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January 27, 2018

From Journal of Economic Behavior & Organization:
This paper utilizes a high frequency dataset on taxi rides in New York City to investigate how emotions due to sporting event outcomes affect passengers’ tipping behavior. I formulate and empirically test a reference-dependent preferences framework of tipping behavior. The results indicate that the tipping amounts are driven by deviations from expectations much more so than wins and losses, with the most salient effects found under unexpected close wins. However, there is no support for loss aversion. The findings suggest that loss averse behavior may be subdued in the presence of social norms while surprises can result in freedom on the upside of tipping.

From Management Science:
The majority of extant studies involving status argue that status enters into choice and evaluation because people personally believe that status serves as a signal of quality. However, this mechanism seems less plausible in cases when consensus on the meaning of quality is lacking. To understand how and why status often nonetheless enters into evaluation in those cases, this paper contributes to a growing body of work that proposes that individuals and organizations are particularly likely to base their choices and evaluations on status when they are concerned with the reactions of others. We provide an empirical test of this argument by analyzing how the sales gap between prizewinning books and their shortlisted-only peers (as well as a second similar-content control group) changes during the December holidays, when the purchase of books as gifts increases relative to purchases for one’s own personal use. Results show that the sales gap widens with the increased orientation toward gift giving, consistent with our theoretical arguments about how attending to audience reactions drives the use of status. Analyses of two online experiments allow for further clarification of the mechanism behind our findings.

From Social Psychology:
We examined the relationship between cognitive style, empathy, and willingness to help. In Study 1 (N = 186), we measured preference for visuospatial or verbal cognitive style using the ZenQ (Zenhausern, 1978), and empathy using the Interpersonal Reactivity Index (Davis, 1983). In Study 2 (N = 76), we experimentally elicited verbal or visual cognitive processing via priming and measured empathy in response to a vignette about a woman injured in a car accident. In both studies, we measured willingness to help by assessing participants’ willingness to assist the injured woman. Results showed that visuospatial cognitive processing increased empathy and willingness to help. Empathic concern mediated the relationship between cognitive style and willingness to help. Results highlight the importance of mental imagery in increasing empathy and helping.

From The Economist:
Firms can no longer spout platitudes about corporate “values”; independent watchdogs and staff stand ready to brand discrepancies as hypocrisy.

From The Economist:
Anticipating changes to political and social norms is hard. But it is a vital part of the CEO’s job description.

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