Scheduling styles


Current Opinion in Psychology

avril A paraître, vol. 26, pp.76-79

Départements : Marketing, GREGHEC (CNRS)

To schedule activities and transition from one activity to the next, humans can rely on the external clock (clock-time style) or on their internal sense (event-time style). This article discusses how relying on an external time cue versus an internal time cue can markedly shape the way people perceive the social world, beyond its mere purpose of organizing activities. First, research shows that individuals’ reliance on clock-time or event-time is not a mere cultural artifact, but also constitutes a way to self-regulate. Second, each scheduling style is akin to different lenses through which people consider the world: each deeply and differently influences people’s sensation of control and their ability to savor positive emotions. Downstream implications for the domains of creativity, consumer decision-making and management are discussed

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

Shareholder Bargaining Power and the Emergence of Empty Creditors


Journal of Financial Economics

A paraître

Départements : Finance, GREGHEC (CNRS)

Mots clés : Empty Creditors, Credit Default Swaps, Bargaining Power, Real Effects

Credit default swaps (CDSs) can create empty creditors who may push borrowers into inefficient bankruptcy but also reduce shareholders' incentives to default strategically. We show theoretically and empirically that the presence and the effects of empty creditors on firm outcomes depend on the distribution of bargaining power among claimholders. Firms are more likely to have empty creditors if these would face powerful shareholders in debt renegotiation. The empirical evidence confirms that more CDS insurance is written on firms with strong shareholders and that CDSs increase the bankruptcy risk of these same firms. The ensuing effect on firm value is negative

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


Administrative Science Quarterly

A paraître

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

Mots clés : markets, institutional change, institutionalization, social movements, categories

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

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

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Départements : Finance, GREGHEC (CNRS)

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 Selection of Risk Models and Bank Capital Regulation


Management Science

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Départements : Finance, GREGHEC (CNRS)

Temporal Discounting of Gains and Losses of Time: An Experimental Investigation


Journal of Risk and Uncertainty

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Départements : Economie et Sciences de la décision, GREGHEC (CNRS)

The Dynamics of Financially Constrained Arbitrage


The Journal of Finance

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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

The Effects of IFRS Adoption on Observed Earnings Smoothing Properties: The Confounding Effects of Changes in TimelyGain and Loss Recognition


European Accounting Review

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Départements : Comptabilité et Contrôle de Gestion, GREGHEC (CNRS)

Mots clés : Earnings smoothing, Timely gain recognition, Timely loss recognition, Earnings quality

Ball and Shivakumar [(2006), The role of accruals in asymmetrically timely gain and loss recognition. Journal of Accounting Research, 44, 207–242] show that the observed smoothness of earnings (i.e. negative contemporaneous correlation between accruals and cash flows) is the joint product of the role of accruals in smoothing out transitory fluctuations in operating cash flows (noise reduction role) and the role of accruals in providing timely recognition of economic gains and losses (contracting role). These two roles of accruals have opposite effects on earnings smoothness properties. Using a regression framework that allows us to simultaneously consider both roles, we show that failing to control for changes in timely gain and loss recognition as firms shift to IFRS can lead to erroneous inferences regarding the effects of IFRS adoption on earnings smoothness, and consequently on researcher’ conclusions about how IFRS adoption has affected accounting quality. Our results are consistent with mandatory (2005) IFRS adoption resulting in a change in the contracting role rather than the noise reduction role (or smoothness role) of accruals. A decrease in timely loss recognition, an increase in timely gain recognition, and a net decrease in asymmetric timely loss recognition are what drives the change in observed smoothness properties of earnings around mandatory IFRS adoption