STUDY IN ATHENS FROM JANUARY 11 TO MAY 10




Become Global, Study Abroad

Maya Sariahmed for TED

Odyssey in Athens, sponsored by Webster University, is one of the most successful study abroad programs.  Many Americans and Europeans find it fascinating to study in the birthplace of Western Civilization.

Why Greece? You may ask… and Why Athens? Greece is the birthplace of so many modern ideas and Athens is the center of where it all happened. Webster-Athens is in an excellent location for formal study – at the foothills of the Acropolis. Just walking around the streets near the university, you can take in so much of this ancient, yet modern, city.

With its extraordinary artistic, intellectual, and cultural heritage, Athens is richly endowed with resources for formal study and experiential learning. The museums at the Acropolis and the ancient Agora, as well as the National Archaeological Museum, the Cycladic Museum, and the Benaki collections are within minutes of the Athens Campus facilities. Cultural events including concerts, recitals, dance and theater, as well as international trade shows, conferences and symposia, public lectures, gallery exhibits, sports events, and marathons, are an integral part of life in this bustling, cosmopolitan city at the confluence of Europe, Asia, and Africa. www.webster.edu.gr

 


 

SPRING SEMESTER SCHEDULE 2016

Date Program
January 9 – 10 Arrival Dates
January 11 – May 10 Course Dates
January 22 Drop Deadline
February 19 Withdraw Deadline
March 7-8 Spring Break
May 11 – 12 Departure Dates

 

Courses include Economics, Finance, Investments, Management, and International Business.  Faculty includes internationally famous business leaders and consultants.

Expand your horizon to Athens from January 11 to May 10.

MARINA
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MARINE LE PEN ALL THE WAY!

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Marine Le Pen and her Front National party are together riding a cresting wave of support in the wake of the Paris terrorist attacks. Latest polling shows the FN is on course to govern three French regions for the first time.

French corruption came back with the return of Sarkozy, trailing his involvement in a total of six criminal investigations, and ignoring the fact that 66 per cent of the electorate hoped that he would not make a comeback. During his five years in office he had conspicuously failed to implement his election program — the limitation of trade-union power and the modernization of the national economy.

Despite all this, corrupt Sarko was ready for more. First he managed to get himself elected as UMP president, which enabled him to cancel the regulation that the party president could not stand as a candidate in the national elections. Then he renamed the party; it is now called ‘Les Républicains’, a slick move which has let him adopt a notably proprietorial air at party rallies.

The first test for the new party will be the regional elections due in December, when the question of immigration is likely to dominate the campaign. The only political group in France with a consistent line on the subject is of course the Front National. Marine Le Pen reacted angrily to the news that Brussels was suggesting an allocation of 24,000 mainly Syrian refugees for France. In a speech in Marseilles, one of her party’s strongholds, she described immigrants as a burden who are stimulating the growth of Islamic fundamentalism in France. She accuses Merkel of being largely responsible for the current crisis, pointing out that the Merkel’s welcoming reaction was deliberately inciting more immigrants to travel to Europe. ‘No doubt she hopes to cure Germany’s stagnant population growth by continuing to use massive immigration as a source of slave labor,’ adds Le Pen.

Le Pen is now the overwhelming favorite to capture north-western France and the Marseille-Nice region in elections set for the next two weekends, according to polls published yesterday. Such is the backing for the party that it might harvest as many votes as its conservative and centrist rivals combined.

The FN is also running neck-and-neck with Les Républicains in the Burgundy-Franche-Comté region in eastern France.

A series of regional polls show the FN gaining between 4 and 7 per cent compared to similar polls before the terrorist assault on Paris.

The FN has never won a regional government before. The regional elections are the first political test for French President Francois Hollande since the Nov. 13 terrorist attacks in Paris that killed 130 people. With the country reeling from that violence and grappling with border controls, FN candidates are showing a significant increase in support across the country.

Asked about the photograph of the drowned body of a three-year-old Kurdish boy, a Front National spokesman remained unmoved. He said that it was an attempt to make the French feel guilty and added that he could not see how the imposition of quotas would have prevented this drowning. In December, Marine Le Pen’s candidates will campaign to repeal the Schengen agreement on border controls within the EU, cancel the traditional right to citizenship of all those born on French soil, cancel free health cover for illegal immigrants, and limit the right to political asylum by confining it to victims of political persecution and excluding victims of war.

Marine Le Pen’s views cannot be brushed aside as extreme. The majority of French opinion is hostile to the mass admission of refugees, and she is currently the favorite to win the first round of the 2017 presidential elections. Having at last expelled her 87-year-old father from the party on the grounds of his anti-Semitism, she has successfully formed several electoral pacts with Républicain candidates in the region of Provence and Côte d’Azur, and she has been building bridges with right-wing Catholic voters. The Bishop of Toulon has approved this initiative, describing Marine Le Pen’s Front National as ‘just another political party’.

The question of how to deal with the Front National has been a long-standing source of division among the Républicains. The argument is between those who believe that the best way of diminishing Front National votes is to cherry-pick its policies, and those who prefer to boycott the extreme right and attract votes from the centre. The leaders of the Républicains are careful to avoid Marine Le Pen’s coarse language, but in some cases their policies on immigration are not that different. One prominent Républicain, the former minister of agriculture Bruno Le Maire, has suggested that all foreigners whose papers are stamped with an ‘S’ (meaning ‘under surveillance for terrorist associations’) should be expelled — a step that would entail the instant removal of more than 5,000 people.

Sarkozy, who has always favored chasing the hard-right vote, also wants to take France out of the current Schengen agreement. In addition he has demanded the militarization of Europe’s external frontiers, and has urged the immediate and permanent closure of all mosques used by fundamentalist preachers. ‘Immigrants have to adapt to France, and not vice-versa’ is his version of the multicultural society. He has further rejected the idea of European immigration quotas and agrees that they are making the problem worse by attracting more immigrants.

France has been the architect of the Muslim invasion of Europe ever since opening its borders, under de Gaulle, to millions of North African Arabs. France has been the instigator of Eurabia, metamorphosed of late as the hopefully-named Mediterranean Co-prosperity Sphere. France is where pogroms of Jews and cartoonists are the norm, Marseille might as well be in Morocco, 1,000 infidels’ cars are torched each year as a Muslim celebration of the Winter Holiday, and productive citizens pay a 75% marginal income tax rate while half of France’s at-least seven million Muslims live on public welfare. France sued Brigitte Bardot five times for inciting racial hatred, and is now suing Marine Le Pen for racism because she criticizes the vast expanse of upturned Muslim posteriors occupying many a public square and church plaza in her country five times a day. It’s that France that’s now pushing suicide-by-Muslim-refugees on the whole of Europe.

The polls show a slight improvement in the centre-left vote – but not the lift in approval and solidarity with President Hollande’s handling of the crisis that the government had hoped for.

The FN would get 28 per cent of votes in the first round of elections starting Saturday, the same as a combination of parties including the Republicans and the centrist MoDem.

The Socialists would get 22 per cent, with as many as 54 per cent of voters abstaining, according to the survey.

We had reported on Le Pen’s growing appeal even before the Paris terrorists attacks. She has been warning of the consequences of open-ended migration from the Middle East and what it will mean not just for the future of France but all of Europe.

She says: “The absolute rejection of Islamic fundamentalism must be proclaimed loudly and clearly” and voters are listening in ever increasing numbers.

Le Pen would become a representative for the North Pas de Calais-Picardie region if the latest polls prove correct. Her niece, Marion Maréchal-Le Pen, is the party’s candidate to lead the Provence-Côte d’Azur region.

THE WAR ON TERROR IS CREATING MORE TERROR

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The interventionists will do anything to prevent Americans from seeing that their foreign policies are perpetuating terrorism and inspiring others to seek to harm us. The neocons know that when it is understood that blowback is real – that people seek to attack us not because we are good and free but because we bomb and occupy their countries – their stranglehold over foreign policy will begin to slip.

That is why each time there is an event like the killings in Paris earlier this month, they rush to the television stations to terrify Americans into agreeing to even more bombing, more occupation, more surveillance at home, and more curtailment of our civil liberties. They tell us we have to do it in order to fight terrorism, but their policies actually increase terrorism.

If that sounds harsh, consider the recently-released 2015 Global Terrorism Index report. The report shows that deaths from terrorism have increased dramatically over the last 15 years – a period coinciding with the “war on terrorism” that was supposed to end terrorism.

According to the latest report:

Terrorist activity increased by 80 per cent in 2014 to its highest recorded level. …The number of people who have died from terrorist activity has increased nine-fold since the year 2000.

The world’s two most deadly terrorist organizations, ISIS and Boko Haram, have achieved their prominence as a direct consequence of US interventions.

Former director of the Defense Intelligence Agency Michael Flynn was asked last week whether in light of the rise of ISIS he regrets the invasion of Iraq. He replied, “absolutely. …The historic lesson is that it was a strategic failure to go into Iraq.” He added, “instead of asking why they attacked us, we asked where they came from.”

Flynn is no non-interventionist. But he does make the connection between the US invasion of Iraq and the creation of ISIS and other terrorist organizations, and he at least urges us to consider why they seek to attack us.

Likewise, the rise of Boko Haram in Africa is a direct result of a US intervention. Before the US-led “regime change” in Libya, they just were a poorly-armed gang. Once Gaddafi was overthrown by the US and its NATO allies, leaving the country in chaos, they helped themselves to all the advanced weaponry they could get their hands on. Instead of just a few rifles they found themselves armed with rocket-propelled grenades, machine guns with anti-aircraft visors, advanced explosives, and vehicle-mounted light anti-aircraft artillery. Then they started killing on a massive scale. Now, according to the Global Terrorism Index, Boko Haram has overtaken ISIS as the world’s most deadly terrorist organization.

The interventionists are desperate to draw attention from the fact that their policies contribute to terrorism. After the Paris attacks, neocons like former CIA director James Woolsey actually pinned the blame on NSA whistleblower Edward Snowden! He claimed that because of Snowden’s revelations about NSA surveillance the terrorists were using sophisticated encryption. He even called for Snowden to be hanged because of it. But it was untrue: the Paris attackers did not use encryption, and other groups had used encryption long before the Snowden revelations.

Terrorism is increasing worldwide because of US and western interventionism. That does not mean that if we suddenly followed a policy of non-interventionism the world would become a peaceful utopia. But does anyone really believe that continuing to do what increases terrorism will lead to a decrease in terrorism?

INSIDER TRADING AND INNOVATION


Research Horizons

By Ross Levine

We investigate the impact of restricting insider trading on the rate of technological innovation. Our research is motivated by two literatures: the finance and growth literature stresses that financial markets shape economic growth and the rate of technological innovation, and the law and finance literature emphasizes that legal systems that protect minority shareholders enhance financial markets. What these literatures have not yet addressed is whether legal systems that protect outside investors from corporate insiders influence a crucial source of economic growth—technological innovation. In our research, we bridge this gap. We examine whether restrictions on insider trading—trading by corporate officials, major shareholders, or others based on material non-public information—influences technological innovation.

Theory provides differing views on whether restricting insider trading accelerates or slows innovation. One view builds from the premise that technological innovation is difficult for outside investors to evaluate, so that improving incentives for acquiring information will enhance valuations, lower the cost of capital, and improve investment in innovative activities. One way that restricting insider trading can increase incentives for acquiring information is by reducing the ability of corporate insiders to exploit other investors, thereby encouraging those other investors to devote more resources to valuing firms. Another way that restricting insider trading can improve valuations is by boosting market liquidity, which can make it less costly for investors who have acquired information to profit by trading in public markets. And, a third mechanism operates through managerial incentives. If restricting insider trading enhances the efficiency of stock prices, this can encourage managers to invest more in long-run, value-maximizing activities. From these perspectives, restricting insider trading enhances the valuation of and hence improves the quality of investments in technological innovation.

Other theories, however, suggest that restricting insider trading can deter effective price discovery, with adverse effects on innovation. For example, if insider trading quickly reveals information in public markets, restricting insider trading will hurt the informativeness of prices. And, if restricting insider trading boosts liquidity, this can both (a) attract myopic investors who induce managers to forgo long-run, profit-maximizing to satisfy short-term performance targets and (b) facilitate takeovers that can encourage managerial myopia.

To provide the first assessment of whether legal systems that protect outside investors from corporate insiders increase or decrease the rate of innovation, we exploit the quasi-natural experiment of the staggered enforcement of insider trading laws across countries. We use the date when a country first prosecutes a violator of its insider trading laws. We have data for over 100 countries covering the period since 1976. This setting is appealing for three reasons. First, countries started enforcing their insider trading laws for a variety of reasons, such as increased competition between stock exchanges for trading volume, and differences in political ideologies. Fortunately, there is no indication that technological innovation or the desire to influence innovation affected the timing of when countries started enforcing their laws. Thus, the potential effects of enforcement on innovation are likely unintended consequences of these legal actions. Second, the cross-country heterogeneity in the timing of the enforcement of insider trading laws allows us to employ a difference-in-differences strategy to identify their impact on innovation. Third, this setting allows us to test whether the cross-industry response of innovation and equity issuances to restrictions on insider trading are consistent with particular theoretical perspectives of how insider trading affects innovation. For example, models stressing that insider trading discourages outside investors from researching firms predict that restricting insider trading will have a particularly positive impact on investment in informationally opaque activities, including innovation.

We use patent-based measures of innovation. Specifically, we obtain information on patenting activities for industries in 94 countries from 1976 through 2006 from the EPO Worldwide Patent Statistical Database (PATSTAT) and compile a sample of 76,321 country-industry-year observations. We construct and examine five patent-based proxies for technological innovation: (a) the number of patents, (b) the number of patent citations to patents, (c) the number of patenting entities, (d) the degree to which technology classes other than the one of the patent cite the patent, and (e) the degree to which the patent cites innovations in other technology classes.

We find that the enforcement of insider trading laws exerts a large, positive impact on innovation. For example, we find that, on average, patent counts increase by 26% and citations by 37% after a country starts enforcing its laws.

We build on these initial analyses by differentiating between industries within the same country to better identify the impact of restricting insider trading on innovation. First, we distinguish among industries by their natural rate of innovation. If insider trading slows innovation, limiting insider trading should spur innovation more in industries that would otherwise experience rapid rates of innovation. Second, we differentiate by opacity. If insider trading laws encourage innovation by enhancing valuations, then the impact of such laws is likely to be greatest in industries with a high degree of informational asymmetries. We use the U.S. to benchmark industries. We include country-year and industry-year fixed effects to control for all time-varying country and industry characteristics.

Consistent with the view that insider trading impedes valuations and boosts the costs of raising capital for innovation, we find that (1) innovation increases much more in industries that are naturally more innovative or opaque after countries enforce their insider trading laws and (2) initial public offerings and seasoned equity offerings rise much more in naturally innovative industries after a country enforces its insider trading laws.

INSIDER TRADING AND TENDER OFFERS

By Christopher E. Austin and Victor I. Lewkow

Valeant’s hostile bid for Allergan was one of 2014’s most discussed takeover battles. The situation, which ultimately resulted in the acquisition of Allergan by Actavis plc, included a novel structure that involved a “partnership” between Valeant and the investment fund Pershing Square. In particular, a Pershing Square-controlled entity having a small minority interest owned by Valeant, acquired shares and options to acquire shares constituting more than nine percent of Allergan’s common stock. Such purchases were made by Pershing Square with Valeant’s consent and with full knowledge of Valeant’s intentions to announce a proposal to acquire Allergan. Pershing Square and Valeant then filed a Schedule 13D and Pershing Square then supported Valeant’s proposed acquisition. Ultimately Pershing Square made a very substantial profit on its investment when Allergan was sold to Actavis.

The structure attracted much commentary, including questions as to whether Pershing Square’s acquisition of Allergan shares while in possession of the non-public information regarding Valeant’s planned bid constituted improper insider trading. The general consensus was that the structure did not appear to implicate traditional 10b-5 insider trading concerns since Pershing Square acted with Valeant’s consent and no breach of duty was involved. Commentators also noted, however, that Rule 14e-3, which is a special insider trading rule relating to tender offers, could be implicated if at the time of Pershing Square’s purchases there had been “substantial … steps to commence a tender offer.” 

The 14e-3 issues were considered last year by a federal court in connection with Allergan’s motion for a preliminary injunction against Valeant’s bid by Allergan and certain shareholders who sold Allergan shares at the time Pershing Square was purchasing Allergan shares and options. The court noted that the 14e-3 claims raised “serious questions” (part of the applicable standard for granting a preliminary injunction), but declined to issue an injunction on the basis that damages would be an adequate remedy for the persons who sold Allergan shares at the time of Valeant’s purchases. After the Actavis acquisition of Allergan was completed, Allergan withdrew as a party but the litigation continued on behalf of the selling shareholders seeking damages from Pershing Square and Valeant. Earlier this year Pershing Square and Valeant moved to dismiss the action. On November 9, 2015 the court issued an order denying the motion, which means that the action will proceed (unless earlier settled).

The court’s order confirmed its analysis of certain of the issues addressed in its 2014 preliminary injunction motion. These included the court’s view that, at least when using the plaintiff-friendly basis for evaluating motions to dismiss, there were adequate allegations that (1) Valeant had taken substantial steps to commence a tender offer prior to Pershing Square’s purchases and (2) Pershing Square was not entitled to the exemption from Rule 14e-3 for purchases made by the “offering person.” The court also confirmed its earlier holding that there was a private right of action under Rule 14e-3.

The court also considered, however, several new arguments raised by the defendants in their motion to dismiss. In particular:

  • Defendants argued that the plaintiffs did not have standing to pursue the claim, relying on the fact that at the relevant time the plaintiffs sold common stock while most of Pershing Square’s purchases were in the form of options on Allergan shares acquired from Nomura International. And, defendants argued, any purchases by Nomura to hedge its exposure to Pershing Square from the sale of the options, were at Nomura’s discretion and could not be attributable to Pershing Square. The court discussed this argument in some detail, but ultimately concluded—again using the plaintiff-friendly standard required when considering a motion to dismiss—that there were sufficient facts alleged to support the argument that Pershing Square “used Nomura to acquire [Allergan] shares on its behalf” and that the options acquired from Nomura were, for these purposes, the “same class” as the underlying common shares. The court also noted that under Rule 14e-3 a party with certain material nonpublic information regarding a tender offer may not purchase or “cause to be purchased” the relevant shares and, as a result, “there is little basis for excluding Nomura’s open market purchases” from the analysis.
  • Defendants also argued that they did not act with the necessary scienter to establish liability—i.e., that they did not have “a mental state embracing intent to deceive, manipulate or defraud”—and in particular that the plaintiff’s needed to allege that each defendant “knew or was deliberately reckless in not knowing that Valeant had taken substantial steps to commence a tender offer.” The court rejected this position and noted that the plaintiffs need only allege that defendants knew “they were in possession of material nonpublic information … and that they acted with the intent to deceive, manipulate or defraud.” And the court concluded that the allegations that the purchases (including via Nomura) were “intentionally designed … to avoid disclosure” were sufficient to meet the “deceive” element of the scienter requirement.

The implications of the court’s decision include the following:

  • The 14e-3 risk from structures such as these is real and is likely to deter use of these types of arrangements going forward except if a tender offer is never commenced (or, at least in theory, even seriously discussed).
  • The court’s discussion of Pershing Square’s relationship with Nomura, if confirmed and expanded beyond the particular facts, could have implications for dealers and other participants in the options and other derivatives markets. For example, if a dealer selling an option to a client is characterized as that client’s agent, and the dealer’s resulting hedging activity is viewed as being undertaken on behalf of the client, numerous reporting and other obligations under securities law and contractual triggers based on share ownership (e.g., rights plans) could be implicated. The Second Circuit considered similar issues in 2011 in the CSX v . TCI matter. Although the majority opinion in that case did not directly resolve the question of whether a holder of cash-settled total return swaps should be deemed to beneficially own the shares underlying the swaps, Judge Winter, in a concurring opinion, concluded that should not be the case absent the swap holder having rights in the underlying shares (e.g., the right to direct the voting or require the sale of the shares).

DONORS ARE TURNED OFF BY OVERHEAD COSTS

Many of us would prefer to see our philanthropic donations go directly to an organization’s core mission, rather than to administrative expenses. If we give money to Save the Children, for instance, we hope the cash goes directly to those children.

“Despite the understanding that CEOs of nonprofits need to be paid, if given the choice of where their money would go, most people donating money wouldn’t choose to contribute to the salary of the organization’s CEO,” says Elizabeth A. Keenan, an assistant professor in the Marketing unit at Harvard Business School.

Hence, donors depend on recommendations from watchdogs like CharityWatch, which tend to give higher ratings to charities with low overhead costs. But that can lead to a harmful cycle in which charities keep their overhead costs unreasonably low in order to encourage future donations—even if cutting those costs actually hampers their ability to carry out core missions.

“Most people donating money wouldn’t choose to contribute to the salary of the organization’s CEO”

“As nonprofits try so hard to pare down their overhead expenses, they end up feeding the expectation that the overhead ratio can and should be very low,” Keenan says. “As donors see that overhead is low in one organization, they expect it to be low everywhere. Some refer to it as the ‘nonprofit starvation cycle.’”

How can nonprofits avoid that cycle? One possible solution is to figure out how to overcome the aversion donors have to paying for administrative expenses. Keenan and her colleagues have spent a lot of time researching ways to do that. Their initial findings indicate that donors are willing to stomach the idea of overhead—as long as they know someone else’s donation is covering it.

A SERIES OF EXPERIMENTS

Keenan’s research on the subject began as a doctoral student at the University of California, San Diego, where she conducted a series of laboratory and field experiments with UCSD’s Uri Gneezy, a professor of economics and strategy, and Ayelet Gneezy, an associate professor of behavioral sciences and marketing. (Their studies are detailed in the article Avoiding overhead aversion in charity, published in the October 2014 issue of Science magazine.)

In their first experiment, the team recruited 449 undergraduates to consider which of two charities should receive a $100 donation: Kids Korps USA, an organization aimed at engaging young people in volunteerism, or charity: water, which brings clean drinking water to people in developing nations.

The experiment tested how varying the level of overhead costs would affect participants’ willingness to donate. The goal: to see whether increasing the overhead associated with donations to charity: water would decrease the likelihood to choose it over Kids Korps. (Participants were told there was no overhead associated with donations to Kids Korps.)

The results showed that participants were turned off by overhead. The higher the level of overhead associated with a donation to charity: water, the lower the percentage of participants who chose to donate to it. When they learned that donations to both charities were overhead-free, 73.3 percent of participants chose to donate to charity: water instead of Kids Korps. When they learned that 50 percent of a donation to charity: water went toward overhead, only 49.43 percent chose charity: water. But a key question remained: Were participants turned off by the idea of overhead costs in general, believing that high overhead was a sign of inefficiency or even corruption? Or were they simply averse to the notion that their own donation might go toward overhead?

To find out, the researchers tested whether participants would be more likely to donate to a charity if the overhead costs had been covered by another contributor, such as a wealthy family or foundation. That made a huge difference, says Keenan. Even when participants were informed that there was 50 percent overhead associated with donations to charity: water, 71.43 percent chose to donate to the charity after learning that the overhead costs would be covered by someone else.

AN OVERHEAD-FREE OPTION PAYS OFF IN THE REAL WORLD

Continuing to pursue the efficacy of a dedicated overhead benefactor, Keenan and her colleagues took their research to the real world, conducting a field experiment with a large education foundation. The potential donors in this study: some 40,000 recipients of a donation request letter, which asked them to give $20, $50, or $100 toward a new project. The letter recipients were divided into four groups.

In the “control” group, recipients simply received information about the foundation’s new educational initiative. In the “seed” group, recipients were also told that a private donor had already seeded the new initiative with a $10,000 donation. In the “match” group, recipients were told that a donor had offered to match every dollar given to the project, up to a total of $20,000. Finally, in the “overhead-free” group, recipients were told that a donor had given a grant to cover all the overhead costs associated with raising money for the project.

The results were significant. In the control group, 336 out of 10,000 letter recipients (or 3.36 percent) donated to the foundation. In the seed group, the number increased to 4.75 percent. In the match treatment, 4.41 percent chose to donate. And in the overhead-free treatment, a comparatively whopping 8.55 percent gave money to the foundation. There was a substantial difference in total donated dollar amounts, too. With most donors opting to give $20 apiece, the control group donated $8,040; the seed group $13,220; and the match group $12,210. But the overhead-free treatment gave $23,120. In short, offering an overhead-free option nearly tripled the donation rate relative to the control group.

NEXT STEPS TO MITIGATE AVERSION TO OVERHEAD

Several organizations have adopted the idea of overhead-free donations, Keenan says, noting that charity: water is one of them. The organization depends largely on professional philanthropists to cover overhead costs through a companion program called The Well. All donations to the charity go directly toward clean water projects.

Still, Keenan acknowledges that many in the nonprofit sector worry that enabling overhead-free donations will perpetuate the idea that overhead is a bad thing. For example, activist Dan Pallotta argues in favor of overhead in his viral TED Talk, The Way We Think about Charity Is Dead Wrong.

“Charities work so hard to basically train or teach their donor base that overhead is important and necessary,” Keenan says. “They don’t want to spoil the pot.”

Acknowledging that administrative expenses are a necessary and critical component of a nonprofit’s success, Keenan and her research partners are investigating alternative ways to mitigate overhead aversion, partially through education campaigns such as Pallotta’s. “We’re trying to figure out if there are ways to make people feel OK about the idea that their own donation might go toward overhead,” Keenan says.

They’re not having a lot of luck so far. “We’ve been vague and subtle about it, and we’ve hit them over the head with it,” she says. “And people just don’t like it. They just don’t like overhead.”

MUSICAL PREFERENCES ARE LINKED TO THINKING STYLES

By David Greenberg

 

We’re exposed to music for nearly 20% of our waking lives. But much of our musical experience seems to be a mystery. Why does some music bring us to tears while other pieces make us dance? Why is it that the music that we like can make others agitated? And why do some people seem to have a natural ability to play music while others have difficulty carrying a tune? Science is beginning to show that these individual differences are not just random but are, in part, due to people’s personalities.

My colleagues and I have published research showing that people’s musical preferences are linked to three broad thinking styles. Empathisers (Type E) have a strong interest in people’s thoughts and emotions. Systemisers (Type S) have a strong interest in patterns, systems and the rules that govern the world. And those who score relatively equally on empathy and systemising are classified as Type B for “balanced”.

Research from the past decade has shown that 95% of people can be classified into one of these three groups and that they predict a lot of human behaviour. For example, they can predict things such as whether someone studies maths and science, or humanities at university. For the first time, we have shown that they can predict musical behaviour, too.

Matching music with thinking style

To study this phenomenon, we conducted multiple studies with over 4,000 participants. We took data on these participants’ thinking styles and asked them to listen to and indicate their preferences for up to 50 musical excerpts, representing a wide range of genres. Across these studies, we found that empathisers preferred mellow music that had low energy, sad emotions, and emotional depth, as heard in R&B, soft rock, and singer-songwriter genres. For example, empathising was linked to preferences for “Come Away With Me” by Norah Jones and Jeff Buckley’s recording of “Hallelujah”.

 

 

On the other hand, systemisers preferred more intense music, as heard in hard rock, punk and heavy metal genres. Systemisers also preferred music with intellectual depth and complexity as heard in avant-garde classical genres. For example, systemizing was linked to preferences for Alexander Scriabin’s “Etude opus 65 no 3”. Importantly, those who are Type B, had a tendency to prefer music that spans more of a range than the other two thinking styles.

 

 

In our most recent study, published in the Journal of Research of Personality, we found that people’s personality traits can also predict their musical ability, even if they don’t play an instrument. Our team worked with BBC Lab UK to recruit over 7,000 participants and assess them for five distinct personality dimensions: openness, conscientiousness, extroversion, agreeableness, and neuroticism/emotionality stability. We also asked them to conduct various tasks that measured their musical ability, including remembering melodies and picking out rhythms.

We found that, next to musical training, the personality trait of openness was the strongest predictor of musical sophistication. People who score highly for openness are imaginative, have a wide range of interests, and are open to new ways of thinking and changes in their environment. Those who score low on openness (or who are “closed”) are more set in their ways, prefer routine and the familiar, and tend to have more conventional values. We also found that extroverts who are often more talkative, assertive, and excitement-seeking had greater singing abilities.

Furthermore, we could apply this even to people who did not currently play a musical instrument, meaning there are people who have a potential for musical talent but are entirely unaware of it.

Music therapy

These new findings tell us that from a person’s musical taste and ability, we can infer a range of information about their personality and the way that they think.

This research shows there are factors beyond our awareness that shape our musical experiences. We hope that these findings can be of help to teachers, parents, and clinicians. Based on information about personality, educators can ensure that children with the potential for musical talent have the opportunity to learn a musical instrument. Music therapists can use information about thinking style to help tailor their therapies for clients, too.

We are also interested in how knowledge gained from science can help children and adults on the autism spectrum who have difficulties with communication, as we recently wrote in the journal Empirical Musicology Review. This could also help people process emotions after experiencing a psychological trauma and when grieving a loss. In fact, initial findings from our lab suggest that people who experienced a traumatic event in childhood engage with music quite differently in adulthood than those who did not experience a trauma.