1. Trang chủ
  2. » Luận Văn - Báo Cáo

Are time preference and risk preference associated with cognitive intelligence and emotional intelligent: A review

3 46 0

Đang tải... (xem toàn văn)

THÔNG TIN TÀI LIỆU

Cấu trúc

  • Are Time Preference and Risk Preference Associated with Cognitive Intelligence and Emotional Intelligent: A review

  • Reference

Nội dung

The research has various strengths that future researchers can learn from. Even though the research seems to be complicated, the clever way researchers connect the papers with reality makes it easier for readers to focus.

Are Time Preference and Risk Preference Associated with Cognitive  Intelligence and Emotional Intelligent: A review There have been various researchers discovering factors affecting time preference and  risk preference between individuals. Time preference varies across individuals (Becker &  Mulligan,   1997)   However,   the   correlation   between   time   preference   and   emotional  intelligence and the connection between risk preference and cognitive intelligence was  first   explained  by  four   analysts   in  2019   This   essay  will   discuss   the   research  and  be  clearly   divided   into     parts   There   will   be   a   summary   of   the   paper   in   the   second  paragraph. While the third paragraph magnifies the strengths and contributions of the  paper, the penultimate paragraph illustrates the limitations of the research and the fifth  paragraph concludes The main objectives of the research are to investigate whether there are relationships  between cognitive intelligence (represented by the intelligent quotient, IQ) as well as  emotional intelligence  (indicated by the  emotional quotient,  EQ)  and time   preference  along   with   risk   preference   and   to   find   statistics   to   support   their   claim   Researchers  concluded the analysis based on prospect theory (PT) and quasi­hyperbolic discounting,  both   of   which   were   based   on   the   traditional   expected   utility   theory   (EUT)   The  experiment supporting the hypothesis of researchers was conducted among 146 junior  and senior business undergraduates found through advertisements and mass emails. The  participants have the obligation to fill in the given form by pencil. The regression results  showed that the estimated coefficients were negative, meaning that the higher IQ and EQ  are, the closer the connection of time preference and traditional time preference is. The  regression results also demonstrated that higher IQ and EQ will find risk preference more  relevant to the tradition, EUT­type risk preference. As a result, the paper finalized that  individuals with higher EQ are less likely to be affected by the present and the future,  therefore they have a lower subjective rate of time preference. High­IQ subjects obtain  less   curvature   in   the   utility   function,   less   probability   weighting   and   less   aversion   to  losses   The   research   will   help   the   authority   to   impose   suitable   policies   to   motivate  residents to accumulate wealth for children’s college fees and retirement. Analysts also  suggested further experiments on the basis of other modern theories The research has various strengths that future researchers can learn from. Even though  the research seems to be complicated, the clever way researchers connect the papers with  reality makes it easier for readers to focus. The introduction has linked the analysis to  some   important   discoveries   and   information   that   was   revealed   by   several   renowned  scientists   The   introduction   also  clearly   states   the   contributions   and  objectives   of  the  analysis. The literature review contains five parts covering each terminology and the way  each of them was developed. The audience can easily understand each term and how it is  constructed in the experiment. The survey of the experiment was thoroughly built and  explained so that  the  subjects   of  the  research  find  it convenient  to answer  The  first  conclusion of the research is that higher EQ residents are prone to being less likely to be   affected by present and future bias; which help the authority to impose policy at the right  time. The second idea given by the paper is that high IQ have less curvature in the utility  function,   less   probability   weighting   and   less   aversion   to   loss,   which   help   the  policymakers to focus on the suitable financial instruments in the country.  On  the   other  hand,   the   research  has   its   own  limitations   that  need  adjusting  by  other  scientists   in   future   experiment   The   sample   of   the   experiments   was   business  undergraduate   students,   which   may   not   have   the   same   opinions   as   office   workers.  Besides, the sample contained Americans, which may also have different perspectives of  saving and investment compared to residents in Europe or developing countries. It was  discovered that the risk attitudes between residents of different countries can influence  the level of labor mobility and migration (Jaeger et al., 2010). Moreover, the sample  consisted of only 146 participants, which can be considered to be small compared to other  analysis   with   at   least   300   subjects   The   analysis   applied   expected   utility   theory,   in  particular, prospect theory and quasi­ hyperbolic theory, which can be regarded as old­ fashioned in 2019. Instead, they should look for more modern theory to applied as the  modern theory proven by modern thinking and situations can bring about more relevant  results. The traditional theory is not the only one tool to measure risk preference and time  preference, individual retirement account (IRA) can be a variable explaining time and  risk   preference   of   investors   (Schoemaker,   1993)   Different   ways   of   measuring   risk  preference   (risk­attitude   surveys,   self­reports,   lottery   choices   or   real­world   decisions)  bring about different results (Figner & Weber, 2011). The research does not show the  relationship between cognitive intelligence and time preference. Higher IQ is assumed to  be good illustrations of individual rates of time preference (Jones & Podemska­Mikluch,  2010) In conclusion, the paper provides a statement for the study of behavioral finance. While  the research indicates its own strength and contribution to the upcoming research, its  problems are also prominent.   Reference Becker,   G.S   and   Mulligan,   C.B.,   1997   The   endogenous   determination   of   time  preference. The Quarterly Journal of Economics, 112(3), pp.729­758 Figner, B. and Weber, E.U., 2011. Who takes risks when and why? Determinants of risk  taking. Current Directions in Psychological Science, 20(4), pp.211­216 Jaeger, D.A., Dohmen, T., Falk, A., Huffman, D., Sunde, U. and Bonin, H., 2010. Direct  evidence on risk attitudes and migration. The Review of Economics and Statistics, 92(3),  pp.684­689 Jones, G. and Podemska­Mikluch, M., 2010. IQ in the utility function: Cognitive skills,  time preference, and cross­country differences in savings rates Schoemaker,   P.J.,   1993   Determinants   of   risk­taking:   Behavioral   and   economic  views. Journal of Risk and Uncertainty, 6(1), pp.49­73 ... results. The traditional theory is not the only one tool to measure risk preference and time preference,  individual retirement account (IRA) can be a variable explaining time and risk   preference  ... contributions   and objectives   of  the  analysis. The literature review contains five parts covering each terminology and the way  each of them was developed. The audience can easily understand each term and how it is ... analysis   with   at   least   300   subjects   The   analysis   applied   expected   utility   theory,   in  particular, prospect theory and quasi­ hyperbolic theory, which can be regarded as old­

Ngày đăng: 15/05/2020, 19:06

TỪ KHÓA LIÊN QUAN

TÀI LIỆU CÙNG NGƯỜI DÙNG

  • Đang cập nhật ...

TÀI LIỆU LIÊN QUAN