Risk Compensation Research Articles

ЗМІНИ УПРАВЛІНСЬКИХ ПРОЦЕСІВ В ОРГАНІЗАЦІЯХ, ВИКЛИКАНІ ВІЙНОЮ В УКРАЇНІ

The article is devoted to the study of the changes in management process at enterprises in Ukraine. The war in Ukraine influenced all areas of activity and all industries. Transformations in management processes in organizations have also undergone. The study is based on the analysis of literature and experience in war. Methods of analysis, synthesis, comparison and generalization are used to understand and identify the main aspects of management transformation. Management processes in organizations during the war have their own characteristics. The main changes in the management process relate to four management functions – planning, organizing, motivation and control are defined. It is revealed that during the war business organizations change the time horizons of planning and move from strategic to tactical and operational planning. When it becomes dangerous to work, there are interruptions of electro-, heat, water supply, prices for raw materials, materials, goods are increasing, there is not enough labor, lack of fuel, strategic plans become inappropriate. Increasingly, organizations are practicing partial or complete transfer of physical space to online environment. The key aspects of business transition into virtual format are identified: communication, remote work, online sales and customer service, cybersecurity, process optimization, data restoration and backup, training and staff development, accessibility, adaptation of marketing strategies, process and project management, data analysis and tracking indicators, adaptation of company culture. The key to maintaining motivation is to preserve the opportunities for career development and professional growth of workers, increase wages, provide financial bonuses or compensation for risk for workers in the area of hostilities, providing social packages, health insurance for families. Possible aspects of changes in control are the introduction of new security, monitoring and control measures, as well as cooperation with the authorities and security authorities. The results of the study can be used by the managers of organizations for development of strategies and practical approaches to achieve sustainability and success in time of war.

False Sense of Security? A Study of Risk Compensation in the Lab and the Field

False Sense of Security? A Study of Risk Compensation in the Lab and the Field

Does sentiment of investor protection information disclosures affect credit risk premium? Evidence from China

As directly relevant information for bond issuance, bond prospectuses clarify the contents related to investor protection, such as protection mechanisms, debt repayment plans and safeguard measures. The sentiment of these disclosures reflects the issuer’s emphasis on risk management and the investor equity, and is an important reference information for investors to determine risk compensation. This paper selects a sample of 6,048 Chinese corporate bonds from 2006 to 2022 and explores the relationship between the sentiment of investor protection disclosure and bond credit risk premium. The findings indicate that the more negative the sentiment of investor protection related disclosures in the bond prospectus, the higher the credit risk premium for the bond. Further empirical analysis reveals the positive moderating role of credit ratings in this relationship: the positive relationship between the negative sentiment of investor protection disclosures and credit risk premiums is more significant among bonds with higher credit ratings, while it is not significant among bonds with lower ratings. The findings can inform regulatory policy makers in improving market transparency and protecting investors’ interests.

Direct Public Support of R&D and Innovation in Czech Firms: Unintended Consequences and Possible Peltzman Effect

This paper investigates the complex relationship between direct public support for innovation projects, being continuous innovator, and turnover growth, with a particular emphasis on the possibility of a Peltzman effect. The quantitative analysis investigates whether companies incentivized by direct subsidies prefer safer projects over riskier, groundbreaking innovations, using the 2014 Czech innovation dataset and an extensive literature review. The findings show a link between firms that receive public funding and those that engage in continuous or occasional innovation activities. However, the impact on turnover growth is not positive, implying that, on average, public subsidies do not significantly contribute to turnover growth. Concerns are raised in the study about potential market distortions, inefficient resource allocation, and the dynamics of collaboration among large firms in publicly funded projects. While acknowledging the models' exploratory nature, the study emphasizes the importance of ongoing scrutiny and refinement of innovation policies to ensure their effectiveness in promoting genuine innovation while mitigating unintended consequences.

Designing effective U = U communication strategies considering the needs of PLHIV, their partners, and healthcare worker constraints in South African clinics.

We sought to understand the Undetectable = Untransmittable (U = U) communication needs of persons living with HIV (PLHIV) and barriers to U = U communication among healthcare providers (HCPs) in South Africa. We conducted five focus group discussions (FGDs) with HCPs (N = 42) including nurses and counsellors from primary healthcare clinics (PHCs) in the Gauteng and Free State Provinces of South Africa, three FGDs (N = 27) with PLHIV recruited by snowball sampling from civil society organizations, and 27 in-depth interviews (IDIs) with recently diagnosed PLHIV in Johannesburg. IDIs and FGDs were audio recorded, transcribed, translated to English, and analysed thematically. PLHIV were largely unaware and sceptical of U = U as the message appeared to contradict the mainstream HIV prevention clinical guidance. The low viral load (VL) knowledge further reduced confidence in U = U. PLHIV need support and guidance on the best approaches for sharing U = U information and disclosing their VL status to their partners, highlighting the central role of community understanding of U = U and VL to mediate the desired stigma reduction, social acceptance and emotional benefits of U = U for PLHIV. HCPs were uneasy about sharing U = U due to concerns about risk compensation and ART non-adherence and worried about enabling any ensuing HIV transmission. HCPs also need a simple, unambiguous, and consistent narrative for U = U, integrated with other HIV prevention messages. PLHIV and HCPs alike recommended a patient-centred approach to communicating U = U, focusing primarily on attaining viral suppression and emphasizing that condomless sex is only safe during periods of ART adherence. These data highlight the need for simple U = U communication support targeting both HCP and PLHIV. Culturally appropriate communication materials, with training and ongoing mentorship of the clinic staff, are essential to improve patient-centred U = U communication in clinics.

Menentukan Nilai Premi Tunggal Bersih Asuransi Jiwa Seumur Hidup Menggunakan TMI IV Tahun 2019 dengan Variasi Uang Pertanggungan (UP)

Life insurance is an agreement made by the insurance company as the party responsible for providing the guarantee in the form of providing money as risk compensation if an event occurs, such as the death of an insurance participant. As compensation, the insurance participant has the obligation to pay a certain amount of premium to the insurance company. Single premium is a premium payment method that is made once at the beginning. Single premium is a way of paying insurance premiums that are paid all at once at the beginning. Sum Insured is funds that will be given the insurance company to the heirs as a replacement if the insurance participant dies. The purpose of this research is to determine the premium value and compare the premium value if various sums insured are given. And it was found that the greater the sum insured, the greater the premium value that must be paid, and the older a person is when taking out life insurance, the greater the premium value that must be paid.

Does vaccination elicit risk compensation? Insights from the COVID-19 pandemic in France

ABSTRACT Vaccination has played a key role in reducing the health burden of COVID-19, however, concern has been raised worldwide regarding risk compensation, a process whereby feelings of security arising from being vaccinated may lead people to reduce their engagement in other protective behaviours. We investigated whether vaccination led to risk compensation and whether this changed over time by conducting a repeated cross-sectional study at seven intervals over the initial months (February to September 2021) of the vaccine rollout in France. Participants (N = 14,003) completed an online survey measuring vaccination status, vaccination intention and engagement in four preventive behaviours: mask wearing, avoidance of physical contact, hand hygiene, and avoiding social gatherings. Risk compensation was measured indirectly by comparing levels of engagement in protective behaviours according to vaccination status, with those unvaccinated but intending to vaccinate serving as a baseline. Risk compensation did not occur systematically and was mostly observed towards the end of the vaccine rollout for two of the four protective behaviours: avoiding social gatherings (in July and September for fully-vaccinated participants (Adjusted Odds Ratio (AOR) = .72, p = .045; AOR = .54, p = .022, respectively) and wearing a mask (those vaccinated with one dose, in September: AOR = .48, p = .029)). Our findings suggest that whilst unlikely to impede the overall effectiveness of public health campaigns, risk compensation nonetheless merits attention when designing informed, targeted public health messages and policy.

Oral Pre-Exposure Prophylaxis (PrEP) for HIV Prevention, Clinical Effectiveness, Safety, Adherence, and Risk Compensation in all Populations

Based on WHO and UNAIDS reports in 2021, 38.4 million (33.9-43.8 million) HIV cases in the world, in Indonesia reported by 34 provinces, the number of people living with HIV found in the January-March 2022 period was 10,525 941,973 people have HIV, and 8,784 people are receiving ARV treatment. The aim of this study is to observe the literature on the clinical efficacy, safety, compliance and risk compliance of oral pre-exposure prophylaxis (PrEP) for HIV prevention in all population groups. A literature review was carried out by identifying national and international articles regarding pre-exposure prophylaxis (PrEP) for preventing HIV transmission. The database used was Google Scholar, Pubmed, Science Direct, The Lancet. There were 331 articles searched from the Pubmed online database, 14 articles, Proquest 134, Science Direct 105, The Lancet 2, Google Scholar 105. There were 20 articles that met the inclusion criteria and were processed.

Unraveling the Peltzman Effect: The Significance of Agent’s Type

Abstract The Peltzman effect posits that implementing safety measures incentivizes agents to reduce their effort to a degree where these measures become counterproductive. This paper emphasizes the significance of including the agent’s type (skills, attributes) when analyzing the effectiveness of safety measures. Using data from iRacing, an online racing simulator, we find that the detection of the Peltzman effect is solely attributed to the omitted variable bias; specifically, the omission of a variable capturing the agent’s type. Additionally, our data demonstrates that enhancing types (increasing skills) leads to safety improvements.

Government subsidy policies for guarantee financing: Risk compensation vs. fee reduction

Small and medium-sized enterprises (SMEs) often rely on credit guarantee companies (guarantors) to obtain financing from banks. To encourage guarantors’ engagement and reduce SMEs’ guarantee costs, governments commonly implement two subsidy policies: risk compensation, which shares a fraction of guarantors’ losses, and fee reduction, which reimburses SMEs for a fraction of their guarantee fees. This paper formulates a game theoretical model to analyze the impact of these two policies on the decisions and profits of a capital-constrained SME firm and a profit-maximizing guarantor, and how a government should choose between the two policies. We find that under each policy, the total expected profit improvement of the firm and the guarantor is greater than the government expected expenditure incurred if and only if the firm's default probability is below a threshold. Comparing the two policies with a budget constraint, we find that if the government's objective is to maximize the firm's expected profit, risk compensation outperforms fee reduction. But if the objective is to maximize the total expected profit of the firm and the guarantor, which policy performs better depends on the firm's default probability. Moreover, if the government aims to maximize social welfare, risk compensation performs as well as or better than fee reduction. We also consider the case where the guarantor is publicly owned and not-for-profit; in this case, under each policy, the expected profit improvement of the firm is always lower than the government expected expenditure.

Downside liquidity risk premium: From the perspective of higher moment

Considering the serious negative impact of crisis events on stock liquidity, we construct the liquidity skewness to depict the asymmetric distribution of liquidity, which is drawn inspiration from the idea of higher moment in statistics, to measure the downside liquidity risk. Our study focuses on the issue of downside liquidity risk premium in Chinese stock market, and further analyze its underlying source from the dual perspectives of behavior and risk. Our findings provide convincing evidence that the downside liquidity risk measured by liquidity skewness has a significant return premium, and the premium is long-term since the liquidity skewness has a persistent impact on the cumulative returns. Furthermore, the downside liquidity risk premium derives from risk compensation instead of behavioral factors such as mispricing and investor sentiment. The conclusions have certain theoretical value for improving and enriching the research on liquidity premium, clarifying the mechanism of the impact of downside change in liquidity on cross-sectional returns, and provide valuable references for investors to allocate portfolios that meet their own risk preferences and regulators to supervise the market.

Vaccination and risk compensation during the COVID-19 pandemic in France

Abstract Vaccination has played a key role in reducing the health burden of COVID-19 (World Health Organisation (WHO), 2022), however, concern has been raised worldwide that risk compensation, a process whereby feelings of security arising from being vaccinated may lead people to reduce their engagement in other protective behaviours (Hedlund, 2000), could detract from the overall health benefit of the COVID-19 vaccination campaign (WHO, 2020). We explored whether COVID-19 vaccination elicited risk compensation and whether this changed over time by conducting a repeated cross-sectional study at seven intervals over the initial months of the vaccine rollout in France (February–September, 2021). Participants (N = 14,003) completed an online survey measuring vaccination status, vaccination intention and engagement in four preventive behaviours: mask wearing, avoidance of physical contact, hand hygiene, and avoiding social gatherings. Risk compensation was measured indirectly by comparing levels of engagement in protective behaviours according to vaccination status, with those unvaccinated but intending to vaccinate serving as a baseline. Risk compensation did not occur systematically and was mostly observed towards the end of the vaccine rollout for two of the four protective behaviours: avoiding social gatherings and wearing a mask. Fully-vaccinated participants reported avoiding social gatherings less often than those intending to vaccinate in July (Adjusted Odds Ratio (AOR) = .72, p = .045), and in September (AOR = .54, p = .022). A similar trend was observed in September among participants vaccinated with one dose who reported wearing a mask less often than their unvaccinated-but-intending-to-vaccinate counterparts (AOR = .48, p = .029). Our findings suggest that whilst unlikely to impede the overall effectiveness of public health campaigns, risk compensation, particularly among certain groups, nonetheless merits attention when designing informed, targeted public health messages and policy. Key messages • Limited evidence of risk compensation was observed towards the end of the vaccination campaign in France. • Risk compensation may not negate overall health benefit of a vaccination campaign, however from a public health perspective, nonetheless merits attention.

The dynamics of entrepreneurial agglomeration formation: Social selection and simulation.

From the facts that numerous regions with initially similar economic conditions end up with different levels of entrepreneurial agglomeration, this paper constructs a model assuming that the sequential entrants make their career choices based on existing entrepreneurial ratio and describing the dynamics of entrepreneurial agglomeration formation. After mathematical analysis and numerical simulation using NetLogo, it is found that under social selection, a nonlinear Polya process with self-reinforcing and path-dependency characters will emerge, and the repeated entrants' career choices will lead to the agglomeration of entrepreneurship; the agent's risk compensation value, the initial population of agents, the number of role models in the early stage and the initial entrepreneurial ratio are determinants to the formation of entrepreneurial agglomeration. The findings confirm that entrepreneurship has "memory" and the entrepreneurial history could have influence on the future. In order to forge the entrepreneurial agglomeration, our suggestions include exerting influence on the determinants from an early age, and improving the individual's risk-taking abilities.

Evolutionary Game-Based Research on Risk Sharing in Major Projects under the EPC+PPP Mode Considering Secondary Risks

Existing research on risk sharing management often ignores the adverse consequences of secondary risks. This study addresses secondary risks that emerge from the implementation of specific risk mitigation measures. Addressing the limitations of existing research that overlooks secondary risks and exploring the impact of secondary risks on the outcome of risk sharing, this paper integrates secondary risks into a game model that examines risk sharing between the public and private sectors in EPC+PPP projects. Utilizing a risk-control benefit model, an evolutionary game model is established to determine the evolutionary stability strategy under various conditions. This encompasses factors such as project income distribution, risk control capability, imbalanced status, and risk compensation. The findings indicate that secondary risks impact the risk-sharing strategies of both parties. Furthermore, a stronger risk-control ability correlates with a greater inclination toward risk-taking. The public sector can motivate risk sharing for the private sector through risk compensation, with a discernible lower limit. Ultimately, risk sharing becomes an active choice for both public and private entities when the risk cost is below the difference in returns between risks.

Virus dynamics with behavioral responses

Motivated by epidemics such as COVID-19, we study the spread of a contagious disease when behavior responds to the disease's prevalence. We extend the SIR epidemiological model to include endogenous meeting rates. Individuals benefit from economic activity, but activity involves interactions with potentially infected individuals. The main focus is a theoretical analysis of contagion dynamics and behavioral responses to changes in risk. We obtain a simple condition for when public-health interventions or variants of a disease will have paradoxical effects on infection rates due to risk compensation. Behavioral responses are most likely to undermine public-health interventions near the peak of severe diseases.

Determinants of bicycle crashes at urban signalized intersections

Problem: Bicycle volumes are increasing in many regions worldwide leading to higher relevance of an in-depth understanding of bicyclist safety mechanisms. Detailed studies on bicyclist safety that consider exposure and distinguish by intersection category and crash types are missing for urban signalized intersections, which are of particular relevance for bicyclist safety. Method: Based on a comprehensive dataset of motorist and bicyclist volumes and infrastructure characteristics for a sample of 269 signalized intersections in two German cities, we utilize a top-down approach to analyze firstly, bicycle crashes of all types and secondly, bicycle crashes by type including turning, right-of-way and loss-of-control. A combination of descriptive statistics and Accident Prediction Models (APM) are applied as analysis methods. Results: Bicycle volumes are relevant for all types of intersections and crashes, whereas the effect of motor vehicle volumes differ between these different applications. The separation of bicyclists from motor vehicles in time and space increases their safety but also leads to behavioral adaption and risk compensation. The likelihood of right-of-way crashes even increases with more separation in the signaling scheme. The main predictor for loss-of-control crashes in terms of infrastructure are tram tracks. Summary: This study provides insights on relevant determinants of bicycle crashes at urban signalized intersections at several levels of detail. Exposure variables as well as the physical separation of bicyclists from motor vehicles show consistent effects on bicycle crash numbers whereas the effects of signaling differ between crash types. Practical Applications: The different types of intersections and crashes follow each specific mechanism of bicyclist safety. The separation of bicyclists and motorists in time and space are paramount at intersections with high bicycle volumes. Risk compensation such as red light running becomes more important as intersections get smaller and motor vehicle volumes decrease.

People interact closer when a face mask is worn but risk compensation is at best partial.

Wearing a face mask and keeping a minimal distance from others are common nonpharmaceutical interventions that governments may mandate or recommend to contain the spread of infectious diseases. The article addresses the following questions: (i) Do people interact closer when the face mask is worn? (ii) Do people interact closer because they believe that the mask reduces the risk of contagion? (iii) If the mask induces people to interact closer, does the increase in risk entailed by shorter distances entirely offset the decrease in risk offered by the mask? With a view to maximizing both the external and the internal validity of the study, between 2021 and 2022 we performed a large field experiment on real-life interactions (n > 4500) and a controlled laboratory experiment in virtual reality. Converging between the field and the lab, the results indicate that in general people interact closer when the mask is worn, and in particular when they believe that the mask reduces the risk of contagion. However, even assuming a very low filtration efficacy and an extremely large distance-reducing effect of the mask, the counteracting effect of shorter interpersonal distances is never strong enough to entirely offset the mask's protection. The distance-reducing effect of the mask is real but warrants no serious objection against a face mask policy.

The Potential Risk Compensation after Receiving HPV Vaccination among Men Who Have Sex with Men in Southwest China: A HAPA-Based Analysis.

Background: men who have sex with men (MSM) are a high-risk group for human papillomavirus (HPV) infection, and the HPV vaccine is effective in preventing it. However, according to risk compensation theory, people may increase sexual risk behaviors after receiving HPV vaccination. Based on the Health Action Process Approach (HAPA), this study investigated the influencing factors to predict intention to reduce condom use (risk compensation intention) among MSM after taking HPV vaccination in southwest China. Methods: we conducted a cross-sectional study among 948 MSM in southwest China using a non-probability sampling method and an electronic questionnaire including sociodemographic characteristics, sexual risk behavior characteristics, HPV-related prevention behavior, and the HAPA scale. Confirmatory factor analysis was performed using a structural equation model. Results: among 948 MSM, the incidence rate of reducing the frequency of condom use was 14.1%. The structural equation model showed that self-efficacy (β = -0.378, p = 0.020) and positive outcome expectancy (β = 0.366, p < 0.05) had greater effects on behavioral intention, followed by negative outcome expectancy (β = -0.296, p < 0.05) and risk perception (β = -0.232, p < 0.05). Conclusions: risk compensation may not be a major barrier to receiving HPV vaccination among MSM. Nevertheless, the recognition of possible risk compensation is necessary to implement appropriate interventions to reduce the occurrence of risk compensation.

The association of medical providers’ attitudes about naloxone and treating people with opioid use disorder and their self-reported low-barrier treatment practices

Opioid-involved overdose deaths continue to climb, in part because of suboptimal access to and retention on medications for opioid use disorder (MOUD), including buprenorphine. Low barrier buprenorphine treatment aims to reduce or eliminate the threshold for getting and staying on medication by providing immediate and long-term access to buprenorphine without strict rules or requirements. This study examines associations between medical providers’ beliefs about treating people with opioid use disorder (OUD) and naloxone access with their self-reported low-barrier buprenorphine prescribing practices. We surveyed and analyzed responses from providers (N = 86) who completed X-waiver courses in Missouri between March 2017 and September 2019, of which 55% (n = 47) both completed the full survey and endorsed prescribing buprenorphine since the training. The survey included questions about buprenorphine prescribing behaviors as well as the Naloxone-Related Risk Compensation Beliefs (NaRCC-B) scale and the Attitudes toward Patients with OUD scale. Analyses consisted of a series of linear and logistic regressions with the NaRCC-B and OUD Attitudes scales predicting various domains of low-barrier prescribing behaviors. Findings indicate medical providers’ beliefs about treating people with OUD are associated with their practice of addiction medicine, with individuals with more favorable views being more likely to endorse low-barrier buprenorphine prescribing practices including offering telemedicine and at-home inductions, prescribing higher doses of buprenorphine, treating larger caseloads, and discussing overdose risk and protective factors with their patients. Providers’ beliefs about naloxone being enabling were less related to their buprenorphine practices but strongly related to their likelihood of providing naloxone. Future research may examine which strategies effectively change prescriber attitudes and their adoption of lower-barrier prescribing practices.

Multi-period portfolio optimization based on credibilistic lower and upper VaR ratios

Emerging markets, such as the Chinese financial market, are occasionally subject to extreme risk events that result in investor losses during the investment process. To address the challenge of investment selection amidst market fluctuations, considering the fuzzy uncertainty and tail risk compensation based on the asymmetric perspective, we propose to use the lower VaR ratio and the upper VaR ratio as investment objectives to construct a multi-period credibilistic portfolio selection model. The study reveals that the cumulative returns and terminal wealth of the constructed model surpassed those of the benchmark models, delivering greater social and economic welfare to investors. During extreme events, investors could promptly adjust their portfolio structure to achieve higher investment returns. Investors who prefer the lower VaR ratio tend to make conservative investment decisions and allocate a higher proportion to defensive assets, such as bonds and risk-free assets. Conversely, investors who favor the upper VaR ratio are inclined to adopt aggressive investment strategies and allocate a larger proportion to high-risk stocks. The findings demonstrate that the proposed model offers differentiated investment decisions, and the research conclusions serve as valuable references for investors engaged in multi-period asset allocation and risk management.