This is a picture of ESMT books and working papers

Publications

ESMT Berlin publishes in international academic journals, which are first-class in their respective fields. Research also provides cutting-edge and profound insights for the business community as well as the classroom through managerial publications and case studies. This rare integration of research and practice makes ESMT Berlin an outstanding location for generating relevant and ground-breaking knowledge.

Journal Article

Imaginary alternatives: The effects of mental simulation on powerless negotiators

Journal of Personality and Social Psychology 115 (1): 96–117
Michael Schaerer, Martin Schweinsberg, Roderick I. Swaab (2018)
Abstract:
Subject(s): Human resources management/organizational behavior
Keyword(s): Negotiation, alternatives, power, first offer, mental simulation

The present research demonstrates that negotiators can act powerfully without having power. Researchers and practitioners advise people to obtain strong alternatives prior to negotiating to enhance their power. However, alternatives are not always readily available, often forcing negotiators to negotiate without much, or any, power. Building on research suggesting that subjective feelings of power and objective outcomes are disconnected and that mental simulation can increase individuals' aspirations, we hypothesized that the mental imagery of a strong alternative could provide similar psychological benefits to having an actual alternative. Our studies demonstrate that imagining strong alternatives causes individuals to negotiate more ambitiously and provides them with a distributive advantage: negotiators reached more profitable agreements when they either had a strong tendency to think about better alternatives (Study 1) or when they were instructed to mentally simulate an attractive alternative (Studies 3-4). Mediation analyses suggest that mental simulation boosts performance because it increases negotiators' aspirations which translate into more ambitious first offers (Studies 2-4), but only when the simulated alternative is attractive (Study 2b). Our findings further show that mental simulations are only beneficial when there is sufficient room in the negotiation to reach a profitable agreement, but backfire in settings where negotiators' positions are difficult to reconcile (Study 5). An internal meta-analysis of the file-drawer produces effect size estimates free of publication bias and demonstrates the robustness of the effect. Our findings contribute to research on social power, negotiations, and mental simulation.

Copyright © 2018 American Psychological Association.

Reproduced with permission.

Volume 115
Issue 1
Pages 96–117
ISSN 1939-1315 (Online) 0022-3514 (Print)

Journal Article

Pricing when customers have limited attention

Management Science 64 (7): 2995–3014
Tamer Boyaci, Yalçın Akçay (2018)
Abstract:
Subject(s): Product and operations management
Keyword(s): Pricing, choice behavior, rational inattention, information acquisition, signaling game

We study the optimal pricing problem of a monopolistic firm facing customers with limited attention and capability to process information about the value (quality) of a single offered product. We model customer choice based on the theory of rational inattention in the economics literature, which enables us to capture not only the impact of true quality and price, but also the intricate effects of customer’s prior beliefs and cost of information acquisition and processing. We formulate the firm’s price optimization problem assuming that the firm can also use the price to signal the quality of the product to customers. To delineate the economic incentives of the firm, we first characterize the pricing and revenue implications of customer’s limited attention without signaling, and then use these results to explore Perfect Bayesian Equilbiria (PBE) of the strategic pricing signaling game. As an extension, we consider heterogeneous customers with different information costs as well as prior beliefs. We discuss the managerial implications of our key findings and prescribe insights regarding information provision and product positioning.

© 2017, INFORMS

Volume 64
Issue 7
Pages 2995–3014

Journal Article

The role of leadership in salespeople's price negotiation behavior

Journal of the Academy of Marketing Science 46 (4): 703–724
Sascha Alavi, Johannes Habel, Paolo Guenzi, Jan Wieseke (2018)
Abstract:
Subject(s): Human resources management/organizational behavior, Marketing
Keyword(s): Sales, leadership, price negotiations, salesperson–customer interaction, transformational leadership, social learning
JEL Code(s): M310
Volume 46
Issue 4
Pages 703–724

Journal Article

What data on Formula One crashes suggests about workplace rivalries

Harvard Business Review
Henning Piezunka, Wonjae Lee, Richard Haynes, Matthew S. Bothner (2018)
Abstract:
Subject(s): Human resources management/organizational behavior, Management sciences, decision sciences and quantitative methods
Keyword(s): Competition, conflict, social networks, status, tournaments
JEL Code(s): D74, J28

Although we are often drawn to colleagues with whom we have much common, when we are too similar to someone - especially in terms of status - that common ground becomes turf we feel compelled to defend. Status-similarity threatens our uniqueness, fostering an urge to compete with and out-perform a would-be workplace "twin." Our study of collisions among Formula One drivers, from which we offer leadership insights in this article, shows that when two drivers are very similar in terms of status, they are especially likely to engage in dangerous competition that escalates into a collision. In the workplace, if you feel a twin is sizing you up and trying to usher you into a "game of chicken" on the corporate racetrack, remember that crashing will take you both out of the race, so take steps to steer clear of escalating the conflict. For instance, ahead of a meeting with a workplace twin, you can practice anticipatory self-discipline: prior to your encounter, make a deliberate choice to stay aligned with your core values. Then, stay aware of your antagonist, but without being obsessed with them. This way, you won’t get seduced into a boardroom "car wreck." Protect your lane, while keeping your eyes on the finish line.

ISSN 0017-8012 (Print)

Journal Article

Research: When you don't have an alternative in a negotiation, try imagining one

Harvard Business Review
Michael Schaerer, Martin Schweinsberg, Roderick I. Swaab (2018)
Abstract:
Subject(s): Human resources management/organizational behavior
Keyword(s): Negotiation, alternatives, social power, first offer, mental simulation
ISSN 0017-8012 (Print)

Journal Article

The escalation of competition into conflict in competitive networks of Formula One drivers

Proceedings of the National Academy of Sciences 115 (15): E3361–E3367
Henning Piezunka, Wonjae Lee, Richard Haynes, Matthew S. Bothner (2018)
Abstract:
Subject(s): Human resources management/organizational behavior, Management sciences, decision sciences and quantitative methods
Keyword(s): Competition, conflict, social networks, status, tournaments
JEL Code(s): D74, J28
Volume 115
Issue 15
Pages E3361–E3367

Journal Article

Superstars in the making? The broad effects of interdisciplinary centers

Research Policy 47 (3): 543–557
Susan Biancani, Linus Dahlander, Daniel A. McFarland, Sanne Smith (2018)
Abstract:
Subject(s): Technology, R&D management
Keyword(s): Organizations, universities, knowledge, networks, interdisciplinarity, centers

Many universities have developed large-scale interdisciplinary research centers to address societal challenges and to attract the attention of private philanthropists and federal agencies. However, prior studies have mostly shown that interdisciplinary centers relate to a narrow band of outcomes such as publishing and grants. Therefore, we shift attention to include outcomes that have been the centers mandate to influence - namely outreach to the media and private industry, as well as broader research endeavors and securing external funding. Using data covering Stanford University between 1993 and 2014, we study if being weakly and strongly affiliated with interdisciplinary centers in one year relates to and increases (1) knowledge production (publications, grants, and inventions), (2) instruction (numbers of students taught, PhDs, and postdocs advised), (3) intellectual prominence (media mentions, awards won and centrality within the larger collaboration network), and (4) the acquisition of various sources of funding in the next year. Our results indicate that interdisciplinary centers select productive faculty and increase their activity on a broad range of outcomes further, and in ways greater than departments and traditional interdisciplinary memberships, such as courtesy and joint appointments.

With permission of Elsevier

Volume 47
Issue 3
Pages 543–557

Journal Article

Willingness to rely on trust in global business collaborations: Context vs. demography

Journal of World Business 53 (3): 373–391
Francis Bidault, José de la Torre, Stelios H. Zanakis, Peter Smith Ring (2018)
Abstract:
Subject(s): Strategy and general management
Keyword(s): Inter-organizational trust; Propensity to trust; Willingness to rely on trust; Trustworthiness; Contextual factors in trust; Demographic factors in trust; Contractual safeguards; International joint ventures (IJVs) and collaborations
JEL Code(s): M16

We examine how 712 executives from several countries, industries and backgrounds are willing to rely on trust (WTRT) when entering a collaborative venture where both partners are at risk. Presented with a specific partnership opportunity they were asked about the level of safeguards required to enter into an agreement. We test for the impact of contextual and demographic conditions and confirmed differences in WTRT between nationalities, but find that several contextual variables mediate this impact. Different nationalities treat three dimensions of trust (integrity, reliability, and benevolence) differently as they are shown to be time dependent. We conclude that context is as important as demography in determining an executive’s WTRT.

With permission of Elsevier

Volume 53
Issue 3
Pages 373–391

Journal Article

IT-Sicherheitsrecht – Abwehr von IT-Angriffen, Haftung und Ausblick [IT security law: Cyber sefense, liability, and perspectives]

Computer und Recht
Abstract:
Subject(s): Information technology and systems, Technology, R&D management
Keyword(s): Cybersecurity, information security, national security, legislation

This article describes the newly enacted or rewritten regulations for the defense against IT attacks as part of IT security law: first the relevant criminal offenses, then the powers of the police and intelligence services, then of the IT security authorities and Internet providers. At the end, the political statements for the 19th parliamentary term will be compared with the remaining need for action in IT security law. Furthermore, the future of IT security law will be discussed in the context of implementation, ongoing development and consolidation.

ISSN 2194-4172 (Online)

Journal Article

Is the confidence gap between men and women a myth?

Harvard Business Review
Abstract:
Subject(s): Human resources management/organizational behavior
Keyword(s): Confidence appearance, gender, influence, job performance
ISSN 0017-8012 (Print)

Journal Article

Emergent leadership structures in informal groups: A dynamic, cognitively informed network model

Organization Science 29 (1): 118–133
Gianluca Carnabuci, Cécile Emery, David Brinberg (2018)
Abstract:
Subject(s): Human resources management/organizational behavior, Strategy and general management
Keyword(s): Organizational behavior, general management

This paper advances novel theory and evidence on the emergence of informal leadership networks in groups that feature no formally designated leaders or authority hierarchies. Integrating insights from relational schema and network theory, we develop and empirically test a 3-step process model. The model’s first hypothesis is that people use a “linear-ordering schema” to process information about leadership relations. Taking this hypothesis as a premise, the second hypothesis argues that whenever an individual experiences a particular leadership attribution to be inconsistent with the linear-ordering schema, s/he will tend to reduce the ensuing cognitive inconsistency by modifying that leadership attribution. Finally, the third hypothesis builds on this inconsistency-reduction mechanism to derive implications about a set of network-structural features (asymmetry, a-cyclicity, transitivity, popularity, and inverse-popularity) that are predicted to endogenously emerge as a group’s informal leadership network evolves. We find broad support for our proposed theoretical model using a multi-method, multi-study approach combining experimental and empirical data. Our study contributes to the organizational literature by illuminating a socio-cognitive dynamics underpinning the evolution of informal leadership structures in groups where formal authority plays a limited role.

© 2018, INFORMS

Volume 29
Issue 1
Pages 118–133

Journal Article

Decomposition of solutions and the Shapley value

Games and Economic Behavior 108 (March 2018): 37–48
André Casajus, Frank Huettner (2018)
Abstract:
Subject(s): Management sciences, decision sciences and quantitative methods
Keyword(s): Decomposition, Shapley value, Potential, Consistency, Higher-order contributions, Balanced contributions
JEL Code(s): C71, D60

We suggest foundations for the Shapley value and for the naïve solution, which assigns to any player the difference between the worth of the grand coalition and its worth after this player left the game. To this end, we introduce the decomposition of solutions for cooperative games with transferable utility. A decomposer of a solution is another solution that splits the former into a direct part and an indirect part. While the direct part (the decomposer) measures a player's contribution in a game as such, the indirect part indicates how she affects the other players' direct contributions by leaving the game. The Shapley value turns out to be unique decomposable decomposer of the naïve solution.

With permission of Elsevier

Volume 108
Issue March 2018
Pages 37–48

Journal Article

Who needs a reason to indulge? Happiness following reason-based indulgent consumption

International Journal of Research in Marketing 35 (1): 170–184
Francine Espinoza Petersen, Heather J. Dretsch, Yuliya Komarova (2018)
Abstract:
Subject(s): Marketing
Keyword(s): Indulgence, consumption happiness, self-control, feeling right, emotions, luxury

While consumers and marketers perpetuate the lay theory that indulging with a reason is more pleasurable and makes everyone happier, this research identifies a condition under which indulging without a reason “feels right” and produces a more positive emotional reaction. The authors show that indulging with or without a reason and consumers’ trait self-control interact to influence happiness felt following an indulgent purchase. While high self-control consumers are happier when they have a reason to buy indulgent products (e.g., when they can justify the indulgence), low self-control consumers are happier when they do not have a reason to indulge, compared to when they have a reason. That is, indulging with a reason is less pleasurable for consumers with low self-control. This effect on happiness has an impact on downstream judgments about the product and yields important implications for consumer welfare as well as marketing managers. Across four studies we show the effect on consumption happiness, examine consequences of the effect, and report evidence for the underlying process.

With permission of Elsevier

Volume 35
Issue 1
Pages 170–184

Journal Article

How to make sustainability every employee's responsibility

Harvard Business Review
CB Bhattacharya (2018)
Abstract:
Subject(s): Ethics and social responsibility, Human resources management/organizational behavior
Keyword(s): Sustainability, employee engagement, ownership

While many organizations talk the talk of sustainability — doing things like integrating environmental and societal concerns into their business models — very few walk the walk. Unsurprisingly, carbon emissions by the world’s largest companies are increasing, and only one-third of the 600 largest companies in the U.S. have any systematic sustainability oversight at the board level. Based on interviews with CEOs and other executives, companies that are winning the sustainability battle have created the conditions for their stakeholders to own sustainability. In these companies, sustainability is not someone else’s problem. A three-phase model of incubation, launching, and entrenching can help companies move beyond rhetoric and take ownership of sustainability.

ISSN 0017-8012 (Print)

Journal Article

Financing capacity investment under demand uncertainty: An optimal contracting approach

Manufacturing and Service Operations Management 20 (1): 85–96
Special Issue on Interface of Finance, Operations, and Risk Management (Winter 2018)
Francis de Véricourt, Denis Gromb (2018)
Abstract:
Subject(s): Management sciences, decision sciences and quantitative methods
Keyword(s): Capacity, optimal contracts, financial constraints, newsvendor model

We study the capacity choice problem of a firm, whose access to capital is hampered by financial frictions, i.e., moral hazard. The firm optimizes both its capacity investment under demand uncertainty and its sourcing of funds from a competitive investor. Ours is the first study of this problem to adopt an optimal contracting approach: feasible sources of funds are derived endogenously from fundamentals and include standard financial claims (debt, equity, convertible debt, etc.). Thus, in contrast to most of the literature on financing capacity investments, our results are robust to a change of financial contract. We characterize the optimal capacity level under optimal financing. First, we find conditions under which a feasible financial contract exists that achieves first-best. When no such contract exists, we find that under optimal financing, the choice of capacity sometimes exceeds strictly the efficient level. Further, the firm invests more when its cash is low, and in some cases less when the project’s unit revenue is high. These results run counter to the newsvendor logic and standard finance arguments. We also show that our main results hold in the case of a strategic monopolist investor, and such an investor may invest more than a competitive one.

© 2017, INFORMS

Volume 20
Issue 1
Pages 85–96

Pages