Amadou Diallo Essay Example for Free

Amadou Diallo Essay Social cognition is the study of how people form attribution or judgments about themselves and the social world from the social information they received from their environment (Chapter Review, 2010). However, it was discovered often marked by apparent errors and biases. People make quick judgment based on their past experiences, hence at times leading to tragic endings. The Amadou Diallo case study was an example of the tragic error which was made by four New York City Police officers. The police shooting of an unarmed man was an act of automatic inferences which happens when people use mental shortcuts to simplify the amount of information they receive from the environment. Automatic thinking is known as the thinking that is unconscious, unintentional, involuntary and effortless (Taylor, Peplau, Sears, 2006). While, schemas are mental structure people use to arrange their information regarding the social world around themes or subjects: schemas affect what information we notice, think about, and remember (Chapter Review, 2010). During the incident February 4, 1999, Carroll had made a low-effort automatic thinking with schemas when Diallo reached into his jacket to get his wallet by assuming that Diallo was reaching for a gun in his pocket, and shouted â€Å"Gun! † to alert his colleagues. Officer Carroll’s action was due to his natural instinct or response as most criminal would reach into their pocket for gun during the detection of police officers. He had use schemas to form an expectation of the event in which made him to expect a gun pulling out of Diallo’s jacket rather than his wallet. As he attends to his schema-consistent knowledge: criminals would pull out guns from their jacket when they spotted police officers; his schemas filtered out any inconsistent information: Diallo reached in his jacket to get his wallet; had caused the NYPD officers to fire at Diallo. Besides that, there are also a few theories or concept under automatic thinking with schemas that had shown relevance to the Amadou Diallo case study, such as, accessibility. Accessibility is the ease with which schemas can be brought to one’s mind (Taylor, Peplau, Sears, 2006). The four police officers had practiced accessibility when they saw Diallo ran up the outside steps toward his apartment house doorway at their approach, ignoring their orders to stop and â€Å"show his hands†. When they saw Diallo ran after they claimed to have identified themselves as NYPD officers, they might assume that Diallo was the serial rapist they were searching for, as logically a serial rapist or a criminal would ran when approached by police officers to avoid getting caught. The ease of the thought that criminals would run when they spotted police officers, had made the four police officers to identified Diallo as a criminal, although that was not the truth in Diallo’s case. As a result, a firestorm had unfortunately occurred. Furthermore, the four police officers had practice priming in this case study. Priming is the process which related to recent experience that made schemas or concept to come to one’s mind more readily (Taylor, Peplau, Sears, 2006). For example, when Officer MeMellon fell down the steps, appearing to be spot, the other three officers might assume that Diallow had fire a gunshot towards Officer McMellon hence causing him to fell down those steps because they had linked it to their recent experiences of gunshot and thought that Officer McMellon had been spot and that Diallo had shot him with his gun. As one would logically fall back when shot. Perseverance effect was also shown in this case study. Perseverance effect is known as the tendency for people’s beliefs about themselves and their world to persist even when those beliefs are discredited (Taylor, Peplau, Sears, 2006). When the four NYDP officers thought Diallo matched the description of a (since-captured) serial rapist, it might be due to the fact that Amadou Diallo was an immigrant to the United States and the four police officers could have the belief that immigrants are the major causal crime increment in the Unites States. Hence resulting the police officers to think the worse out of Diallo when he ran and even though he was reaching into his jacket to get his wallet, the police officers had persisted that the square object had been of a firearm although in logical terms both wallet and gun do not share the same shape and size. On the other hand, people also tend to use mental strategies and shortcuts to organize and make sense of their social world, especially when they are lack of full processing time, lack of solid information to use for decision making, information overload, or when the issues are not important to them (Taylor, Peplau, Sears, 2006). Mental strategies and shortcuts help people to make decisions easier and allow them to get on with their lives and not turn every decision into a major hurdle. Four NYDP officers had practise judgmental heuristics when they made judgments about Diallo. Police officers thought Diallo had matched the description of a (since-captured) serial rapist. This might be because that Diallo was a dark skin immigrant which had logically matched the description of the serial rapist leading officers to made a quick decision so that they do not need analyse in detailed and make a major hold-up over the matter. Furthermore, the four police officers also did performed availability heuristic in this case. Availability heuristic is a mental rule of thumb whereby people base a judgment on the ease with which they can bring something to their mind (Taylor, Peplau, Sears, 2006). During the incident, Diallo had been mistaken that he was reaching into his jacket to get his firearm whereas he was actually reaching to get his wallet. Officer Carroll had shouted â€Å"Gun! † to his colleagues. His judgment might be due to his ease with which he can bring to his mind, which in this case, was automatically thinking that Diallo’s wallet was a gun, hence warned his colleagues about the matter. Attitude heuristic is the determination of what is â€Å"true† based upon an individual’s feelings towards or for a matter (Taylor, Peplau, Sears, 2006). The four police officers also had carried out attitude heuristic towards Amadou Diallo. For example, these police officers might dislike Diallo because he was an immigrant or ‘black’ person therefore assuming that Diallo’s intention, plan, or doings would also be bad too. This caused Diallo to be misinterpreted to be a criminal trying to escape from police detention rather than his true intention, which was believed to initially intend to show the NYPD officers his identification card in his wallet before he wrongly shot. Besides theories and concept of automatic thinking with schemas, the Amadou Diallo case had also displayed a few relevant theories of social perception. During the incident, the four police officers had displayed the attribution theory. Attribution theory is a description of the way which people explain the causes of their own and other people’s behavior (Taylor, Peplau, Sears, 2006). It is because that Diallo had run up the outside steps of his apartment after they claimed to identified themselves as NYPD officers, and that he had reached into his jacket, the police officers have made a cause and effect explanation towards Diallo’s behavior hence assuming that he was a criminal or the serial rapist they were searching for, therefore Diallo had run up in the attempt to escape and when he reached into his jacket for his wallet, they thought that he was reaching for his gun to defend himself. Due to this theory, it made sense of he reason four police officers have assumed that Diallo was a criminal and they had to fire back Diallo. All this might be due to the attachment of meaning they decode from Diallo’s nonverbal behavior. In addition, the fundamental attribution error was also shown in the incident when the four police officers have focus on Diallo’s action to run and reached into his jacket, rather than the situation causes of his action, which was intending to reached into his jacket to get his wallet to show the police officers that he was innocent when he was approached by the police officers and asked to â€Å"show his hands†. Fundamental attribution error is known as the tendency to overestimate the extent to which a person’s behavior is due to internal, dispositional factors and to underestimate the role of situational factors, one reason people make fundamental attribution error is because the observer only put their attention on the actor, while ignoring the situational causes of the actor’s behavior (Taylor, Peplau, Sears, 2006). Furthermore, Diallo had also displayed the spotlight effect in this case study. The spotlight effect is the tendency to overestimate the extent to which our actions and appearance are salient or clear to others (Taylor, Peplau, Sears, 2006). When Diallo had reached into his jacket to get his wallet, he might had assumed that the NYPD officers know or understand what he was doing, which in his case, was the probability to take out his wallet and show them he was not the criminal or man they were searching for. However, the four police officers were not aware of his action hence assumed that he has a gun, hence fired at Diallo. Moreover, police officers had also displayed the aggression objects as cues concept during the shooting event. Aggression objects as cue is an aggressive stimulus that act as an object that is associated with aggressive response, and whose mere presence can increase the probability of aggression (Taylor, Peplau, Sears, 2006). The aggressive stimulus in this Diallo case is the guns that the police officers possessed. When the police officers had encountered a threatening or violent stimulus, they were more likely to â€Å"shoot† regardless of what stimulus actually appeared (Baumann Desteno, 2010). Due to the possession of firearms, the four police officers had the higher possibilities to response aggressively towards Diallo, hence the gun act as the object that associated with their aggressive response. Without the firearms that the four police officers possessed, the act of aggression towards Diallo would decrease therefore the firestorm would not have happened. According to Correll et al. (2002), it was found that participants’ performance shown difference regarding race of the targeted person. When a decision making process was time limited, participants had made more errors shooting unarmed African American targets than unarmed White targets. Whereas, participants had made more errors not shooting armed White targets than armed African American targets. In other words, participants were more likely made errors evaluating African American targets as threatening compared to White targets. This means that because Diallo was a ‘black’ immigrant, it increases his rate of being shot. This is an act of stereotype as because Diallo was a ‘black’ immigrant, they assumed that he might be a criminal, hence the police officers thereby increasing the likelihoods for certain interpretations and ensuing actions during the crucial moment, resulting them to mistaken Diallo’s wallet as a gun, hence shot him. In another words, it is like the Arabs possess guns, resulting in more frequent mistaken â€Å"shootings† of Arab men within the context of the shooter bias paradigm (Unkelbach, Forgas, Denson, 2008). There are also group prejudices that had been displayed in the Amadou Diallo case study. The four police officers had shown prejudice against Diallo because he was a dark-skin immigrant, hence they have ordered him to stop and â€Å"show his hands† without confirming whether he was the serial rapist they were searching for. Seeing the suspect holding a small square object, Officer Carroll yelled Gun! to alert his colleagues, believing that Diallo had aimed a gun at them at close range, the officers opened fire on Diallo. Diallo was a West African immigrant with no criminal record (Cooper, 1999). It was clearly shown the act of prejudice towards Diallo, whom was misunderstood or misinterpreted just because of his race. Furthermore, discrimination was shown in the Amadou Diallo case when the four NYPD officers had opened fire to shoot Diallo without proper investigation on his identity and the square object that he was holding during the incident. The action carried out by the four police officers was unjustified and harmful towards Diallo because he was a West American immigrant in the United States. Finally, illusory correlation was also shown in the Amadou Diallo case. An illusory correlation is the tendency to see relationships, or correlations, between events that are actually unrelated (Taylor, Peplau, Sears, 2006). When Diallo ran up the outside steps of his apartment and pulled out his wallet, the police officers had correlated his action to a criminal’s doing hence leading them to assume that he was a criminal ready to open fire at them in short range. These two events are distinctive and hardly correlated. Because Diallo was a West African immigrant, therefore the police officers correlated the two events together, causing Diallo his innocent life.

Kitzmiller v. Dover Area School District Essay -- Church State Argumen

In cases having to do with constitutionality, the issue of the separation of church and state arises with marked frequency. This battle, which has raged since the nation?s founding, touches the very heart of the United States public, and pits two of the country's most important influences of public opinion against one another. Although some material containing religious content has found its way into many of the nation's public schools, its inclusion stems from its contextual and historical importance, which is heavily supported by material evidence and documentation. It often results from a teacher?s own decision, rather than from a decision handed down from above by a higher power. The proposal of the Dover Area School District to include instruction of intelligent design in biology classes violates the United States Constitution by promoting an excessive religious presence in public schools. The Dover Area School District of Dover, Pennsylvania is seeking approval from the General Assembly of Pennsylvania House to include the theory of intelligent design in the instruction of biology. Intelligent design, also known as I.D., is a theory that seeks to refute the widely-accepted and scientifically-supported evolution theory. It proposes that the complexity of living things and all of their functioning parts hints at the role of an unspecified source of intelligence in their creation (Orr). For all intents and purposes, the evidence cited by I.D. supporters consists only of the holes or missing links in evolutionary theory; it is a widely-debate proposal, not because ?of the significant weight of its evidence,? but because ?of the implications of its evidence? (IDnet). House Bill No. 1007?the bill in question?propos... ...20Biology%20Curriculum--011005.pdf ?Dover Area School District Biology I Planned Instruction/ Curriculum Guide.? Dover Area School District. http://www.dover.k12.pa.us/3598_7352811954/lib/3598_7352811954/Biology%20Curriculum.pdf ?Edwards v. Aguillard, 482 U.S. 578.? Pepperdine University School of Public Policy. 1987. http://publicpolicy.pepperdine.edu/academics/faculty/lloyd/projects/conlaw/ed_v_ag.htm ?House Bill No.1007.? The General Assembly of Pennsylvania. 2005. http://www2.legis.state.pa.us/WU01/LI/BI/BT/2005/0/HB1007P1153.pdf ?Lemon v. Kurtzmann 403 U.S. 602.? FindLaw for Legal Professionals. 1971. http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=us&vol=403&invol=602 ?Walz v. Tax Commission of City of New York, 397 U.S. 664.? FindLaw for Legal Professionals. 1970. http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=us&vol=397&invol=664

American Politics in the Context of Obama’s Election and First 100 Days Essay

The election of Barack Hussein Obama as the 44th President of the United States is a watershed in the history of American politics. In a country were blacks were once prohibited from voting just because of the color of their skin, his ascent into the White House is indeed a milestone. Obama’s victory is often attributed to several factors, including changes in voting behavior and public opinion and constant media exposure. Popular support of his regime did not end with the election hype – a 2009 Associated Press-GfK poll revealed that about 48% of Americans were satisfied with the economic outcomes of the Obama presidency’s first 100 days (Philstar. com n. pag. ). The rise of the Obama regime had a tremendous impact on American politics. It brought about the prospect of women and minorities gaining a greater voice in political institutions. But Obama’s first 100 days in office told a different story. His first 100 days revealed that the substance of his regime remained largely the same as that of George W. Bush’s. This just goes to show that in the context of Obama’s election and first 100 days, American politics changed its style but retained its hegemonic and elitist nature. Winning the nomination proved to be a greater challenge for Obama than winning the general elections. Because of a national political machine attached to her and her husband, Hillary Clinton was initially chosen by the Democrat Party to become its presidential candidate (Ceaser, Busch and Pitney 15). Although Obama was young, charismatic, cerebral and self-assured, the Democrats were apprehensive about his lack of experience in the political scene (Ceaser, Busch and Pitney 16). This weakness would probably not sit well with the American electorate, who were desperate for a leader who could rectify the damaging mistakes of the Republican administration (Ceaser, Busch and Pitney 15). But shifts in the economic and demographic profile of American voters rendered Obama a more suitable presidential candidate than Clinton. As of 2004, about 56. 6% of American voters were below 30 years old (Dahl n. pag. ). Majority of these individuals grew up using the Internet as an indispensable tool for work, study and leisure. When the Clintons staged their last national campaign in 1996, the Internet was just a fledgling industry. Obama’s youth and tech savvy (he kept a Blackberry with him at all times), therefore, would make him more appealing to the aforementioned voter’s age group than Clinton (Ceaser, Busch and Pitney 106). Obama must have been aware of these advantages of his – his election campaign involved mainly the utilization of the Internet. By April 2007, he already had 1,543,000 â€Å"friends† in his account in the social-networking website MySpace. com. In sharp contrast, Clinton only had 41,500 people in her network (Dupuis and Boeckelman 123). In the spring of 2008, Obama had at least 1 million â€Å"friends† in Twitter, while Clinton only had 330,000. Although they had the same number of Facebook â€Å"friends† during this period, the website’s largest pro-Obama group had over 500,000 members, while the largest Facebook group that supported Clinton only had 30,000 members (Tapscott 252). Furthermore, Obama’s rhetoric reflected the American public’s disillusionment with traditional political ideologies. His slogan, â€Å"Change You Can Believe In,† appealed to voters because it did not bombard them with highfaluting dogmas. Rather, it showed them that â€Å"change† meant exploring for new solutions to problems. The American people did not have to make do with traditional solutions which Obama believed have already failed them in the past. For instance, he is constantly criticized for his relative youth and limited high-level government inexperience. Obama downplayed this attack by claiming that â€Å"Dick Cheney and Donald Rumsfeld have an awful lot of experience, and yet have engineered what I think is one of the biggest foreign policy failures in our recent history† (Dupuis and Boeckelman 123). Through this argument, he pointed out that adherence to convention is not always the best for the nation. There are instances when the government and the people must work together and come up with new solutions. In addition, Obama created a firm connection between himself and the people by letting them know that he also underwent their plights. In his campaign speeches, he often used his experience as the son of a working woman and as the husband of a working woman in order to show to the people that he knew how it felt to be in their shoes (Leanne 52). He knew how it was to be poor, marginalized and to work hard just to keep ends meet. Thus, his cynicism towards conventional ideologies – he and so many other Americans remained impoverished despite their application. Given such a populist and down-to-earth campaign strategy, it was no longer surprising if Obama won a landslide victory in the 2008 national elections. But his first 100 days in office revealed that his regime was essentially the same as that of George W. Bush’s. Obama’s first 100 days revealed the â€Å"right-wing character of his administration and the class interests that it serves† (Eley n. pag. ). If there was any difference at all, it was the approach – Bush assumed a warmonger-like stance to obtain the presidency, while Obama adopted a populist one. Obama continued the Bush administration’s militarist and aggressive foreign policy. Although he promised that he will all American troops out of Iraq, troop levels in Iraq remained virtually unchanged. Furthermore, Obama expanded the war in Afghanistan and even extended it to Pakistan. Worse, he proposed a defense budget worth $664 billion – believed to be the largest appropriation for military spending in American history (Eley n. pag. ). The prison camp at Guantanamo Bay remains open, despite Obama’s pledge to eventually close it down. As a result, its inmates are at risk of being shipped to US military prisons such as those in Iraq and Afghanistan, where they can be tortured and or killed in secret. Under the guise of â€Å"moving on,† he blocked all investigations and or criminal prosecution of parties that were responsible for the torture of detainees in US military prisons across the world. Obama’s government also intervened in the procedures of several court cases in order to deny habeas corpus to detainees in US military prisons in Afghanistan (Eley n. pag. ). While Obama was busy perpetuating Bush’s foreign policy, the American economy further deteriorated. Mounting layoffs took place, along with wage cuts, home foreclosures and depreciation of real estate value and retirement savings. These developments, in turn, resulted in escalating hunger and homelessness. But instead of creating concrete solutions to put an end to these calamities, the Obama administration used billions of dollars in public funds to bail financial institutions such as AIG, Lehman Brothers and Merrill Lynch out of bankruptcy. Worsening the situation was that these banks were discovered to have been doling out huge portions of the bailout money to their executives as â€Å"bonuses† (Eley n. pag. ). It is very ironic that Obama, a black man who experienced growing up poor and marginalized, would end up perpetuating the repressive and anti-poor policies of his predecessor. But what Obama did reflected the recourse that the US most probably resorted to in order to steer itself from the economic crisis – tighten its grip over the Third World. It is during the current economic crisis that the US needs unlimited access to the natural resources of the Third World more than ever before. Thus, the Obama administration’s promise of â€Å"change† was replaced with the de facto continuation of the Bush regime. Works Cited â€Å"AP Poll: After Obama’s 100 Days, US on Right Track. † 24 April 2009. Philstar. com. 4 May 2009 . Ceaser, James W. , Andrew E. Busch, and John J. Pitney. Epic Journey: The 2008 Elections and American Politics. New York: Rowman & Littlefield, 2009. Dahl, Melissa. â€Å"Youth Vote May have been Key in Obama’s Win. † 5 November 2008. MSNBC. 4 May 2009 . Dupuis, Martin, and Keith Boeckelman. Barack Obama: The New Face of American Politics. Santa Barbara: Greenwood Publishing Group, 2008. Eley, Tom. â€Å"Obama’s 100 Days. † 29 April 2009. GlobalResearch. ca. 4 May 2009 . Leanne, Shel. Say It Like Obama: The Power of Speaking with Purpose and Vision. New York: McGraw-Hill Professional, 2008. Tapscott, Don. Grown Up Digital: How the Net Generation is changing Your World. New York: McGraw-Hill Professional, 2008.

Literature Review about Investors Behavior Toward Stocks Splits

A share split is an action taken by corporate executives to increase the number of outstanding shares by dividing each share by a given split ratio that diminishes its price. In this case, the stock market capitalization does not change since the price per share reduces by the ratio of the share split. For instance, if a company splits its shares in the ratio of two shares for each one share held, the share holders will enjoy an increased numbers of shares nut at a reduced price thus the overall market capitalization remains unchanged. Stock splits are not a new term in world stock exchanges, many company have adopted the policy for a couple of reasons all geared towards increasing the marketability of its shares. Equity bank, for instance, one of the leading micro finance institutions in the world, incorporated in Kenya recently split its shares in a ratio of 10-1 giving the shares a lot of liquidity and marketability. In finance, investors are said to be rational decision makers and would try to maximize the returns to their investments by whatever means, given several constrains. Their response to share splits thus depends on several factors as explained below. Information available-financial information is critical in making investment decisions. The amount of information that investors have thus informed their response to proposed share splits.   If investors have adequate advance information concerning the share split, future investment projects by the company among other relevant information. They are likely to respond quickly to share splits. Nature of investors there are several types of investors in the stock exchange. The broadest categories of investors in the market are the long term investors and speculators. Long term investors may not quickly respond with the same gusto as the speculators who would want to make a quick kill from the investment opportunity after the shares become more affordable. Usually, such speculators are small investors who do not have enough capital to invest in expensive stocks but prefer the cheap and affordable investments. Economic situation although share splits happen in companies that are doing well, investors may be quite skeptical about purchasing stocks if they foresee a gloomy economic future. Investors buy shares if they anticipate a rise in the share prices, with a depressed economic situation, the possible share price increase may be overshadowed. Reverse split is the opposite of a share split. In some stock markets, there is a required minimum share price. If the companies share prices dip below the required share prices of that particular company, the share holders may be advised to consolidate their share holding, a term referred to as reverse split. There are several reasons why companies prefer to split their shares. The decision to split share in a company is informed by the behavior of investors towards a share split. This article thus explores the behavior of investors towards a share split and the impacts of the split on the investor’s earnings. Most traders view a stock split as a very crucial investment opportunity with great potential to increase their wealth. They consider share splits as a positive step in value and good will of the company, share splits thus psychologically makes investors feel wealthier. In some cases, some investors take stock splits as dividends oblivious of the reality in terms of the impact of such splits on price and market capitalization of the company’s shares. Critics however, argue that stock splits only make since in accounting and are quite irrelevant in real life since they do not affect performance of the shares. They actually think that shareholders would be stupid to believe that their wealth has increased as a result of a stock split (Shiller, Robert 1981), Empirical studies have however confirmed that increased market activity as a following a share split is justified. In 1996, a study by David Ikennbery of Rise University in Hong Kong measuring the long term and short-term effects of a stock split on the performance of the company company’s securities. His research findings indicated that 1275 companies that had split their share between 1975-1990 performed 8% better than their similar counterparts who had not split their shares in the first year and about 16% better in the subsequent three years. In 2003, the same researcher updated his research but this time included splits of 2-1, 3-1, and 4-1 and found that the results from this study were very similar with his original findings. He found that the companies that had split their share in the ratios above reported better results compared to those stocks that were not split, in the first year following the split and about 12% better than their counterparts in the following three years. In another research carried out in China and published in 2005, although stock splits appear purely cosmetic, there is ample empirical evidence that they are associated with abnormal returns. Theoretically, there are several reasons that explain the behavior of investors in case of a share split. This reason rotate on the fact that a share split increases the number of shares held by the shareholders and at the same time reduces the price of the shares thus making them more affordable. One, stock splits announcement raises attention to a company’s perceived success. This is because, for a company to split its shares, they must be trading at a price above the market and industry average. Such high prices result from the company’s success leading to high prices for its shares. If a company is perceived to be successful, investors would like town stocks in that company with the intention of benefiting from the capital gains expected in the long run. Investors thus respond very quickly to the announcement of a share split with the hope of making more money as the share prices go up. The reduced price per share after this split of the shares often attracts many investors since the smaller investors can now afford to purchase the company’s stocks at the reduced prices. The increased activity at the stock exchange usually makes the company’s prices to increase. Such an increase in the prices of the company stocks is a benefit to the well positioned investors who purchase their stocks at the announcement of the split. Some company’s share prices are very high to the extend that low income earners are not able to afford. With the lowered prices as a result of share splits, many investors will buy stocks at the affordable rates. Life cycle of a share split The behavior of investors towards a share split can also be analyzed using the lifecycle of a share split. Investors in the stock market behave differently at the different stages of the life cycle and thus it’s important to understand this lifecycle as an investor. Such an analysis also gives hints on the best time for one to invest in the stock market following a share split. Pre-announcement During this stage, there is not much fanfare in the stock market after a long period of healthy growth. In many cases however, emergence into this stage occurs quickly as unexpected gains cause a rapid increase in the prices of the stocks. Significant changes in price are thus witnessed at this stage. To make a good profit during this stage, it’s important that one identifies the stocks that will most likely be split and when they will be split. Investor behavior at this stage is unpredictable since investors do not have perfect information about the split and they only carry on their business as usual although sometimes there are indicators that may lead investors to anticipate such splits such as abnormally high prices per share. Announcement The upbeat atmosphere of the share split usually pulls investors in large numbers to buy shares at the reduced prices. The influx of traders in the market leads to an increase in the stock prices and this gives exceptional advantage to those investors who are well positioned before the announcement since they can sell their securities at the increased prices and make capital gains or simply wait and receive higher dividends I the future. For those investors who were initially not in the company, this period usually offers a low risk set up for timing short term trading entries. It is at this time that speculators get in and buy shares only to sell them in the near future immediately the prices look up (Simon, Herbert 1947). Dormancy period In this period, there is a return to normalcy in prices and behavior in the weeks following the announcement of the split s the initial interest subsides. The shorter this time interim, the less subdued this stage will be. Pre split run For many stocks, this is the most powerful phase of the share split cycle as investors are busy bidding up the prices of the limited stock supply. The prices are still high pending the speculators mass shift from the stock exchange. Shiller, Robert 1981) Post split run Here, the investor’s excitement after the share split is begins to fade. This stage is characterized by a retreat in the price of the share as speculators are actively selling their securities in the short run. The increased supply of the securities drives the prices down thus as the speculators exit the market. This is believed to be the best time for the long term investors to buy the securities at the reduced prices and profit fro the capital gains I the future after the prices stabilize. The above analysis indicates that the behavior of investors towards a share split will depend on the particular stage n the share split life cycle. Investors consider the price of the share and the potential future earnings in making their decisions on investment. Although practitioners like ( Bakerand Gallagher, (1980; Baker and Powel,1993) suggest that marketability of the stocks is the primary motivation for stock splits, fewer papers have shown interest in this possibility. Academic research on common stocks has however found some support for marketability hypothesis. For instance, (Lamoureux and Poon 1987) and Maloney and Mulherin 1992) confirm that the number of share holders in a company increases following a stock split. A Schultz 1999) shows that the number of small investors increases following a share split and majority of these new investments are new buys. According to empirical studies, Managers report that the main report that the major factor that contributes to stock split is to move the price of the stocks to a better and desirable trading range. The trading range for most stocks in the United States is 20-35 USD (Baker, Phillips and Powell 1995) in a review article on splits. Stock splits have been a common feature in the Newyork stock exchange. Of the listed stocks in the market at the end of 1930, almost 20% split at least once in the prior 10 years. Over a half a century later, 5-10% of all the listed companies announced a stock. The stock prices I this stock exchange have been quite stable for quite a long time, averaging between $30 to $40. Over the last half a century, the average Newyork Stock Exchange has stayed in the dollar range despite the remarkable increases in consumer prices and corporate equity values. This constancy in the price levels has been partly attributed to the frequent share splits. Some companies however, such as Berkshire Hathaway and Google, though have very high share prices averaging about 100,000 and 500USD respectively have not had share splits in their history. Another interpretation of investor behavior is that investors and analysts have no preferred price but simply adapt from the firms past split behaviors. Pilotte and Manuel (1996) for instance, provide evidence that the firms post split earnings performance to make inferences about a newly announced share split. If managers assume an optimal price for the splits and their stocks maintain that particular price level, investors can be seen to infer the manager’s private information based on announced split price and respond to that information. A lot of research a lot has been found to support these claims even if the motivation for that belief is less clear (e.g. Baker and Powell, 1993). Financial theories advanced to explain stock splits rely primarily on two attributes. The information flows between investors and managers and transaction costs as financial intermediaries and investors interact. Theories focusing on interactions between investors and intermediaries investigate the idea that share splits adjust prices to a level that redues the transaction costs and at the same time increases the investor trading opportunities. At this level, investors will find the securities to be more attractive and will move in to purchase more shares thus increasing the liquidity of the shares in the stock market. Summary and conclusion As mentioned earlier, share splits can also be reversed by the managers of the company. It is done when management intends to place the shares in an attractive range. Decisions to consolidate shares is either discretionary or non discretionary. Management may decide to improve the company’s image by consolidating the company’s shares if they are selling at an abnormally low price. This increases the marketability and demand for the shares. This is because investors’ view too low share prices as being speculative. Management may also consolidate the company’s shares to attract institutional investors. Such investors make huge share purchases and invest with along term perspective. For management to attract such investors, the share prices must be attractive. Reducing the number of outstanding shares also has an effect on the earnings per share attributable to the existing share holders. Since earning per share is computed as after tax profit for the company divided by the number of ordinary share holders, reducing the number of ordinary share shares will have a positive impact on the share holder earnings. In some stock exchange markets however, firms are supposed to maintain a given level of price per share. Incase a firms share price drops below this level required, then the company has no option but to consolidate its shares. This phenomenon is called non-discretionary reverse split. A lot of research has been directed towards the behavior of investors towards stock splits. Findings from most of the researches’ indicate that there is positive correlation between stock splits and investor response to the markets activities. Empirical research indicates that companies that have split their shares have reported better performance than their counterparts who have not split their shares. Many researchers have backed these findings with empirical evidence that indicate that such companies perform better by over 8% while others dismiss such claims as very cosmetic and baseless. They believe that stock splits do not alter the wealth of the share holders since there is no real change in the market capitalization. They argue that investors are stupid enough to believe that the increased number of shares as a result of a share split improves their wealth. They argue that such believe is not true and only in the investors psychology (Fama, Eugene 1965). Other researchers on the other hand have proven that the lowered prices after the share split induces small investors to purchase more shares since they become affordable after the share split. The increased attention towards the company after the announcement of the share split by investors leads to the appreciation of the company’s stocks prices. This creates value to the share holders through capital gains or future dividends in the long run. A lot of opportunities for empirical research however, exist on the benefits of a share split on the companies shares. It’s also important that share holders and investors have clears information on the impacts of the pre and post split effects on their future earning. 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