Research Paper Series

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Departments: Strategy & Business Policy, GREGHEC (CNRS)

This review assembles two highly referenced streams of research in organization and management studies over the past decade: institutional logics and categories. We present the gist of each literature focusing on the interaction within and between organizations vis-à-vis the institutional logics and category systems that condition behavior. Then, we suggest that both streams have compatible assumptions that warrant further integration and suggest opportunities for future research stemming from (1) complementarities related to inter-and-intra-audience variance, formation and recombination of logics and categories, and actors’ identity and (2) differences related to theory level of analysis, incorporation of conflict, and methods of analysis. Integration can lead to better specified mechanisms, processes, and contexts important to improving accuracy and development of these research streams.

Keywords: Institutional Logics, Categories


Departments: Strategy & Business Policy, GREGHEC (CNRS)

In this paper, we investigate family firms’ position in the intercorporate ownership network. Rooting our predictions in the Behavioral Agency Model and a Network analytical framework, we predict and find that family involvement decreases the likelihood of business group affiliation and of cross-group ties leading to a lower embeddedness within the overall network. We predict and find the opposite effect for community involvement. We use the complete longitudinal dataset of publicly listed firms’ corporate ownership ties in India (2001, 2005, and 2009). Theoretical and substantive contributions are to research on family businesses and to research on interorganizational networks.

Keywords: Family Firms, Community, Embeddedness, Network


Departments: Marketing, GREGHEC (CNRS)

Consumers gain choice closure when they perceive a sense of finality over a past decision and limit comparisons between the selected and the forgone options. We investigate consumers’ ability to make strategic use of choice closure to enhance outcome satisfaction. Seven studies show that consumers experience greater satisfaction when they achieve choice closure with an inferior outcome and when they do not achieve choice closure with a superior outcome; however, they expect to be more satisfied by avoiding choice closure with an inferior outcome and by seeking it with a superior outcome. We provide a rationale for this experience–expectation contrast based on rule overgeneralization. Consumers form their expectation on an implicit rule learned and internalized in a context in which it is appropriate and advantageous: when they aim to increase satisfaction with a future choice; however, consumers erroneously apply the same implicit rule to a different context, one in which they aim to increase satisfaction with a past choice. We conclude that consumers are unlikely to be able to make strategic use of choice closure to enhance satisfaction with the outcome of a decision they have made.

Keywords: choice closure, outcome valence, satisfaction, prediction error, rule overgeneralization


Departments: Tax & Law, GREGHEC (CNRS)

The EU’s approach to fake news, as epitomised by the European External Action (EEAS) Service East Stratcom Disinformation Review, violates the rights to freedom of expression and due process of those accused of distributing disinformation. The EU Disinformation Review is a publication of the European External Action Service (the European Union’s diplomatic service) to target fake news and online disinformation. Following our request for access to documents, EEAS conceded that the EU Disinformation Review uses an “ad hoc” methodology for conducting its fact-checks, which makes it an outlier in the international fact-checking community led by the International Fact-Checking Network (IFCN). Despite being a well-intentioned initiative to respond to the challenges posed by pro-Kremlin disinformation, the EU should ensure the respect of fundamental rights when engaging in fact-checking.The EU Disinformation Review seeks to control the right to freedom of expression by labelling publishers as “disinforming outlets” and their content as “disinformation,” creating a chilling effect on the work of journalists that is central to democracy. The right to freedom of expression is expressed in Article 11.1 of the Charter of Fundamental Rights of the European Union (2000/C 364/01) and Article 10 of the European Convention on Human Rights. The labelling of publishers as “disinformation outlets” is contrary to principle of the freedom of press established by the European Court of Human Rights: “[a] general requirement for journalists systematically and formally to distance themselves from the content of a quotation that might insult or provoke others or damage their reputation is not reconcilable with the press’ role of providing information on current events, opinion and ideas.”In addition, the methodology used by EEAS in the EU Disinformation Review is “ad hoc,” which constitutes a violation of the fundamental right to good administration in Article 41 of the European Charter of Fundamental Rights. Specifically, the ad hoc design and operation of the EU Disinformation Review fails to ensure the review acts “impartially, fairly and within a reasonable time.”First, publications are not provided with the right to be heard or proper notice. The EU Disinformation Review’s homepage offers an opportunity to contact the Task Force report a suspected mistake in a fact-check but the page is only available in English, in violation of the principle of multilingualism, and no notice if given to outlets accused of being “disinforming outlets” before or after fact-checks of their content are published.Second, the EEAS does not fulfil its duty to motivate. EEAS is given a broad margin of discretion to identify disinformation, but fails to do so according to a consistent methodology. Therefore, EEAS cannot justify, on the basis of objective criteria, its choice of which content to review and how to determine its truth or falsehood.To comply with EU law and ensure the respect of fundamental rights, the EEAS should develop and make public (1) a methodology for selecting partnerships and reviewing fact-checks in line with international standards and (2) a notice and response mechanism for journalists, publishers and citizens whose content is being reviewed. If EEAS is unable to comply with the above, the EU Disinformation Review should be shut down.

Keywords: Fake news, EU Law, European Ombudsman, Access to Information, Transparency


Departments: Finance, GREGHEC (CNRS)

How do resolution frameworks affect the private restructuring of distressed banks? We model a distressed bank’s shareholders and creditors negotiating a restructuring given asymmetric information about asset quality and externalities onto the government. This yields negotiation delays used to signal asset quality. We find that strict bail-in rules increase delays by worsening informational frictions and reducing bargaining surplus. We characterize optimal bail-in rules for the government. We then consider the government’s possible involvement in negotiations. We find this can lead to shorter or longer delays. Notably, the government may gin from committing not to partake in negotiations.

Keywords: Bank resolution, bail-out, bail-in, debt restructuring


Departments: Economics & Decision Sciences, GREGHEC (CNRS)

Decision theory offers a formal approach to decision making, which is often viewed and taught as the rational way to approach managerial decisions. Half a century ago it generated high hopes of capturing and perhaps replacing intuition, and providing the “right” answer in practically all managerial situations. Today it seems fair to say that decision theory has not lived up to these expectations. Behavioral science provides ample evidence that managers fail to follow the dicta of decision theory, even when these are explained to them. As a result, executives often find decision theory frustrating and useless and prefer to rely on their intuition. This paper suggests that this extreme conclusion is unwarranted and calls for a re-appraisal of decision theory. We propose that it should not always be regarded as a mathematical tool that produces the answer; rather, it can be viewed as a framework for a dialog between the decision maker and the decision theorist. In one extreme, the decision theorist studies the problem and provides the “correct’’ answer. But in another, the decision theorist only challenges the decision maker’s intuition and logic. In between, a whole gamut of possible dialogs exists, in which decision theory doesn’t replace intuition, but supports and refines it.


Departments: Finance, GREGHEC (CNRS)

We measure demand for information prior to nonfarm payroll announcements using a novel dataset consisting of clicks on news articles. We find that when information demand is high shortly before the release of the nonfarm payroll announcement, the price response of U.S. Treasury note futures to nonfarm payroll news surprises doubles. We argue that this relationship stems from the fact that market participants have more incentive to collect information when uncertainty about asset payoffs is higher, as implied by Bayesian learning models. Thus, high information demand about macroeconomic news is a proxy for high macroeconomic uncertainty.

Keywords: Public information, Macroeconomic News, Uncertainty, U.S. Treasury futures, Investors' Attention, Information Demand, Bitly, Media Coverage


Departments: Accounting & Management Control, GREGHEC (CNRS)

The objective of this study is to investigate how non-financial reporting (NFR) is defined and has expanded in recent years. First, we explore the heterogeneity in definitions and current NFR practices. We find a lack of convergence between regulators and standard-setters, as well as leading sustainable firms. Second, we examine the changes in the extent and type of NFR reported by firms over the period 2006-2016. Based on a sample of firms in South Africa, a leading country in NFR, we document a significant increase in the amount of NFR, particularly between 2006 and 2011. This change appears to be driven by new environmental, human capital, performance and strategic disclosures. The relative importance of financial information in corporate reporting decreased substantially over the same period. Third, we compare reporting practices for corporate social responsibility (CSR)/sustainability information between constituents of the S&P 500 index and the EuroStoxx 600 index. We find that overall, the percentage of firms issuing CSR/sustainability reports increased dramatically between 2002 and 2015 for both stock indices. Constituents of the U.S. stock index and growth firms are less likely to report CSR/sustainability information, whereas firms in the European stock index in environmentally sensitive industries, have high capital intensity and good CSR performance, are larger with better financial performance, are more likely to report CSR/sustainability information.

Keywords: Non-Financial Reporting (NFR), Non-Financial Information (NFI), Integrated Reporting, Corporate Social Responsibility (CSR) Reporting, Sustainability Reporting, Environmental Reporting, Social Reporting


Departments: Marketing, GREGHEC (CNRS)

People—be they politicians, marketers, job candidates, product reviewers, bloggers, or romantic interests—often use linguistic devices to persuade others, and there is a sizeable literature that has documented the effects of numerous linguistic devices. However, understanding the implications of these effects is difficult without an organizing framework. To this end, we introduce a Language Complexity × Processing Mode Framework for classifying linguistic devices based on two continuous dimensions: language complexity, ranging from simple to complex, and processing mode, ranging from automatic to controlled. We then use the framework as a basis for reviewing and synthesizing extant research on the effects of the linguistic devices on persuasion, determining the conditions under which the effectiveness of the linguistic devices can be maximized, and reconciling inconsistencies in prior research.

Keywords: Linguistics, Attitudes and Persuasion, Automatic and Controlled Processes, Language


Departments: Economics & Decision Sciences, GREGHEC (CNRS)

We study the interaction between multiple information designers who try to influence the behavior of a set of agents. When the set of messages available to each designer is finite, such games always admit subgame perfect equilibria. When designers produce public information about independent pieces of information, every equilibrium of the direct game (in which the set of messages coincides with the set of states) is an equilibrium with larger (possibly infinite) message sets. The converse is true for a class of Markovian equilibria only. When designers produce information for their own corporation of agents, pure strategy equilibria exist and are characterized via an auxiliary normal form game. In an infinite-horizon multi-period extension of information design games, a feasible outcome which Pareto dominates a more informative equilibrium of the one-period game is supported by an equilibrium of the multi-period game.

Keywords: Bayesian persuasion , information design , sharing rules , splitting games , statistical experiments.


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