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While consumers and marketers perpetuate the lay theory that indulging with a reason is more pleasurable and makes everyone happier, this research identifies a condition under which indulging without a reason “feels right” and produces a more positive emotional reaction. The authors show that indulging with or without a reason and consumers’ trait self-control interact to influence happiness felt following an indulgent purchase. While high self-control consumers are happier when they have a reason to buy indulgent products (e.g., when they can justify the indulgence), low self-control consumers are happier when they do not have a reason to indulge, compared to when they have a reason. That is, indulging with a reason is less pleasurable for consumers with low self-control. This effect on happiness has an impact on downstream judgments about the product and yields important implications for consumer welfare as well as marketing managers. Across four studies we show the effect on consumption happiness, examine consequences of the effect, and report evidence for the underlying process.

With permission of Elsevier

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

Service employees frequently must enforce rules upon their customers to mitigate dysfunctional customer behavior and ensure proper service delivery (e.g., enforce “fasten seatbelt” signs on flights). However, the consequences of enforcing service rules (ESR) are not well understood. To elucidate the effect of ESR, the authors present seven studies involving > 6800 customers and consisting of cross-sectional and longitudinal data from customer surveys and company records as well as experiments. The results indicate that ESR exerts ambivalent effects: customers who experience ESR directed at other customers perceive service employees as more competent, which increases customer loyalty. However, if ESR is directed at customers themselves, they perceive a self-concept threat, leading them to devalue service employees' warmth and competence and to become less loyal. The effects of ESR hinge on a number of factors, including the harm that dysfunctional behavior potentially causes, the way ESR is communicated, and customers' experience with the service situation. Furthermore, the authors show that service employees can alleviate the negative effects of ESR by communicating service rules in advance and justifying ESR appropriately.

With permission of Elsevier

Most scientific research is performed by teams, and for a long time, observers have inferred individual team members’ contributions by interpreting author order on published articles. In response to increasing concerns about this approach, journals are adopting policies that require the disclosure of individual authors’ contributions. However, it is not clear whether and how these disclosures improve upon the conventional approach. Moreover, there is little evidence on how contribution statements are written and how they are used by readers. We begin to address these questions in two studies. Guided by a conceptual model, Study 1 examines the relationship between author order and contribution statements on more than 12,000 articles to understand what information is provided by each. This analysis quantifies the risk of error when inferring contributions from author order and shows how this risk increases with team size and for certain types of authors. At the same time, the analysis suggests that some components of the value of contributions are reflected in author order but not in currently used contribution statements. Complementing the bibliometric analysis, Study 2 analyzes survey data from more than 6000 corresponding authors to examine how contribution statements are written and used. This analysis highlights important differences between fields and between senior versus junior scientists, as well as strongly diverging views about the benefits and limitations of contribution statements. On the basis of both studies, we highlight important avenues for future research and consider implications for a broad range of stakeholders.

Public policy makers seek to enhance disclosure of firms’ sustainability performance, yet firms debate about whether, or to what extent, they should engage in sustainability reporting. This article seeks to advance current understanding about the business returns to sustainability reporting by examining the short- and long-term investor reactions. Through an event study, this research documents significant short-term stock market reaction to the release of sustainability reports. In particular, abnormal stock returns around the release of such reports are positively related to firm sustainability performance, and this positive link is smaller for firms in a strong information environment. The results show that over the long term, relative to nonreporting firms, firms that release sustainability reports enjoy higher value relevance of sustainability performance. These findings suggest that sustainability reports enhance information transparency and allow investors to incorporate sustainability information in stock valuation. This study provides strong evidence for the business case of sustainability reporting, and offers important implications for public policy makers in terms of devising policies and regulations to promote sustainability reporting.

With the permission of the American Marketing Association

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

There is increasing evidence that science & engineering PhD students lose interest in an academic career over the course of graduate training. It is not clear, however, whether this decline reflects students being discouraged from pursuing an academic career by the challenges of obtaining a faculty job or whether it reflects more fundamental changes in students’ career goals for reasons other than the academic labor market. We examine this question using a longitudinal survey that follows a cohort of PhD students from 39 U.S. research universities over the course of graduate training to document changes in career preferences and to explore potential drivers of such changes. We report two main results. First, although the vast majority of students start the PhD interested in an academic research career, over time 55% of all students remain interested while 25% lose interest entirely. In addition, 15% of all students were never interested in an academic career during their PhD program, while 5% become more interested. Thus, the declining interest in an academic career is not a general phenomenon across all PhD students, but rather reflects a divergence between those students who remain highly interested in an academic career and other students who are no longer interested in one. Second, we show that the decline we observe is not driven by expectations of academic job availability, nor by related factors such as postdoctoral requirements or the availability of research funding. Instead, the decline appears partly due to the misalignment between students’ changing preferences for specific job attributes on the one hand, and the nature of the academic research career itself on the other. Changes in students’ perceptions of their own research ability also play a role, while publications do not. We discuss implications for scientific labor markets, PhD career development programs, and science policy.

In face of the increasing attention on issues of sustainability and corporate social responsibility (CSR) by the general public and policy makers, companies have put growing emphasis on ensuring CSR along their supply chains. In this vein, existent research has produced evidence that companies can increase their suppliers’ CSR engagement by exerting explicit pressure on them, e.g., through contractual clauses. Adding to this conventional chain of CSR enforcement, this paper conceptualizes and empirically validates a so far undescribed extended chain of CSR enforcement that also leads to higher levels of a supplier firm’s CSR engagement irrespective and even in the absence of explicit pressure by its customer company. In particular, a customer firm’s CSR orientation in interaction with a powerful position in the supply chain leads suppliers to perceive pressure to engage in CSR regardless of factually exerted pressure. As a result, suppliers are likely to increase their CSR engagement in order to be customer oriented or in preemptive obedience. These results entail substantial implications for policy makers as well as marketing academics and managers.

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.

With permission of SAGE Publishing