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Anscombe & Aumann (1963) offer a definition of subjective probability in terms of comparisons with objective probabilities. That definition - which has provided the basis for much of the succeeding work on subjective probability - presumes that the subjective probability of an event is independent of the prize consequences of that event, a property we term Prize Independence. We design experiments to test Prize Independence and find that a large fraction of our subjects violate it; thus, they do not have subjective probabilities. These findings raise questions about the empirical relevance of much of the literature on subjective probability.

View all ESMT Working Papers in the ESMT Working Paper Series here. ESMT Working Papers are also available via SSRN, RePEc, EconStor, and the German National Library (DNB).

This dissertation proposes methods that bridge network science, machine-learning, and agent-based simulations to infer information about context-dependent relationships. The methods are applied to analyze and understand the roles and actions associated with organizational leadership. Findings indicate, among other things, that effective leadership, both as found in practice and in theory, may be more authoritative and hierarchical than is commonly asserted.

With the growing interest in employer attractiveness, research is unsystematic on how this phenomenon can be conceptualized and studied. Studies tend to make little conceptual differentiation regarding for whom employers should be attractive, and therefore, address the perspectives of potential as well as current employees, who work in organizations for long periods of time. In this study our arguments relate to the phenomenon’s conceptual clarity as well as its differentiation from other related concepts. By focusing on employer attractiveness for current employees, we have systematically reviewed 48 studies published in business and management journals, and categorized findings into the Inputs-Mediators-Outputs model. This approach allowed us to depict significant limitations in the existing knowledge about employer attractiveness from the current employees’ perspective, and offer avenues for future research. Next, to delineate the future research agenda, we have concluded this study with a discussion on what our findings mean for managers and organizations.

Cash flows to hedge funds are highly sensitive to performance streaks, a streak being defined as subsequent quarters during which a fund performs above or below a benchmark, even after controlling for a wide range of common performance measures. At the same time, streaks have limited predictive power regarding future fund performance. This suggests investors weigh information suboptimally, and their decisions are driven too strongly by a belief in continuation of good performance, consistent with the “hot hand fallacy.” The hedge funds that investors choose to invest in do not perform significantly better than those they divest from. These findings are consistent with overreaction to certain types of information and do not support the notion that sophisticated investors have superior information or superior information processing abilities.

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The case tells the evolution of the call center transformation at Frontelco (a major telecom company in disguise). “Digital” and “agile” approaches to changing the way how call centers operate seem to produce different results. Debate between proponents of alternative approaches takes place across three levels of organizational hierarchy: the Managing Director seems to prefer “agile”, those close to operations in VP ranks seem to prefer “digital”, while three “managers in the middle” following each other in Senior Vice President rank seem to follow different strategies as to how to align the top and the bottom. To settle the debate, evidence-based clarity is being sought and the protagonist is tasked to design an appropriate performance measure to show the real impact of competing approaches.

Conflict management scholars study mixed-motive negotiation situations with cooperative and competitive incentives predominantly through multi-issue negotiation tasks in experimental studies. Intriguingly, experimenters currently lack an objective, generalizable, and continuous measure that precisely quantifies the incentives underlying these negotiation tasks. We present the conflict strength coefficient, which enables scholars to systematically quantify the incentive structures in these multi-issue negotiation tasks. By making the incentive structures accessible and numerically comparable, the conflict strength coefficient provides new insights into the central element of the experimental study of negotiation and conflict management, unmasks differences across existing tasks, facilitates research transparency, knowledge sharing, and open science practices. We demonstrate the coefficient’s benefits by providing a hands-on example from past research, by reviewing and quantitatively assessing the current literature, and by mapping conflict strength coefficients for the negotiation and conflict management research landscape and its subareas. Our analysis suggests that the conflict strength coefficient can enrich the understanding of cooperative and competitive incentives in the established tasks and directly guide and support an individual scholar’s process of knowledge creation. The conflict strength coefficient provides a methodological contribution to the experimental study of conflict management and negotiation with immediate benefits for the production of scientific knowledge, the experimental study of real-world phenomena, and theory development.

Executive Education must be seen as an investment. If we are serious about achieving business impact through training, the first question should be “What business outcomes would we like to see because of this intervention?” Next, we ask questions like “How, where, and when do we need our leaders to perform better to achieve those business outcomes” and “What specific knowledge and skills do we need to equip our leaders with to deliver the improved performance?”. We illustrate this approach through our work with one of the world’s largest commercial vehicle manufacturers, TRATON.

In order to study sexual violence internationally, it is helpful to understand similarities and differences in how sexual violence is conceptualised across countries. The current study examined prosecuting attorneys’ judgments about which sexual tactics legally qualify as sexual violence in two countries. Attorneys from the U.S. (n = 28) and Colombia (n = 24) evaluated whether 36 tactics would qualify as a sexual offense in their jurisdiction. Although Colombian and U.S. attorneys agreed on the legality of many tactics, Colombian attorneys judged more behaviours as criminal, on average, than U.S. attorneys. Within-country variations suggested that differences were due not only to different legal statutes, but also to different interpretations of laws. Open-ended responses illustrated sources of ambiguity, including lack of clarity about how much coercion is required and which behaviours indicate nonconsent. This suggests that vagueness within legal definitions may allow attorney judgements to be influenced by stereotypes and prejudices.

Practical Impact Statement: This study illustrates the vagueness of legal definitions of sexual violence in two countries—the United States and Colombia. This vagueness provides prosecuting attorneys with substantial power to interpret the law, and in this study, some attorney judgements of legality seemed to be influenced by stereotypes. Greater training for law students and attorneys about the realities of sexual violence may be helpful in undermining belief in rape myths that may inhibit attorneys from prosecuting certain sexual violence cases.