Suchergebnisse

The book-to-market ratio's numerator adds assets and liabilities differing in risk. We propose a test for the value premium and its sources. Individual balance sheet holdings are divided by firm size. When associated risk premium coefficients are equal, an overall book-to-market is appropriate. Otherwise, there are different risks in assets and liabilities. For U.S. firms, for four decades since 1980, the excess return is regressed on seven ratios relative to size for cash, receivables, tangibles, intangibles, payables, short and long-term debt, and controls. The seven value premiums are not equal. Firms earn higher returns for cash and receivables and lower for short-term debt. Tangible and intangible assets earn no value premium.

AbstractInterruptions during consumer decision making are ubiquitous. In seven studies, we examine the consequences of a brief interruption during a financial risk decision. We identify a fundamental feature inherent in an interruption's temporal structure—a repeat exposure to the decision stimuli—and find that this re-exposure reduces decision stimuli's subjective novelty. This reduced novelty in turn reduces decision makers' apprehension and increases the amount of risk they take in a wide range of risky financial decision contexts. Consistent with our theoretical framework, this interruption effect disappears when a stimulus's subjective novelty is restored after an interruption. We further find that these consequences are often unique to interruptions are often do not result from other interventions (e.g., time pressure and elongated thinking); this is because an interruption's unique temporal structure (which results in a repeat exposure to the decision stimuli) underlies its consequences. Our findings shed light on how and when interruptions during decision making can influence risk taking.