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AbstractThis paper derives an upper bound on the discounts for lack of marketability of private equity funds using option‐pricing theory. The upper bound is a function of the volatility of the fund returns, of the (remaining) lifetime of the fund, of two parameters governing the speed of capital drawdowns and distributions, of the volatility of the stock market returns, and of the return correlation between the fund and the stock market. The model calibration and numerical analysis deliver several novel insights about how non‐marketability affects the value: (i) upper boundary discounts are increasing functions of the return volatility of the fund, of the return volatility of the stock market, and of the average time over which a dollar committed remains invested in the fund; (ii) upper boundary discounts decrease non‐linearly over the finite lifetime of a fund; (iii) estimated upper boundary discounts at the start of an average private equity fund equal $35.3 relative to $100 committed, which corresponds to an annual upper boundary return premium demanded for lack of marketability of around 7%; and (iv) estimated upper boundary discounts of venture and buyout funds are around the same magnitude, though, discounts of venture capital funds are slightly higher.

Objective In usability studies, the subjective component of usability, perceived usability, is often of interest besides the objective usability components, efficiency and effectiveness. Perceived usability is typically investigated using questionnaires. Our goal was to assess experimentally which of four perceived-usability questionnaires differing in length best reflects the difference in perceived usability between systems. Background Conventional measurement wisdom strongly favors multi-item questionnaires, as measures based on more items supposedly yield better results. However, this assumption is controversial. Single-item questionnaires also have distinct advantages and it has been shown repeatedly that single-item measures can be viable alternatives to multi-item measures. Method N = 1089 (Experiment 1) and N = 1095 (Experiment 2) participants rated the perceived usability of a good or a poor web-based mobile phone contract system using the 35-item ISONORM 9241/10 (Experiment 1 only), the 10-item System Usability Scale (SUS), the 4-item Usability Metric for User Experience (UMUX), and the single-item Adjective Rating Scale. Results The Adjective Rating Scale represented the perceived-usability difference between both systems at least as good as, or significantly better than, the multi-item questionnaires (significantly better than the UMUX and the ISONORM 9241/10 in Experiment 1, significantly better than the SUS in Experiment 2). Conclusion The single-item Adjective Rating Scale is a viable alternative to multi-item perceived-usability questionnaires. Application Extremely short instruments can be recommended to measure perceived usability, at least for simple user interfaces that can be considered concrete-singular in the sense that raters understand which entity is being rated and what is being rated is reasonably homogenous.

Objective: To test the display luminance hypothesis of the positive polarity advantage and gain insights for display design, the joint effects of display polarity and character size were assessed with a proofreading task. Background: Studies have shown that dark characters on light background (positive polarity) lead to better legibility than do light characters on dark background (negative polarity), presumably due to the typically higher display luminance of positive polarity presentations. Method: Participants performed a proofreading task with black text on white background or white text on black background. Texts were presented in four character sizes (8, 10, 12, and 14 pt; corresponding to 0.22°, 0.25°, 0.31°, and 0.34° of vertical visual angle). Results: A positive polarity advantage was observed in proofreading performance. Importantly, the positive polarity advantage linearly increased with decreasing character size. Conclusion: The findings are in line with the assumption that the typically higher luminance of positive polarity displays leads to an improved perception of detail. Application: The implications seem important for the design of text on such displays as those of computers, automotive control and entertainment systems, and smartphones that are increasingly used for the consumption of text-based media and communication. The sizes of these displays are limited, and it is tempting to use small font sizes to convey as much information as possible. Especially with small font sizes, negative polarity displays should be avoided.

Objective: A series of experiments assessed biases in perceived distance that occur while driving as a function of the backlight position of the car ahead and fog density. Background: V. Cavallo, M. Colomb, and J. Doré (2001) have shown that smaller horizontal backlight separation and fog may result in increased estimates of the distance between an observer and a car of which only the backlights are visible. They also predicted that raising the height of the car backlights would lead to increasing distance estimates. Method: Distance perception was assessed in both static and dynamic computer-simulated scenarios in which the distance estimates were performed using a familiarized analog scale or using time-to-collision judgments for both pairs of backlights and single backlights. Results: In a series of five experiments, the horizontal separation and fog density effects were replicated. In addition, distance estimates were consistently larger with higher than with lower vertical backlight positions. Conclusion: There is reason to believe that biases in distance perception may be augmented by car backlight positions and by low-visibility weather conditions. Application: Car designers should take backlight placement seriously. Speed-dependent car-to-car distance control systems seem desirable to counteract biases in distance perception.