Concern For Reputation Research Articles

Disclosure of Disaggregated Information in the Presence of Reputational Concerns

This study examines a reputation-concerned entrepreneur’s incentives to provide disaggregated information about a project’s future performance when the entrepreneur seeks to increase both the market price of the project and the market assessment of the entrepreneur’s ability as a project manager. Two factors determine equilibrium: (i) the informational quality of the signal related to the entrepreneur’s ability and (ii) the magnitude of reputational concerns. If the former is relatively low, the entrepreneur with moderate reputational concerns is more likely to provide disaggregated information when the signal about the project’s overall performance is intermediate than when it is sufficiently good or bad. Also, given any value of the signal about the overall performance, this entrepreneur withholds disaggregated information when the signal about the entrepreneur’s ability is intermediate rather than sufficiently good or bad. The comparative static results provide novel empirical predictions about disclosure of aggregate versus disaggregated information. This paper was accepted by Eric So, accounting.

Local-province chief executive officer and managerial myopia: Evidence from China.

Managerial myopia occurs when executives value short-term benefits to the extent that firm long-run development will be obstructed. Recent studies have shown that the locality effect plays an important role in managerial myopia—local United States chief executive officers (CEOs) who work near their home states are less likely to behave myopically because of more effective monitoring and greater reputation concern. In an emerging market, government policies play a more important role in the strategic planning enterprises. A local CEO may have better understanding of local government’s policies thus makes less short-term decisions. This article adds to this literature by testing whether local-province CEOs in China, i.e., the CEO’s native place or birthplace is in the same province as her company’s headquarters, are also far-sighted. Using data on 470 publicly listed non-state-owned Chinese firms from 2014 to 2018, supportive evidence has been found that non-local-province CEOs in China tend to cut R&D expenses for beating analyst forecasts, reversing earnings decline, or pursuing higher returns. This article also confirms social capital as one mechanism of Chinese local-province CEOs behaving less myopically. This investigation also adds to the literature by revealing a new mechanism that CEO locality in China has a positive and direct bearing on how governments support corporate innovation.

The Boss Behind the Scenes: Nonfamily Leadership and Earnings Management

ABSTRACT We examine the effect of nonfamily leadership in family firms, whereby family members do not act as either a board chair or a CEO, on corporate earnings management. We find that firms with nonfamily leadership conduct significantly more earnings management than firms with family leadership, although this effect can be alleviated by more effective internal control and a stronger reputation concern. Additional analyses show that the increased related-party transactions can be one mechanism through which the nonfamily leadership increases earnings management. We further find that nonfamily leaders in family firms are on average weaker but receive higher (excess) payment than their peers in nonfamily firms, all consistent with the role of the nonfamily member as a marionette for the family’s misbehaviors. Moreover, earnings management increases with the degree of family noninvolvement and is mainly driven by nonfamily chairs rather than the CEOs. Overall, our paper suggests that not having a family leader aggravates incentives for the controlling family to manage earnings to realize private benefits.

Maintaining Trust When De-Escalating Commitment: Precommitment Alleviates Reputational Concerns

Escalation of commitment costs businesses and taxpayers billions of dollars. Management research has consistently found that even in cases where future prospects look dire, decision makers routinely escalate commitment to failing courses of action. We draw on psychological research on self-presentation to argue that reputational considerations are a key driver of such escalation: leaders who de-escalate may fear, and in fact be, distrusted. In four pre-registered experiments with managers (N= 2,661), we demonstrate an effective way to de-escalate while maintaining trust: pre-specifying conditions for de-escalation (i.e., precommitment). In the presence of precommitment, third-party observers perceive de-escalators as having more integrity and are more likely to trust them in a behavioral economic game, compared to the absence of precommitment (Studies 1 and 2). Decision-makers themselves recognize how precommitment changes their reputational incentives: in the presence of this precommitment, managers are not only more likely to de-escalate (Study 3), but also anticipate that they will be perceived as being more trustworthy (Studies 3 and 4). This work contributes evidence to the underexplored idea that self-presentation motives influence escalation of commitment, and also provides a practical and costless solution leaders can implement. By harnessing precommitment, leaders can maintain trust when deciding to de-escalate.

Influence of reputational concern and social distance on moral decision-making under the harmful dilemma: Evidence from behavioral and ERPs study

<p id="p00005">Reputational concern has been suggested as an important determinant of human cooperative behavior and moral judgment in social interactions. Previous studies have demonstrated that reputational concern influences behavioral and neural responses during prosocial behaviors and decision-making, such as moral decision-making. Moral decision- making is a typical social decision-making process involving trade-offs between the self and others. It refers to the process in which individuals make optimal choices under the guidance of social systems and norms according to their own value orientations when faced with a variety of possible dilemmas and conflicts in behavioral choices. Emerging studies have shown that social distance modulates behavioral and neural responses during moral decision-making. However, little is known about how reputational concern and social distance interact to affect moral decision-making, particularly regarding the underlying cognitive neural mechanism of moral decision-making associated with proscriptive morality (i.e., harmful behavior). <break/>In the present study, we adopted the “shock-benefit dilemma” task and event-related potential (ERP) technology to examine temporal processing of the interactive influence of reputational concern and social distance on moral decision-making when faced with harmful dilemmas. Participants were instructed to complete a series of alternative dilemmas in an anonymous or public context. After being instructed whether their decisions were going to be made public to the target person, participants decided whether to deliver a certain intensity of painful electric shocks toward the targets (i.e., friends, acquaintances, or strangers) to receive money. A choice not to shock the targets meant that they would forego the benefit. Behavioral and neural responses were recorded while the participants made their decisions. The experiment consisted of 360 trials, including two blocks of anonymous and public situations and 120 trials with friends, acquaintances, and strangers. <break/>The results showed that participants administered fewer electric shocks to friends than to acquaintances and strangers, which suggested an obvious “egoistic altruism” decision tendency in anonymous situations. Participants spent more time and experienced greater disgust in dilemmas involving acquaintances relative to those involving friends and strangers, which showed an obvious “acquaintance effect”. However, these differences were weakened in public situations. As for the ERP results, the dilemmas involving acquaintances elicited a larger P260 component, which is associated with emotional responses, and late positive potential (LPP, 300~450 ms), which is associated with cognitive reasoning. However, these differences in ERP indices disappeared in public situations. <break/>The aim of this study was to explore the interaction between reputational concern and social distance in behavioral and neural responses during moral decision-making involving harmful dilemmas. The results supported the hypothesis that individuals follow the egoistic altruism moral principle to conduct moral decision-making involving reputational concern and social distance. These findings suggest that the uncertainty of acquaintance relations induces stronger negative emotions and cognitive load during moral decision-making, and reputational concern effectively weakens the aversion and dilemma conflict brought about by self-interest tendencies and interpersonal uncertainties.

Staying Safe or Staying Popular? Popularity and Reputation Concerns Predict Adherence and Adjustment During the COVID-19 pandemic

Adherence to COVID-19 social distancing restrictions may be challenging for adolescents, especially those concerned about social status. This study examined self-perceived popularity and reputation concerns as predictors of adherence to health guidelines and the effects of self-perceived popularity on adjustment. Adolescents ( n = 1,068, 14–18 years at Time 1, Mage = 16.86 years) completed three self-report surveys across 10 months during the COVID-19 pandemic. Consistent with hypotheses, greater self-perceived popularity and concerns about peer reputation predicted less adherence, controlling for COVID-19 threat. Further, greater self-perceived popularity predicted less internalizing symptoms at Time 3. Adolescents’ perceptions of their popularity may simultaneously act as a public health risk and provide social protection. Results emphasize the importance of acknowledging adolescents’ social pressures and concerns regarding reputations and popularity during COVID-19.

Cheap‐talk advertising, product experience, and reputation concern

As platforms have access to more users' data, platforms can know better about users' preferences. In this case, how would users choose a platform? Can platforms convey informative messages by cheap‐talk advertising? Our analytical model suggests that in the case of strong reputation concern, users prefer a known biased platform without reputation concern rather than an unknown platform. Because this unknown platform is more likely to recommend products that help the platform earn reputation, regardless of users' preferences. In semi‐separating equilibria, the unbiased platform truthfully reports its type while the biased platform mixes message on type report.

Trait Negative Reputational Concerns Among In-group Members and In-group Favoritism in Minimal Groups

People tend to behave more cooperatively with in-group members than out-group members, even in minimal group situations. This study investigated the relationship between trait reputational concern (fear of negative evaluation) from in-group members and in-group favoritism in minimal group contexts. A total of 176 participants completed hypothetical prisoner’s dilemma games; when reputation was at stake, in-group favoritism was significantly associated with trait negative reputational concern. In this context, greater concerns about reputation from in-group members resulted in stronger in-group favoritism. By contrast, in-group favoritism under anonymity was not related to trait reputational concern. We also measured fear of negative reputation from others, finding that in-group favoritism was correlated with both trait reputational concern from in-group members and others in general as long as reputation was at stake.

Introduction of European standards of higher education in Ukraine: principles of academic integrity in the educational and scientific space ZSMU

The profound transformations of the national higher education system are the result of a combination of various factors. The process of creating a knowledge society puts the field of higher education at the center not only of the development of basic and applied science, the formation of future social and professionalelites, it makes it generally responsible for the interpretation, dissemination and use of new knowledge. The ethics of higher education, the values that underlie its scientific and educational activities, the principles and rules of relationships in each institution, in teaching staff, in relationships with students are the basis of the academic corporation’s ability to effectively self-regulate and meet society’s demand. Thus, conscious moral choice, concern for reputation become one of the main mechanisms of internal self-regulation of the professional community, determine its ethical priorities, balance of power and logic of professional communications. Academic integrity, as a certain social ideal, must counteract the excessive commercialization of universities, their intensive bureaucratization, which destroys not only the ability to fulfill their social mission, but also the logic of their existence. Violation of the principles of academic interaction, undermining of corporate solidarity and trust, reduction of professional involvement, low interest in the active work of the academic community - all this is a consequence of the limited autonomy of the academic space. The activities of the academic community can be effective only if it is based on a certain set of values that unite very different people into one team and give meaning to their joint activities. Academic honesty in this situation significantly affects the formation of common approaches to the organization of work, the definition of job competencies and trust, decision-making procedures, perception and resolution of conflicts, and so on. The article presents the basic principles and experience of implementing academic integrity in the educational and scientific space of Zaporizhia State Medical University in the framework of the implementation of European standards of higher education institutions in Ukraine.

On the paradox of mediocracy

AbstractWe consider a two‐agent hierarchical organization with a leader and a specialist in a reputation‐signaling model. The specialist proposes an innovative but risky project to the leader, and decides whether to exert an effort to improve the value of the project, which benefits the organization. The leader decides whether to endorse the project or block it. The leader's competence is her private information, and the market updates its belief about the leader's type based on observation of her action (endorsing the project or blocking it) and its outcome. In equilibrium, the leader could behave excessively conservatively when she is subject to reputation concerns. We have two main findings. First, aside from its usual distortionary effects, the leader's reputation concern has a beneficial effect by inducing the specialist to supply productive effort and improves the organization's performance. Second, there exists a nonmonotonic relationship between the perceived competence of the leader and the performance of the organization. As a result, a paradox of mediocracy emerges: The organization may benefit from a seemingly mediocre leader, as a mediocre leader motivates the specialist to exert effort, which offsets the efficiency loss due to incorrect decisions.

Committees as Active Audiences: Reputation Concerns and Information Acquisition

We study committees that acquire information, deliberate and vote. A member cares about state-dependent decision payoffs and about his reputation for expertise. The state remains unobserved, even after the decision has been taken. In such inconclusive environments, in equilibrium, a member's internal (peer) reputation is based on deliberation patterns, while members' external (market) reputation is based on the observed group decision. Either form of reputation concerns create strategic complementarity among members' effort levels. Internal reputations create stronger incentives to become informed than external reputations, and their strength grows in committee size; external reputations create no incentives in large committees. If prior information favors a state, internal -- not external – reputations may hinder deliberation. In equilibrium, reputation concerns lead to additional information acquisition without affecting the expected reputations. Nevertheless, moderate rates of reputation concerns relax members' participation constraints, by counteracting the often predicted underprovision of information in committees.

Strategic Disclosure with Reputational Concerns

Strategic Disclosure with Reputational Concerns

Magic muzzles? The silencing of teachers through HRM, performance appraisal and reputation concern

PurposeIn the deregulated public sector upper secondary school field in Oslo, Norway, teachers’ voice is found to be restricted. The purpose of the present paper is to examine human resource management (HRM) approach, satisfaction with the performance appraisal (PA) system and concern for reputation as possible antecedents to voice restrictions.Design/methodology/approachThe present study is based on a survey (N = 1,055) carried out among upper secondary school teachers in one urban, one suburban and one rural area of Norway. Data were analyzed with path analysis, including analyses of mediation, moderation and moderated mediation.FindingsAnalyses reveal that there is a positive relationship between voice restrictions and control-oriented HRM, PA dissatisfaction and reputation concern, respectively. Low-quality leader–member exchange (LMX) mediates the relationships between voice restrictions and control-oriented HRM, and voice restrictions and PA dissatisfaction, but not between voice restrictions and reputation concerns. No moderation or moderated mediation effects were found.Originality/valueWhile there is a broad literature on deregulation and marketization of public sector schools, research on its consequences is limited, and scholarship on the consequences for teachers’ voice is in its infancy. To the best of the author’s knowledge, this study is among the first to explore these issues, and, in addition, makes a rare contribution by unveiling that both PA satisfaction and reputation concern is related to voice restrictions.

The psychological foundations of reputation-based cooperation.

Humans care about having a positive reputation, which may prompt them to help in scenarios where the return benefits are not obvious. Various game-theoretical models support the hypothesis that concern for reputation may stabilize cooperation beyond kin, pairs or small groups. However, such models are not explicit about the underlying psychological mechanisms that support reputation-based cooperation. These models therefore cannot account for the apparent rarity of reputation-based cooperation in other species. Here, we identify the cognitive mechanisms that may support reputation-based cooperation in the absence of language. We argue that a large working memory enhances the ability to delay gratification, to understand others' mental states (which allows for perspective-taking and attribution of intentions) and to create and follow norms, which are key building blocks for increasingly complex reputation-based cooperation. We review the existing evidence for the appearance of these processes during human ontogeny as well as their presence in non-human apes and other vertebrates. Based on this review, we predict that most non-human species are cognitively constrained to show only simple forms of reputation-based cooperation. This article is part of the theme issue 'The language of cooperation: reputation and honest signalling'.

Disclosure of Corporate Social Responsibility, Company Performance, and Corporate Reputation as the Mediating Role: Indonesian Context

Research aims: This study aims to provide new empirical evidence regarding CSR practices and their impacts on firm performance and corporate reputation in the context of a developing country region, namely Indonesia.Design/Methodology/Approach This research samples were 70 companies listed on the Indonesia Stock Exchange with five years of observation. This study used secondary data, which already exists and was obtained from the Indonesia Stock Exchange's official website. Also, Partial Least Square was employed to test the hypothesis's parameter estimates.Research findings: The results revealed that CSR disclosure could improve firm performance but could not increase corporate reputation. Thus, companies that carry out CSR activities and pay attention to stakeholders mean that they (employees, customers, suppliers, investors, etc.) will contribute to the company’s economic performance. The results of this study also uncovered that the level of investor awareness of corporate reputation was still low. Investors were only oriented to short-term investments and did not care about the long-term viability of the company. It showed that corporate reputation did not fully mediate the relationship between CSR disclosure and company performance.Theoretical contribution/Originality: As this study develops scientific research in the fields of CSR, corporate performance, and corporate reputation as the mediating role, the findings of this research support the stakeholder theory that a company not only increases profits but also should be accountable to all stakeholders. Besides, corporate reputation partially mediated the relationship between CSR and firm performance. It indicated that in Indonesia, concern for corporate reputation was still low.

The Emergence of Lying for Reputational Concerns in 5-Year-Olds.

Research suggests that even young children engage in strategic behaviors to manipulate the impressions others form of them and that they manage their reputation in order to cooperate with others. The current study investigated whether young children also lie in order to manage their, or their group’s, reputation in front of ingroup and outgroup members. Five-year old children (n=55) were randomly assigned to an individual reputation condition or a group reputation condition. Then, they played a mini dictator game in which they could share privately any number of their or their group’s stickers with an anonymous child. Participants then met ingroup and outgroup members, established through a minimal group design, via a pre-recorded, staged Skype call. Group members asked the participant how many stickers she, or her group, had donated. Results revealed that children stated to peers to have donated more than their actual donation, with no differences between conditions and no difference toward ingroup and outgroup members. Findings suggest that by 5years of age, children use lying as a strategy to manage their reputation.

What’s in a Name? Eponymous Private Firms and Financial Reporting Quality

This study examines the relation between financial reporting quality (FRQ) and eponymy, that is, naming a firm after the founder. We hypothesize that compared with noneponymous firms, eponymous firms have higher FRQ because of reputation concerns. Using a sample of 2,271 large Italian private firms, we document that eponymy is positively associated with accrual-based FRQ measures, a Benford’s law–based FRQ measure, and a tax-related misstatement–based FRQ measure. Consistent with the reputation concern rationale, we find that the positive association between eponymy and FRQ is attributable to eponymous firms that have rarer names or receive more press coverage. Furthermore, the positive association between FRQ and eponymy is similar whether the top executives/board members belong to the founding family’s first or later generations. We also find that eponymous firms are more conditionally conservative. Collectively, the results suggest that reputation concerns act as a disciplining mechanism for FRQ in private firms. This paper was accepted by Suraj Srinivasan, accounting.

The role of positive and negative gossip in promoting prosocial behavior.

Gossip can promote cooperation via reputational concern. However, the relative effectiveness of positive and negative gossip in fostering prosociality has not been examined. The present study explored the influence of positive and negative gossip on prosocial behavior, using an economic game. Supporting previous evidence, it was found that individuals were more prosocial when gossip of any kind was possible, compared to when their behavior was completely anonymous. However, there was no significant difference in the efficiency in promoting cooperation between positive and negative gossip, suggesting that it is reputational concern elicited by gossip per se, rather than its valence, that stimulates prosociality.

Corruption and cheating: Evidence from rural Thailand

• This study tests the prediction that perceived corruption reduces ethical behavior in a broad household survey in rural Thailand. • Respondents who perceive corruption in state affairs are more likely to cheat. • Thus, the induced cheating fortifies the negative consequences of corruption. • The reputational concern to be seen as honest, approximated by attendance of others, reduces cheating. • Consequently, transparency, here indicated by attendance of others, provides one remedy. This study tests the prediction that perceived corruption reduces ethical behavior. Integrating a standard “cheating” experiment into a broad household survey in rural Thailand, we find tentative support for this prediction: respondents who perceive corruption in state affairs are more likely to cheat and, thus, to fortify the negative consequences of corruption. Interestingly, there is a small group of non-conformers. The main relation is robust to consideration of socio-demographic, attitudinal, and situational control variables. Attendance of others at the cheating experiment, stimulating the reputational concern to be seen as honest, reduces cheating, thus indicating transparency as a remedy.

Implications of culture of honor theory and research for practitioners and prevention researchers.

Since the seminal publication of Nisbett and Cohen in 1996 linking the higher rates of violence in the Southern United States compared with the Northern United States to a "culture of honor," researchers have paid increasing attention to conceptualizing honor and identifying its underlying psychological mechanisms and its behavioral outcomes. The concern for reputation and other values embedded in culture of honor act as potential sociocultural risk factors for several major social problems in the United States. The aim of this article is to review the recent research on culture of honor and to discuss its societal implications by focusing on 3 pressing social problems: intimate partner aggression, school violence, and reluctance to seek mental health care. Relative to Whites in northern states, White populations in the southern and western states (considered to have cultures of honor) have higher levels of intimate partner violence, more school shootings, and are less likely to seek mental health care. We also briefly review the incidence of these issues among American Latinx groups, another culture of honor. We suggest ways that the scientific findings on culture of honor can enhance prevention and intervention efforts in education, health, and mental health care settings. (PsycInfo Database Record (c) 2021 APA, all rights reserved).