Leadership & Organizational Behavior

Drawing on the motivated cognition literature, we examine how self-affirmation processes influence self-justification needs and escalation decisions. Study 1 found that individuals with a larger pool of affirmational resources (high self-esteem) reduced their escalation compared to those with fewer affirmational resources (low self-esteem). Study 2 extended these findings by demonstrating that individuals also de-escalated their commitments when they were provided an opportunity to affirm on an important value.

Three experiments examine how power affects consumers' spending propensities. By integrating literatures suggesting that (a) powerlessness is aversive, (b) status is one basis of power, and (c) products can signal status, the authors argue that low power fosters a desire to acquire products associated with status to compensate for lacking power. Supporting this compensatory hypothesis, results show that low power increased consumers' willingness to pay for auction items and consumers' reservation prices in negotiations but only when products were status related.

We investigate the effects of babyfaceness on the trustworthiness and judgments of a company's chief executive officer in a public relations crisis. Experiment 1 demonstrates boundary conditions for the babyfaceness-honesty trait inference and its influence on company evaluations. Experiment 2 shows that trait inferences of honesty are drawn spontaneously but are corrected in the presence of situational evidence (a severe crisis) if cognitive resources are available.

Individuals define themselves, at times, as who they are (e.g., a psychologist) and, at other times, as who they are not (e.g., not an economist). Drawing on social identity, optimal distinctiveness, and balance theories, four studies examined the nature of negational identity relative to affirmational identity. One study explored the conditions that increase negational identification and found that activating the need for distinctiveness increased the accessibility of negational identities.

Three experiments examine the relationship between past performance and strategies and risk attitudes in integrative negotiations. We hypothesized that past performance would affect negotiators' willingness to embrace two types of risk: strategic (i.e., information sharing in the present) versus contractual (i.e., uncertainty about the future). Consistent with the hypothesis that past success promotes strategic risk taking, dyads with a history of success were more integrative than dyads with a history of failure in Experiment 1.

Many practices aimed at cultivating multicultural competence in educational and organizational settings (e.g., exchange programs, diversity education in college, diversity management at work) assume that multicultural experience fosters creativity. In line with this assumption, the research reported in this article is the first to empirically demonstrate that exposure to multiple cultures in and of itself can enhance creativity.

This paper compares centralized and decentralized coordination when managers are privately informed and communicate strategically. We consider a multi-divisional organization in which decisions must be adapted to local conditions but also coordinated with each other. Information about local conditions is dispersed and held by self-interested division managers who communicate via cheap talk. The only available formal mechanism is the allocation of decision rights. We show that a higher need for coordination improves horizontal communication but worsens vertical communication.

The separation of ownership and control allows controlling shareholders to pursue private benefits. We develop an analytically tractable dynamic stochastic general equilibrium model to study asset pricing and welfare implications of imperfect investor protection. Consistent with empirical evidence, the model predicts that countries with weaker investor protection have more incentives to overinvest, lower Tobin's q, higher return volatility, larger risk premia, and higher interest rate.

A German broker's clients place similar speculative trades and therefore tend to be on the same side of the market in a given stock during a given day, week, month, and quarter. Aggregate liquidity effects, short sale constraints, the systematic execution of limit orders (coordinated through price movements) or the correlated trading of other investors who pick off retail limit orders, do not fully explain why retail investors trade similarly. Correlated market orders lead returns, presumably due to persistent speculative price pressure.