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

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 Véricourt, 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 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.


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

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

Organization Science
Gianluca Carnabuci, Cécile Emery, David Brinberg
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.

© 2017, INFORMS


Journal Article
Forthcoming

Exerting pressure or leveraging power? The extended chain of CSR enforcement in B2B supply chains

Journal of Public Policy and Marketing
Urs Müller, Johannes Habel, Marcel Stierl
Abstract:
Subject(s): Economics, politics and business environment, Ethics and social responsibility, Marketing, Strategy and general management
Keyword(s): Corporate social responsibility (CSR); CSR regulation; customer–supplier relationship; power; stakeholder pressure

Journal Article
Forthcoming

Financing capacity investment under demand uncertainty: An optimal contracting approach

Manufacturing and Service Operations Management
Francis de Véricourt, Denis Gromb
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


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

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

Infuriating impasses: Angry expressions increase exiting behavior in negotiations

Social Psychological and Personality Science
Jeremy A. Yip, Martin Schweinsberg
Abstract:
Subject(s): Human resources management/organizational behavior
Keyword(s): Negotiations, emotion, conflict, selfishness, timing, communication, social norms, impasses, anger

Prior research has focused on the influence of emotional expressions on the value of negotiated outcomes. Across three studies, we demonstrate that people interacting with angry counterparts become more likely to walk away from a negotiation, resulting in an impasse. In Study 1, participants who encountered counterparts expressing anger were more likely to choose an impasse, relative to those with neutral counterparts. In Study 2, building on the emotion-as-social-information model, we found that inferences of selfishness mediate the effect of angry expressions on impasses. In Study 3, we found that timing moderates the relationship between angry expressions and impasses. Furthermore, we demonstrated that perceptions of inappropriateness mediate the interactive effect of timing and angry expressions on impasses. Taken together, our work reveals that expressing anger is risky in negotiations because people infer that angry counterparts are selfish and become more likely to exit negotiations.


Journal Article
Forthcoming

Joint procurement and demand-side bidding strategies under price volatility

Annals of Operations Research
Xiaofeng Nie, Tamer Boyaci, Saibal Ray, Mehmet Gumus, Dan Zhang
Abstract:
Subject(s): Product and operations management
Keyword(s): Supply chain management, procurement, bidding, supply risk, price volatility, price-dependent base-stock policy

We consider a firm buying a commodity from a spot market as raw material and selling a final product by submitting bids. Bidding opportunities (i.e., demand arrivals) are random, and the likelihood of winning bids (i.e., selling the product) depends on the bid price. The price of the commodity raw material is also stochastic. The objective of the firm is to jointly decide on the procurement and bidding strategies to maximize its expected total discounted profit in the face of this demand and supply randomness. We model the commodity prices in the spot market as a Markov chain and the bidding opportunities as a Poisson process. Subsequently, we formulate the decision-making problem of the firm as an infinite-horizon stochastic dynamic program and analytically characterize its structural properties. We prove that the optimal procurement strategy follows a price-dependent base-stock policy and the optimal bidding price is decreasing with respect to the inventory level. We also formulate and analyze three intuitively appealing heuristic strategies, which either do not allow for carrying inventory or adopt simpler bidding policies (e.g., a constant bid price or myopically set bid prices). Using historical daily prices of several commodities, we then calibrate our models and conduct an extensive numerical study to compare the performances of the different strategies. Our study reveals the importance of adopting the optimal integrative procurement and bidding strategy, which is particularly rewarding when the raw material prices are more volatile and/or when there is significant competition on the demand side (the probability of winning is much smaller when submitting the same bid price). We establish that the relative performances of the three heuristic strategies depend critically on the holding cost of raw material inventory and the competitive environment, and identify conditions under which the shortfalls in profits from adopting such strategies are relatively less significant.

© Springer Science+Business Media New York 2015. With permission of Springer


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
Abstract:
Subject(s): Information technology and systems, Strategy and general management
Keyword(s): IS organization, IT Value, IT Governance, centralisation, decentralisation

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.


Journal Article
Forthcoming

Robust fuzzy extractors and helper data manipulation attacks revisited: Theory vs practice

IEEE Transactions on Dependable and Secure Computing
Abstract:
Subject(s): Information technology and systems
Keyword(s): Robust fuzzy extractor, physical unclonable functions (PUFs), helper data manipulation attacks
ISSN 1545-5971 (Print)

Pages