Information technology (IT) users encounter signal words (e.g., “Warning”) and signal icons (e.g., an exclamation point) in “exception messages.” The first of two experiments reported in this paper examines the “arousal strength” associated with signal words and icons that commonly appear in exception messages. An elicitation exercise was completed by 316 participants, in which each viewed exception messages containing combinations of signal words and icons and provided their perception as to the severity of a computer problem communicated. The results allow “hazard matching”; whereby, the severity of hazard implied by the exception message can be matched to the level of the hazard. The second experiment reports a strong habituation effect in that users exhibit decreased attention to an exception message after repeated exposure, with a corresponding decrease in compliance. The effect was also found to be mitigated by increasing the arousal strength of the exception message.

The IASC recently recommended that employee compensation in the form of stock options be measured at the 'fair value' based on an option pricing model and the value should be recognized in financial statements. This follows adoption of "SFAS No. 123" in the United States, which requires firms to estimate the value of employee stock options using either a Black-Scholes or binomial model. Most US firms used the B-S model for their 1996 financial statements. This study assumes that option life follows a Gamma distribution, allowing the variance of option life to be separate from its expected life. The results indicate the adjusted Black-Scholes model could overvalue employee stock options on the grant date by as much as 72 percent for nondividend paying firms and by as much as 84 percent for dividend paying firms. The results further demonstrate the sensitivity of ESO values to the volatility of the expected option life, a parameter that the B-S model or a Poisson process cannot accommodate. The variability of option life has an especially big impact on ESO value for firms whose ESOs have a relatively short life (5 years, for example) and high employee turnover. For such firms, the results indicate a binomial option pricing model is more appropriate for estimating ESO value than the B-S type model. Copyright Blackwell Publishers Ltd, 2003.

As Web-based courses become more prevalent, tools need to be created that go beyond electronic page turning. The tools should allow for easy development of Web-based interactive instruction. The Learning Machine is data-driven tutorial software that is based on behavioral education philosophy. Development and presentation use the same database, but separate scripts, so that changes to content do not require changes to the presentation script. This decoupling enables content providers to concentrate on course development. This paper validates the effectiveness of Learning Machine tutorials as compared with classroom lectures. The experiment conducted to validate the Learning Machine tutorials showed that the tutorials were at least as good as classroom lectures.

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Users of information technology (IT) frequently encounter “exception messages” during their interactions with computing systems. Exception messages are important points of communication with users of IT and are similar in principle to compliance and warning messages that appear on consumer products and equipment (e.g., cigarettes, power tools, etc.), in various environments (e.g., around machinery), and on chemicals. This study reviews the normative elements and information that are included in product, chemical, and environment compliance and warning messages and combines these with recommendations in the IT literature to propose that five elements and information should be included in IT exception messages with a standard format. It is argued that including these elements in the proposed format will improve the consistency and effectiveness of exception messages. Also reported are the results of an investigation of a sample of actual exception messages to determine their degree of conformity with the proposed elements. Results indicate that IT exception messages lack descriptive content.