What motivates avoidance in paranoia? Three failures to find a betrayal aversion effect

Believing that others intend to harm you (paranoia) is often accompanied by social withdrawal, avoidance and isolation. We investigated whether paranoia is related to betrayal aversion: the tendency to avoid potential harm caused by other people over and above an equivalent harm caused by a non-social mechanism. Across three large-N (Ntotal=2433) pre-registered online studies, we employed a game theoretic paradigm where participants engaged in interactions with real players. Studies 1 and 2 explored betrayal aversion by eliciting participants’ willingness to enter interactions where monetary reward was either determined by another player or a lottery. Study 3 examined betrayal aversion in a context where choices were not financially-incentivised. Paranoia was not associated with betrayal aversion or risk aversion in any study. We consider two possibilities: that paranoia does not involve increased risk aversion or betrayal aversion, or that the paradigm was limited in terms of its ability to trigger betrayal and risk aversion behaviour in paranoia.

Hold It Right There!

The approach-aversion effect refers to a devaluation of approaching (vs. static) stimuli and is attributable to the fact that being approached is threatening. However, the explanation and the generalizability of this effect still remain unclear. To fill this gap, we provide a powerful test of the approach-aversion effect using Virtual Reality. Participants evaluated approaching and static virtual individuals for which we manipulated the threatening nature via their emotional facial expressions (Experiment 1), their group membership (Experiment 2), and the agency of their movements (Experiment 3). The results suggest a general approach-aversion effect which is attenuated when the self (vs. the target) initiates the movement. We thus bring convergent evidence that being approached is threatening.

MEDIA COVERAGE, POLITICAL CONNECTIONS AND CORPORATE RISK

Media coverage, as an important part of the external corporate governance mechanism, plays an important guiding role in corporate behavior patterns and public opinion. Taking A-share listed companies of Shanghai Stock Exchange and Shenzhen Stock Exchange from 2012 to 2017 as research examples, this paper analyzed how media coverage and political connections exert influence on corporate risk in an empirical study approach. This paper makes the following conclusions. First, the media, as information medium and external participant of the company, significantly lower the listed company’s corporate risk through closed media coverage. Second, the closer connection a company has with government, the higher corporate risk it encounters and, in the meantime, less effect of media coverage’s aversion effect towards corporate risk. Third, based on a further research on the nature of company’s property rights, this paper revealed that in state-owned companies, close political connections weaken much more media coverage’s aversion effect towards corporate risk than that in private companies.

Competition Among Contests: a Safety Level Analysis

We study a competition among two contests, where each contest designer aims to attract as much effort as possible. Such a competition exists in reality, e.g., in crowd-sourcing websites. Our results are phrased in terms of the ``relative prize power'' of a contest, which is the ratio of the total prize offered by this contest designer relative to the sum of total prizes of the two contests. When contestants have a quasi-linear utility function that captures both a risk-aversion effect and a cost of effort, we show that a simple contest attracts a total effort which approaches the relative prize power of the contest designer assuming a large number of contestants. This holds regardless of the contest policy of the opponent, hence providing a ``safety level'' which is a robust notion similar in spirit to the max-min solution concept.

Effect of Employees’ Pay-performance Sensitivity on Future Firm Performance: Evidence from State-owned Listed Enterprises in China over 2007-2015

Taking a balanced panel data consisting of 4365 firm-year observations drawn from the listed state-owned enterprises in Shanghai and Shenzhen Stock Exchange over 2007-2015 as the research sample, the paper examines the effect of the employees’ pay-performance sensitivity (PPS) on the future firm performance from the two competing perspectives of “incentive effect” and “risk-aversion effect”, adopting the method of multiple regression analysis based on OLS and applying the SPSS23 as the data processing tool. Theoretical analysis and empirical results demonstrate that there is a positive link between the employees’ PPS and the future firm performance. To improve the employees’ PPS can stimulate the engagement of the employees, improve their working quality, enrich their workplace innovative behavior, and further lead to higher future firm performance. Meanwhile, the positive effect of the employees’ PPS on the future firm performance is, on average, lower than that of the top executives’ PPS on the future firm performance. Implications of the findings are provided in the end.

Size Doesn't Really Matter

When attempting to draw a ball of a specified color either from an urn containing 50 red balls and 50 black balls or from an urn containing an unknown ratio of 100 red and black balls, a majority of decision makers prefer the known-risk urn, and this ambiguity aversion effect violates expected utility theory. In an experimental investigation of the effect of urn size on ambiguity aversion, 149 participants showed similar levels of aversion when choosing from urns containing 2, 10, or 100 balls. The occurrence of a substantial and significant ambiguity aversion effect even in the smallest urn suggests that influential theoretical interpretations of ambiguity aversion may need to be reconsidered.