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The purpose of this paper is to investigate a unique sample of lottery-like stocks and contextualize their short-run price behavior with respect to behavioral principles.

The authors conduct a short-run event-study of the abnormal returns for stock market investments in Australian small-cap oil and gas (O & G) explorers centered on the drilling commencement (spudding) of 157 wildcat oil or gas wells drilled between January 2000 and June 2010.

Small-cap stock market investments associated with newly spudded wildcat O & G wells are negative NPV gambles rather than fair (zero NPV) investments. Once a wildcat well is spudded, the 30-day expected abnormal return is 6-8 percent: wealth-maximizing stockholders are advised to sell upon news of spudding, but gamblers may wish to hold on for the chance of a 10.6 percent 30-day average abnormal return (if the well is not plugged and abandoned). In the lead-up to each gamble the authors observe a significant pre-spudding stock price run-up on average, perhaps indicative of positively affected investors aroused by an easily imagined successful wildcat gusher as per evidence on the influence of image and affect on investors’ decisions (MacGregor et al., 2000; Loewenstein et al., 2001; Rottenstreich and Hsee, 2001; Peterson, 2002).

The wildcat drilling events considered in this paper are lottery-like by nature, and spudding represents the distinct moment when the gamble is unambiguously on, following shortly on from which investors either strike it lucky or strike out. The specifically small-cap wildcatters are typically heavily vested in one well at a time, therefore the sample stocks are uniquely lottery like. This differs from other studies which infer the lottery-like nature of their sample stocks from characteristics such as price and idiosyncratic volatility.

The purpose of this paper is to examine the relationship between psychopathy and its underlying traits and financial risk and time preferences.

The authors measure risk and time preferences using both the cumulative prospect theory and quasi-hyperbolic time discounting in a sample of business majors. The Psychopathic Personality Inventory – Revised test is then used to measure the global psychopathy and eight primary and two secondary traits of the sample of business majors. The measures of psychopathy are used as explanatory variables to model variation in subjects’ time and risk preferences.

The authors find that the overall score on the continuum of psychopathy is positively related to the linearity of the cumulative prospective utility function. A breakdown of psychopathy into its secondary and primary traits shows a more complex relation. For example, the secondary trait of self-centered impulsivity is statistically significant in models of financial risk preference determinants under the cumulative prospect theory. The authors find that the primary traits of self-centered impulsivity and stress immunity are related to a higher time preference discount rate under quasi-hyperbolic time preferences.

This paper adds to the literature on personality and financial decisions and highlights the importance of psychopathy in finance.

Daniel and Titman (1997) contend that the Fama‐French three‐factor model’s ability to explain cross‐sectional variation in expected returns is a result of characteristics that firms have in common rather than any risk‐based explanation. The primary aim of the current paper is to provide out‐of‐sample tests of the characteristics versus risk factor argument. The main focus of our tests is to examine the intercept terms in Fama‐French regressions, wherein test portfolios are formed by a three‐way sorting procedure on book‐to‐market, size and factor loadings. Our main test focuses on ‘characteristic‐balanced’ portfolio returns of high minus low factor loading portfolios, for different size and book‐to‐market groups. The Fama‐French model predicts that these regression intercepts should be zero while the characteristics model predicts that they should be negative. Generally, despite the short sample period employed, our findings support a risk‐factor interpretation as opposed to a characteristics interpretation. This is particularly so for the HML loading‐based test portfolios. More specifically, we find that: the majority of test portfolios tend to reveal higher returns for higher loadings (while controlling for book‐to‐market and size characteristics); the majority of the Fama‐French regression intercepts are statistically insignificant; for the characteristic‐balanced portfolios, very few of the Fama‐French regression intercepts are significant.

This article explores how the commentary of intermediaries – third-party entities that do not have direct economic stakes in the sales of goods – can contribute to the creation of new market categories comprising preexisting but neglected and undervalued goods. Specifically, I study how the Sundance Institute facilitated the creation of a market for independent cinema in the United States, suggesting that intermediaries create market categories by defining boundaries, generating criteria of evaluation, and setting standards for measuring and establishing hierarchies of quality, which help audiences understand and value the category. The study, thus, adds nuance to our understanding of markets and categories.

The purpose of this paper is to systematically profile investors’ personality traits to examine if, and how, those traits are associated with phenomena observed in financial markets. In particular, the paper looks at overconfidence and overreaction in an experimental foreign exchange market.

The paper measures the personality of the subjects using the short form of the NEO-PIR instrument, the NEO-FFI developed by Costa and McRae (1992) which is based on Norman's (1963) “Big Five” personality constructs of negative emotion, extraversion, openness to experience, agreeableness and conscientiousness. The paper measures psychological gender using questions developed by Bem (1994). Preference for innovation and risk-taking propensity are measured using instruments developed by Jackson (1976). The paper then examines the behavior of the subject who traded interactively in “real time” in an interactive-simulated foreign exchange market where “price discovery” was instantaneous and pricing decisions were made instantaneously as items of news, determined by the researchers, were released.

The paper demonstrates that personality traits are associated with overconfidence and overreaction in financial markets. The paper presents meta-analysis which facilitates the development of a posteriori theories of how particular traits affect investment; there are important roles for risk-taking propensity, negative emotion, extraversion, masculinity, preference for innovation and conscientiousness.

A typical behavioral finance paper might find an empirical regularity in prices and, on the basis of such patterns, infer the underlying psychology motivating the behavior of investors. The approach differs from this caricature of the “typical” behavioral finance paper. The paper does not infer the underlying psychology of investors from patterns in prices. Rather, the paper learns about investors by systematically profiling their personality traits. The paper then demonstrates how those traits are associated with the prices generated by the investors the authors study. In focussing on the role of individual personality, the paper refocusses behavioral finance on the individuals who set prices.

Social movements can disrupt existing industries and inspire the emergence of new markets by drawing attention to problems with the status quo and promoting alternatives. We examine how the influence of social movements on entrepreneurial activity evolves as the markets they foster mature. Theoretically, we argue that the success of social movements in furthering market expansion leads to three related outcomes. First, the movement-encouraged development of market infrastructure reduces the need for continued social movement support. Second, social movements’ efforts on behalf of new markets increase the importance of resource availability for market entry. Third, market growth motivates countermovement that reduce the beneficial impact of initiator movements on entrepreneurial activity. We test these arguments by analyzing evolving social movement dynamics and entrepreneurial activity in the US wind power industry from 1992 to 2007. We discuss the implications of our findings for the study of social movements, stakeholder management, sustainability, and entrepreneurship.

This chapter addresses the common assumption that research questions are fixed at the outset of a study and should remain stable thereafter. We consider field-based organizational research and ask whether and when research questions can legitimately change. We suggest that change can, does, and indeed should occur in response to changes in the context within which the research is being conducted. Using an illustrative example, we identify refinement and reframing as two distinct types of research question development. We conclude that greater transparency over research question evolution would be a healthy development for the field.

This paper seeks to use an analytical approach to examine the relation of systematic risk and accounting variables.

The paper theoretically integrates the capital asset pricing model, Cobb‐Douglas function and clean surplus relation to derive the relation.

The analytical results suggest that determinants of systematic risk include earnings, sales growth, book value, dividend, degree of operating leverage (DOL), degree of financial leverage (DFL), market return, and risk‐free return. Three general conclusions are: For a firm with positive prior‐year earnings and current‐year sales growth, if the combined effect of its current book value, dividend and earnings on stock price is positive (negative), then its degree of total leverage has a positive (negative) effect on systematic risk; When the effect of book value and earnings on stock price each is positive and the effect of dividend on stock price is positive (negative), then the dividend has a positive (negative) effect on systematic risk; For a firm with positive (negative) sales growth, its DOL is positively (negatively) related with its DFL for a given level of systematic risk.

The findings have significant implications for the risk management literature and practice.

This paper aims to investigate the social structure of strategic management research in the hospitality management field to determine whether a strong social structure is needed and, if so, how this structure can be enriched within the hospitality field.

A total of 1,652 articles related to hospitality strategic management published in leading hospitality and tourism as well as business journals were analyzed using co-authorship analysis combined with social network analysis.

The study’s findings demonstrate a progressive growth in collaboration. Leading authors, institutions and countries in the collaboration networks are identified. Network analysis shows that the ties in the network are too weak to build a strong social identity, although the community is broad.

This study provides solutions for building a strong social identity related to strategic management in the hospitality field. Moreover, this study helps leaders and managers, who need to know whom to speak to within academia to get industry-based advice, as well as scholars, junior researchers and graduate students, who must recognize the individuals producing knowledge in the academic field, to identify the key actors within the field.

As one of the first studies in this field, this research discusses why a strong social identity is necessary and how it can be built further while also looking at the potential for expansion in future studies.