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This paper aims to give a brief review on behavioral economics and behavioral finance and discusses some of the previous research on agents' utility functions, applicable risk measures, diversification strategies and portfolio optimization.

The authors also cover related disciplines such as trading rules, contagion and various econometric aspects.

While scholars could first develop theoretical models in behavioral economics and behavioral finance, they subsequently may develop corresponding statistical and econometric models, this finally includes simulation studies to examine whether the estimators or statistics have good power and size. This all helps us to better understand financial and economic decision-making from a descriptive standpoint.

The research paper is original.

This chapter examines China’s corporate governance and accounting environment that shapes the adoption of internationally acceptable principles and standards. Specifically, it examines international influences, including supranational organizations; foreign investors and international accounting firms; domestic institutional influences, including the political system, economic system, legal system, and cultural system; and accounting infrastructure. China’s convergence is driven by desired efficiency of the corporate sector and legitimacy of participating in the global market. Influenced heavily by international forces in the context of globalization, corporate governance and accounting practices are increasingly becoming in line with internationally acceptable standards and codes. While convergence assists China in obtaining legitimacy, improving efficiency is likely to be adversely affected given that corporate governance and accounting in China operate in an environment that differs considerably from those of Anglo-American countries. An examination of the corporate governance and accounting environment in China suggests heavy government involvement within underdeveloped institutions. While the Chinese government has made impressive progress in developing the corporate governance and accounting environment for the market economy, China’s unique institutional setting is likely to affect how the imported concepts are interpreted and implemented.

The study aims to optimize truck routes by minimizing social and economic costs. It introduces a strategy involving diverse drones and their potential for reusing at DNs based on flight range. In HTDRP-DC, trucks can select and transport various drones to LDs to reduce deprivation time. This study estimates the nonlinear deprivation cost function using a linear two-piece-wise function, leading to MILP formulations. A heuristic-based Benders Decomposition approach is implemented to address medium and large instances. Valid inequalities and a heuristic method enhance convergence boundaries, ensuring an efficient solution methodology.

Research has yet to address critical factors in disaster logistics: minimizing the social and economic costs simultaneously and using drones in relief distribution; deprivation as a social cost measures the human suffering from a shortage of relief supplies. The proposed hybrid truck-drone routing problem minimizing deprivation cost (HTDRP-DC) involves distributing relief supplies to dispersed demand nodes with undamaged (LDs) or damaged (DNs) access roads, utilizing multiple trucks and diverse drones. A Benders Decomposition approach is enhanced by accelerating techniques.

Incorporating deprivation and economic costs results in selecting optimal routes, effectively reducing the time required to assist affected areas. Additionally, employing various drone types and their reuse in damaged nodes reduces deprivation time and associated deprivation costs. The study employs valid inequalities and the heuristic method to solve the master problem, substantially reducing computational time and iterations compared to GAMS and classical Benders Decomposition Algorithm. The proposed heuristic-based Benders Decomposition approach is applied to a disaster in Tehran, demonstrating efficient solutions for the HTDRP-DC regarding computational time and convergence rate.

Current research introduces an HTDRP-DC problem that addresses minimizing deprivation costs considering the vehicle’s arrival time as the deprivation time, offering a unique solution to optimize route selection in relief distribution. Furthermore, integrating heuristic methods and valid inequalities into the Benders Decomposition approach enhances its effectiveness in solving complex routing challenges in disaster scenarios.

To determine the probable drainage load for sizing a stack serving a number of domestic washrooms in high‐rise buildings, with various occupant loads served by an appliance and simultaneous use of appliances in a domestic washroom taken into account.

With the reported probable demand patterns of domestic appliances from laboratory testing results, on‐site measurements and survey studies, the probable maximum discharge flow rates from a number of domestic washrooms in a stack are estimated with Monte‐Carlo simulations.

The results demonstrated that the occupant loads and the usage patterns of an appliance had significant effects on the sizing of a drainage stack. It was reported that a reduction of 16 per cent in the design discharge flow rate for a washroom, at an occupant load of 4.2 persons per apartment, could be achieved with no more than one appliance discharging at a time. Influence of the occupant load served by an appliance on the probable maximum drainage demand at the stack was addressed. The results also showed a reduction of the predicted discharge flow rate at the stack serving a number of typical domestic washrooms from −26 to +21 per cent as compared with those predicted by the nominal occupant load in current practice.

The model parameters were determined from surveys for some high‐rise residential buildings in Hong Kong and from some laboratory testing results for typical domestic sanitary appliances. The model therefore may require adaptation for use in other countries.

A useful source of information in determining the stack size serving a number of domestic washrooms for those involved in building design and management related to drainage systems of residential buildings.

This paper proposes mathematical expressions in sizing a drainage stack serving a number of domestic washrooms in high‐rise buildings, where drainage demands are dependent on the building occupant loads at certain discharge patterns of appliances in a domestic washroom.

To model the evacuation time from buildings in the event of emergencies based on occupant load, looking specifically at the exit width as a design parameter.

In this study, transient occupant loads from a simulation model based on a recent study of 34 offices in Hong Kong were used to evaluate the probable risk to evacuees in the case of an emergency evacuation. For this analysis the “door carrying capacity” approach was used, together with probability profiles for the occupant loads at certain exit flow rates. This paper investigates the occupant load profiles as well as the yearly and daily occupant load variations of some typical offices in Hong Kong and examines the fire safety implications of the office building designs from the perspective of the risk to evacuees.

The results show that the building occupant load, occupant‐load ratio, total exit width and specific flow rate at the exit significantly affect the risk to evacuees.

The model parameters are not exhaustive and are determined from surveys in Hong Kong.

A useful source of reference in conducting risk assessment for safe egress design of office buildings for those involved in building design, operation and management.

This paper, taking account of exit design, occupant load and its variations using the door carrying capacity approach, presents a simple method to determine the probable risk to evacuees in offices.

This paper aims to investigate whether and how air pollution affects auditor behavior and audit quality. Specifically, the authors draw from studies of behavioral economics and psychology to develop a new prediction that air pollution-induced negative mood causes pessimistic bias in auditors’ risk assessments of client firms, which motivates them to put more effort into achieving higher audit quality.

This study uses a sample of Chinese public firms for the period 2013 to 2018 and an ordinary least squares model to examine the effects of air pollution on audit quality.

The results suggest that auditors exposed to higher levels of air pollution are more likely to put more effort into their audits, resulting in higher audit quality. Furthermore, the impacts of air pollution on audit quality are more pronounced when an auditor has a higher level of education, a major in accounting or a related subject and a position as a partner. A series of identification tests and sensitivity tests further support the main findings.

This study provides deeper insight into how air pollution affects auditors’ decision-making through its effect on mood.

The findings have broad potential implications for auditing and other high-skill professions. Because air pollution-induced negative mood is a common occurrence and numerous psychological experiments have demonstrated the potentially adaptive and beneficial role of negative mood in decision-making for professions like auditing that need a more conservative, alert and detail-oriented cognitive style, negative mood may to some extent facilitate decision-making. Professionals may benefit from paying closer attention to the adaptive benefits of different moods.

Few studies empirically discuss the effects of auditors’ psychology on audit outcomes. This study responds to this research gap with analyzes of how air pollution-induced negative mood can affect auditors’ professional judgment and audit outcomes. Further, this study adds to the growing literature that examines how air pollution affects various aspects of the economy and enriches the literature on behavioral economics, providing empirical evidence from a large sample of the effects of an environmental stressor on individual auditors’ professional judgment.

To determine the domestic flushing water consumption for a building development.

A statistic mathematical model is proposed and the model parameters are sampled with the Monte Carlo sampling technique. The frequency distribution of the parameters for Hong Kong is identified from the survey results of the water closet usage patterns in five typical residential building estates. In particular, the density function of the diurnal variations of occupant load and flushes per occupant, and the cistern volume of the water closets in 597 apartments are used to establish the model.

The flushing water consumption of the residential developments in Hong Kong is determined and compared with the measurement result of typical residential buildings.

The model parameters are not exhaustive and are determined from surveys in Hong Kong, which perhaps limits the model's usefulness elsewhere.

A useful source of reference in determining the domestic flushing water consumption of building developments for those involved in building design and management related to the flushing water systems of residential buildings.

This paper proposes a statistical mathematical model of domestic flushing water consumption and presents a template to determine the required model parameters. The model offers practical help to professionals involved in planning, designing and managing the flushing water facilities for domestic buildings.

This chapter analyzes and discusses the empirical results of the study. The discussion is organized under the following themes: independent director, audit committee, auditor independence, corporate code of conduct, adoption of IFRS, and measures for improvement. Three main findings emerge from the analysis. First, the current institutional environment does not yet fully support the Anglo-American practices. Second, in recent years the quality of financial reporting has improved considerably, which is largely attributable to strengthened accounting rules and regulations. However, the imported Anglo-American models of corporate governance and financial reporting, except for enhancing auditor independence, have had only a minor impact on financial reporting quality. Third, although the imported practices are not working as intended, the vast majority of interviewees stated that it was appropriate to move toward internationally acceptable principles and standards. Improving laws and regulations seems to be the main measure for rendering the institutional environment in China more supportive of Anglo-American models of corporate governance and financial reporting.