Subjectivity in Professionals' Incentive Systems: Differences between Promotion‐ and Performance‐Based Assessments

We examine how managers assess performance and promotion prospects—that is, the ex ante likelihood of promotion—and the conditions under which these assessments diverge. We argue that managers apply different cognitive schemas when they make different assessments. To the extent that a signal provides different information about future versus current contributions, assessed performance and promotion prospects are likely to diverge. In two experiments, we manipulate professionals' promotion eligibility and level of consultative decision making. We find that experienced managers assess performance and promotion prospects differently, but only when professionals are promotion eligible. Specifically, more (as opposed to less) consultative decision making decreases promotion prospects while not affecting assessed performance (Experiment 1) or even improving it (Experiment 2). By contrast, more consultative decision making improves both assessments when professionals are not eligible for promotion. We shed light on the relations between subjective assessments, including that promotion is not necessarily the consequence of superior assessed performance.     

Firms’ skills as drivers of radical and incremental innovation

Using firm level data from the Irish Community Innovation Survey 2008–2010 we analyse the importance of eight skill sets for the innovation performance of firms. We distinguish between radical and incremental innovation. Our results suggest that there is substantial heterogeneity in the importance of skills for different types of innovation and that some skills are best sourced from outside the firm while others are best developed in-house.     

Walking the walk? Bank ESG disclosures and home mortgage lending

Review of Accounting Studies - We show that banks with high environmental, social, and governance (ESG) ratings issue fewer mortgages in poor localities—in number and dollar amount—than...     

ChatGPT and consumers: Benefits,Pitfalls and Future Research Agenda

The need of the hour is to encourage research on topics with newness and novelty. In this context, this article discusses multidimensional benefits and potential pitfalls of using artificial intelligence-based Chat Generative Pre-trained Transformer (ChatGPT), and provides numerous ideas for future research in consumer studies and marketing in the context of ChatGPT. ChatGPT provides algorithm-generated conversational responses to text-based prompts. Since its launch in the late 2022, ChatGPT has generated significant debate surrounding its hallmarks, benefits and potential pitfalls. On the one hand, ChatGPT can offer enhanced consumer engagement, improved customer service, personalization and shopping, social interaction and communication practice, cost-effectiveness, insights into consumer behaviour and improved marketing campaigns. On the other hand, potential pitfalls include concerns about consumer well-being, bias, misinformation, lack of context, privacy concerns, ethical considerations and security. The article concludes by outlining a potential future research agenda in the area of ChatGPT and consumer studies. Overall, this article provides valuable insights into the benefits and challenges associated with ChatGPT, shedding light on its potential applications and the need for further research.     

Consumer ethics: A review and research agenda

Consumer ethics continues to draw the attention of academicians and practitioners as a significant economic and social issue globally. Consumer ethics refers to moral principles that govern a consumer's behaviour. This literature review seeks to enrich the discourse on consumer ethics through a comprehensive and detailed review of 106 articles, covering 21 journals from 2010 to 2020. Through an examination of theories, contexts, characteristics, and methodologies used in consumer ethics research, our review (1) presents a comprehensive and up-to-date overview of the research in this field and (2) sets a future research agenda to spur scholarly research. We found studies have primarily relied on a single theoretical lens such as the theory of marketing ethics, planned behaviour, and neutralization theory. Further consumer ethics research focuses on advanced countries, with a narrow focus on developing countries. We have diagnosed the need to examine boundary conditions impacting consumer ethics. Finally, we provide actionable inputs to combat unethical consumer actions as well as promote ethical consumption.     

Age-related taxation of bequests in the presence of a dependency risk

This paper studies the properties of the optimal taxes on bequests when individuals differ in wage and in their risks of mortality and old-age dependance. Survival is positively correlated to income but dependency is negatively correlated with it. The government cannot distinguish between bequests motives, that is whether bequests resulted from precautionary reasons or from pure joy of giving reasons. Instead, it observes the timing of bequests and the health status at death. Under the utilitarian social welfare criterion, we show that bequests taxation results from a combination of equity, insurance, and public revenue motives. If redistribution concerns dominate insurance concerns, it is desirable to tax the most bequests of those individuals living long in good health and to tax the least bequests of those dying early. This is a direct consequence of the socio-demographic structure we assumed where richer agents live longer and in better health than poorer agents. To the opposite, if insurance concerns dominate redistributive concerns, early bequests should be the most taxed and, bequests under dependency the least taxed. Under the Rawlsian criterion, we find that early bequests should be the least taxed and bequests left by the healthy long-lived individuals should be the most taxed.     

Intergenerational income mobility and economic freedom

Numerous studies have found that income inequality reduces the chances of upward relative mobility (i.e., climbing up the income ladder). However, most of this work ignores the role played by institutional quality (namely, economic freedom) in determining mobility and increasing the individual's set of choices. We fill this gap by empirically testing the direct and indirect (through economic growth) impacts of economic freedom on intergenerational income mobility. We find that economic freedom has both direct and indirect effects on intergenerational income mobility, while income inequality is a strong predictor of downward income mobility. When we incorporate findings about the purely mechanical relationship between inequality and intergeneration income mobility, we find that the legal system and property rights component of economic freedom matters more than inequality. These results suggest that good institutions can increase intergenerational income mobility.     

Status motives and agent-to-agent information sharing

Review of Accounting Studies - Although decision-making within firms improves when agents share information with one another, agents often have limited motivation to share because doing so takes...     

Age- and health-related non-linear inheritance taxation

This paper studies the design of optimal non linear bequest taxation when individuals differ in wage, survival and probability to become dependent at the old age. Following the recent health and economic literature, we assume that agents with higher wage have higher survival chances and lower risks to become dependent. Agents make precautionary savings for their old age taking into account the uncertainty on their health. They exhibit joy of giving utility, so that they also set aside money for their heirs. In the absence of annuity and long-term care (LTC) insurance markets, heirs obtain different levels of bequests, depending on whether the donor died early or late in life and whether he was healthy at time of death. We assume that the government does not observe the decomposition of bequests between voluntary and involuntary ones. Instead, it observes the timing of death and the health condition at death of the donor. We show that, under asymmetric information, on top of marginal income taxation, the bequests left by low-income individuals in case of early death should be taxed at the margin. To the opposite, bequests obtained later in life need not be taxed or subsidized at the margin.