Leadership & Organizational Behavior

This paper studies optimal communication flows in organizations. A production process can be coordinated ex ante, by letting agents stick to a prespecified plan of action. Alternatively, agents may adapt to task-specific shocks, in which case tasks must be coordinated ex post, using communication. When attention is scarce, an optimal organization coordinates only a few tasks ex post. Those tasks are higher performing, more adaptive to the environment, and influential. Hence, scarce attention requires setting priorities, not just local optimization.

We propose a model where investors can choose to acquire costly information that allows them to identify good assets and purchase them in opaque over the counter (OTC) markets. Uninformed investors trade on an organized exchange and only have access to an asset pool that has been (partially) cream-skimmed by informed dealers. We show that when the quality composition of assets for sale is fixed there is always too much information acquisition and cream skimming by dealers in equilibrium.

Although it is known that certain names gain popularity within a culture because of historical events, it is unknown how names become associated with different social categories in the first place. We propose that vocal cord vibration during the pronunciation of an initial phoneme plays a critical role in explaining which names are assigned to males versus females.

This paper explores the quantitative asset-pricing implications of expectations-based reference-dependent preferences, as introduced by Koszegi and Rabin, in an otherwise traditional Lucas-tree m model. I find that the model easily succeeds in matching the historical equity premium and its variability when the preference parameters are calibrated in line with micro evidence. The equity premium is high because expectations-based loss aversion makes uncertain fluctuations in consumption more painful.

The current research explores why people desire power and how that desire can be satisfied. We propose that a position of power can be subjectively experienced as conferring influence over others or as offering autonomy from the influence of others. Conversely, a low-power position can be experienced as lacking influence or lacking autonomy. Nine studies show that subjectively experiencing one’s power as autonomy predicts the desire for power, whereas the experience of influence over others does not.

The past decade has seen a rise in both economic insecurity and frequency of physical pain. The current research reveals a causal connection between these two growing and consequential social trends. In five studies, we found that economic insecurity produced physical pain and reduced pain tolerance. In a sixth study, with data from 33,720 geographically diverse households across the United States, economic insecurity predicted consumption of over-the-counter painkillers.

In an "activist risk arbitrage," a shareholder attempts to change the course of an announced M&A deal through public campaigns, and profits from improved terms. Compared to conventional (passive) risk arbitrageurs, activists target deals susceptible to managerial conflicts of interest (e.g., going-private and "friendly" deals) and deals with lower announcement premiums. Their presence increases the sensitivity of deal completion to market signals.

In the experiments reported here, we integrated work on hierarchy, culture, and the enforcement of group cooperation by examining patterns of punishment. Studies in Western contexts have shown that having high status can temper acts of dominance, suggesting that high status may decrease punishment by the powerful. We predicted that high status would have the opposite effect in Asian cultures because vertical collectivism permits the use of dominance to reinforce the existing hierarchical order.

Researchers have debated whether a person’s behavior can be predicted from his or her face. In particular, it is unclear whether people’s trustworthiness can be predicted from their facial appearance. In the present study, we implemented conceptual and methodological advances in this area of inquiry, taking a new approach to capturing trustworthy behavior and measuring targets’ own self-expectations as a mediator between consensual appearance-based judgments and the trustworthiness of targets’ behavior.