Economics Insights @ CBS

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.

Dynamic pricing offers the potential to increase revenues. At the same time, it creates an incentive for customers to strategize over the timing of their purchases. A firm should ideally account for this behavior when making its pricing and stocking decisions. In particular, we investigate whether it is optimal for a firm to create rationing risk by deliberately understocking products. Then, the resulting threat of shortages creates an incentive for customers to purchase early at higher prices. But when does such a strategy make sense?

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.

Venture capitalists add value to portfolio firms by obtaining and transferring information about senior managers across firms over time. Information transfer occurs on a significant scale and takes place both among a single venture capitalist's portfolio firms and between different venture capitalists' firms via a network of venture capitalists, which venture capitalists use to locate and relocate managers. Cross-sectional differences are associated with differences in the intensity with which venture capitalists network.