects for quantitative visual attributes (4,602 adults, 237 college-age participants), which reversed to repulsion effects when the visual attributes were qualitative (6,005 adults)

Tangibility bias in investment risk judgments

The most popular ways of holding wealth include tangible investments such as real estate and gold, and intangible investments such as stocks and mutual funds. Five experiments revealed a tangibility bias whereby the tangibility of an investment or tangibility cues linked to an investment provides a false sense of financial safety. When focusing on avoiding risk, investors indicated a higher willingness to sell the stocks of companies that invest in intangible versus tangible assets (Study 1). The greater perceived permanence of tangible versus intangible assets appeared to underlie the difference in market risk assessments. Respondents judged the same asset as riskier when it was framed as intangible (Study 2), and differences in perceived permanence mediated this effect. Increasing perceived permanence independently of tangibility led to lower market risk assessments of commodity futures (Study 3). Tangibility prompts that leave asset tangibility unchanged were sufficient to lower risk judgments (studies 4 and 5). The differences in market risk assessments were not due to a general preference for tangible assets (Study 4) or differences in familiarity, complexity, or understanding of the asset types (studies 2 and 5)

Better to Have a Book in the Hand Than Two in the Cloud: Consumer Preferences For Physical Over Digital Goods

We found that people value physical versions of goods more than their digital counterparts, across a variety of product categories including books, photographs, and movies. Greater psychological ownership felt for physical goods appears to explain their higher valuation, and not other plausible factors such as production costs or signaling motives. [to cite]

Digital Goods Are Valued Less Than Physical Goods

Digital goods are, in many cases, substantive innovations relative to their physical counterparts. Yet, in five experiments, people ascribed less value to digital than to physical versions of the same good. Research participants paid more for, were willing to pay more for, and were more likely to purchase physical goods than equivalent digital goods, including souvenir photographs, books (fiction and nonfiction), and films. Participants valued physical goods more than digital goods whether their value was elicited in an incentive compatible pay-what-you-want paradigm, with willingness to pay, or purchase intention. Greater capacity for physical than digital goods to garner an association with the self (i.e., psychological ownership), underlies the greater value ascribed to physical goods. Differences in psychological ownership for physical and digital goods mediated the difference in their value. Experimentally manipulating antecedents and consequents of psychological ownership (i.e., expected ownership, identity-relevance, perceived control) bounded this effect, and moderated the mediating role of psychological ownership. The findings show how features of objects influence their capacity to garner psychological ownership before they are acquired, and provide theoretical and practical insights for the marketing, psychology, and economics of digital and physical goods

Beyond personal ownership : examining the complexities of ownership in culture

We argue that ownership is a highly flexible concept, shaped by both innate and learned aspects, and heavily influenced by culture. Boyer's model focuses solely on universal personal ownership, neglecting other forms such as shared ownership, fractionalized property rights, and the ownership of the meanings and memories attached to possessions. A comprehensive understanding requires considering diverse human relationships with objects

Digital Goods Are Valued Less Than Physical Goods

Digital goods are, in many cases, substantive innovations relative to their physical counterparts. Yet, in five experiments, people ascribed less value to digital than to physical versions of the same good. Research participants paid more for, were willing to pay more for, and were more likely to purchase physical goods than equivalent digital goods, including souvenir photographs, books (fiction and nonfiction), and films. Participants valued physical goods more than digital goods whether their value was elicited in an incentive compatible pay-what-you-want paradigm, with willingness to pay, or with purchase intention. Greater capacity for physical than digital goods to garner an association with the self (i.e., psychological ownership) underlies the greater value ascribed to physical goods. Differences in psychological ownership for physical and digital goods mediated the difference in their value. Experimentally manipulating antecedents and consequents of psychological ownership (i.e., expected ownership, identity relevance, perceived control) bounded this effect, and moderated the mediating role of psychological ownership. The findings show how features of objects influence their capacity to garner psychological ownership before they are acquired, and provide theoretical and practical insights for the marketing, psychology, and economics of digital and physical goods

Digital goods are valued less than physical goods

Digital goods are, in many cases, substantive innovations relative to their physical counterparts. Yet, in five experiments, people ascribed less value to digital than to physical versions of the same good. Research participants paid more for, were willing to pay more for, and were more likely to purchase physical goods than equivalent digital goods, including souvenir photographs, books (fiction and nonfiction), and films. Participants valued physical goods more than digital goods whether their value was elicited in an incentive compatible pay-what-you-want paradigm, with willingness to pay, or with purchase intention. Greater capacity for physical than digital goods to garner an association with the self (i.e., psychological ownership) underlies the greater value ascribed to physical goods. Differences in psychological ownership for physical and digital goods mediated the difference in their value. Experimentally manipulating antecedents and consequents of psychological ownership (i.e., expected ownership, identity relevance, perceived control) bounded this effect, and moderated the mediating role of psychological ownership. The findings show how features of objects influence their capacity to garner psychological ownership before they are acquired, and provide theoretical and practical insights for the marketing, psychology, and economics of digital and physical goods