• How Virtual Reality Leads to Positive Responses to Persuasion Attempts: The Implications of VR Brand Placement

      Rabbani Movarekh, Ahmadreza; Faculty of Business Programs
      Facebook has started to test advertising in virtual reality, yet consumers’ responses toward this phenomenon have been neglected in the virtual reality and consumer behaviour literature. Most of the previous research has focused on VR as the primary tool for representing the service or product and not a medium for advertising purposes. Therefore, brand placement in virtual environments, as one of the most common persuasive advertising efforts by brands, is the focus of this study. More specifically, this research analyzes the effect of brand placement context (VR, 360 or 2D) and placement congruity on consumers’ persuasion knowledge and their responses towards brands, using the cognitive load theory and persuasion knowledge model to predict and explain the effect. The research model was tested using PLS-SEM and the PROCESS macro with a sample of 209 participants. The results confirmed that participants who experienced a higher sense of telepresence and interactivity (VR condition) were more likely to report lower persuasion knowledge and better brand evaluations and behavioural intentions. It was also found that compared to the 360 condition, in VR and 2D environments, participants were more likely to recall the brand embedded into the environment. Placement congruity was found to moderate the underlying mechanism through which interactivity and telepresence affect persuasion knowledge. These findings provide helpful insights to marketers and brand managers, who think of VR as an advertising tool, on how the technology factor impacts consumers’ responses to their persuasion attempts, such as brand placements.
    • When Moneyball Meets the Beautiful Game: A Predictive Analytics Approach to Exploring Key Drivers for Soccer Player Valuation

      Li, Yisheng; Faculty of Business Programs
      To measure the market value of a professional soccer (i.e., association football) player is of great interest to soccer clubs. Several gaps emerge from the existing soccer transfer market research. Economics literature only tests the underlying hypotheses between a player’s market value or wage and a few economic factors. Finance literature provides very theoretical pricing frameworks. Sports science literature uncovers numerous pertinent attributes and skills but gives limited insights into valuation practice. The overarching research question of this work is: what are the key drivers of player valuation in the soccer transfer market? To lay the theoretical foundations of player valuation, this work synthesizes the literature in market efficiency and equilibrium conditions, pricing theories and risk premium, and sports science. Predictive analytics is the primary methodology in conjunction with open-source data and exploratory analysis. Several machine learning algorithms are evaluated based on the trade-offs between predictive accuracy and model interpretability. XGBoost, the best model for player valuation, yields the lowest RMSE and the highest adjusted R2. SHAP values identify the most important features in the best model both at a collective level and at an individual level. This work shows a handful of fundamental economic and risk factors have more substantial effect on player valuation than a large number of sports science factors. Within sports science factors, general physiological and psychological attributes appear to be more important than soccer-specific skills. Theoretically, this work proposes a conceptual framework for soccer player valuation that unifies sports business research and sports science research. Empirically, the predictive analytics methodology deepens our understanding of the value drivers of soccer players. Practically, this work enhances transparency and interpretability in the valuation process and could be extended into a player recommender framework for talent scouting. In summary, this work has demonstrated that the application of analytics can improve decision-making efficiency in player acquisition and profitability of soccer clubs.
    • Risk-Taking and CEO Compensation: CEO Pay Slice Versus Pay-Volatility Sensitivity

      Ye, Fan; Faculty of Business Programs
      This paper aims to analyze the impacts of compensation incentives and CEO power on firm’s risk-taking by using stock return volatility (Srisk) and earnings volatility (Erisk) as the proxies of firm’s risk-taking level, and by using pay-volatility sensitivity (PVS) and CEO-pay slice (CPS) as the proxies of compensation incentives and CEO power, respectively. By applying ordinary least square (OLS) regression and two-stage least square (2SLS) regression on obtained data, this paper provides strong empirical evidence that PVS and CPS have negative impact on earnings volatility and stock return volatility. In addition, the negative impact of PVS on managerial risk-taking is greater for CEOs with lower CPS than that for CEOs with higher CPS. That is, EBC discourages CEOs from taking more risks, and more powerful CEOs are less risk-averse than less powerful CEOs when granted EBC.
    • Firm Performance and CEO Compensation: CEO Pay Slice vs Pay-Performance Sensitivity

      Hasan, S M Muyeed; Faculty of Business Programs
      I study the relationship between CEO incentive compensation and firm performance in the presence of CEO dominance to examine how incentive compensation improves firm performance by reducing agency conflicts between shareholders and managers. I estimate pay-performance sensitivity (PPS) as a measure of CEO incentive compensation and the CEO pay slice (CPS) as a measure of CEO dominance. Controlling for standard control variables, I conduct multiple OLS regressions and find that at the high level of CPS, PPS improves firm performance, but at the low level of CPS, impact of PPS diminishes. This shows that determining stand-alone associations of PPS or CPS to firm value—a popular practice in the literature—might not be adequate because of an unexplored interaction effect between executive incentive and executive dominance. To address the potential endogeneity issues, I conduct robustness check by employing instrumental variables with a two-stage least square (2SLS) estimation procedure. As an additional robustness check, I account for the year effect and confirm that the results still stand to the same level of significance.
    • Examining The Influence of Social Augmented Reality Apps on Customer Relationships: The Mediating Role of Shared Social Experience

      Nguyen, Oanh; Faculty of Business Programs
      The development of augmented reality (AR) has provided firms with increasing opportunities to improve customer experiences, especially in a shared context where customers are encouraged to communicate with others. This study investigates the effectiveness of social AR in building relationships among customers through a shared social experience, one which includes shared sense of place, social interaction, and social identity. Data was collected from 378 active users of a social AR application and was analyzed using the partial least squares structural equation modelling (PLS-SEM) and Hayes’ PROCESS Macro. Results from this study show that shared sense of place, social interaction, and social identity mediate the influence of social AR past usage on customer-to-customer relationships, which consequently enhance customers’ continuance intention to use the social AR application. Additionally, the results of the moderated mediation analysis reveal that the indirect effect of social AR past usage on continuance intention is positively moderated by extraversion, such that at higher level of extraversion the mediated relationship becomes stronger. These findings offer important contributions to the AR marketing literature and add valuable insights for practitioners to advance the use of AR technology.
    • Distress Effects in Stock Returns

      Arnott, Spencer; Faculty of Business Programs
      This thesis addresses a fundamental topic in financial economics: the effects of distress risk in the cross section of equities returns. Initial results show that both raw and risk-adjusted excess returns are rising in distress risk, and the remainder of this thesis examines the general robustness of the distress premium. Accordingly, the additional excess returns to stocks having heightened levels of financial distress are contingent upon the stock price being low. These findings are then extended to demonstrate that these same stocks are also microcap firms, thus attributing the anomalous behaviour of distressed stocks to a common factor with many other market anomalies. The economic implication is that arbitrage profits are likely to be limited due to the high transaction costs alongside the limited investment capacity with associated low-priced, microcap stocks.
    • A Study on Immersion and Emotions’ Influence on Impulse Buying in Virtual Environments

      Selcuk, Cem; Faculty of Business Programs
      Impulse buying has always been an interesting phenomenon that is observed in our daily lives. Statistics have shown that impulse purchases make up almost 40% of all purchases made online. Many studies have examined impulse buying, and they have found that emotions accompany impulsive behaviors naturally. With the recent development in virtual reality (VR) technology, this phenomenon is observable in online virtual environments. Retailers can create immersive virtual shops where the customer can walk among the aisles of a virtual store and make purchases. This study examines whether the effects of emotions on impulse buying vary across different immersion levels (2D vs. VR) and gender. To test our hypotheses, we collected data from the 2D and VR setting using experiments. The results provide evidence that gender plays a significant role in the three-way relationship between positive/negative emotions, immersion, and impulse buying. The unique setting of our research extends the literature on impulse buying, marketing, and virtual reality. The results offer valuable insights to marketers and retailers who want to develop virtual shops and influence impulse buying in these virtual shops.
    • The Influence of Perceived Value on Exploratory Behaviour Towards Future Patronage Intention in M-Commerce: An S-O-R Approach.

      Pouyan, Mohammad Mahdi; Faculty of Business Programs
      The exploratory behaviour issue has received considerable attention in both online and brick-and-mortar consumer behaviour literature so far. However, regarding the widely prevalent use of mobile commerce in daily life, surprisingly, mobile exploratory behaviour has seldom been investigated. It is unclear to what extent mobile commerce characteristics can facilitate explorative behaviour. Thus, this study aims to fill the gap in the extant literature by examining the positive relationship between the perceived value, namely, functional, emotional and social and exploration (diversive and specific), which in turn, directly impacts future patronage intention. Due to the pivotal role of flow state in computer-mediated and online behaviour in the extant literature, the current study set out to examine the mediation role of flow between the relationship of perceived values and divisive vs specific exploration. This thesis begins with a brief overview of the recent history of noted research elements and proposes the conceptual model based on the stimulate-organism-response (S-O-R) model. It then discussed the hypotheses development. The remaining part of the paper proceeds with details on the data collection process and the methodological approach adopted to test these relationships.
    • Implications of Non-Operating Room Anesthesia Policy for Operating Room Efficiency

      Liang, Yihang; Faculty of Business Programs
      This thesis focuses on examining the use of Non-Operating Room Anesthesia (NORA) policy in Operating Room (OR) scheduling. A NORA policy involves a practice whereby the administration of anesthesia stage is performed outside the OR. The goal of the thesis is to determine whether NORA policy can improve OR efficiency measured by the performance of total costs, which consists of a weighted sum of patient waiting time, OR overtime and idle time. A simulation optimization method is adopted to find near-optimal schedules for elective surgeries in an outpatient setting. The results of a traditional OR scheduling model, where all stages of the surgery are performed in the OR, will be compared to the results of a NORA OR model where the initial anesthesia stage is performed outside of the OR. Two cases are considered for the NORA model given the decrease on mean durations: (1) a model with the same number of surgery appointments and shorter session length and (2) a models with the same session length and more surgery appointments. . The impact of a NORA policy on OR performance is further analyzed by considering scenarios that capture Surgery duration variability and mean surgery durations which are two traits for surgeries that have been shown to impact OR performance. This thesis aims to investigate how a NORA policy performs when standard deviations and mean surgery durations change. The results show that NORA policy can improve OR efficiency in all settings.
    • CEO Overconfidence and the Probability of Bankruptcy

      Amin, Ruhul; Faculty of Business Programs
      This thesis examines the relation between CEO overconfidence and the probability of bankruptcy. In addition to the main research question, we develop two additional hypotheses. We evaluate the potential link or channel between CEO overconfidence and the probability of bankruptcy. In the relationship between CEO overconfidence and the probability of bankruptcy, we seek for any interaction effects of CEO dominance. It is not uncommon for CEOs to be overconfident about their firms' prospects. In our sample, we use data from the year 2000 to 2019 for US companies. We proxy the bankruptcy probability using Altman’s Z Score. We use a stock option-driven measure of overconfidence, and this measure assumes that non-overconfident CEO will exercise their stock options if it is in the money, while overconfident CEOs will hold stock options beyond a rational threshold. We construct both continuous and indicator-based measures of overconfidence to test the hypotheses. The empirical findings reveal that CEO overconfidence increases the probability of bankruptcy. We do not find any evidence in favor of overinvestment which we consider as a channel through which overconfidence leads to increased bankruptcy risk. We also find that dominant and overconfident CEOs are suited for innovative firms, implying that giving an overconfident CEO a dominant position can minimize a firm's probability of bankruptcy. The implications of this study are that firms should be cautious in hiring overconfident CEO and they should take measures to reduce the negative effects of CEO overconfidence like the probability of bankruptcy. One way to reduce the probability of bankruptcy in innovative firms is to appoint overconfident CEO into a dominant position.