Seeking and Avoiding Choice Closure to Enhance Outcome Satisfaction


Journal of Consumer Research

A paraître

Départements : Marketing, GREGHEC (CNRS)

Mots clés : choice closure, outcome valence, satisfaction, prediction error, rule overgeneralization

Consumers gain choice closure when they perceive a sense of finality over a past decision and limit comparisons between the selected and the forgone options. We investigate consumers’ ability to make strategic use of choice closure to enhance outcome satisfaction. Seven studies show that consumers experience greater satisfaction when they achieve choice closure with an inferior outcome and when they do not achieve choice closure with a superior outcome; however, they expect to be more satisfied by avoiding choice closure with an inferior outcome and by seeking it with a superior outcome. We provide a rationale for this experience—expectation contrast based on rule overgeneralization. Consumers form their expectation on an implicit rule learned and internalized in a context in which it is appropriate and advantageous: when they aim to increase satisfaction with a future choice; however, consumers erroneously apply the same implicit rule to a different context, one in which they aim to increase satisfaction with a past choice. We conclude that consumers are unlikely to be able to make strategic use of choice closure to enhance satisfaction with the outcome of a decision they have made

Shine on me: Industry coherence and policy support for emerging industries


Administrative Science Quarterly

A paraître

Départements : Stratégie et Politique d’Entreprise, GREGHEC (CNRS)

It has long been recognized that government support can catalyze the emergence and growth of new industries. But under what conditions does an emergent category of organizations come to receive state support in the first place? In this paper, we theorize how government support for a nascent industry is jointly determined by the industry's internal features and external forces. We test our arguments by analyzing feed-in-tariff policies for the emergent solar photovoltaics (PV) industry in 28 European countries over more than two decades. We find that feed-in-tariffs were more likely in countries with greater numbers of solar PV producers and in countries where the industry was more coherent, containing fewer producers coming from industries with a contrasting identity. Further, we find that the concentration of the incumbent energy sector enhances the effect of the number of producers on policy support when the industry is coherent, but not when it is incoherent. Our results shed new light on the relationship between public policy and industry category emergence, and extend our understanding of how new industries can attain valuable state support while operating in seemingly hostile environments

Signal Incongruence and Its Consequences: A Study of Media Disapproval and CEO Overcompensation


Organization Science

A paraître

Départements : Stratégie et Politique d’Entreprise

Mots clés : media, CEO compensation, social evaluations, philanthropy, signaling

We draw on the signaling and infomediary literatures to examine how media evaluations of CEO overcompensation (a negative cue associated with selfishness and greed) are affected by the presence of corporate philanthropy (a positive cue associated with altruism and generosity). In line with our theory on signal incongruence, we find that firms engaged in philanthropy receive more media disapproval when they overcompensate their CEO, but they are also more likely to decrease CEO overcompensation as a response. Our study contributes to the signaling literature by theorizing about signal incongruence, and to infomediary and corporate governance research by showing that media disapproval can lead to lower executive compensation. We also reconcile two conflicting views on firm prosocial behavior by showing that, in the presence of incongruent cues, philanthropy can simultaneously enhance and damage media evaluations of firms and CEOs. Taken together, these findings shed new light on the media as agents of external corporate governance for firms and open new avenues for research on executive compensation

Simulating Stigma: Initial Prejudices are Sufficient to Create an Intractable Underclass


PLoS One

A paraître

Départements : Stratégie et Politique d’Entreprise, GREGHEC (CNRS)

Social Presence in Virtual World Collaboration: An Uncertainty Reduction Perspective Using a Mixed Methods Approach


MIS Quarterly

A paraître

Départements : Information Systems and Operations Management, GREGHEC (CNRS)

Mots clés : Virtual worlds, uncertainty reduction theory, institutional trust, sequential mixed methods

The life-like collaborative potential offered by virtual worlds (VWs) has sparked significant interest for companies to experiment with VWs in order to organize convenient, cost-effective virtual global workplaces. Despite the initial hype, recent years have witnessed a rather stagnant use of VWs for collaboration in organizations. Previous research recognizes that the inherent uncertainties within the VW environment are factors limiting their utilization by businesses. Hence, grounding this research in uncertainty reduction theory (URT), we aim to understand the modalities and mechanisms for mitigating the uncertainties and fostering user trust within VWs so that they can be effectively utilized as a workplace collaboration tool. With this end in view, we propose contextualizing and extending McKnight et al.’s (2002) institutional trust framework to the context of VWs by examining the significant role that social presence has in influencing the efficacy of the institution-based trust-building factors of situational normality and structural assurance in VWs. Using a sequential mixed methods approach (Venkatesh et al. 2013; Venkatesh et al. 2016), this research integrates results from a quantitative study with findings from a qualitative study to arrive at rich and robust inferences and meta-inferences, with the qualitative method first corroborating the inferences obtained from the quantitative research and then complementing them by identifying boundary conditions that may limit the use of VWs in organizations for workplace collaboration. The results together suggest not only the direct, but also the interactional (complementary and substitutive) influences of social presence on the relationships of the two institutional-trust-building factors to user trust in VWs

Sticky Expectations and the Profitability Anomaly


The Journal of Finance

A paraître

Départements : Finance

Mots clés : Stock market anomalies, Sticky expectations

We propose a theory of one of the most economically significant stock market anomalies, i.e. the "profitability" anomaly. In our model, investors forecast future profits using a signal and sticky belief dynamics. In this model, past profits forecast future returns (the profitability anomaly). Using analyst forecast data, we measure expectation stickiness at the firm level and find strong support for three additional predictions of the model: (1) analysts are on average too pessimistic regarding the future profits of high profit firms, (2) the profitability anomaly is stronger for stocks which are followed by stickier analysts, and (3) it is also stronger for stocks with more persistent profits

Strategic Default, Debt Structure, and Stock Returns


Journal of Financial and Quantitative Analysis

A paraître

Départements : Finance

Mots clés : Debt Structure, Debt Renegotiation, Stock Returns

This paper theoretically and empirically investigates how the debt structure and the strategic interaction between shareholders and debt holders in the event of default affect expected stock returns. The model predicts that expected stock returns are higher for firms that face high debt renegotiation difficulties and that have a large fraction of secured or convertible debt. Using a large sample of publicly traded US firms between 1985 and 2012, the paper presents new evidence on the link between debt structure and stock returns that is supportive of the model's predictions

Strategic Selection of Risk Models and Bank Capital Regulation


Management Science

A paraître

Départements : Finance, GREGHEC (CNRS)

The authenticity of the museum experience in the digital age: the case of the Louvre


Journal of Cultural Economics

A paraître

Départements : Marketing

Mots clés : Art museums, Authenticity, Digital policies, Real/virtual relationship, Cultural audiences, Measures in art

The technological shift of museums is extensively documented, even if research on the impact of technologies on cultural practices and social patterns at large is still lacking. As part of a research programme conducted by the Louvre and HEC Paris, the article proposes a conceptual analysis of ‘real’ (visiting the museum) and ‘virtual’ (visiting its website) experiences of museums. It contributes to the understanding of whether the two experiences are substitutes or complements using a newly created measurement scale. In addition, the article also aims at enriching the contemporary discussion on the artworks’ aura and the authenticity of the cultural experience in the digital age

The Dynamics of Financially Constrained Arbitrage


The Journal of Finance

A paraître

Départements : Finance, GREGHEC (CNRS)

Mots clés : Arbitrage, financial constraints, market segmentation, liquidity, contagion

We develop a model in which financially constrained arbitrageurs exploit price discrepancies across segmented markets. We show that the dynamics of arbitrage capital are self-correcting: following a shock that depletes capital, returns increase, and this allows capital to be gradually replenished. Spreads increase more for trades with volatile fundamentals or more time to convergence. Arbitrageurs cut their positions more in those trades, except when volatility concerns the hedgeable component. Financial constraints yield a positive cross-sectional relationship between spreads/returns and betas with respect to arbitrage capital. Diversification of arbitrageurs across markets induces contagion, but generally lowers arbitrageurs’ risk and price volatility