Death tolls spur pro-war stance, study finds

Mounting casualities in America’s nearly 10-year-old wars in Iraq and Afghanistan might seem to serve as a catalyst for people to denounce the war and demand a way out. But a Washington University in St. Louis study into the psychology of “sunk-costs” finds that highlighting casualties before asking for opinions on these wars actually sways people toward a more pro-war attitude. This sunk-cost mindset may also expain why losers stay in the stock market.

No need to hit panic button; subprime mess isn’t all bad

The stock market might be nervous due to the subprime loan mess, but Stuart Greenbaum, Ph.D., former dean and Bank of America Professor Emeritus of Managerial Leadership for the Olin Business School, is bullish on the situation. Despite the circumstances, this is not a time to panic, says Greenbaum.

Earnings statements can trigger reactions in a company’s supply chain

When good fortune smiles on a company, the stock market responds by valuing the firm more favorably. It’s well known that good news for one firm means other companies in the same industry will be affected as well. But a business professor at Washington University in St. Louis says we can also anticipate a predictable connection between news announcements of a company and its suppliers or customers.

Options backdating is part of a tradition of boosting executive pay by bending the rules.

Managers can find way to increase their compensation.Now that the U.S. Senate Finance Committee has returned from its summer holiday, members have put the recent spate of backdating stock options at the top of the agenda. Over the summer, several companies have been caught up in the practice, which skims the top off a firm’s profits. According to professors at the Olin School of Business, the backdating of options is just one of the ways to time executive compensation in a way that enable executives to maximize their own pay. More…

Baby boomers’ retirement could threaten Wall Street

It’s not just social security and health-care that could be adversely affected when the baby boomers leave the workforce; the stock market could go into shock as well. According to research at the Olin School of Business at Washington University in St. Louis, when people retire, they tend not invest as much they did in their younger years. With the boomer generation starting to pull out of the workforce, Wall Street is bound to feel the blow. More…

Can Sarbanes-Oxley influence investors’ trust?

What is a ‘fair’ price for fairness? New research from Washington University’s Olin School of Business reveals that a just system of governance may not enhance trust when returns do not meet investors’ expectations. This is sobering news for businesses that have spent countless hours and large amounts of money complying with the Sarbanes-Oxley Act (SOX) in the hopes of building stronger corporate governance. More…
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