Economics Insights @ CBS

Past work on interpersonal assertiveness and organizational effectiveness paints a mixed picture: some research suggests a positive link, other work highlights negative effects. This article reviews recent research and an account that stems from a different perspective, looking at assertiveness as a factor in leadership shortcomings and failure. This approach suggests that interpersonal assertiveness is a major factor and has a curvilinear, inverted-U-shaped relationship with leadership effectiveness. I review evidence for this effect as well as social and instrumental outcome mediators.

A criticism of mechanism design theory is that the optimal mechanism designed for one environment can produce drastically different actions, outcomes, and payoffs in a second, even slightly different, environment. In this sense, the theoretically optimal mechanisms usually studied are not "robust." To study robust mechanisms while maintaining an expected utility maximization approach, we study a multiagent model in which the mechanism must be designed before the environment is as well understood as is usually assumed.

We revisit and critically reevaluate the widely accepted modernization hypothesis which claims that per capita income causes the creation and the consolidation of democracy. Existing studies find support for this hypothesis because they fail to control for the presence of omitted variables. Controlling for these factors either by including country fixed effects in a linear model or by including parameterized random effects in a non-linear double hazard model removes the correlation between income and the likelihood of transitions to and from democratic regimes.

We investigate pricing effects of the joint production of loans and security underwritings. We control for firm and borrower characteristics, including differences in sequencing, which are important for pricing. Contrary to previous studies, when banks combine lending and underwriting within the same customer relationship they charge premiums for both loans and underwriting services. Abstracting from effects of joint production within relationships, depository banks engaged in underwriting price lending and underwriting more cheaply than stand alone investment banks.

Past research has established a connection between regret (negative emotions connected to cognitions about how past actions might have achieved better outcomes) and both depression and anxiety. In the present research, the relations between regret, repetitive thought, depression, and anxiety were examined in a nationally representative telephone survey. Although both regret and repetitive thought were associated with general distress, only regret was associated with anhedonic depression and anxious arousal.