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Asset Price Response to New Information examines the effect of two types of psychological biases (namely, conservatism bias and representativeness heuristic) on the asset price reaction to new information. The author constructs various models of a competitive securities market or a security market allowing for strategic interaction among traders to prove rigorously that either conservatism or representativeness is capable of generating both asset price overreaction and underreaction to new information. The results shed some new insights on the phenomena of the asset price overreaction and underreaction to new information. In the literature, very little has been published in this area of behavioral finance. This volume will appeal to graduate-level students and researchers in finance, behavioral finance, and financial engineering

We decompose the market-to-book ratio into two additive components: a conservatism correction factor and a future-to-book ratio. The conservatism correction factor exceeds the benchmark value of one whenever the accounting for past transactions has been subject to an (unconditional) conservatism bias. The observed history of a firmś past investments allows us to calculate the magnitude of its conservatism correction factor, resulting in an average value that is about two-thirds of the overall market-to-book ratio. We demonstrate that our measure of Tobinś q, obtained as the market-to-book ratio divided by the conservatism correction factor, has greater explanatory power in predicting future investments than the market-to-book ratio by itself. Our model analysis derives a number of structural properties of the conservatism correction factor, including its sensitivity to growth in past investments, the percentage of investments in intangibles, and the firmś cost of capital. We provide empirical support for these hypothesized structural properties.

This research note engages the current research on measuring media bias. I present a reanalysis of the results found in Groseclose and Milyo (2005) and show that the original parameter estimates of the ideological positions of media outlets are not stable over time. Using the same data but analyzed over different periods of time, I find a different conclusion than the previous article. I examine four-year rolling time periods and find that the data produce different parameter estimates in the early- to mid-1990s as compared to after 2000, with all analyzed outlets appearing more moderate or conservative in later time periods. My results indicate that the estimated positions are sensitive observations in the data and the time period of observation of the outlet. Adapted from the source document.

Sci'fic facts do not speak for themselves, but are governed by the perspective of the investigator. Pictorial & data-based illustrations are provided to indicate how conclusions can be altered through the reconceptualization of what the behavioral response is to mean. Extended treatment is given to Herbert McClosky's scale of pol'al conservatism "Consensus and Ideology in American Politics," American Political Science Review, 1964, 58, Jun, 361 -- 382, questioning the contention by Arthur Kalleberg that this scale provides a validation of subjective meaning structures. 18 R's rank-ordered 18 of McClosky's original items from "most" to "least" conservative, & the ranks were factor analyzed. 3 factors resulted, indicating at least 3 diff subjective perspectives (or 3 conceptualizations) of conservatism, & casting doubt on the presumed unidimensionality of the concept. Questions are raised as to the need for operational definitions, which really only represent the investigator's perspective built into a measuring device. The implications are related to ancient & contemporary theoretical positions concerning the perception of reality & its epistemological importance. AA.

Examines the current attack on "left-wing" media content. Discussion opens with a look at the role of early-20th-century professional journalism, listing nine ideal principles that govern journalism & that find a narrow field of application that has since been transformed given the political & commercial requirements of media owners. Three biases have been adopted by professional journalism -- eg, government officials & powerful individuals are seen as the primary legitimate news source -- resulting in the institution of an establishment bias. The conservative media critique centers on four propositions: (1) Decisive power over the news lies with the journalists; owners & advertisers are irrelevant or relatively powerless. (2) Journalists are political liberals. (3) Journalists abuse their power to advance liberal politics. (4) Objective journalism would reflect the conservative worldview. These propositions are subjected to their own critique before addressing how the conservative critique of the liberal news media has assumed such strength in US political & media culture, citing hardcore financially powerful political organizing & the constant repetition of the phenomenon of a liberal news bias with no countervailing response as core reasons. Factors driving journalism's right-wing shift include the Republican Party's right wing, the diminished autonomy of journalists, & conservatism's comfort within corporate media. It is concluded that the key transformation in the news media has been the loss of space for critical journalistic work & an accompanying shift in favorable coverage to the conservative wing of elite opinion as evident in the news coverage of controversial & scandalous events connected to Bill Clinton as compared to George Bush. J. Zendejas

Human rights are generally identified as a left-wing cause. There are many reasons for that, perhaps foremost among them the fact that human rights standards are established largely by international instruments, and enforced, to the extent to which they are enforced at all, by international institutions. Conservatives tend to resist subsuming American sovereignty to international regimens and to be suspicious of international institutions, in part because they include some member states lacking consent of the governed and basic liberties. Moreover, human rights have come to be associated with a number of causes -- notably opposition to the death penalty; the closure of the prison camp at Guantanamo Bay; and the assertion of a right to health care -- that, justifiably or not, are considered liberal causes in American political terms. As human rights figures identified with different parts of the political arc, we regret this bias because it does damage to the human rights cause. Adapted from the source document.

The article assesses voting patterns from the 2001 general & local elections in GB, which saw a strong, predictable endorsement of Labour & rejection of the Conservatives. Analyzed are the systemic anti-Conservative electoral bias & the performance of minor parties; the role of tactical voting; geographic & demographic influences on results; the implications of declining turnout; & the impact of ticket splitting. The conclusion evaluates the failed Conservative strategies, which underscore a continuing vacuum of leadership, direction, & party unity, all exacerbated by the worsening electoral bias. 4 Tables, 14 References. K. Coddon

This article describes the decline in Conservative Party representation in local government, 1979-1997. It explores a number of factors to account for the nature & depth of that decline: differential abstention; the desertion of heartland voters; tactical voting at local level; & electoral bias. Clearly, the Conservatives' performance at local elections was worse than might have been expected given the party's overall electoral popularity. It appears that Conservative council candidates largely fell victim to the changing pattern of party competition & the apparent ability of rival parties to target seats more effectively. Further, the impact of these factors was compounded by the operation of biases within the electoral system. 11 Tables, 1 Figure, 1 Appendix, 23 References. Adapted from the source document.

The left-right dimension and grid-group theory differ in their empirical track records and the complexity of their conceptual structures. As regards the former, the left-right dimension is the clear winner. With respect to the latter, grid-group theory comes out ahead. The parsimony of the unidimensional left-right dimension may result in a conflation of, or failure to account for, important political distinctions which grid-group theory accounts for through its four political biases or orientations: hierarchy, egalitarianism, individualism and fatalism. The degree to which grid-group theory holds 'excess empirical content' compared to the left-right dimension is tested by way of nine hypotheses. The analysis draws on a 1999 survey in the five Nordic countries (N = 4,832) and demonstrates excess empirical content. Except in Norway, the left-right dimension is found to be a surrogate for the conflict between egalitarianism's equality of outcome and individualism's equality of opportunity. Sweden and Denmark are prototypical cases. Conservatism conflates individualism and hierarchy, whereas radicalism conflates egalitarianism and fatalism. Confirmed excess empirical content is a necessary step. Theoretical complexity must also demonstrate enhanced causal power. (European Journal of Political Research / FUB)

The Spanish electoral system is sufficiently heterogeneous in that inequality between relevant regions in the study yields political consequences. We propose the distinction of three subsystems election and find that they have different effects on the party system, in terms of fragmentation and proportionality. Moreover, inequality in the size of constituencies induces most differentiated awards, while inequality in the apportionment of seats also induces distinct overrepresentation awards. Both factors accumulate in the prize location of the votes which translates into a conservative partisan bias. Adapted from the source document.

A suggestive analysis of the reasons for the apparent failure of US conservatives to effectively make their case through the national media, based on 1977/78 data. The ability of conservative politicians to generate public support for their policies will be crucial to their ability to turn their antiliberal 1980 election victory into a conservative national policy. It is probably inaccurate & certainly self-defeating to blame conservative media problems simply on a liberal bias in the media. An "us vs them" attitude must be avoided. Reporters are dependent on suppliers of stories. The biggest suppliers tend to be government bureaucrats, who try to justify their program of liberal big government. The media feed on crisis, making it easy for liberals to justify their programs by creating a crisis mentality about issues for which they want government action. Finally, an analysis of Senatorial staffing shows that liberals put more resources into media staffers & concentrate greater efforts on the national, as opposed to home state audience. 3 Tables. J. Woodward.