Leadership & Organizational Behavior

We present a model in which asset managers design their contracts to attract flows of investor capital. We find that they make their contracts depend on public information, e.g., credit ratings or benchmark indices, as a way to attract flows, rather than as a way to mitigate incentive problems, as has been emphasized in the literature. Unfortunately, asset managers' competition for flows triggers a race to the bottom: asset managers use public information in their contracts even though it is socially inefficient.

I find that shadow bank money creation significantly expands during monetary tightening. This "shadow money channel" offsets the reductions in commercial bank deposits and dampens the impact of monetary policy. Using a structural model of bank competition, I show that heterogeneous depositor clientele quantitatively explains the difference in monetary transmission between commercial and shadow banks. Facing more yield-sensitive clientele, shadow banks pass through more rate hikes to depositors, thereby attract more deposits when the Fed raises rates.

In this paper, we introduce a brief and effective way to increase leader's perceived authenticity in the form of a values affirmation exercise. Personal values reflect what people consider as most important and ideal (Rokeach, 1973). As a result, values affirmation exercise where people are reminded of their values activates their ideal selves. In Experiment 1, we show that values affirmation induces the feeling of authenticity by activating the ideal-self.

Consumer reviews and ratings of products and services have become ubiquitous on the Internet. This paper analyzes, given the sequential nature of reviews and the limited feedback of such past reviews, the information content they communicate to future customers. We consider a model with heterogeneous customers who buy a product of unknown quality and we focus on two different informational settings. In the first setting customers observe the whole history of past reviews. In the second one they only observe the sample mean of past reviews.

We investigate the implementation of a 2014 Government of India mandate that requires companies to at least spend 2% of their profits on corporate social responsibility (CSR) activities. Firms that voluntarily engaged in CSR before the mandate reduce their spending significantly down to the suggested 2% level. Firms that did not actively engage in CSR before the mandate increase their spending marginally. CSR spending post mandate is highly sensitive to negative shocks to firm profits, but not to positive profit shocks.

People quickly form impressions about moral character; for example, if people learn that someone cheated, they form a negative impression about that person's character and expect that person to cheat in the future. Four studies show that the formation of such moral character impressions depends on the degree of valence homogeneity in the target's context. We argue that this is the case because the degree of homogeneity in the context (the evaluative ecology) informs perceivers about the reliability of signals.

This integrative review presents the Agentic-Communal Model of Advantage and Disadvantage to offer insight into the psychology of inequality. This model examines the relation between individuals' position of advantage or disadvantage in a social hierarchy and their propensity toward agency and communion. We begin by identifying and reviewing four inequalities — Resources, Opportunities, Appraisals, and Deference, or the ROAD of inequality — that are fundamental to social advantage and disadvantage.