Impulsive buying behavior explained by the brain

Docenten Vakgroep Taal Mirre Stallen MSc Marketing Management Nederlands

Did you ever wonder why people take loans to purchase products they actually can not afford? Or did you ever ask yourself to what extent our buying behavior is steered by emotions instead of rational thinking? These are the kinds of questions that will be addressed in this research theme. The focus of the theme is on dual-system theories, which posit that human decisionmaking is the result of an interaction between deliberative (rational) and automatic (emotional) systems. This dual-processing account is supported by recent studies in neuroeconomics, a new emerging field that combines behavioral measures with brain imaging techniques to increase insight into the psychological processes underlying decision making. In this theme you will not perform any brain measurements but will test a theory on impulsive buying behavior that is also supported by neuroscience findings.

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User Generated Content: The role of User Reviews on Product Performance

Docenten Vakgroep Taal Zeynep Aydin MSc Marketing Management Engels

User generated content has been shown to be an important source of information for consumers and companies. With the growing penetration of new technologies in our daily lives, accessibility and saliency of user reviews in a wide variety of industries made it a more valuable source of information for other users and companies. In this theme you will focus on the underlying dynamics of the markets driven by user generated content, namely, user reviews and ratings. This useful source of information readily made available by growing technology allows us to investigate the relationships between user reviews and product performances such as sales or demand. Therefore, you will investigate how online reviews and ratings affect the other users opinions and the future demand of the corresponding product. You will focus on one specific proposition when trying to answer this broad question, such as the effect of ratings on product performance, the effect of volume of user reviews on product performance or the effect of valence of user reviews on product performance.

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Asset pricing
Docenten Vakgroep Taal Teodor Dyakov MSc, dr. Ben Tims Finance Engels

Different financial assets (e.g. stocks, bonds, exchange rates) have different returns and these differences can be large. For example, investors appear to require a lower return on average for investing in growth firms (7% per annum) when compared to value firms (14% pa), and a higher return for investing in futures contracts on crude oil (10% pa) versus even negative return for futures on sugar (-10% pa). Another example is that investors earn a positive return by going short in low-interest rate currencies and long in high-interest rate currencies (so-called carry trade strategies). So the question is why investors require different returns for different assets or securities? Can we model or even predict these returns? And if yes, can investors earn profits by predicting future performance of the assets? Finance theory offers some explanations. For example assets will have higher expected returns when they are riskier, when they deliver low returns in bad states of the economy. Rational risk averse investors will need to be compensated by means of higher expected returns for holding such undesired assets. On the contrary, investors desire assets that deliver high payoffs in the bad states of the economy and such assets will have lower expected returns or risk premiums. Furthermore, the Uncovered Interest Rate Parity predicts that differences in interest rates between countries are offset by changes in the corresponding exchange rate; however, due to the empirical failure of this theory investors can exploit this failure using the aforementioned carry trade strategies.

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Stock Market Reactions to Bank Loan Announcements

Lecturers Department Language Philip Fliers MSc, Dr. Viorel Roscovan Finance English

Banks play a special role as providers of informative signals to the market about the quality and value of their borrowers. Given this view, equity investors assess the value and the credit quality of the borrower as increasing when bank loans are announced. It has been convincingly shown that equity holders in publicly traded firms assess bank loans to increase firm equity value. The earlier literature distinguishes between new loan agreements and loan renewals and find that the positive response is solely due to the second group. More recent authors find that equity prices react significantly to both loan initiations and renewals, but only for small firms. Finally, the literature also shows that equity price reactions to bank loan announcements have considerably decreased over time, possible due to increased competition and the changing nature of the banking sector. The impact, however, is still considerable for small, poor performing firms and in environments characterized by high economic risk and uncertainty. This theme is an avenue for those interested in the special role that banks play in the economy and its mapping in equity prices.

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Strategic Performance Management: Wat motiveert managers?

Docenten Vakgroep Taal Dr. Marcel van Rinsum Accounting & Control Nederlands

Regelmatig komen er schandalen aan het licht van managers die een grote bonus hebben gencasseerd, terwijl het ondernemingsresultaat slecht is. Vooral vertrekkende managers hebben soms de neiging snel rijk te willen worden, voordat ze met de noorderzon verdwijnen. Ook de financile crisis is (mede) veroorzaakt door bonusstructuren, die het nemen van teveel risico veroorzaakten door voornamelijk opbrengsten te belonen. Aan de andere kant kunnen bonussen ook zeer bevorderlijk zijn voor de ondernemingsresultaten, door hun motiverende werking. De kern is dan ook om meet- en beloningssystemen te ontwerpen die passen bij de specifieke omstandigheden waarin de onderneming verkeert, zodat de strategie van de onderneming tot succes leidt. Kortom, in dit thema maken de studenten een keus om enkele aspecten van het meet- en beloningssysteem, en hoe deze samenhangen, nader te onderzoeken.

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Executive Compensation
Lecturer Department Taal dr. Rui Shen Accounting & Control Engels

This theme is about topics related to executive compensation. Executive compensation has attracted much attention in both academia and practice for the past decades. The debate on highly overpaid executives has been very popular, even before the financial crisis started in late 2007. However, despite the debate between those in favor of executive bonuses and those against, we do not have much evidence to address the many questions raised by both practitioners and the general public, such as: How much does executive compensation cost the firm? How much is executive compensation worth to the recipient? How well does executive compensation work? What are the effects of executive compensation? How much executive compensation is enough? Could executive compensation be improved?

In spite of the limited knowledge of executive compensation, some theories have been developed. One set of theories concerns the effects of the size and type of executive compensation on firm performance. An example is a theory that states that higher executive pay leads to higher stock prices of the firm. Among this set is also the Tournament Theory which states that firms with larger dispersion of payment will perform better than their peers because their lower level employees have strong incentives to work hard and to get promoted.

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Entrepreneurs: start-up, growth and success

Docenten Vakgroep Taal Dr. Anet Weterings Strategic Management and Entrepreneurship, Erasmus Centre for Entrepreneurship & New Business Venturing Nederlands

Entrepreneurship is widely recognized as one of the main contributors to economic growth and prosperity. However, not all new ventures are successful. What are the driving forces behind start-ups and fast growing new companies that could explain their successes and failures? Factors that may play a role in new venture creation and the early growth of firms are: (i) the characteristics and capabilities of the (nascent) entrepreneurs and their prior work experiences; (ii) their social networks and strategic networks such as family, friends and fools, business angels and venture capitalists, technology and business partners, parent organizations and incubators; (iii) the way they combine resources and craft strategies in setting up successful and legitimate businesses; and (iv) the way the new company is managing the different stages of its evolution and growth, and the particular problems it has to go through. In this trajectory, the focus is on further expanding the insights in the impact of entrepreneurial capabilities, resources, prior experiences and social and strategic networks on the start-up, growth and success of young firms by thoroughly testing propositions that stand central in the theories on entrepreneurship.

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(Corporate) Effectuation: de mythe van ondernemerschap ontrafeld

Docenten Vakgroep Taal drs. Th.J.Blekman Strategic Management and Entrepreneurship, Erasmus Centre for Entrepreneurship & New Business Venturing Nederlands

Peter Drucker stelde in 1985: Most of what you hear about entrepreneurship is all wrong. It has nothing to do with genes. Its a discipline and, like any discipline, it can be learned. Saras Sarasvathy, nu gevierd wetenschapster, besloot tien jaar geleden om onderzoek te doen naar het geheim van succesvolle expert-entrepreneurs. Welke principes passen zij toe? Waarom slagen zij er keer op keer in om succesvolle producten op de markt te zetten en te ondernemen waar anderen onzeker worden en niet weten wat ze moeten doen? Prof. Dr. Saras Sarasvathy vond (onder begeleiding van Herbert Simon, voormalig Nobelprijs winnaar voor wetenschappelijk onderzoek) en beschreef een set van vijf besluitvormingsprincipes die gehanteerd worden door topondernemers om in controle te blijven tijdens het opereren in onzekere markten. Het bijzondere daarvan is dat die principes te leren zijn! Zij noemde haar set van vijf principes de effectuation theorie. Voor bestaande bedrijven gelden mogelijk dezelfde succesfactoren als voor zelfstandigen. Corporate effectuation is dan het antwoord voor managers en CEOs die net als zelfstandigen willen ondernemen zonder onnodige risicos te lopen. Maar dat is een geheel nieuwe kijk op effectief (intern) ondernemerschap die in veel gevallen haaks staat op wat er tot nu toe in de leerboekjes wordt vermeld. Als de theorie van corporate effectuation juist is, dan is ondernemen binnen grote organisaties of als zelfstandige niet langer een kwestie van Russisch roulette, dan is ondernemerschap dus echt te leren. In dit leeronderzoek ga je de (corporate) effectuation theorie toetsen om te kijken of Saras Sarasvathy met haar effectuation principes de discipline beschrijft waar Drucker het in 1985 over had, maar waar hij zelf het antwoord op dat moment op schuldig moest blijven.

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De klokkenluidersparadox: (on)etisch gedrag, (on)ethische reacties.

Docent(en) Vakgroep Taal

Gijs van Houwelingen MA, MSc

Business-society Management Nederlands

In juli 2002 ontdekte Satyendra Dubey bewijs voor grootscheepse fraude in het project waar hij recentelijk verantwoordelijk was gemaakt: het bouwen van een nieuwe snelweg die de belangrijkste steden van India met elkaar zou moeten gaan verbinden. Een project ter waarde van meer dan 10 miljard dollar. Dubey kwam er snel achter dat een deel van de gelden naar malafide bouwbedrijven in handen van de maffia werd doorgesluisd. Toen hij geen gehoor kreeg bij zijn bovengeschikten, besloot hij ondanks bedreigingen en expliciete verboden deze informatie publiek te maken een open brief naar de premier van India te schrijven over deze misstanden. Deze van grote moed getuigende daad kwam hem echter, duur te staan: in november 2003 werd Dubey vermoord gevonden langs de kant van de weg. Dit voorbeeld illustreert op een dramatische wijze de klokkenluidersparadox; het aan de kaak stellen van onethisch gedrag (meestal) binnen de eigen organisatie is vaak van groot belang om onethische praktijken uit de wereld te helpen. Het belang daarvan wordt alleen al onderstreept door het feit dat onethisch gedrag binnen organisaties volgens een recente schatting de maatschappij bijna 3 miljard dollar per jaar kost. Echter klokkenluiden is een relatief zeldzaam fenomeen en de mensen die toch tot klokkenluiden overgaan worden vaak geconfronteerd met sterke repercussies zoals het voorbeeld van Dubey meer dan duidelijk maakt. In dit thema kun je het klokkenluidersfenomeen van twee kanten belichten. Ten eerste willen we gaan kijken welke factoren ertoe bijdragen dat mensen soms onethisch gedrag van anderen rapporteren en soms juist niet. Wat voor soort mensen zijn geneigd tot klokkenluiders en wat voor soort mensen juist niet? De tweede kant heeft te maken met de consequenties waarmee klokkenluiders vaak te maken hebben; hier zijn we met name op zoek naar het antwoord op de vraag waarom en onder welke omstandigheden mensen geneigd zijn vergeldingsgedrag te vertonen tegen klokkenluiders in de eigen omgeving.

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