Concern For Reputation Research Articles

Short-sighted Greed? Focusing on the Future Promotes Reputation-based Generosity (trans. Maria Yu. Beletskaya)

Long-term thinking and voluntary resource sharing are two distinctive traits of human nature. Across three experiments (N=1,082), I propose a causal connection: Sometimes people are generous because they think about the future. Participants were randomly assigned to either focus on the present or the future and then made specific decisions in hypothetical scenarios. In Study 1 (N=200), future-focused participants shared more money in a public dictator game than present-focused participants (+39%), and they were willing to donate more money to charity (+61%). Study 2 (N=410) replicated the positive effect of future-focus on dictator giving when the choice was framed as public (+36%), but found no such effect when the choice was framed as private. That is, focusing on the future made participants more generous only when others would know their identity. Study 3 was a high-powered and pre-registered replication of Study 1 (N=472), including a few extensions. Once again, future-focused participants gave more money to charity in a public donation scenario (+40%), and they were more likely to volunteer for the same charity (+17%). As predicted, the effect was mediated by reputational concern, indicating that future-orientation can make people more generous because it also makes them more attuned to the social consequences of their choices. Taken together, the results suggest that focusing on the future promotes reputation-based generosity. By stimulating voluntary resource sharing, a central function of human foresight might be to support cooperation in groups and society.

Auditor Reputation Concerns, Legal Liability, and Standards

ABSTRACTThis paper studies how legal liability due to negligence can weaken or strengthen an auditor's reputation concerns in the client market to provide high audit effort. A negligence liability rule relies on auditing standards to provide a threshold for the level of due care. When the negligence standard is lax, legal liability can weaken the auditor's reputation incentives, with lower audit effort than without legal liability. If the damage payment is low, noncompliance is less costly, because with compliance, reputational concerns cause the auditor to provide higher costly audit effort than the standard. In this case, investors also prefer noncompliance, and earnings quality is lower than if there were no legal liability damages. When the standard is stringent, noncompliance is less costly for the auditor, and legal liability strengthens reputation incentives. Investors may also prefer noncompliance, and earnings quality is higher than if there were no legal liability damages.JEL Classifications: M41; M42; D82; M48.

Reputation Concerns Under At-Will Employment

We study a continuous-time model of long-run employment relationship with fixed wage and at-will firing; that is, termination of the relationship is non-contractible. Depending on his type, the worker either always works hard, or can freely choose his effort level. The firm does not know the worker’s type and the monitoring is imperfect. We show that, in the unique Markov equilibrium, as the worker’s reputation worsens, his job becomes less secure and the strategic worker works harder. We further demonstrate that the relationship between average productivity and job insecurity is U shaped, which is consistent with typical findings in the organizational psychology literature.

Understanding reputational concerns within government agencies

Scholars have argued that government agencies face a complex web of reputational concerns regarding how they are perceived by multiple audiences who prioritise different dimensions of their work. Drawing on social identity theory, we argue that civil servants are concerned about the reputation of the agency for which they work, but also about other actors in the political–administrative system. Focusing on hierarchy, socialisation, and independence, we hypothesised six possible relationships, which we tested via a multilevel analysis of a survey of more than 2,000 Norwegian agency employees. This reveals that bureaucratic reputation depends not only on how external audiences perceive the agency, but also on how agency employees perceive themselves, particularly in terms of their professional background and organisational affinity. This article therefore highlights the multiple identities of civil servants and the multifaceted aspects of reputational concern; and argues that future research should pay attention to these hitherto neglected intersections of reputation.

Men’s Perceptions and Emotional Responses to Becoming a Caregiver Father: The Role of Individual Differences in Masculine Honor Ideals and Reputation Concerns

Despite the rising number of men and women in counter-stereotypical roles, it is rare for men to serve as primary caregivers in families with dependent children. In two studies, we examined how British men and women perceive and emotionally react to primary caregiver (vs. breadwinner) fathers, whether their perceptions and reactions are contingent upon individual differences in masculine honor endorsement, and the potential mediators in these relationships. Results showed that both men and women perceived the primary caregiver fathers more positively – warmer and not less competent – than the primary breadwinner fathers, yet endorsement of masculine honor ideals increased men’s (but not women’s) tendency to attribute less positive emotions (e.g., proud and satisfied) and more negative emotions (e.g., ashamed and resentful) to the primary caregiver (vs. breadwinner) fathers. Mediated moderation analyses showed that for men with high masculine honor orientation, their less positive and more negative emotional attributions were driven by perceived loss of reputation among male friends, whereas for men with low masculine honor orientation, their more positive and less negative emotional attributions were driven by perceived gain of wife’s and children’s admiration. By shifting the focus to men’s individual differences and motives, these findings offer nuanced explanations for why some men may feel eager about serving as caregiver fathers, whereas others may feel reluctant to do so.

Managing Algorithmic Accountability: Balancing Reputational Concerns, Engagement Strategies, and the Potential of Rational Discourse

While organizations today make extensive use of complex algorithms, the notion of algorithmic accountability remains an elusive ideal due to the opacity and fluidity of algorithms. In this article, we develop a framework for managing algorithmic accountability that highlights three interrelated dimensions: reputational concerns, engagement strategies, and discourse principles. The framework clarifies (a) that accountability processes for algorithms are driven by reputational concerns about the epistemic setup, opacity, and outcomes of algorithms; (b) that the way in which organizations practically engage with emergent expectations about algorithms may be manipulative, adaptive, or moral; and (c) that when accountability relationships are heavily burdened by the opacity and fluidity of complex algorithmic systems, the emphasis of engagement should shift to a rational communication process through which a continuous and tentative assessment of the development, workings, and consequences of algorithms can be achieved over time. The degree to which such engagement is, in fact, rational can be assessed based on four discourse-ethical principles of participation, comprehension, multivocality, and responsiveness. We conclude that the framework may help organizations and their environments to jointly work toward greater accountability for complex algorithms. It may further help organizations in reputational positioning surrounding accountability issues. The discourse-ethical principles introduced in this article are meant to elevate these positioning contests to extend beyond mere adaption or compliance and help guide organizations to find moral and forward-looking solutions to accountability issues.

#DeleteFacebook: Antecedents of Facebook Fatigue.

Despite the trend of leaving Facebook (#DeleteFacebook campaign), investigation on both the social and psychological factors affecting Facebook fatigue is limited. This study aims to explore the social and psychological antecedents of Facebook fatigue and identify the effects of the antecedents on overall Facebook fatigue. A total of 327 Facebook users participated in an online survey. Respondents were recruited from a major online panel in Korea. The results from the principal component analysis suggest that there are six social and psychological antecedents: impression management, unwanted posts, reputation concern, personal relative deprivation, privacy concern, and relationship concern. In addition, the results show that personal relative deprivation, privacy concern, impression management, and relationship concern positively predicted overall Facebook fatigue. This research not only sheds light on the antecedents of social networking services (SNS) fatigue that influence overall Facebook fatigue but also suggests practical implications for the everexpanding SNS market.

Gratitude, conscience, and reciprocity: Models of supplier motivation when quality is non-contractible

Standard game-theoretic models that apply principal-agent problems to analyse buyer–supplier relations have postulated that in a single-period game, the agent will not choose non-contractible quality. However, evidence exists that suppliers (or service providers) choose costly quality in non-contractible dimensions, even in absence of reputation concern, if they are offered a premium. Such actions violate the axiom of ‘individual rationality’ and are not subgame perfect in standard game theory, wherein only material payoffs are considered. This paper builds three models of supplier behaviour in a single-period Stackelberg-like buyer–supplier game by using the framework of psychological game theory and explains supplier motivations to choose quality on non-contractible dimensions in absence of any reputation effect. If the buyer offers a price higher than the market price, the supplier may be motivated to choose non-contractible quality due to a sense of gratitude, or because of his conscience, or in order to reciprocate kindness. The results show that maximum possible quality is chosen by the supplier only in the presence of a sufficiently strong sense of gratitude or a sufficiently strong conscience. However, the buyer is better-off with a fair supplier who is motivated to reciprocate than a supplier having a very poor sense of gratitude or one having a weak conscience, because the buyer can choose an optimal premium above market price to ensure that a fair and reciprocal supplier chooses an optimal quality.

Short-sighted greed? Focusing on the future promotes reputation-based generosity

AbstractLong-term thinking and voluntary resource sharing are two distinctive traits of human nature. Across three experiments (N=1,082), I propose a causal connection: Sometimes people are generousbecausethey think about the future. Participants were randomly assigned to either focus on the present or the future and then made specific decisions in hypothetical scenarios. In Study 1 (N=200), future-focused participants shared more money in a public dictator game than present-focused participants (+39%), and they were willing to donate more money to charity (+61%). Study 2 (N=410) replicated the positive effect of future-focus on dictator giving when the choice was framed as public (+36%), but found no such effect when the choice was framed as private. That is, focusing on the future made participants more generous only when others would know their identity. Study 3 was a high-powered and pre-registered replication of Study 1 (N=472), including a few extensions. Once again, future-focused participants gave more money to charity in a public donation scenario (+40%), and they were more likely to volunteer for the same charity (+17%). As predicted, the effect was mediated by reputational concern, indicating that future-orientation can make people more generous because it also makes them more attuned to the social consequences of their choices. Taken together, the results suggest that focusing on the future promotesreputation-based generosity. By stimulating voluntary resource sharing, a central function of human foresight might be to support cooperation in groups and society.

Farming cultivates a community-level shared culture through collective activities: Examining contextual effects with multilevel analyses.

It has been suggested that the well-known cultural differences in interdependence across cultures are linked to economic activities, such as farming. However, the underlying processes of how such psychological tendencies are shared among people in a society has not been sufficiently investigated. This article addresses the multilevel processes of how psychological characteristics are shared among people. We focus on collective activities that go beyond the individual's personal economic activities. Multilevel analyses on a large-scale survey (residents of Japanese communities, N = 7,295) of 408 communities, along with a follow-up survey (N = 1,714) of 86 communities, suggested that "concern for reputation" (one aspect of interdependence) was more prevalent in farming communities than in nonfarming communities, not only for farmers, but also for nonfarmers. Furthermore, multilevel mediational analyses suggested that, (a) the proportion of farmers in a community was positively associated with participation in collective activities (e.g., maintenance of community infrastructure) by both farmers and nonfarmers, and (b) this is in turn associated with increased levels of concern for reputation at the community level. Community-level longitudinal analyses revealed that collective activities promoted residents' concern for reputation about two years later. These findings support our "collective activity" hypothesis, and demonstrate that interdependence can be constructed through social interaction via community activities. Fishing was associated with high levels of self-esteem and risk avoidance, and these effects were found only at the individual level. We conclude that economic activities affect social interaction, which in turn affects the multilevel processes of cultural emergence. (PsycINFO Database Record (c) 2018 APA, all rights reserved).

Reputation Concerns in Risky Experimentation

We develop a general model, with the exponential bandit as a special case, in which high-ability agents are more likely to achieve early success but also learn faster that their project is not promising. These counteracting effects give rise to a signaling model in which the single-crossing condition fails but a double-crossing property holds. We characterize the unique D1 equilibrium under double-crossing condition, and show that it tends to produce pooling. Ability to identify good projects and ability to execute a good project have different implications for the equilibrium allocation. Our model also incorporates public news, which generates dynamic distortions.

Cheating and Corruption: Evidence from a Household Survey

This study tests the prediction that a corrupt government reduces ethical behavior among its citizens. We integrate a standard experiment into a broad household survey and find clear support for this prediction: respondents who perceive corruption in state affairs are more likely to cheat. Interestingly, there is a small group of non-conformers. The main relation is robust to consideration of many (largely insignificant) socio-demographic control variables. Attendance of others at the cheating experiment, thus stimulating the reputational concern to be seen as honest, reduces cheating. Again, this does not diminish the predictive role of corruption.

How Does Competition Affect Reputation Concerns? Theory and Evidence from Airbnb

I show how changes in competition affect the power of reputation to induce sellers to exert effort. The impact of competition on sellers’ incentives is theoretically ambiguous. More com-petition disciplines sellers, but, at the same time, it erodes reputational premia. This paper identifies empirically whether one effect dominates the other using data from Airbnb. To guide the empirical analysis, I develop a model of reputation where the relative number of hosts and guests affects the value of building a reputation through effort. In this framework, more competition depresses hosts’ profits and leads hosts to reduce effort. I test the model’s predic-tion exploiting a change in regulation for Airbnb listings effective in San Francisco in 2017. I identify a negative causal effect of competition on effort. As the number of competitors sur-rounding each listing increases by 10 percent, ratings about hosts’ effort decrease by more than one standard deviation. These findings suggest that more competition may erode incentives for high-quality services in markets where sellers’ performances depend on reputation.

Party Leader or Party Reputation Concerns? How Vertical Partisan Alignment Reins in Subnational Fiscal Profligacy

Some scholars argue that party leader considerations drive governors copartisan with presidents toward fiscal discipline, while others argue that party reputation concerns guide their behavior. To ...

Committees As Active Audiences: Reputation Concerns and Information

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.

Non-family chair and corporate performance

Using a sample of Chinese family firms listed from 1999 to 2014, we investigate the relationship between non-family leadership and firm performance. We find that firms with a non-family member as board chair perform significantly worse than firms whose chair belongs to the family. Moreover, we show that the underperformance of non-family-chair firms is more pronounced when firms are under weaker outside monitoring and when the controlling families care less about family business longevity. The negative effect of a non-family chair is robust to a variety of endogeneity tests. We also dismiss alternative explanations other than concern for reputation. Overall, our empirical results suggest that the social norms regarding family reputation are important in shaping the controlling shareholders’ expropriation incentives and firm performance.

Non-Contractible Quality in Absence of Reputation Effect: What Motivates Service Providers to Be Ethical?

Standard game-theoretic analysis of a principal-agent problem postulates that in a one-period game the agent will not choose non-contractible quality. However, evidence exists that service providers choose costly quality in non-contractible dimensions, even in absence of reputation concern, if they are offered a premium. Such actions are not sub-game perfect, if only material payoffs are considered. This paper builds three models of agent behaviour, applying the framework of psychological game theory in one-period principal-agent problems. The models reveal what motivates the service provider to choose quality on non-contractible dimensions in absence of any reputation effect. If the customer (principal) offers a price higher than the market price, the service provider (agent) may be motivated to choose non-contractible quality due to a sense of gratitude, or because of his conscience, or in order to reciprocate kindness. The results show that maximum possible quality is chosen by the service provider only in the presence of a sufficiently strong sense of gratitude or a sufficiently strong conscience. However, the customer is better-off with a fair service provider who is motivated to reciprocate than one having a very poor sense of gratitude or one having a weak conscience, because the customer can choose an optimal premium above market price to ensure that a fair and reciprocal service provider chooses an optimal quality.

The ‘Stock Market of Diplomatic Reputation’: Reputation on Diplomacy’s Frontline

Summary Diplomacy was in the midst of a transformation from ‘old diplomacy’ to ‘new diplomacy’ one century ago, yet the changes were not welcomed by everyone. The renowned diplomat Harold Nicolson lamented the loss of the ‘stock market of diplomatic reputation’, meaning the corporate estimate of character built up during a lifetime of frontline diplomatic service. As we progress through another period of remarkable transformation in diplomacy, what has become of the stock market of diplomatic reputation? This article undertakes a case study of diplomatic alumni from a public policy training institute. It investigates understandings of the construct of reputation, concern for reputation and use of reputation. It finds that reputation remains very important to practising diplomats. Reputation is indeed a timeless feature that is intrinsic to frontline diplomacy. Furthermore, Nicolson’s conceptualization of ideal diplomacy as a building block of reputation remains relevant and presents an appealing topic for future research.

Taxes and risk-taking behavior: evidence from mergers and acquisitions in the G7 nations

PurposeThis study aims to examine how corporate taxes affect corporate risk-taking decisions.Design/methodology/approachThis study examines corporate risk-taking by analyzing how a firm’s asset risk changes following an acquisition carried out by publicly listed companies in the G7 nations. To measure the asset risk of a firm, this study uses the option pricing framework in Merton (1974).FindingsConsistent with an implication of the Merton (1974) framework, the findings show that firms take more risk in their investment decisions when tax rates are high. Moreover, the tax effects wane for firms with a relatively large borrowing opportunity and this suggests that the risk-taking incentive from taxes is moderated by the reputation concern in the debt market, lending support to the Diamond (1989) reputation-building model. The empirical results also show that the tax-induced risk-taking incentive is restrained by creditor rights. Overall, the study reveals an important role of taxes in the structure of corporate investment decisions.Practical implicationsThe implications of this study can be beneficial to policymakers when considering the alteration of tax rates, as it will affect the riskiness of firm investment decisions.Originality/valueThis study provides a better understanding of the role of taxes on risk-taking and also contributes to the growing body of evidence supporting tax effects of risk-taking. The relationship between taxes and risk-taking has proven that the corporate taxation is one of the key factors that firms consider during their selection of risky investments. Unlike previous studies, this research is the first to investigate the change in asset risk, estimating by the option pricing framework, through studying a particular event: mergers and acquisitions.

Multi-level influences on the evolution of unethical behavior amongst longshoremen in France

In this paper, we build theory about how the taken-for-granted nature of certain unethical workplace behaviors evolves over time. A qualitative study of longshoremen in two major ports across the south of France revealed how a trifecta of cross-level factors combine to create an ideal setting for unethical conduct. Data collected from 47 interviewees either longshoremen or working in direct contact with them (foremen, port officials and ship owners) found that profession level factors (changing ideologies), group level factors (beliefs around power and exclusion) and individual level factors (little reputational concern, and ease of misconduct) resulted in a workplace where engagement in certain unethical behaviors (e.g. theft, violence, work stoppage) was normalized. However, we find that as organizational, group, and individual level factors evolved, certain of these unethical behaviors became unacceptable (e.g. theft, damaging workplace materials, and extreme violence) while others became newly adopted and increasingly normalized (e.g. claiming double pay, faking sick leave, shirking). Our findings contribute to a more nuanced understanding of how unethical norms around specific acts of misconduct are sustained, developed, and dismantled.