Consequences of Debt Forgiveness: Strategic Default Contagion and Lender Learning

I use a unique data set of loans to small business owners to examine whether lenders face adverse consequences when they grant debt forgiveness to borrowers. I provide evidence consistent with borrowers communicating their debt forgiveness to other borrowers, who then more frequently strategically default on their own obligations. This strategic default contagion is economically large. When the lender doubles debt forgiveness, the default rate increases by 10.9% on average. Using an exogenous shock to the lender's forgiveness policy, my findings suggest that as the lender learns about the extent of borrower communication the lender tightens its debt forgiveness policy to mitigate default contagion.     

Consumers’ forgiveness after brand transgression: the effect of the firm’s corporate social responsibility and response

Abstract

In this article we examine the interplay between the severity of a brand transgression, consumers’ prior awareness of the firm’s corporate social responsibility (CSR) initiatives, and the firm’s response (apology vs. apologia) on the rates of forgiveness among consumers. Results of two experiments show that consumers’ prior awareness of the firm’s CSR initiatives significantly differentiates apologia from apology, with the effect of apology on consumer forgiveness being more apparent when brand transgression severity is mild. Results also show that consumer forgiveness mediates the effect of brand transgression severity, firm response, and consumer awareness on repurchase intentions. In this way, the study enables managers to determine whether or not an apology or apologia will be sufficient to solicit consumer forgiveness, using information about the levels of awareness of CSR among consumers.     

略论儒道释核心价值观及其生态伦理思想

忠恕是儒家的核心价值观,也是做人做事的根本法则。清净是道家的核心思想,也是产生大德大智,谋求人与自然和谐的核心理念。慈悲是佛教大乘之根本,也是超越自我,提升境界,追求众生平等,给乐拔苦的不二法门。儒道释诸教的核心思想可以相互印证,并生成大智大慧。在生态危机严峻的今天,要谋求人与自然的和谐,追求幸福祥和的生活,需要挖掘儒道释的智慧,构建生态伦理,才能促进自然界的和谐与持续,建设人类与众生真诚、平等、幸福、祥和、持续的地球家园。     

The role of personality characteristics and service failure severity in consumer forgiveness and service outcomes

Abstract

This study investigates how consumer personality characteristics of religiosity, spirituality, and emotional intelligence and the severity of service failure affect emotional and decisional forgiveness as a response to service failure. Further, the study explores the relationships between these two forms of forgiveness and service outcomes, including the intention to switch the service provider and spread negative word of mouth. Findings reveal that consumer religiosity has a strong and positive effect on both types of forgiveness. However, contrary to expectations, consumer spirituality has a negative relationship with decisional and no relationship with emotional forgiveness. While consumers' perceived severity of service failure is negatively related to both types of forgiveness, the findings also suggest that emotional intelligence exerts a significant moderating influence on the relationship between service failure severity and emotional forgiveness, whereas its moderating effect on decisional forgiveness does not appear to be significant. Results demonstrate the asymmetric effects of perceived severity of service failure and the two types of forgiveness on negative service outcomes. These findings contribute to the understanding on the role of consumers' implicit personality characteristics in interpretation of service failure incidents.     

Self-diminishing effects of awe on consumer forgiveness in service encounters

Previous studies address consumers' emotions as an endogenous consequence of the service experience and assume that consumers base their decisions to forgive on the service situation's features; however, they rarely mention the role of the emotions that people might be experiencing, for reasons unrelated to the service failure itself. The current study thus considers a foundational but rarely examined human experience in business settings, awe, as well as its prosocial effect in service encounters. Incidental awe might alleviate the negative impacts of a service failure and enhance consumer forgiveness, through self-diminishment processes. Using four scenario-based experiments, referring to four types of service failures (outcome, process, controllable, and uncontrollable failures), this study tests for the positive effect of awe on consumers' inclination to forgive service failures and the mediating role of the small self in this effect. The present research thus enriches understanding of consumer forgiveness due to incidental emotions, which offers marketers some insights into how they might leverage methods that affect consumers' incidental emotions to encourage consumer forgiveness in service failures.     

Addiction to debt forgiveness in developing countries: Consequences and who gets picked?

We explore whether the expectation of debt forgiveness discourages developing countries from attaining sustainable fiscal independence through improving their tax effort. While the international financial community advises poor countries to improve revenue mobilization, the same international community routinely bails out poor countries that fail to meet their loan repayment obligations, among other reasons as a result of the low tax effort they exercise. The act of bailing out creates an expectation about receiving debt forgiveness time and again in the future. The key prediction of our theoretical framework is that in the presence of debt forgiveness, countries’ tax efforts will decline and more so the higher the intensity of the bailouts. We test this proposition using data for 55 countries from 1995 to 2015. We find that debt forgiveness is significant in lowering tax effort. In addressing the potential of reverse causality, we also find that the international financial community has been more forgiving to countries that exert lower tax effort. These results, which are robust to various specifications, have significant policy implications for donor and recipient countries.     

Would you forgive Kristen Stewart or Tiger Woods or maybe Lance Armstrong? Exploring consumers’ forgiveness of celebrities’ transgressions

Employing a qualitative approach, within the context of Generation Y consumers, this research investigates the internal justification processes used by consumers contemplating to forgive a celebrity who has transgressed society’s norms of acceptable behaviour. A thematic analysis of data from in-depth interviews identified nine emergent categories, grouped into four themes or core drivers: celebrity-related drivers, consumer-related drivers, context-related drivers and time-related drivers. The findings show that although there is generally no personal relationship between consumers and celebrities, consumers tend to bond with celebrities in para-social relationships. Many consumers see these relationships as similar to how they connect with friends thus leading them to show forgiveness tendencies towards a celebrity comparable to forgiving friends. The paper presents a conceptual framework highlighting the consumer’s forgiveness justification process.     

高校思想政治教育与中华优秀传统文化——以人与自然、人与人、人与己为三维视阈

自古以来,如何认识和处理人与自然、人与人、人与己的相互关系,一直是各种哲学流派和社会思潮所着力解决的热点、难点和重点。20世纪以来,随着资本主义的全球扩张和近现代西方文明现代性困境的日益凸显,人们对这三大关系或者问题的关注程度更加深入。而对于这三大关系的分析和解决,中华传统文化所体现出来的东方整体思维、生态伦理情怀和生命哲学关怀意识,有着无可比拟的思维优势和建构路径。高校思想政治教育应当加强这方面的中华优秀传统文化教育。     

Relationship Intention and Length of Customer–Firm Associations in Two Emerging Markets

ABSTRACT

Despite the benefits of following a relationship marketing approach, firms should use caution when targeting customers with relationship marketing strategies as not all customers want to enter into long-term relationships. Targeting customers based on the length of customer-firm association could also be flawed as the success of doing so is disputed. This study explored relationship intention under cell phone customers in two emerging markets, namely the Philippines and South Africa. Findings show that relationship marketing strategies should only be focused on customers displaying high relationship intentions rather than, erroneously, investing in relationships with customers based on association length.     

The underdog trap: The moderating role of transgression type in forgiving underdog brands

This study aims to investigate the interactive effects of brand biography and brand transgression type on consumers’ forgiveness intention. Brand transgression is categorized as relational or nonrelational, with the former (compared to the latter) seriously undermining consumers’ high identification with underdog brands. Across four experimental studies in which transgression type is manipulated in three different ways, it is confirmed that when facing nonrelational transgressions, participants show greater forgiveness intention for underdog than for top‐dog brands. However, when facing relational transgressions, they do not show increased forgiveness intention for underdog brands compared to top‐dog brands. Moreover, perceived anger mediates the interaction effect between brand biography and brand transgression type on forgiveness intention. The theoretical and managerial implications of the findings are discussed.