January 29, 2018

From NBER Working Paper:

We introduce a novel use of genetic data for studying social influences on behavior: Using data from the National Longitudinal Study of Adolescent to Adult Health (Add Health), we deploy the distribution of genotypes in a given grade within a school to instrument the influence of peer smoking on an individual’s own smoking behavior. We argue that this design alleviates many problems inherent to estimating peer effects. Using this approach, we find the relationship between peer smoking and individual smoking to be larger than that estimated by prior studies. Further, we explore the reduced form relationship between peer genotypes and ego smoking and find that the impact of peers’ genetic risk for smoking on ego’s smoking behavior is at least half as large as the effect of individual’s own genotype and sex, and 30% the effect of age. Moreover, peer influence on smoking appears heterogeneous by race: although whites and non-whites are equally susceptible to peer influence with respect to smoking, white egos are more likely to be influenced by white alters. This analysis suggests a promising way that genetic information can be leveraged to identify peer effects that avoids the reflection problem, contextual effects and selection into peer groups.

From Psychological Science:

We tested whether affiliating beer brands with universities enhances the incentive salience of those brands for underage drinkers. In Study 1, 128 undergraduates viewed beer cues while event-related potentials (ERPs) were recorded. Results showed that beer cues paired with in-group backgrounds (logos for students' universities) evoked an enhanced P3 ERP component, a neural index of incentive salience. This effect varied according to students' levels of identification with their university, and the amplitude of the P3 response prospectively predicted alcohol use over 1 month. In Study 2 ( N = 104), we used a naturalistic advertisement exposure to experimentally create in-group brand associations and found that this manipulation caused an increase in the incentive salience of the beer brand. These data provide the first evidence that marketing beer via affiliating it with students' universities enhances the incentive salience of the brand for underage students and that this effect has implications for their alcohol involvement.

From MIT Working Paper:

The best worker is not always the best candidate for manager. In these cases, do firms promote the best potential manager or the best worker in her current job? Using microdata on the performance of sales workers at 214 firms, we find evidence consistent with the Peter Principle: when making promotion decisions, firms prioritize current job performance at the expense of other observable characteristics that better predict managerial performance. We estimate that the costs of managerial mismatch are substantial, suggesting that firms make inefficient promotion decisions or that the incentive benefits of promoting based on current performance are also high.

From PLoS ONE:

Facial Width-to-Height Ratio (fWHR) has been linked with dominant and aggressive behavior in human males. We show here that on portrait photographs published online, chief executive officers (CEOs) of companies listed in the Dow Jones stock market index and the Deutscher Aktienindex have a higher-than-normal fWHR, which also correlates positively with their company’s donations to charitable causes and environmental awareness. Furthermore, we show that leaders of the world’s most influential non-governmental organizations and even the leaders of the Roman Catholic Church, the popes, have higher fWHR compared to controls on public portraits, suggesting that the relationship between displayed fWHR and leadership is not limited to profit-seeking organizations. The data speak against the simplistic view that wider-faced men achieve higher social status through antisocial tendencies and overt aggression, or the mere signaling of such dispositions. Instead they suggest that high fWHR is linked with high social rank in a more subtle fashion in both competitive as well as prosocially oriented settings.

From NBER Working Paper:

Corporate Social Responsibility (CSR) has become a cornerstone of modern business practice, developing from a “why” in the 1960s to a “must” today. Early empirical evidence on both the demand and supply sides has largely confirmed CSR's efficacy. This paper combines theory with a large-scale natural field experiment to connect CSR to an important but often neglected behavior: employee misconduct and shirking. Through employing more than 3000 workers, we find that our usage of CSR increases employee misbehavior - 20% more employees act detrimentally toward our firm by shirking on their primary job duty when we introduce CSR. Complementary treatments suggest that “moral licensing” is at work, in that the “doing good” nature of CSR induces workers to misbehave on another dimension that hurts the firm. In this way, our data highlight a potential dark cloud of CSR, and serve to forewarn that such business practices should not be blindly applied.