Entrepreneurship & Innovation

We analyze the Pareto optimal contracts between lenders and borrowers in a model with asymmetric information. The model generalizes the Rothschild-Stiglitz pure adverse selection problem by including moral hazard. Entrepreneurs with unequal "abilities" borrow to finance alternative investment projects which differ in degree of risk and productivity. We determine the endogenous distribution of projects as functions of the amount of loanable funds, when lenders have no information about borrowers' ability and technological choices.

Perspective-taking, by means of creating an overlap between self and other cognitive representations, has been found to effectively decrease stereotyping and ingroup favoritism. In the present investigation, the authors examined the potential moderating role of self-esteem on the effects of perspective-taking on prejudice. In two experiments, it was found that perspective-takers, but not control participants, with temporarily or chronically high self-esteem evaluated an outgroup more positively than perspective-takers with low self-esteem.

Two experiments explored the hypothesis that the impact of activating gender stereotypes on negotiated agreements in mixed-gender negotiations depends on the manner in which the stereotype is activated (explicitly vs. implicitly) and the content of the stereotype (linking negotiation performance to stereotypically male vs. stereotypically female traits). Specifically, two experiments investigated the generality and limits of stereotype reactance.

For more than two decades, businesses have been warned to "change or perish." Yet a growing number of companies are perishing because of change. What's going on? Columbia Business School Professor Eric Abrahamson argues that although change is necessary for companies to grow and prosper, many organizations have blindly taken the mandate too far. The "creative destruction" advocated by change champions has resulted in a painful cycle of initiative overload, change-related chaos, and widespread employee cynicism.

Negotiation scholars and practitioners have long noted the impact of face, or social image, concerns on negotiation outcomes. When face is threatened, negotiators are less likely to reach agreement and to create joint gain. In this paper, we explore individual differences in face threat sensitivity (FTS), and how a negotiator's role moderates the relationship of his or her FTS to negotiation outcomes. Study 1 describes a measure of FTS. Study 2 finds that buyers and sellers are less likely to reach an agreement that is in both parties' interests when the seller has high FTS.

This article focuses on the role of threats in negotiations. Broadly speaking, a threat is a proposition that issues demands and warns of the costs of noncompliance. Even if neither party resorts to them, potential threats shadow most negotiations. Researchers have found that people actually evaluate their counterparts more favorably when they combine promises with threats rather than extend promises alone. Whereas promises encourage exploitation, the threat of punishment motivates cooperation.

In this chapter, the authors argue that having a position of leadership often means having power over other people and that this power may have psychological consequences on the leaders. Specifically, they review research that supports their hypothesis that power tends to make people action prone — leaders tend to act. This tendency may be fine when action is called for, but it may interfere if caution and patience are called for.

Three experiments investigated the hypothesis that power increases an action orientation in the power holder, even in contexts where power is not directly experienced. In Experiment 1, participants who possessed structural power in a group task were more likely to take a card in a simulated game of blackjack than those who lacked power. In Experiment 2, participants primed with high power were more likely to act against an annoying stimulus (a fan) in the environment, suggesting that the experience of power leads to the performance of goal-directed behavior.