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
Forthcoming

Appearing self-confident and getting credit for it: Why it may be easier for men than women to gain influence at work

Human Resource Management
Laura Guillén, Margarita Mayo, Natalia Karelaia
Abstract:
Subject(s): Human resources management/organizational behavior
Keyword(s): Self-confidence appearance, gender, job performance, prosocial orientation, organizational influence

Appearing self-confident is instrumental for progressing at work. However, little is known about what makes individuals appear self-confident at work. We draw on attribution and social perceptions literatures to theorize about both antecedents and consequences of appearing self-confident for men and women in male-dominated professions. We suggest that performance is one determinant of whether individuals are seen as confident at work, and that this effect is moderated by gender. We further propose that self-confidence appearance increases the extent to which individuals exert influence in their organizations. However, for women, appearing self-confident is not enough to gain influence. In contrast to men, women in addition are “required” to be prosocially oriented. Multisource, time-lag data from a technological company showed that performance had a positive effect on self-confidence appearance for both men and women. However, the effect of self-confidence appearance on organizational influence was moderated by gender and prosocial orientation, as predicted. Our results show that through self-confidence appearance, job performance directly enables men to exert influence in their organizations. In contrast, high performing women gain influence only when self-confidence appearance is coupled with prosocial orientation. We discuss the implications of our results for gender equality, leadership, and social perceptions.


Journal Article
Forthcoming

Brand positioning and consumer taste information

European Journal of Operational Research
Arcan Nalca, Tamer Boyaci, Saibal Ray
Abstract:
Subject(s): Product and operations management
Keyword(s): Supply chain management, uncertain consumer taste, product introduction, product positioning, store brands, national brands, information acquisition, information sharing, vertical differentiation, horizontal differentiation

In this paper, we study how a retailer can benefit from acquiring consumer taste information in the presence of competition between the retailers store brand (SB) and a manufacturers national brand (NB). In our model, there is ex-ante uncertainty about consumer preferences for distinct product features, and the retailer has an advantage in resolving this uncertainty because of his close proximity to consumers. Our focus is on the impact of the retailers information acquisition and disclosure strategy on the positioning of the brands. Our analysis reveals that acquiring taste information allows the retailer to make better SB positioning decisions. Information disclosure, however, enables the manufacturer to make better NB positioning decisions – which in return may benefit or hurt the retailer. For instance, if a particular product feature is quite popular, then it is beneficial for the retailer to incorporate that feature into the SB, and inform the manufacturer so that the NB also includes this feature. Information sharing, in these circumstances, benefits both the retailer and the manufacturer, even though it increases the intensity of competition between the brands. But, there are situations in which the retailer refrains from information sharing so that a potentially poor positioning decision by the NB makes the SB the only provider of the popular feature. The retailer always benefits from acquiring information. However, it is beneficial to the manufacturer only if the retailer does not introduce an SB due to the associated high fixed cost.

With permission of Elsevier


Journal Article
Forthcoming

Competition, loan rates and information dispersion in microcredit markets

Journal of Money, Credit and Banking
Guillermo Baquero, Malika Hamadi, Andréas Heinen
Abstract:
Subject(s): Finance, accounting and corporate governance
Keyword(s): Bank competition, microfinance, microcredit, microbank, loan rates, information dispersion, PAR, portfolio quality
JEL Code(s): D4, G21, L1, O1

We study the effects of competition on loan rates and portfolio-at-risk in microcredit markets using a new database from rating agencies, covering 379 microbanks located in 67 countries between 2002 and 2008. Our study reveals different competitive effects in nonprofit and for-profit microbanks. We find that for-profit microbanks charge significantly lower rates and exhibit improved portfolio-at-risk in less concentrated markets. In particular, the effect of concentration on loan rates is nearly three times the one reported in previous studies in banking. In contrast, nonprofit microbanks are relatively insensitive to changes in concentration. We control for interest rate ceilings, which very significantly reduce rates in for-profit microbanks. However, our study also uncovers a competitive interplay between for-profit and nonprofit microbanks. In particular, the PAR of nonprofit microbanks deteriorates when the proportion of profit-oriented microbanks increases. Finally, we find evidence consistent with dispersion of borrower-specific information among competing microbanks in the for-profit sector, even after controlling for the presence of credit registries.


Journal Article
Forthcoming

Contracting in medical equipment maintenance services: An empirical investigation

Management Science
Tian Chan, Francis de VĂ©ricourt, Omar Besbes
Abstract:
Subject(s): Product and operations management
Keyword(s): Health care, contracting, fine balance matching, service value chain

Maintenance service plans (MSPs) are contracts for the provision of maintenance by a service provider to an equipment operator. These plans can have different payment structures and risk allocations, which induce various types of incentives for agents in the service chain. How do such structures affect service performance and service chain value? We provide an empirical answer to this question by using a unique panel data covering the sales and service records of more than 700 diagnostic body scanners. We exploit the presence of a standard warranty period and employ a matching approach to isolate the incentive effects of MSPs from the confounding effects of endogenous contract selection. We find that moving the equipment operator from a basic, pay-per-service plan to a fixed-fee, full-protection plan not only reduces reliability but also increases equipment service costs. Furthermore, that increase is driven by both the operator and the service provider. Our results indicate that incentive effects arising from MSPs leads to losses in service chain value, and we provide the first evidence that a basic pay-per-service plan—under which risk of equipment failure is borne by the operator—can improve performance and reduce costs.

© 2017, INFORMS


Journal Article
Forthcoming

Decomposition of solutions and the Shapley value

Games and Economic Behavior
André Casajus, Frank Huettner
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 naĂŻve 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 naĂŻve solution.


Journal Article
Forthcoming

Did Europe move in the right direction on e-waste legislation?

Production and Operations Management
Shumail Mazahir, Vedat Verter, Tamer Boyaci, Luk N. Van Wassenhove
Abstract:
Subject(s): Product and operations management
Keyword(s): Legislation, product recovery, remanufacturing, recycling, end-of-life products

Journal Article
Forthcoming

Do credit shocks affect labor demand? Evidence for employment and wages during the financial crisis

Journal of Financial Intermediation
Jörg Rocholl, Alexander Popov
Abstract:
Subject(s): Economics, politics and business environment, Finance, accounting and corporate governance
Keyword(s): Credit shocks, financial crisis, labor demand, employment, wages
JEL Code(s): D92, G01, G21, J23, J31

We study the impact of exogenous funding shocks to German savings banks during the U.S. subprime mortgage crisis on the labor decisions of 30,000+ private and public firms in Germany. We find that firms with credit relationships with affected banks experience a significant decline in labor demand relative to firms with credit relationships with healthy banks, manifested in a simultaneous reduction in firm‐level employment and average wages. The employment effect is more pronounced in larger firms, while the wage effect is stronger in smaller firms. Both employment and wages go back to pre‐shock levels three years after the shock.

(Abstract from author's website.)


Journal Article
Forthcoming

Fire in the belly? Employee motives and innovative performance in startups versus established firms

Strategic Entrepreneurship Journal
Abstract:
Subject(s): Entrepreneurship
Keyword(s): Entrepreneurial firms, human capital, innovative performance, motives, start-up joiners

We examine whether start-ups attract employees with different pecuniary and non-pecuniary motives than small or large established firms. We then explore whether such differences in employee motives may lead to differences in innovative performance across firm types. Using data on more than 10,000 U.S. R&D employees, we find that start-up employees (“joiners”) place lower importance on job security and salary but greater importance on independence and responsibility. Start-up employees have higher patent output than employees in small and large established firms, and this difference is partly mediated by employee motives - especially joiners’ greater willingness to bear risk. We discuss implications for research as well as for managers and policy makers concerned with the supply of human capital to entrepreneurship and innovation.

Copyright © 2017 Strategic Management Society


Journal Article
Forthcoming

Idea rejected, tie formed: Organizations' feedback on crowdsourced ideas

Academy of Management Journal
Henning Piezunka, Linus Dahlander
Abstract:
Subject(s): Strategy and general management, Technology, R&D management

When organizations crowdsource ideas, they ultimately select only a small share of the submitted ideas for implementation. Organizations generally provide no feedback on ideas they do not select. Contributors whose ideas are not selected for implementation tend to forego submitting ideas in the future. We suggest that organizations can increase contributors’ willingness to submit ideas in the future by giving a thus far understudied form of feedback: rejections. Drawing on social network theory, we develop the overarching argument that rejections lead contributors to bond with the organization, increasing their willingness to continue to interact with the organization. While it may be counterintuitive to associate rejections with bonding, we hypothesize that rejections indicate to contributors that the organization is interested both in receiving their ideas and in developing a relationship with them. This effect, we argue, is particularly pronounced when rejections provide newcomers with explanations that suggest to them that they and the organization are a good match. To test our theory, we examine the crowdsourcing efforts of 70, 159 organizations that receive ideas from 1,336,154 contributors. Using large-scale content analysis, we examine differences in how rejections are written in order to disentangle the mechanisms through which rejections affect contributors’ willingness to continue to interact with an organization. We find that getting a rejection has a positive effect on a newcomer’s willingness to submit idea in the future. The effect is stronger if the rejection includes an explanation, and is particularly pronounced if the explanation accompanying the rejection matches the original idea in terms of linguistic style.

With permission of the Academy of Management


Journal Article
Forthcoming

Imaginary alternatives: The effects of mental simulation on powerless negotiators

Journal of Personality and Social Psychology
Michael Schaerer, Martin Schweinsberg, Roderick I. Swaab
Abstract:
Subject(s): Human resources management/organizational behavior
Keyword(s): Negotiation, alternatives, power, first offer, mental simulation
ISSN 1939-1315 (Online) 0022-3514 (Print)

Journal Article
Forthcoming

Knowing me, knowing you: Inventor mobility and the formation of technology-oriented alliances

Academy of Management Journal
Stefan Wagner, Martin Goossen
Abstract:
Subject(s): Strategy and general management, Technology, R&D management
Keyword(s): Inventor mobility, alliance formation, interfirm collaboration, technological capabilities, pharmaceuticals

We link the hiring of R&D scientists from industry competitors to the subsequent formation of collaborative agreements, namely technology-oriented alliances. By transferring technological knowledge as well as cognitive elements to the hiring firm, mobile inventors foster the alignment of decision frames applied by potential alliance partners in the process of alliance formation thereby making collaboration more likely. Using data on inventor mobility and alliance formation amongst 42 global pharmaceutical firms over 16 years, we show that inventor mobility is positively associated with the likelihood of alliance formation in periods following inventor movements. This relationship becomes more pronounced if these employees bring additional knowledge about their prior firm’s technological capabilities and for alliances aimed at technology development rather than for agreements related to technology transfer. It is weakened, however, if the focal firm is already familiar with the competitor’s technological capabilities. By revealing these relationships, our study contributes to research on alliance formation, employee mobility, and organizational frames.

With permission of the Academy of Management


Journal Article
Forthcoming

Precise offers as barriers to entry in negotiations

Organizational Behavior and Human Decision Processes
Alice J. Lee, David D. Loschelder, Martin Schweinsberg, Malia F. Mason, Adam D. Galinsky
Abstract:
Subject(s): Human resources management/organizational behavior
Keyword(s): Anchor precision, negotiation entry, barriers-to-entry, first offers, social attribution, decision making

Precise first offers strongly anchor negotiation outcomes. This precision advantage has been previously documented only when the parties were already engaged in a negotiation. We introduce the concept of negotiation entry, i.e., the decision to enter a negotiation with a particular party. We predict that precise prices create barriers-to-entry, reducing a counterpart’s likelihood of entering a negotiation. Six studies (N=1,580) and one archival analysis of real estate sector data (N=11,214) support our barrier-to-entry prediction: Potential negotiators were less likely to enter a negotiation with precise versus round first offers. Using both statistical mediation and experimental-causal-chain analyses, we establish that perceptions of offer maker inflexibility underlie the precision barrier. Furthermore, we demonstrate that this inflexibility mechanism of precision is distinct from the mechanism (being offended) that creates barriers-to-entry for extreme first offers. The discussion theoretically integrates research on first-offer precision and extremity by offering the Precision-Extremity Model of First Offers.

With permission of Elsevier


Journal Article
Forthcoming

Pricing when customers have limited attention

Management Science
Tamer Boyaci, Yalçın Akçay
Abstract:
Subject(s): Product and operations management
Keyword(s): Pricing, choice behaviour, rational inattention, information acquisition, signalling 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 signalling, and then use these results to explore Perfect Bayesian Equilbiria (PBE) of the strategic pricing signalling 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


Journal Article
Forthcoming

Rethinking the concept of the IS organization

Information Systems Journal
Joe Peppard
Abstract:
Subject(s): Information technology and systems, Strategy and general management
Keyword(s): IS organization, IT value, IT governance, centralization, decentralization

Do conceptualizations of the IS organization reflect findings from research studying requirements for successfully harnessing information, systems and technology to achieve operational and strategic objectives? This paper addresses this question, reporting on an analysis of articles published in leading academic journals. It describes how the IS organization is portrayed in these studies and examines the results of this analysis through a sensitizing lens constructed from research that has examined how organizations generate business value from IS. The lens depicts this objective as a quest to harness knowledge that is distributed enterprise wide. The analysis suggests that conceptualizations of the IS organization used by researchers do not reflect the requirements for generating business value from IT that have been identified in the literature. While highlighting that definitions are vague or indeed absent, it challenges the dominant orthodoxy of the IS organization as a separate organizational unit suggesting that it is a more pervasive construct. The implications of this conclusion for practice, research and teaching are considered.

© 2016 John Wiley & Sons Ltd


Journal Article
Forthcoming

Speeding up the Internet: Regulation and investment in the European fiber optic infrastructure

International Journal of Industrial Organization
Wolfgang Briglauer, Carlo Cambini, MichaƂ Grajek
Abstract:
Subject(s): Economics, politics and business environment, Information technology and systems, Technology, R&D management
Keyword(s): Internet access market, access regulation, investment, infrastructure, Next Generation Networks, broadband, telecom, cable operators and EU regulatory framework
JEL Code(s): L96, L51

In this paper, we study how the coexistence of access regulations for legacy (copper) and fiber networks shapes the incentives to invest in fiber-based network infrastructures.
To this end, we first develop a theoretical model that extends the existing literature by, among other things, considering alternative firms with proprietary legacy network (e.g., cable operators) and the presence of asymmetric mandated
access to networks. In the empirical part, we test the theoretical predictions using a novel panel data from 27 EU member states pertaining to the last decade. Our main
finding is that, in line with the theoretical results, stricter access regulations (i.e., a decrease in access price to legacy network and the adoption of fiber regulation) decrease the incumbent operators’ fiber investments. The estimated magnitude of these effects is economically significant. On the other hand, cable operators, who are responsible for the largest share of investments in fiber, are not affected by
access regulation. Our paper thus provides policy insights for the on-going revision of the EU regulation framework for the electronic communications industry.

With permission of Elsevier


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