Using mutual fund flows, we evaluate prospect theory with choice outcomes in the market. We provide strong support for prospect theory: under a standard set of parameters, funds whose past returns generate higher prospect theory value attract significantly larger future flows; we also find corroborative evidence using account-level data. Taking a revealed preference approach, we estimate the prospect theory parameters through a discrete choice model and find that our field-based estimates align well with previous experiment-based estimates. Moreover, we show that prospect theory offers a new framework for understanding flows, as it has explanatory power beyond existing drivers.

We find that consumption spreads through social networks via a "visibility bias" channel, consistent with the model of Han et al. (2023). Using county-level Facebook connectedness and exogenous fracking shocks, we show that a 1% increase in a closely linked county's consumption raises local spending by 0.35% next year. Heterogeneous effects-stronger among more socially connected households and for socially visible goods-indicate transmission through social observation instead of economic linkages. Without their own income gains, households respond by buying cheaper goods, and peer-induced spending increases delinquency rates, underscoring that biased social observation, rather than economic connectedness, undermines financial stability.

Using a unique dataset of Chinese households, we document a robust negative causal effect of past house price growth on local entrepreneurial activity. This finding stands in sharp contrast to a positive effect typically documented in developed countries. We find that strong past house price growth fosters extrapolative housing-market optimism and stimulates greater housing investment. Consistent with crowding out, housing optimism — and the ensuing surge in housing investment — redirects resources away from entrepreneurship. This belief-based channel highlights an important mechanism through which housing booms may dampen real economic activity in emerging markets.

Using a unique survey data of Chinese households, we study the impact of house price growth and house price risk on entrepreneurship. House price risk, measured as the sensitivity of house price growth to local GDP growth, negatively impacts the entrepreneurship of homeowners relative to renters. This finding is concentrated only among sophisticated households and is consistent with the portfolio effect when housing and occupational choices are integral parts of the household portfolio. Moreover, a high past house price growth reduces the entrepreneurship of homeowners relative to renters. This holds for both sophisticated and unsophisticated households. We propose a new economic channel based on extrapolative belief and provide further supportive evidence.

Dynamic structure-soil-structure interaction (SSSI) for periodically arranged structure system under incident plane SH wave is investigated using the indirect boundary element method. The solution is presented through response of an infinite number of equally spaced, identical structures (periodically arranged structure system) supported by rigid foundations embedded in a soil layer overlying elastic bedrock. The presented method has the advantages of high accuracy, low computational cost, and low memory requirement. In parametric analysis, whether only immediately adjacent structures contribute significantly to the structural response in dense areas is analyzed first. Numerical results showed that the structural response for periodically arranged structure system may be evidently different from that of a finite array of structures model. While the immediately adjacent structures have the most significant effect, the effect of farther structures is still non-negligible. Then, the effects of separation distance and soil layer are investigated. It is shown that the separation distance may reduce or amplify the structural response compared with that for single structure, which could be as large as 67.5% and 59.7%, respectively, for building relative displacement. The soil layer also has prominent influence. With decreasing soil layer stiffness or soil layer thickness, the building's relative displacement amplitude increases. The conclusions may be useful for prediction of seismic response for design and interpretation of recorded response of full-scale structures in densely built areas.

We examine the impact of foreign equity flows on the Chinese stock market, identifying a novel channel through which retail investors’ herding generates significant market externalities. We find that the mandatory daily disclosure of foreign institutional holdings induces local investors to imitate these trades, resulting in pronounced price distortions and subsequent reversals. Utilizing inflow predictability tests and path analysis decomposition, we demonstrate that the herding effect driven by retail participants carries greater price impact than the direct informational content of the foreign capital itself. Furthermore, we document that the inflated valuations resulting from retail herding lead to corporate overinvestment and a significant reduction in investment efficiency. Our findings highlight the unintended consequences in markets dominated by noise traders, suggesting that position disclosure can inadvertently undermine both market stability and the efficiency of capital allocation.

We show theoretically and empirically that the cross-section of stock return idiosyncratic volatilities contains useful information about the ICAPM. We construct a proxy cross-sectional bivariate idiosyncratic volatility (CBIV) for the covariance risk between the market and the unobserved hedge portfolio under the ICAPM. Consistent with the ICAPM pricing relation, CBIV is a robust and significant predictor of the equity risk premium. We further show that the return predictability of the tail index in Kelly and Jiang (2014) can be explained by the ICAPM covariance risk.

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The Extremely Low Frequency (ELF) electromagnetic network has successfully detected numerous Pc1 geomagnetic pulsation events. To facilitate comprehensive analysis of the geospace environment, it is essential to automatically identify Pc1 events from massive observational data. This study proposes an automated detection model named the Automatic Detection Model for Pc1 Geomagnetic Pulsation (ADM-Pc1). The ADM-Pc1 utilizes the YOLOv8 object detection network, ResNet residual network, and directional feature enhancement technology. This study utilized low-frequency observation data from Dalian and Lijiang electromagnetic stations as a case study. Data from 2015 to 2016 was employed as the training set for supervised learning of the model, while data from 2017 to 2022 served as the test set for evaluating the model's performance. The ADM-Pc1 achieved an F1-score of 95%, a misclassification rate of 0.9%, a false alarm rate of 5.8%, a missed detection rate of 9%, and an average processing time of 2.72 seconds per day of data, outperforming most state-of-the-art methods. These results indicate that the ADM-Pc1 model exhibits high accuracy and robustness. Future work will focus on further developing the automatic recognition prototype system for Pc1 geomagnetic pulsations to meet practical engineering requirements.

The fault zone architecture may provide reliable information about the deformations in both on-fault and off-fault media. The outer damage zones of faults may extend for kilometers and exhibit structural anisotropy, which potentially causes electrical anisotropy in rocks. Thus, electrically anisotropic structures may indicate the dimensions and extent of fault damage zones. We investigated the electrical anisotropic structure of the sinistral Altyn Tagh fault (ATF), NW China, using magnetotelluric data collected in and around the Subei Basin. Our three-dimensional resistivity model reveals widespread anisotropic anomalies at depths <similar to 5 km. The directions of the minimum horizontal resistivity values of the anomalies inside the Qilian Shan southeast of the ATF are dominantly subparallel to the fault traces at the surface. At deeper levels (similar to 15-19 km and similar to 33-43 km), the anisotropic anomalies are mainly concentrated near the northern strand of the ATF (NATF) and the North Yemahe fault (NYMF) in the northeastern Subei area. The mid-lower crust (similar to 33-43 km) inside the Qilian Shan is characterized by isotropy or weak anisotropy with low resistivities (similar to 10 Omega m), which deviate significantly from the values along the NATF. Our results indicate the presence of a similar to 30 km wide off-fault damage zone along the NATF and NYMF in the shallow crust that thins downward to the lower crust. We propose that the distribution of anisotropic anomalies is influenced primarily by neighboring faults. An independent deformation model could be appropriate for evaluating the relationships between the ATF and thrust faults within the Qilian Shan.

The COVID-19 pandemic had significant effects on the health and wellbeing of people worldwide. However, in the post-epidemic era, we still know very little about how disease threat shapes consumer psychology and behavior. To fill this gap in knowledge, the present study explores the effect of disease threat on a particular sensory preference of consumers, that is, a preference for colorfulness. Based on compensatory consumption theory, we propose the following: (1) consumers prefer colorful products and brand logos to compensate for both disease threat and chronically perceived disease threat; (2) the underlying mechanism for this effect is death-related thoughts, in that disease threat leads to more death-related thoughts, which in turn enhance colorfulness seeking; (3) the impact of disease threat on consumers' colorfulness seeking diminishes among high sensation seekers. A set of four studies, adopting both lab and survey methods, using various manipulations and measures, and testing diverse samples, provide convergent evidence for these hypotheses. Moreover, six alternative explanations were ruled out to further elucidate the psychological process under examination in this study. This paper contributes to the literature on consumer behavior, sensory marketing, terror management theory, and compensatory consumption. Implications of these findings are discussed.

We employ a regression discontinuity design to study how a market division experiment affects stock liquidity and firm valuation in an illiquid market. We document that an increase in firm visibility can substantially improve a firm's liquidity (measured by trading immediacy) and increase valuation by 28.4% for thinly traded assets. We also find some evidence that an improved information environment may contribute to enhanced liquidity and valuation.

We apply machine learning methods to extract textual signals from company news articles that strongly forecast their delta-hedged equity option returns. Our results are robust to variations in text representations and machine learning approaches. The option return predictability of our textual signals remains significant after controlling for existing option return predictors. Regarding the underlying mechanisms, we find that news media contains valuable information about future stock volatility beyond traditional volatility forecasting models. Further, textual signals capture higher-order risk premia such as volatility and jump risk.

We investigate stock return predictability by various option price-based measures using real estate investment trusts (REITs). REITs are more transparent and efficiently priced than general stocks, but REIT options are less liquid. We find that most of the option price-based measures do not significantly forecast REIT stock returns, but changes in option implied volatilities are robust and significant return predictors. We provide further evidence supporting the informed trading channel instead of price pressure effects as the explanation for this return predictability.

The use of artificial intelligence (AI) service robots is on the rise. With service frontlines gradually shifting to human–robot interactions, the question of whether the anthropomorphism of robots facilitates or constrains consumers’ experiences has emerged. This article focuses on the individual factor “consumer mindset” (competition vs collaboration) and investigates how it impacts consumers’ attitudes toward anthropomorphic AI robots during service delivery. Across three studies, we confirm our main prediction that competitive mindset consumers respond less favorably to anthropomorphic (vs. non-anthropomorphic) AI robots, whereas collaborative mindset consumers respond more favorably to anthropomorphic (vs. non-anthropomorphic) AI robots. We test the mediating role of perceived psychological closeness and the moderating role of interaction distance to explain the underlying mechanism. Our findings provide theoretical insights into the mixed results of previous studies of service robot anthropomorphism and have practical implications for service agencies using frontline robots.

The main components of seismo-electromagnetic research are the deep underground electromagnetic seismogenic environment, electromagnetic field changes at different stages of the seismogenic process, and the physical mechanism and change rules of electromagnetic properties of the earth’s interior. Traditional electric and magnetic methods mainly analyze the single field change of the geoelectric field, geomagnetic field, or resistivity at frequencies less than 1 Hz. These do not include the extremely low-frequency band that is sensitive to seismic events, so it is difficult to obtain the characteristics of time-spatial variations and propagation characteristics precursors. In comparison, magnetotelluric stations observe magnetotelluric fields containing seismogenic-induced electromagnetic disturbances, and the observation frequency band is wide. In this paper, the three-dimensional numerical simulation method is used to calculate the magnetotelluric apparent resistivity anomaly generated by resistivity changes in the seismogenic zone, and the forward algorithm of arbitrarily orientated dipole source in layered earth is used to simulate the response of low-frequency pre-earthquake electromagnetic radiation. The magnetotelluric response including seismogenic resistivity anomaly and pre-earthquake electromagnetic radiation is obtained using the field component composition method. The frequency characteristics and spatial distribution characteristics of apparent resistivity anomalies are systematically analyzed, and the results are of important significance for the observation, data processing, and identification and analysis of seismic electromagnetic anomalies in different seismogenic processes.

We model visibility bias in the social transmission of consumption behavior. When consumption is more salient than nonconsumption, people perceive that others are consuming heavily, and infer that future prospects are favorable. This increases aggregate consumption in a positive feedback loop. A distinctive implication is that disclosure policy interventions can ameliorate undersaving. In contrast with wealth-signaling models, information asymmetry about wealth reduces overconsumption. The model predicts that saving is influenced by social connectedness, observation biases, and demographic structure, and provides new insight into savings rates. These predictions are distinct from other common models of consumption distortions.

The Abaga-Dalinor volcanic field (ADVF) in Inner Mongolia, China, located to the west of the North-South Gravity Lineament (NSGL), is the largest and less known area of Late Cenozoic intraplate volcanism in North-east China. Knowledge of the subsurface structure beneath the ADVF will improve our understanding of its evolution process and formation mechanisms. New broadband magnetotelluric (MT) data were collected along a profile of about 300 km that crosses the major basaltic areas exposed at the surface in the ADVF and a series of east-north-east (ENE) trending faults. The electrical resistivity structure of the crust and uppermost mantle across the ADVF was generated by 3-D inversion of full impedance tensor and tipper data. This model reveals a thick high-resistivity layer (>1000 omega m) in the upper crust that may represent the Precambrian basement and Late Paleozoic-Mesozoic granitic plutons. In contrast, high conductivity anomalies dominate the middle-lower crust. The northward-dipping high-conductivity feature at depths of 20-40 km below sea level under the Chagan Obo fault is suggested to be the involvement of the Early Paleozoic subducted oceanic crust. A remarkably high-conductivity zone (1-20 omega m) exists in the middle-lower crust beneath the Abaga and Dalinor volcanic areas. It is explained to be a saline fluid zone of-0.45%-0.48% that exsolved from the partial melts as magma ascent rapidly. The impermeable upper crust traps these fluids in the middle-lower crust. A moderately high-conductivity anomaly in the uppermost mantle below near the Solonker Suture Zone (SSZ) is attributed to a minimum partial melt of-3-4% associated with the localized asthenospheric upwelling, which feeds the Abaga and Dalinor volcanos as a common magma source. Integrating our resistivity model with previous geophysical and geochemical studies, we suggest that intraplate volcanism in the ADVF is mainly controlled by the pre-existing tectonic weak zones. The lithosphere within the SSZ is susceptible to thermal perturbation from the upwelling mantle, providing the preconditions for melt generation. A set of ENE trending faults and an inferred NW-SE trending fault jointly dominated the vertical transport of magma and lateral extension along the faults, which may have influenced the spatial distribution of basalts and volcanic cones at the surface in the ADVF. In addition, we tend to suggest that Late Cenozoic intraplate volcanism in the ADVF could be the result of decompressing melting within the localized small-scale asthenospheric upwelling induced by the edge-driven convection near the NSGL, which is indirectly related to the westward subduction and retreat of the (Paleo-) Pacific plate during the Late Mesozoic to Cenozoic.