Decision Making & Negotiations

Research on repeated ties has concluded almost lopsidedly that repeated exchanges are beneficial. Yet, most empirical evidences backing up this conclusion either do not measure real economic outcomes of repeated exchanges, or have performance data from only one side of the transaction. Our paper develops a synthetic view of the exchange dynamics through which positive or negative effects might take place, and exposes direct evidence of the impact of repeated ties on price, cost, profit and governance structure.

Six studies show that subtle contextual cues that increase customers' self-awareness can be used to influence their satisfaction with service providers holding the objective service delivery constant. Self-awareness cues tend to increase customers' satisfaction when the outcome of a service interaction is unfavorable, but tend to decrease customers' satisfaction when the outcome of the interaction is favorable. This is because higher self-awareness increases customers' tendency to attribute outcomes to themselves as opposed to the provider.

This is a fictitious case in which Universal Studies, a major U.S. theme parks and resorts company, has to negotiate with China's central government to build its first theme park in the country. Students are divided into groups and each student is assigned a role as one of the negotiators or as an observer. The topics covered in the negotiation include the new theme park's location, ownership structure, size, nature of theme zones, local employment and hospitality training programmes.

We argue that a fundamental reason for the short-term perspective of corporate executives is the short-term orientation of shareholders themselves and the financial markets that drive the performance benchmarks of CEOs. Although some shareholders are prepared to take a more long-term view they are generally not rewarded for their loyalty to the company.

We examine whether securitization impacts renegotiation decisions of loan servicers, focusing on their decision to foreclose a delinquent loan. Conditional on a loan becoming seriously delinquent, we find a significantly lower foreclosure rate associated with bank-held loans when compared to similar securitized loans: across various specifications and origination vintages, the foreclosure rate of delinquent bankheld loans is 3% to 7% lower in absolute terms (13% to 32% in relative terms).

Research on choice overload has demonstrated that choosing from larger, versus smaller, sets can reduce consumers’ wellbeing. However, in real life consumers seem able to cope with ever-expanding assortments better than what this research would predict. We argue that this discrepancy depends on differences in choice timeframes: Whereas participants in choice overload studies usually make a one-off choice within a limited amount of time, real consumers often spend longer time making certain choices and/or experience repeated exposures to the same choice over time.

In the customer expectations arena, relatively little attention has been paid to the impact on expectations of variation in cultural variables unique to a country. Here the authors focus on one country, India, and a major cultural influence there — the extent of belief in karma. Prior research in the United States suggests that disconfirmation sensitivity lowers expectations. Here the authors examine whether belief in karma and, consequently, having a long-term orientation, counteracts the tendency to lower expectations in two studies that measure and prime respondents' belief in karma.

In settings such as investing for retirement or choosing a drug plan, individuals typically face a large number of options. In this paper, we analyze how the size of the choice set influences which alternative is selected. We present both laboratory experiments and field data that suggest larger choice sets induce a stronger preference for simple, easy-to-understand options.