Fixed Versus Floating Interest Rates in Shipping Finance: A Behavioral Finance Perspective
0
조회
0
다운로드
2
인용
0
참고문헌
키워드
초록
This study analyzed the decision-making process in ship finance for the choice between fixed and floating interest rates using behavioral finance theories. Results confirmed that causes and background of decision-making processes could be explicitly explained by the framework of behavioral finance theories. This study also determined whether decisions were irrational. A case-study research was applied as the methodology. Decision-making data on ship finance collected through narrative and questionnaire responses were analyzed and evaluated using behavioral finance theories. Theories of behavioral finance used in the analysis and research of this study included availability heuristic, anchoring effect, and opportunity cost theory. Narrative and survey responses were clearly explained by theories of behavioral finance. It was found that a shipping company suffered additional losses owing to decisions that included behavioral finance errors. Behavioral finance theories largely influenced the decision-making process of choosing between a fixed interest rate and a floating interest rate. Shipping finance decisions related to interest rate selections could be clearly explained by behavioral finance theories. Errors related to behavioral finance could result in irrational decisions. Thus, managers who are responsible for shipping finance should remain vigilant toward any behavioral finance errors when making shipping finance decisions.
Abstract
This study analyzed the decision-making process in ship finance for the choice between fixed and floating interest rates using behavioral finance theories. Results confirmed that causes and background of decision-making processes could be explicitly explained by the framework of behavioral finance theories. This study also determined whether decisions were irrational. A case-study research was applied as the methodology. Decision-making data on ship finance collected through narrative and questionnaire responses were analyzed and evaluated using behavioral finance theories. Theories of behavioral finance used in the analysis and research of this study included availability heuristic, anchoring effect, and opportunity cost theory. Narrative and survey responses were clearly explained by theories of behavioral finance. It was found that a shipping company suffered additional losses owing to decisions that included behavioral finance errors. Behavioral finance theories largely influenced the decision-making process of choosing between a fixed interest rate and a floating interest rate. Shipping finance decisions related to interest rate selections could be clearly explained by behavioral finance theories. Errors related to behavioral finance could result in irrational decisions. Thus, managers who are responsible for shipping finance should remain vigilant toward any behavioral finance errors when making shipping finance decisions.
참고문헌 (86)
- Agans, R. P., "The Hindsight Bias: The Role of the Availability Heuristic and Perceived Risk", Basic and Applied Social Psychology, 15(4), pp.439~449 (1994)
- Ariely, D., "Buying, Bidding, Playing, or Competing? Value Assessment and Decision Dynamics in Online Auctions", Journal of Consumer Psychology, 13(1&2), pp.113~123 (2003)
- Baddeley, M., "Behavioural Economics: A Very Short Introduction" (2017), Oxford University Press
- A Survey of Behavioural Finance, "Barberis, N.", National Bureau of Economic Research, ~ (2002)
- Bell, E., "Business Research Methods" (2019), Oxford University Press
- Bennis, W. M., "Fast and Frugal Heuristics in Sports", Psychology of Sport and Exercise, 7, pp.611~629 (2006)
- USD 3M LIBOR, "Bloomberg", Bloomberg Terminal, ~ (2020)
- Buckingham, C. D., "Classifying Clinical Decision Making: Interpreting Nursing Intuition, Heuristics and Medical Diagnosis", Journal of Advanced Nursing, 32(4), pp.990~998 (2000)
- Camerer, C. F., "Advances in Behavioral Economics" (2004), Princeton University Press
- Chang, E. C., "A Note on the Spread Between the Rates of Fixed and Variable Rate Loans", Journal of Banking and Finance, pp.1479~1487 (1995)
- Chang, T. P., "Anchoring Effect on Macroeconomic Forecasts: A Heterogeneity Approach", Romanian Journal of Economic Forecasting, 21(4) (2018)
- Chatterjee, S., "Tradeoff Between Time and Money: The Asymmetric Consideration of Opportunity Costs", Journal of Business Research, 69, pp.2560~2566 (2016)
- Chava, S., "Determinants of the Floating-to-Fixed Rate Debt Structure of Firms", Journal of Financial Economics, 85(3), pp.755~786 (2007)
- Chen, C. S., "The Role of House Money Effect and Availability Heuristic in Investor Behaviour", Management Decision, 55(8), pp.1598~1612 (2017)
- Cho, I., "The Anchoring Effect in Decision-Making with Visual Analytics", IEEE Conference on Visual Analytics Science and Technology, pp.116~126 (2017)
- Bradford Cornell, "Money Supply Announcements and Interest Rates: Another View", The Journal of Business, 56(1), pp.1~23 (1983), University of Chicago Press[DOI]
- Creswell, J. W., "Qualitative Inquiry and Research Design: Choosing Among Five Approaches" (2013), SAGE Publications Inc
- Davies, G., "As Covid Optimism Grows, Investors Seek to Hedge Against Inflation Risk", Financial Times, ~ (2020)
- Detmer, D. E., "Heuristics and Biases in Medical Decision-making", Journal of Medical Education, 53 (1978)
- Dijk, M. V., "Estimating the Weight of Opportunity Costs in Housing Consumption", Applied Economics, 49(57), pp.5762~5770 (2017)
- Englich, B., "Sentencing Under Uncertainty: Anchoring Effects in the Courtroom", Journal of Applied Social Psychology, 31(7), pp.1535~1551 (2001)
- Englich, B., "The Last Word in Court - A Hidden Disadvantage for the Defense", Law and Human Behavior, 29(6), pp.705~722 (2005)
- Faulkender, M., "Hedging or Market Timing? Selecting the Interest Rate Exposure of Corporate Debt", Journal of Finance, 60(2), pp.931~962 (2005)
- Fiske, S. T., "Social Cognition" (1991), McGraw-Hill
- "Federal Reserve Sets Stage for 2016 US Interest Rate Rise" (2016)[URL]
- Forbes, W., "Behavioural Finance" (2009), John Wiley & Sons Ltd.
- Frederick, S., "Opportunity Cost Neglect", Journal of Consumer Research, 36(4), pp.553~561 (2009)
- Galinsky, A. D., "Regulatory Focus at the Bargaining Table: Promoting Distributive and Integrative Success", Personality and Social Psychology Bulletin, 31(8), pp.1087~1098 (2005)
- Galinsky, A. D., "First Offers as Anchors: The Role of Perspective-Taking and Negotiator Focus", Journal of Personality and Social Psychology, 81(4), pp.657~669 (2001)
- Galinsky, A. D., "Disconnecting Outcomes and Evaluations: The Role of Negotiator Focus", Journal of Personality and Social Psychology, 83(5), pp.1131~1140 (2002)
- Gao, S., "The Anchoring Effect of Underwriter’s Proposed Price Ranges on Institutional Investors’ Bid Prices in IPO Auctions:Evidence from China", International Review of Economics and Finance, 63, pp.111~127 (2019)
- Graham, J. R., "Do Firms Hedge in Response to Tax Incentives?", The Journal of Finance, 57(2) (2002)
- Greenberg, A. E., "Opportunity Cost Neglect Attenuates the Effect of Choices on Preferences", Psychological Science, 27(1), pp.103~113 (2016)
- Haden, V. R., "Global and Local Concerns: What Attitudes and Beliefs Motivate Farmers to Mitigate and Adapt to Climate Change?", PLoS ONE, 7(12), pp.e52882~ (2012)
- Harwood, S., "Shipping Finance" (1995), Euromoney Institutional Investor
- Hedrick, T. E., "Applied Research Design" (1993), SAGE Publications Inc
- Hertwig, R., "Decisions from Experience and the Effect of Rare Events in Risky Choice", Psychological Science, 15(8), pp.534~539 (2004)
- Hoskin, R. E., "Opportunity Cost and Behavior", Journal of Accounting Research, 21(1), pp.78~95 (1983)
- "Inflation is Back on the Menu —And Not Only Because of Brexit" (2020)[URL]
- Kahneman, D., "Thinking Fast and Slow" (2011), Farror, Straus and Giroux
- Kliger, D., "The Availability Heuristic and Investors’ Reaction to Company-Specific events", The Journal of Behavioral Finance, 11(1), pp.50~65 (2010)
- Klonoski, R., "The Case for Case Studies:Deriving Theory from Evidence", Journal of Business Case Studies, 9(3), pp.261~266 (2013)
- Ku, G., "Starting Low But Ending High: A Reversal of the Anchoring Effect in Auctions", Journal of Personality and Social Psychology, 90(6), pp.975~986 (2006)
- Kudryavtsev, A., "The Availability Heuristic and Reversals Following Large Stock Price Changes", Journal of Behavioral Finance, 19(2), pp.159~176 (2018)
- "캠코선박, 국적선 5척 추가 매입" (2016)[URL]
- Larrick, R. P., "Who Uses the Cost-Benefit Rules of Choice? Implications for the Normative Status of Microeconomic Theory", Organizational Behaviour and Human Decision Processes, 56, pp.331~347 (1993)
- "'Dot Plot' shows Fed governors expect fewer rate hikes in 2016" (2016)[URL]
- Li, H., "Corporate Use of Interest Rate Swaps: Theory and Evidence", Journal of Banking & Finance, 27(8), pp.1511~1538 (2003)
- Liao, L. C., "Anchoring Effect on Foreign Institutional Investors’ Momentum Trading Behavior: Evidence from the Taiwan Stock Market", North American Journal of Economics and Finance, 26, pp.72~91 (2013)
- "Inflation Debate Looms Large Over US Market Outlook" (2020)[URL]
- Mackey, T. B., "Incorporating Opportunity Costs in Strategic Management Research:The Value of Diversification and Pay Out as Opportunities Forgone When Reinvesting in the Firm", Strategic Organization, 11(4), pp.347~363 (2013)
- Makin, J., "American Hero", International Economy, 25(2), pp.24~24 (2011)
- "Deal Database" (2020)[URL]
- Mase, A. S., "Enhancing the Social Amplification of Risk Framework (SARF) by Exploring Trust, the Availability Heuristic, and Agricultural Advisors’ Belief in Climate Change", Journal of Environmental Psychology, 41, pp.166~176 (2015)
- McClure, S. M., "Separate Neural Systems Value Immediate and Delayed Monetary Rewards", Science, 306(5695), pp.503~507 (2004)
- Mussweiler, R., "The Use of Category and Exemplar Knowledge in the Solution of Anchoring Tasks", Journal of Personality and Social Psychology, 78(6), pp.1038~1052 (2000)
- Mussweiler, T., "Overcoming the Inevitable Anchoring Effect:Considering the Opposite Compensates for Selective Accessibility", Personality and Social Psychology Bulletin, 26(9), pp.1142~1150 (2000)
- Neumann, B. R., "Opportunity Costs: Further Evidence Through an Experimental Replication", Journal of Accounting Research, 16(2), pp.400~410 (1978)
- Northcraft, G. B., "Experts, Amateurs and Real Estate: An Anchoring-and-Adjustment Perspective on Property Pricing Decisions", Organisational Behaviour and Human Decision Processes, 39, pp.84~97 (1987)
- Phillips, O. R., "Sunk and Opportunity Costs in Valuation and Bidding", Southern Economic Journal, 58(1), pp.112~128 (1991)
- Plantinga, A., "Evidence for Opportunity Cost Neglect in the Poor", Journal of Behavioral Decision Making, 31, pp.65~73 (2018)
- Poses, R. M., "Availability, Wishful Thinking and Physicians’ Diagnostic Judgments for Patients with Suspected Bacteremia", Medical Decision Making, 11(3), pp.159~168 (1991)
- Read, D., "The Value of Nothing: Asymmetric Attention to Opportunity Costs Drives Intertemporal Decision Making", Management Science, 63(12), pp.4277~4297 (2017)
- Ritter, J. R., "Behavioral Finance", Pacific-Basin Finance Journal, 11, pp.429~437 (2003)
- Human Behavior and the Efficiency of the Financial System, "Shiller, R. J.", National Bureau of Economic Research, ~ (1998)
- Shiller, R. J., "Why Did the Nikkei Crash? Expanding the Scope of Expectations Data Collection", The Review of Economics and Statistics, 78(1), pp.156~164 (1996)
- Sjoberg, L., "Risk Perception and Movies: A Study of Availability as a Factor in Risk Perception", Risk Analysis, 30(1), pp.95~106 (2010)
- Smith, C. W., "The Determinants of Firms' Hedging Policies", Journal of Financial and Quantitative Analysis, 20(4), pp.391~405 (1985)
- Spiller, S. A., "Opportunity Cost Consideration", Journal of Consumer Research, 38(4), pp.595~610 (2011)
- Stake R., "The Art of Case Study Research" (1995), Sage
- Stapel, D. A., "Contextual Determinants of Strategic Choice: Some Moderators of the Availability Bias", European Journal of Social Psychology, 25, pp.141~158 (1995)
- Sunstein, C. R., "The Availability Heuristic, Intuitive Cost-Benefit Analysis, and Climate Change", Climatic Change, 77, pp.195~210 (2006)
- Thaler, R., "Toward a Positive Theory of Consumer Choice", Journal of Economic Behavior and Organization, 1, pp.39~60 (1980)
- Tversky, A., "Availability: A Heuristic for Judging Frequency and Probability", Cognitive Psychology, 5, pp.207~232 (1973)
- Tversky, A., "Judgement Under Uncertainty: Heuristics and Biases", Science, 185(4), pp.1124~1131 (1974)
- Tversky, A., "Support Theory:A Non-Extensional Representation of Subjective Probability", Psychological Review, 101(4), pp.547~567 (1994)
- Thanos Verousis, "The implications of a price anchoring effect at the upstairs market of the London Stock Exchange", International Review of Financial Analysis, 32, pp.37~46 (2014), Elsevier BV[DOI]
- Visvanathan, C., "Who Uses Interest Rate Swaps? A Cross-Sectional Analysis", Journal of Accounting, Auditing & Finance, 13(3), pp.173~200 (1998)
- Wall, L. D., "Alternative Explanations of Interest Rate Swaps: A Theoretical and Empirical Analysis", Financial Management, 18(2), pp.59~73 (1989)
- Whyte, G., "The Effect of Multiple Anchors on Anchoring in Individual and Group Judgment", Organizational Behaviour and Human Decision Processes, 69(1), pp.75~85 (1997)
- Wilkinson, N., "An Introduction to Behavioral Economics" (2012), Palgrave Macmillan
- Wright, W. F., "Effects of Situation Familiarity and Financial Incentives on Use of the Anchoring and Adjustment Heuristic for Probability Assessment", Organizational Behaviour and Human Decision Processes, 44, pp.68~82 (1989)
- "Current Conditions and the Outlook for the U.S. Economy" (2016)[URL]
- Yin, R. K., "Case Study Research: Design and Methods" (2009), Sage
- Yin, R. K., "Case Study Research: Designs and Methods" (2014), Sage
- Zauberman, G., "Consumer Intertemporal Preferences", Current Opinion in Psychology, 10, pp.136~141 (2016)
