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(2021)ThesisHousing wealth is typically the largest component of retirees’ portfolios. Although economic theory predicts that retirees would benefit from using housing wealth as a source of retirement funding, the take-up of enabling products and approaches is low. This thesis addresses three key areas in the utilization of housing wealth in retirement: (i) identification of the preferred home equity release approach for different types of households; (ii) exploration of means to address behavioral impediments to the utilization of housing wealth through equity release products; (iii) investigation of potential demand for long-term care insurance (LTCI) financed through home equity release. Chapter 3 investigates the preferred home equity release approach for retirement, given available options (i.e., downsizing, reverse mortgages, the government-offered Pension Loans Scheme, and home reversion–type schemes) and reflects the current tax, superannuation, and age pension rules in Australia. We use state-of-the-art economic and actuarial modeling to identify the preferred approach for the use of housing wealth by Australian retirees with different marital status, wealth portfolios, and preferences. Chapter 4 uses an online experimental survey administered to a representative sample of Australian (pre-)retiree homeowners to explore whether information framing to address mental accounting and narrow choice bracketing can enhance the demand for reverse mortgages. The information framing to address mental accounting significantly increases the stated demand for reverse mortgages. Chapter 5 presents the results of an online experimental survey administered to a representative sample of Chinese (pre-)retiree homeowners to investigate the demand for LTCI financed through home equity release. We find that access to home equity release products significantly increases the stated demand for LTCI and that the preferred approach is to use a reverse mortgage. Overall, the findings in this thesis confirm that retirees would benefit from using housing wealth to finance retirement. The results also identify approaches to reduce the gap between theoretical and actual demand for home equity release products. The findings provide evidence that government and private providers can use to address barriers to increasing interest in and take-up of home equity release products and to develop new products to enhance the utilization of housing wealth in retirement.
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(2021)ThesisDecades of research on organizational change and its leadership has explored the influence of leaders on change outcomes. Yet, despite this accumulated effort, the likelihood of success remains stubbornly low. This dissertation explores: how do leaders improve the likelihood of change success? Prior scholarship has examined this question from two perspectives. Change practice discussion describes change processes, the activities that enable change, with allied suggestions for leader engagement – how to lead change processes. Change leadership discussion studies leader attributes, aiming to identify and generalize those allied with success and, in doing so, provide guidance for leadership development. Addressing the leader-success challenge, scholars have identified two problems: (1) these two discussions lack integration – while it is difficult to talk about change leadership without inherently referring to a change process, the former discussion overlooks the available choices between change processes, and (2) the study of attributes has yielded desired leader behaviors, yet evidence shows that these behaviors do not always manifest in practice. Addressing the first challenge, I commence with a process study of 79 cases of change. This research finds that a dynamic choice between two perspectives of change processes – illustrated as diagnostic and dialogic – significantly improves the likelihood of change success. It also extends an understanding of a leadership practice that facilitates this choice. Integrating these findings, I develop a model that explains how choice connects change leadership to change process knowledge, at the same time as providing a roadmap for leaders to navigate between diagnostic and dialogic processes in practice. Addressing the second challenge, psychologists explain a key limitation of behavioral study is that a large component of people’s behavior is a product of situational cues. To explain this phenomenon, these scholars have explored mindsets, describing how behavioral dispositions result from mental frameworks that stand ‘ready to fire’ based on situational cues. My second study establishes psychology-derived mindsets as relevant for leadership engagement of change processes. It does so by developing a typology of mindset constructs, then conducting an integrative review of mindset knowledge between change leadership and psychology settings. This study matches the fixed and growth mindsets with leadership engagement of diagnostic and dialogic change processes. My third study empirically examines how the fixed and growth mindsets manifest within leaders when change is targeted. It finds that leaders with a growth mindset are likely to choose to oscillate between change processes and achieve change success. Further, I identify that diagnostic change processes can provide situational cues that foster a fixed mindset within leaders, with detrimental effects on outcomes. Integrating these findings from all three studies, this dissertation puts forward a new means for leadership development – mindset activation theory – explaining a means for leaders to take control of their situation-mindset interaction and guide their behaviors in practice. It demonstrates how leaders can increase awareness of and operationalize the situational cues that guide their mindset, facilitating choices between change processes that improve their likelihood of change success.
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(2021)ThesisConsumers encounter thousands of scarcity messages daily, yet the effects of scarcity tactics are unclear. This thesis aims to uncover the effects of different types of scarcity tactics from both firm and customer perspectives. Included herein are fifteen studies that employed mixed research designs (i.e., experimental designs, cross-sectional surveys) with a variety of product categories (i.e., clothing, shoes, electronics, food, sustainable products, etc.). Three essays are produced to articulate this work; Essay One focuses on product scarcity and investigates when and why a corporate decision to create an intentional scarcity of products would improve or impair the brands. Essay Two examines how two types of messaging, scarcity based, and social proof based, can drive or diminish consumers’ information sharing in promotional contexts. Essay Three identifies how a personal scarcity concept - feelings of relative deprivation - undermines consumers’ adoption of sustainable products. Collectively, this thesis contributes advances to multiple streams of research including scarcity, branding, information sharing behaviour, and sustainable purchases. It also offers practical guidance for marketers, retailers, and policy makers.
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(2021)ThesisThis paper explores extensive asset allocation possibilities and asset pricing tests shedding light into the cross-sectional and time-varying nature of combining multi-asset alternative risk premia. Existing literature in the multi-asset risk premia space is limited in terms of allocation studies as most research on combining factor exposures are only in the single-stock equity space. The literary gap is further exacerbated over the last decade with the explosion of new factors discovered. To address this, key asset allocation techniques commonly used in allocating across long-only traditional asset classes and equity factors are applied to multi-asset risk premia. The results seem to suggest the key assumptions of expected returns, followed by expected risks, higher moments and then lastly correlations in this order of importance are associated with building portfolios with higher risk-reward. To the best of my knowledge, this is one of the first papers that provide a comprehensive and practical study of a wide array of portfolio implementation approaches to multi-asset risk premia. This paper serves as an annex for investors to better understand the interaction and concentration of multi-asset risk premia exposures to meet their desired investment profiles.
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(2021)ThesisMarketers increasingly recognize that consumer decisions may be ascribed to emotional motivations. While several scholars have examined the influence of discrete negative and positive emotions in consumption contexts, one emotion that has been understudied in marketing is the influence of the emotion of awe. Awe is a positive emotion elicited by extensive or vast stimuli, either perceptually or conceptually, which leads to the revision of mental schemas. Further, as a self-transcendent, other-focused emotion, awe has properties that suggest its potential in driving consumer well-being. The central insight of this thesis is that awe and related states like threat-awe can have unique influences on consumer behaviour. For instance, prior research has argued threat-awe as a negative-valenced variant of awe that would prime similar downstream consequences as awe. Contrastingly, the first essay, “The Curious Case of Threat-Awe”, conceptualizes threat-awe as a mixed emotion of awe and fear, rather than a negative-valenced state. Over five studies, we draw on two methodologies - cognitive appraisals and an index of bivalence - and elucidate how threat-awe’s appraisal profile, valence, and behaviour (risk-taking) are distinct from univalenced emotions like awe and fear. The second essay, “Feeling Small but Thinking Big”, conceptualizes awe's positive self-diminishment effect and develops a framework of how awe facilitates engagement in sustainable consumption. Across four studies, this essay demonstrate how awe positively impacts consumers’ willingness to pay for sustainable products. The essay further shows the underlying sequential mechanism of positive self-diminishment and examines boundary conditions of product packaging and product type. In the final essay, “Betting on Myself”, we show that the positive self-diminishment effect of awe reduces financial risk-taking in the domain of gambling. Using multiple methodologies to prime awe (writing/reading task, virtual reality), we compare awe against other positive emotions such as pride, happiness, amusement, and neutral, and demonstrate that awe-induced self-diminishment reduces gambling tendency. The studies also rule out several alternative explanations and examine the boundary condition of feedback on performance. Overall, across the three essays, this thesis highlights socio-cognitive engagement of awe and its behavioural consequences relevant to consumer decisions and well-being.
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(2021)ThesisFor decades scholars have detailed the benefits of having embedded workers in the workplace. Increasing embeddedness reduces the costs workplaces incur from workers’ withdrawal behaviours. In comparison, less is known regarding the costs of high embeddedness. Drawing on conservation of resource theory, this thesis examines the negative effects of embeddedness in conjunction with work role overload on burnout and withdrawal. It further considers the impact of workers’ physical and psychological maintenance of barriers between work and life (i.e., work-life boundary control flexstyles) on the aforementioned effects. The results of two waves of survey data from 243 aged care workers, analysed using a moderated mediation framework, showed work role overload and flexstyle moderate the mediated relationship between job embeddedness, burnout, and withdrawal behaviours (lateness, absenteeism, and turnover). These results underscore the importance of workers’ experience of work overload and their work-life control flexstyles when considering the impact of embeddedness on retaining, expanding, and sustaining the aged care workforce. These findings have important implications for employees, managers, and organisations in the aged care industry.
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(2021)ThesisThe aim of this thesis is to utilise transnational regulatory network (TRN) theory to examine the effectiveness of the regulatory framework promulgated by the International Organisation of Securities Commissions (IOSCO) — to address the activities of transnational hedge funds. Scholarship employing TRN theory has not previously accounted for the distinctive role that IOSCO — a body well-described as a TRN — has played in developing hedge fund regulation to prevent, identify and mitigate systemic risk related to transnational hedge funds. It is a gap that this thesis attempts to fill. This thesis asks whether and in what ways the IOSCO framework contributes to systemic risk mitigation in relation to transnational hedge funds operating at the global level. It does so to help academics and policymakers to better understand and appreciate the value, and overcome the limitations of IOSCO in this respect. Using the case studies of the failure of Long-Term Capital Management at the end of the 20th century and the demise of Bear Stearns’ hedge funds during the global financial crisis, it argues that it is the systemic hazards posed by hedge funds that make them merit extra regulation at both national and transnational levels. Deploying the findings of the TRN theory, it further demonstrates that the IOSCO framework for transnational hedge fund regulation holds not only advantages to be maintained but also shortcomings to be overcome in addressing these systemic hazards. The significance of this study lies in its contribution to advancing comprehension of the global regulatory framework for transnational hedge funds. It makes the advance by introducing a focus on systemic risk mitigation, hitherto lacking, and developing a critical, doctrinal understanding of the relatively understudied rules and standards under IOSCO.
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(2021)ThesisThis thesis studies several important issues for ageing populations in developing countries facing basic public provisions of health services and pensions and high levels of air pollution. In particular, I investigate the demand for longevity, critical illness insurance (CII), and long-term care insurance (LTCI) in developing countries from both theoretical and empirical perspectives. I also study how PM2.5 (particles less than 2.5 micrometres in diameter) affects multimorbidity, cognition, and disability in activities of daily living (ADL) that are important health indicators for the old. The results provide insights into the design and risk management of retirement insurance products and government policies. First, we conduct an online experimental survey to elicit and analyse preferences for retirement portfolio including longevity, CII, and LTCI products after the COVID-19 pandemic outbreak in urban China. We observe a high variation of insurance demand by individual factors and COVID-19 experience, and their effects can be opposite by health-contingent insurance and life annuity. On average, the most preferred retirement portfolio contains health-contingent insurance that covers half of the expected out-of-pocket (OOP) costs for critical illness and long-term care expenditures, a monthly annuity of 20% of the disposable income. The portfolio that covers half of the OOP cost for long-term care, critical illness, or both, is most effective in increasing annuitisation. Next, we derive the optimal portfolio for retirees in China facing uncertain lifespan, catastrophic medical expenditures, and long-term care costs. An optimal portfolio highly depends on a retiree’s economic background. For a retiree with an average pension, we find that at least 30% of retirement wealth is allocated to CII, while at least 40% is allocated to a life annuity for those with a low pension. The demand for LTCI is less than 15% of retirement savings. State-dependent utility and bundled insurance products can both increase annuity demand for some retirees. Finally, we investigate the long-term impact of exposure to PM2.5 on multimorbidity, cognition, and ADL disability for the middle- and old-aged adults in China. We find different non-linear associations between PM2.5 exposure and the three health outcomes, and we also observe different impacts of past and current exposure to PM2.5 on them. We interpret the risk of PM2.5 exposure by comparing it to the effects of ageing.
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(2022)ThesisThe stochastic optimal decision-making problem concerns the process of dynamically deciding actions to optimize pre-specified criteria based on specific stochastic models. It is, however, common that a decision-maker is unable to obtain complete information to formulate fully reliable models and faces the issue of model uncertainty. Existing empirical studies have shown that ignoring model uncertainty leads to improper decisions and causes losses in the financial market. Thus, it is important to incorporate model uncertainty into decision-making. To our best knowledge, no existing works on dividend optimization have taken model uncertainty into consideration. This thesis is an early attempt to fill such a gap in the actuarial literature. This thesis studies three popular optimization problems in the framework of model uncertainty, which involve different models with multiple control variables and various assumptions. It consists of three projects. The first project investigates an optimal risk exposure-dividend control problem under a diffusion model with model uncertainty. Due to the concerns about model uncertainty, the ambiguity averse insurer aims at finding the robust strategies such that a penalized reward function is maximized in the worst-case scenario. The problem is formulated as a zero-sum stochastic differential game between the insurer and the market. Explicit expressions for the value functions are obtained and the optimal dividend strategies are identified as barrier strategies. The second project incorporates model uncertainty into a dividend optimization problem of a singular type under the classical risk model with general assumptions on the claim size distribution. Using the standard stochastic control techniques, we characterize the value function as the smallest viscosity supersolution to the existing Hamilton-Jacobi-Bellman equation and show that the optimal strategies are of band type. The third project extends the second project by incorporating fixed and proportional transaction costs on dividend payments. The problem is an impulse control problem and the optimal dividend strategies are shown to be n-level lump sum strategies. Numerical studies are provided for each project and the economic implications of model uncertainty on insurer’s decision-making are discussed. It is shown that the insurer who is more averse to ambiguity tends to be more conservative in the optimal strategies.
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(2021)ThesisThis thesis consists of three chapters that investigate the linkage between uncertainty and corporate investment decisions on an international basis. In first chapter, I investigate the extent of U.S. policy-related spillovers into 22 other real economies. I find that, after accounting for factors previously used to explain corporate investment, US Economic Policy Uncertainty (US EPU, hereafter) fluctuations affect foreign corporate investments through two channels. First, the single effect of US EPU on international corporate investment shows an unequivocal negative relation (the direct channel). Second, an increase in US EPU also attenuates the negative sensitivity of corporate investment towards the cost of capital (the indirect channel). Further, I find that while the direct channel of US EPU on corporate investment persists across several subsamples, its indirect channel relates to a high degree of dependence on the U.S. economy and opacity exhibited by local economies. The second chapter reconciles the contrary views on the foreign investors using local disaster shocks from 46 countries over the period 1998-2018. I find that local disaster shocks cause significant disruptions to corporate investments, but foreign institutional investors attenuate the costs of disaster risks. The benefits associated with foreign institutional investors are not uniformly held across all economies, where the role of foreign institutional investors is particularly measurable in countries with well-developed institutional environment. The third chapter focuses on the uncertainty at domestic level using national elections across 23 different countries. I find that the corporate investment cycle corresponds with the timing of national elections, but there is a cross-sectional difference in the firm-level investment sensitivity to elections. During election periods, while firms temporarily reduce investment expenditures relative to nonelection years, the decline is mainly sourced from firms with greater political exposures. Further, I find that the investment cycles are more volatile when the election outcomes are uncertain, and the institutional environments are weaker.