Self-interested Behavior Research Articles

Inter-organizational purchasing contracts: the effects of multi-agents in a supplying firm

We investigate how supplier performance is influenced by the behaviors (self-interested behaviors and gatekeeping actions) of a supplier’s salesperson and engineer, and how such behaviors affect a performance-based contract design to ensure the desired performance from the supplier. This article develops a incentive contract that proves how such behaviors affect supplier performance, elucidating how agents’ behaviors influence a buyer’s incentive contract form for collaboration with the supplier. Our study found that in general, the behaviors of salespeople and engineers can damage supplier performance. Their impact changes depending on some contingent factors, proposing incentive contract forms that can mitigate the negative consequences of the behaviors on supplier and buyer performance. This paper takes multiple agents’ behaviors and their behavioral disutility into consideration when developing an incentive contract.

Performance Measurement and Professional Decision making: A Resolvable Conflict?

ABSTRACT Does performance measurement clash with professional decision-making? From a public management perspective, professional decision-making may imply a lack of accountability and self-interested behavior. Performance measurement offers a solution to those concerns. From the professions’ point of view, performance management hijacks the autonomy of street-level professionals and contributes to deskilling. We examine an example of such a clash in record keeping in a Danish family center, and we show why and over what professional staff disagree. Results point to the role of managers in securing improvements by changing the record-keeping system to enhance effective professional treatment. This can contribute to a shared rationality among social workers and allied professional staff.

Adding Party Building Provisions in Corporate Articles and Enterprise Cost Stickiness: Based on the Interpretation of Party Organization Governance

Adding Party building provisions in corporate articles is conducive to safeguarding the statutory status of Party organizations in the corporate governance structure. And it can help to improve enterprises’ ability of political governance. After implementing this practice, the internal management and decision-making of enterprises might be deeply influenced by Party organizations, and thus the cost control level might be changed. This paper focuses on the impact of this practice on cost stickiness and analyzes its functional mechanism. Cost stickiness refers to the asymmetric cost change in response to sales change, and it reflects the tendency of enterprises to hold on to resources in the downturns. Based on a research sample of A-share listed companies from 2013 to 2018, we apply the difference-in-differences approach to examine the effect of adding Party building provisions in corporate articles on cost stickiness. We manually collect data on listed companies that have implemented this practice. The results show that the stickiness level of enterprise total operating cost is significantly reduced after implementing the practice, and this change is achieved by mitigating the dual agency problems. As the statutory status of Party organizations is established, Party organizations in enterprises have more motivation and ability to participate in the operation and management of enterprises. Thus, managers are subject to greater scrutiny by Party organizations. In this case, managers will constrain their opportunistic behaviors, leading to lower cost stickiness. In addition, Party organizations help to protect the interest of minority shareholders. The increasing difficulty of resource extraction of majority shareholders leads to a reduction in expropriation behaviors such as asset occupation, which in turn lessens enterprise cost stickiness. The participation of Party organizations in corporate governance also means that they guide shareholders and management to make decisions in line with the spirit of the Party by means of cultural publicity and spirit guidance, so as to reduce self-interested behaviors that are contrary to the spirit of the Party, thus alleviating the dual agency problem of enterprises. The findings indicate that Party organization governance contributes to optimizing the resource allocation decision of managers and improving the efficiency of cost management. Further research finds that the relationship between the practice and cost stickiness is moderated by the ownership structure of enterprises, and it is more significant in the case of more dispersed ownership structure, lower ownership constraints, and lower management shareholding. Mediation mechanism tests show that adding Party building provisions in corporate articles can indeed reduce cost stickiness by alleviating the dual agency problems. The innovation of this paper is mainly reflected in two aspects: First, this paper contributes to the literature on the determinants of cost stickiness by documenting a new way of corporate governance. Through combining Party building and cost stickiness, the study examines the impact of political governance on cost stickiness. The findings expand the channel of enterprise cost management. Second, different from the existing research methods, this paper uses the difference-in-differences approach to examine the dynamic changes of cost stickiness before and after the Party building reform. It provides relatively rigorous scientific evidence for the implementation of adding Party building provisions in corporate articles, and provides guidance for Chinese listed companies to properly and effectively embed the Party organization into the corporate governance structure.

The Proposed EU Digital Markets Act: A New Era for the Digital Economy in Europe

The analysis presented in this article suggests that the Digital Markets Act (DMA) would be a game-changer for the digital economy. From a legal perspective, the DMA should be regarded as a sector-specific, ‘ex ante’ regulation, i.e., a ‘lex specialis’ in relation to the general EU competition law, which relies on ‘ex post’ enforcement. The DMA restricts self-interested behaviour by ‘big tech’ and grants smaller competitors affirmative competitive rights, even where there is no anticompetitive behaviour by big tech under general EU competition law. By its terms, the DMA is aimed at ensuring ‘contestable and fair digital markets’, irrespective of consumer welfare. To achieve this objective, it will impose generic obligations on big tech that resemble remedies previously employed by the Commission in specific antitrust enforcement measures or that address antitrust complaints that the Commission is currently investigating. Unlike conventional EU competition law, despite the DMA’s stated purpose, its main effect is not protection of European internet users (although they may benefit indirectly), but the protection of smaller European competitors against US ‘big tech’. These smaller competitors would no longer need to resort to the current system of ex post enforcement against abuse of monopoly power, which is believed to be insufficiently equipped to deal with digital monopoly power. Antitrust proceedings take a long time (five years or more is no exception), and in the meantime the competitive harm can increase. In many cases, the DMAwould make reliance on this slow, ex post enforcement program unnecessary. Instead, it would enable ‘ex ante’ enforcement actions to ensure competitive markets under the threat of very large fines. Due to its far-reaching terms, the DMA would likely require changes to the business models of big tech. The DMA restates Adam Smith’s famous quip ‘[i]t is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest’. For the digital economy, the saying would be rewritten as: ‘It is not from the regard for their own interest of the gatekeepers that we expect our dinner, but from their benevolence’. Mandatory ‘big tech benevolence’ may well benefit ‘business users’, i.e., people or companies that use platforms to provide goods or services to internet users. Changes in big tech’s business models prompted by the DMA, however, might also affect free internet services. In any event, the DMAwould give rise to significant changes and friction in the operation of the digital economy, which may result in frequent disputes and enforcement actions.

Does Legitimacy Mitigate Corruption? The Relevance of Social Traps in Low-corruption Contexts

ABSTRACT People tend to accept decisions if the process leading up to them is perceived as legitimate. However, the literature seldom asks if perceived legitimacy translates to compliant, non-corrupt behavior. Thus, the association between legitimacy and corruption is curiously understudied. This paper argues that, while legitimation may contribute to acceptance of authority, it does not necessarily lead to compliance with anti-corruption norms. Analysing a mature democracy characterised by absence of endemic corruption, it finds that while legitimacy may, to a small extent, contribute to compliance with anti-corruption norms, it is in most cases insufficient to overcome incentives of self-interested behavior. Instead, compliance with anti-corruption norms crucially depends on individuals’ perceptions of how willing others are to take part, or not to take part, in corruption. This implies support for the ‘social trap’-view of corruption, where credible enforcement of non-corruption norms is crucial to persuading people not to take part in it.

A Tale of Two Quotes: When Power “Corrupts” and When It Triggers “Great Responsibility”

Two seemingly contradictory quotes can be cited in the power literature. The first – and most traditionally held assumption by early power scholars – is attributed to the 19th century British politician Lord Acton: “Power tends to corrupt, and absolute power corrupts absolutely.” The other has more ambiguous roots (French Revolution, Voltaire, Churchill, Roosevelt, Uncle Ben Parker, etc.): “With great power comes great responsibility.” Though the notion that power corrupts seems to be the status quo, there are instances when individuals use their power for good. This begs the questions, why and when does power corrupt and why and when does it trigger great responsibility? To answer these questions, I draw from theorizing on cognitive morality (e.g., Kohlberg, 1976) and attribution theorizing (e.g., Heider, 1958) to argue that peoples’ reactions to having power – specifically self-/other-focused behaviors – depends on power attribution. Furthermore, I suggest that peoples’ reactions to power can be explained by where they direct their sense of responsibility – towards themselves (resulting in self-interested behaviors) or towards others (resulting in more other-interested behaviors). Moreover, behaviors directed towards others can be further understood by distinguishing the target (e.g., prosocial behaviors towards a specific individual or individuals vs. prosocial behavior towards the community or society at large). Using a multi-time period study design and structural equation modeling, I demonstrate that when powerholders attribute their power internally, they tend to participate in more self-interested work behaviors, but when they attribute their power externally, they tend to participate in more global prosocial behaviors.

Narcissism in Organizations: Zooming in on Personality Facets and Situations

Narcissism plays a central role among the personality traits that lead to problems in the workplace and beyond and its complexity has fascinated researchers for decades. Although mostly studied as a one-dimensional trait, narcissism has in fact different facets, such as grandiosity, authority and entitlement. Its association with self-interest is well-established conceptually and could be particularly damaging to organizations, despite some research attesting to positive effects of narcissism. Empirically disentangling the relationship of different facets and situational cues will advance our understanding of narcissism and self-interested behavior. Thus, we contacted employees (N = 370) via a panel firm to assess personality traits and, two weeks later, measures for self-interested behavior based on two different situations that may occur in the workplace. Our results suggest that trait narcissism is not related to self-interested behavior and may, depending on the situation, even be a negative predictor. Exploitative entitlement predicted self-interested behavior, but only in a scenario that was somewhat suggestive of an opportunity to take an unduly large reward for oneself. We interpret our findings in terms of trait activation and discus potential alternative explanations, as well as conceptual difficulties of the concept self-interest.

MONEY VERSUS LEGACY: PRE-SUCCESSION BEHAVIOR OF VOLUNTARILY DEPARTING CEOs

Do CEOs who leave voluntarily influence firm performance before their departure to boost their own wealth or do they care more about their legacy? We address this research question by examining whether voluntarily departing CEOs—defined as CEOs who terminate their tenure without facing significant pressure to do so—make decisions in the pre-succession phase to boost firm performance. In this study, we focus on voluntary departure because the pre-succession phase of this departure type is uniquely characterized by pronounced information asymmetry and considerations of future career prospects of the CEO. Building on the premises of agency theory and on cognition-based explanations of executive decision-making we distinguish between two types of self-interested behavior: CEO personal wealth interests and CEO legacy interests. Our analyses of hand-collected data for voluntary CEO departures in S&P 500 firms between 2000 and 2016 reveal that voluntarily departing CEOs do not actively engage in self-interested decisions in the pre-succession phase. However, throughout their tenures, these CEOs do make accounting-based decisions that are likely to serve their interests in the post-departure phase. With this study, we aim to spur research devoted to voluntary CEO departures and their implications for organizations. These findings have important theoretical and practical implications for corporate governance research and agency theory and what the most appropriate mechanisms of monitoring and control might be on the behavior of voluntarily departing CEOs.

How Information Advantage Influences Employee Voice Behavior

Although information is the premise of voice, the role of information plays in voice literature is less understood. In this study, we introduce the concept of voicer information advantage over peers to explore how information functions in the context of voice. Specifically, by incorporating the perspectives of self-interest behavior and voice as a planned behavior theory, we propose that employees possessing voice-related information advantage over their peers are motivated to voice by expected benefits brought to themselves. Moreover, this effect is particularly likely to exist in a cooperative rather than competitive team. An experiment employing a scenario task was designed to test our hypotheses. Data from 135 participants supported our hypotheses. Implications for theory and practice are discussed.

Is it all about appearance? Limited cognitive control and information advantage reveal self-serving reciprocity

Previous research on social preferences has found that reciprocal behavior is an automatic response, which requires less cognitive control than self-interested behavior. However, research on unethicality has demonstrated that cognitive control is required to resist the temptation to benefit from engaging in an unethical act, thus suggesting that self-interested behaviors are automatic. By manipulating information asymmetry (i.e., advantage) among trust game receivers, we examined whether the automatic tendency to positively reciprocate a kind gesture is driven by a genuine motivation to be fair, or whether it reflects a motivation to appear fair. In an equal-information condition, we replicated previous findings by showing that limited cognitive control, due to ego-depletion, promotes reciprocal behavior (Experiments 1 & 2). However, this effect did not replicate under time-constraint, an additional manipulation to limit cognitive control (Experiment 3). Importantly, in an advantaged-information condition, under ego-depletion (Experiments 1 & 2) or time-constraint (Experiments 3 & 4) manipulation, participants did not exhibit enhanced reciprocity. Rather, in three out of these four experiments, and as confirmed by a meta-analysis that additionally included a pilot experiment, participants exploited their information advantage and positively reciprocated to a lesser extent than participants whose cognitive control was intact. These results suggest that the automatic preference for reciprocity might be more driven by a self-serving motivation to appear (rather than to be) fair than is typically credited. We further discuss various other findings supporting the notion that what may appear as automatic pro-sociality may in fact reflect an automatic self-serving motivation of self-presentation.

Cheap talk? Follower sarcasm reduces leader overpay by increasing accountability

Leaders often engage in costly, self-interested behaviors when they have the power and discretion to do so. Because followers are well-positioned to reduce these behaviors, I test how a specific follower communication—sarcasm expression—affects a particularly costly behavior: leader overpay. In three behavioral experiments and a field study (Ns = 240–526), I test the effect of follower sarcasm on leaders' self-pay. I also test a moderator—leader moral identity—because leaders with low moral identity are more likely to overpay themselves and are more open to social norm violations (including follower sarcasm), as well as a mechanism—leader accountability—because I propose that follower sarcasm decreases leaders' overpay by increasing leaders' perceived accountability. As expected, follower sarcasm reduced leader overpay (vs. the control/no humor and vs. non-sarcastic humor), especially for leaders with weak moral identity. Study 3 replicated these results while showing explicit evidence of the accountability mechanism. Study 4 further supported these ideas with correlational data from real leaders recalling a more (vs. less) sarcastic follower, but only when the sarcasm was publicly (vs. privately) enacted. While talk is cheap, these results show that follower sarcasm can also be valuable, because it reduces leaders' overpay by increasing accountability.

Executive pay bandwagon and stock price crash risk

Purpose This paper aims to investigate the impact of executives’ self-interested behaviors induced by the pay bandwagon on stock price crash risk in Chinese listed firms and attempt to shed light on the influencing channels of this effect. Design/methodology/approach The empirical analysis is based on the panel data set which contains information on the executives and stock price of 11,710 firm-year observations over the period 2007–2015. The multiple linear regression models are implemented to examine whether the executive pay bandwagon affects corporate future stock price crash risk. Then, earnings management, tax avoidance and overinvestment are applied as the behavior choice of executive pay bandwagon to analyze the potential influencing channels. Findings Results indicate that the lower the executives’ pay is than the median pay level of executives in firms of similar size and industry, incentives of pay bandwagon are stronger, leading to a higher future stock price crash risk. Moreover, evidence shows that the positive relationship between executive pay bandwagon and crash risk is attenuated when firms have strong external monitoring mechanisms such as Big Four auditors, cross-listing in the Hong Kong stock exchange, high marketization process and high institutional ownership. Then, some weak evidence supports that internal governance such as internal control plays the same moderating role. In addition, based on the path test, the stock price crash effect of the executive pay bandwagon has a complete tax avoidance intermediary effect and a partial earnings management intermediary effect. Originality/value This study contributes to the executive compensation literature from a psychological perspective on the economic consequences research brought about by the pay bandwagon for China’s listed firms. Moreover, this paper provides a supplement to the literature on factors which is completely different from previous studies that affect the future stock price crash risk.

Excess insider control and corporate social responsibility: Evidence from dual-class firms

We investigate the corporate social responsibility (CSR) performance of firms with a dual-class share structure. Dual-class firms, which represent a fast-growing segment of the U.S. capital market, violate the "one share, one vote" principle by giving corporate insiders control in excess of their economic interest in the firm. We observe a negative association of excess insider control and firms’ CSR performance, primarily with respect to the community- and employee-related dimensions of CSR. Extended analyses reveal that this negative association is mitigated by high financial resource availability. Consistent with a trade-off between corporate spending on CSR or on benefits for insiders, we also observe a negative association between CSR performance and executive pay in dual-class firms. Taken together, these extended analyses are consistent with self-interested behavior of entrenched insiders who, unless resources are abundant, appear to reduce CSR activities to maintain resources available for their personal benefit. While the exposure to risks engendered by a dual-class equity structure may be reflected in the share price, our findings draw attention to an externality: diminished CSR performance affects not just shareholders, but all stakeholders.

Research on Environmental Information Disclosure of Polluting Industry Enterprises from the Perspective of Impression Management

Environmental information disclosure is the main way for enterprises to convey their performance of environmental responsibility, and also an important tool for the government to carry out environmental protection work. Based on stakeholder theory, impression management theory and information asymmetry theory, this research regression analyzed the impact of corporate performance on environmental information disclosure for 112 listed companies in heavy polluting industries. The results show that the quality of environmental information disclosure of high-performing enterprises is higher than that of low-performing enterprises. The self-interested impression management greenwashing behavior adopted by enterprises in heavy polluting industries reduces the quality of environmental information disclosure. This study breaks through the previous single research from the perspective of financial information manipulation, analyzes the impression management behavior of enterprises on text information reflecting circular thinking, and enriches literature on environmental information disclosure.

Persistent inequality in economically optimal climate policies

Benefit-cost analyses of climate policies by integrated assessment models have generated conflicting assessments. Two critical issues affecting social welfare are regional heterogeneity and inequality. These have only partly been accounted for in existing frameworks. Here, we present a benefit-cost model with more than 50 regions, calibrated upon emissions and mitigation cost data from detailed-process IAMs, and featuring country-level economic damages. We compare countries’ self-interested and cooperative behaviour under a range of assumptions about socioeconomic development, climate impacts, and preferences over time and inequality. Results indicate that without international cooperation, global temperature rises, though less than in commonly-used reference scenarios. Cooperation stabilizes temperature within the Paris goals (1.80∘C [1.53∘C–2.31∘C] in 2100). Nevertheless, economic inequality persists: the ratio between top and bottom income deciles is 117% higher than without climate change impacts, even for economically optimal pathways.

A pandemic treaty for a fragmented global polity

A pandemic treaty for a fragmented global polity

Measuring voluntary and policy-induced social distancing behavior during the COVID-19 pandemic

Staying home and avoiding unnecessary contact is an important part of the effort to contain COVID-19 and limit deaths. Every state in the United States enacted policies to encourage distancing and some mandated staying home. Understanding how these policies interact with individuals' voluntary responses to the COVID-19 epidemic is a critical initial step in understanding the role of these nonpharmaceutical interventions in transmission dynamics and assessing policy impacts. We use variation in policy responses along with smart device data that measures the amount of time Americans stayed home to disentangle the extent that observed shifts in staying home behavior are induced by policy. We find evidence that stay-at-home orders and voluntary response to locally reported COVID-19 cases and deaths led to behavioral change. For the median county, which implemented a stay-at-home order with about two cases, we find that the response to stay-at-home orders increased time at home as if the county had experienced 29 additional local cases. However, the relative effect of stay-at-home orders was much greater in select counties. On the one hand, the mandate can be viewed as displacing a voluntary response to this rise in cases. On the other hand, policy accelerated the response, which likely helped reduce spread in the early phase of the pandemic. It is important to be able to attribute the relative role of self-interested behavior or policy mandates to understand the limits and opportunities for relying on voluntary behavior as opposed to imposing stay-at-home orders.

The Influence of Empathy on Moral Judgments

Empathy is expected to correlate with pro-social attitude s, but what effect does empathy have on judgments of distributive fairness? In our study, we found that participants with higher empathy scores on the Interpersonal Reactivity Index (IRI) were more likely to: (a) favor the use of egalitarian distribution when the joint effort is involved, and (b) deem overly self-interested or opportunistic behavior unfair. Female participants were more consistent in the exercise of moral judgments across diverse scenarios. Furthermore, empathy has several dimensions (e.g., perspective-taking or empathetic concern) and we observed that they interacted with gender and the nature of the hypothetical problem differently in some cases. Although the findings of the study are not counterintuitive, it has identified some avenues for further explorations and highlighted some potential methodological shortcomings of the IRI as a measure of empathetic traits.

Rhetorical strategies of counter-journalism: How American YouTubers are challenging dominant media election narratives

The standards and practices in journalism that best serve democratic deliberation remain a matter of intense scrutiny in the digital age. The United States has a long history of journalists exposing self-interested behaviors of political or corporate elites with investigative journalism. With online media, journalistic practices encompass fact-checking against a variety of sources, and countering the claims of other journalists from competing outlets. This article aims at delimiting the rhetorical properties of an emerging genre of YouTube counter-journalism. The study reports on a rhetorical and eristic analysis of the main patterns of countering in a sample of videos posted on YouTube on the subject of the US presidential campaign in spring 2020. The analysis reveals some ways in which YouTube journalists break down the dominant media narratives and present counterclaims and critiques, which is usually accompanied by fact-checking, showcasing evidence and providing alternative explanations or counterarguments. However, counter-journalism is not free from eristic devices that may misrepresent political issues for the subscribers.

COVID-19 Pandemic on Fire: Evolved Propensities for Nocturnal Activities as a Liability Against Epidemiological Control.

Humans have been using fire for hundreds of millennia, creating an ancestral expansion toward the nocturnal niche. The new adaptive challenges faced at night were recurrent enough to amplify existing psychological variation in our species. Night-time is dangerous and mysterious, so it selects for individuals with higher tendencies for paranoia, risk-taking, and sociability (because of security in numbers). During night-time, individuals are generally tired and show decreased self-control and increased impulsive behaviors. The lower visibility during night-time favors the partial concealment of identity and opens more opportunities for disinhibition of self-interested behaviors. Indeed, individuals with an evening-oriented chronotype are more paranoid, risk-taking, extraverted, impulsive, promiscuous, and have higher antisocial personality traits. However, under some circumstances, such as respiratory pandemics, the psychobehavioral traits favored by the nocturnal niche might be counter-productive, increasing contagion rates of a disease that can evade the behavioral immune system because its disease cues are often nonexistent or mild. The eveningness epidemiological liability hypothesis presented here suggests that during the COVID-19 pandemic, the evening-oriented psychobehavioral profile can have collectively harmful consequences: there is a clash of core tendencies between the nocturnal chronotype and the recent viral transmission-mitigating safety guidelines and rules. The pandemic safety protocols disrupt much normal social activity, particularly at night when making new social contacts is desired. The SARS-CoV-2 virus is contagious even in presymptomatic and asymptomatic individuals, which enables it to mostly evade our evolved contagious disease avoidance mechanisms. A growing body of research has indirectly shown that individual traits interfering with social distancing and anti-contagion measures are related to those of the nocturnal chronotype. Indeed, some of the social contexts that have been identified as superspreading events occur at night, such as in restaurants, bars, and nightclubs. Furthermore, nocturnal environmental conditions favor the survival of the SARS-CoV-2 virus much longer than daytime conditions. We compare the eveningness epidemiological liability hypothesis with other factors related to non-compliance with pandemic safety protocols, namely sex, age, and life history. Although there is not yet a direct link between the nocturnal chronotype and non-compliance with pandemic safety protocols, security measures and future empirical research should take this crucial evolutionary mismatch and adaptive metaproblem into account, and focus on how to avoid nocturnal individuals becoming superspreaders, offering secure alternatives for nocturnal social activities.