Impact of family control/influence on stakeholders' perceptions of benevolence

This article proposes a model explaining how family control/influence in an organization affects individual stakeholders’ perceptions of benevolence. The model suggests two effects. First, based on socioemotional wealth research, we propose that family control/influence positively affects stakeholders’ perceptions of benevolence through the benevolent behavior that the organization shows toward its stakeholders. However, this effect can be negatively influenced if the family’s socioemotional wealth goals in terms of “Family control and influence” and/or “Renewal of family bonds to the firm through dynastic succession” are at risk. Second, we argue that family control/influence, to the extent that it is perceivable to the stakeholder, influences stakeholders’ perceptions of benevolence through categorization processes. However, the impact of perceivable family control/influence on stakeholders’ perceptions of benevolence is not straightforward but instead hinges on a set of individual-level contingency factors of the stakeholder, such as stakeholders’ family business in-group membership, stakeholders’ secondhand category information, and stakeholders’ firsthand category information.

The loss of trust in the European Union during the great recession since 2007: The role of heuristics from the national political system

How can we explain the decline in support for the European Union (EU) and the idea of European integration after the onset of the great recession in the fall of 2007? Did the economic crisis and the austerity policies that the EU imposed—in tandem with the IMF—on several member countries help cause this drop? While there is some evidence for this direct effect of EU policies, we find that the most significant determinant of trust and support for the EU remains the level of trust in national governments. Based on cue theory and using concepts of diffuse and specific support, we find that support for the EU is derived from evaluations of national politics and policy, which Europeans know far better than the remote political system of the EU. This effect, however, is somewhat muted for those sophisticated Europeans that are more knowledgeable about the EU and are able to form opinions about it independently of the national contexts in which they live. We also find that the recent economic crisis has led to a discernible increase in the number of those who are disillusioned with politics both at the national and the supranational level. We analyze 133 national surveys from 27 EU countries by estimating a series of cross-classified multilevel logistic regression models.

Testing for Measurement Equivalence in Surveys: Dimensions of Social Trust across Cultural Contexts

Our study evaluates the dimensionality and equivalence of social trust across cultural contexts, using new data from Switzerland and the World Values Survey 2005–2008. Whereas some scholars assert that trust should be regarded as a coherent concept, others claim that trust is better conceived of as a multidimensional concept. In contrast to the conventional dichotomy of the forms of social trust, we identify three distinct forms of trust, namely, particularized, generalized, and identity-based trust. Moreover, we dispute the view that respondents understand the wording of survey questions regarding social trust differently between different cultural contexts, which would imply that comparative research on trust is a pointless endeavor. Applying multiple-group confirmatory factor analysis to the various constructs of social trust, we conclude that one may study relationships among the three forms of trust and other theoretical constructs as well as compare latent means across cultural contexts. Our analyses therefore provide an optimistic outlook for future comparative analyses that investigate forms of social trust across cultural contexts.

Neighbourhood Diversity and Social Trust: An Empirical Analysis of Interethnic Contact and Group-specific Effects

To date, neighbourhood studies on ethnic diversity and social trust have revealed inconclusive findings. In this paper, three innovations are proposed in order to systemise the knowledge about neighbourhood ethnic diversity and the development of social trust. First, it is proposed to use a valid trust measure that is sensitive to the local neighbourhood context. Second, the paper argues for a conception of organically evolved neighbourhoods, rather than using local administrative units as readily available proxies for neighbourhood divisions. Thirdly, referring to intergroup contact theory and group-specific effects of diversity, the paper challenges the notion that ethnic diversity has overwhelmingly negative effects on social trust.

Leveraging Trust and Privacy Concerns in Online Social Networks: an Empirical Study

Unprecedented success of Online Social Networks, such as Facebook, has been recently overshadowed by the privacy risks they imply. Weary of privacy concerns and unable to construct their identity in the desired way, users may restrict or even terminate their platform activities. Even though this means a considerable business risk for these platforms, so far there have been no studies on how to enable social network providers to address these problems. This study fills this gap by adopting a fairness perspective to analyze related measures at the disposal of the provider. In a Structural Equation Model with 237 subjects we find that ensuring interactional and procedural justice are two important strategies to support user participation on the platform.

Privacy Calculus on Social Networking Sites: Explorative Evidence from Germany and USA

Worldwide social networks, like Facebook, face fierce competition from local platforms when expanding globally. To remain attractive social network providers need to encourage user self-disclosure. Yet, little research exists on how cultural differences impact selfdisclosure on these platforms. Addressing this gap, this study explores the differences in perceptions of disclosure-relevant determinants between German and US users. Survey of Facebook members indicates that German users expect more damage and attribute higher probability to privacy-related violations. On the other hand, even though American users show higher level of privacy concern, they extract more benefits from their social networking activities, have more trust in the service provider and legal assurances as well as perceive more control. These factors may explain a higher level of self-disclosure indicated by American users. Our results provide relevant insights for the social network providers who can adjust their expansion strategy with regard to cultural differences.

Oxytocin shapes the neural circuitry of trust and trust adaptation in humans.

Trust and betrayal of trust are ubiquitous in human societies. Recent behavioral evidence shows that the neuropeptide oxytocin increases trust among humans, thus offering a unique chance of gaining a deeper understanding of the neural mechanisms underlying trust and the adaptation to breach of trust. We examined the neural circuitry of trusting behavior by combining the intranasal, double-blind, administration of oxytocin with fMRI. We find that subjects in the oxytocin group show no change in their trusting behavior after they learned that their trust had been breached several times while subjects receiving placebo decrease their trust. This difference in trust adaptation is associated with a specific reduction in activation in the amygdala, the midbrain regions, and the dorsal striatum in subjects receiving oxytocin, suggesting that neural systems mediating fear processing (amygdala and midbrain regions) and behavioral adaptations to feedback information (dorsal striatum) modulate oxytocin's effect on trust. These findings may help to develop deeper insights into mental disorders such as social phobia and autism, which are characterized by persistent fear or avoidance of social interactions.

What Makes a Family Firm Innovative? CEO Risk-Taking Propensity and the Organizational Context of Family Firms

Investigating the new product portfolio innovativeness of family firms connects two important topics that have recently received considerable attention in innovation and family firm research. First, new product portfolio innovativeness has been identified as a critical determinant of firm performance. Second, research on family firms has focused on the questions of if and why family firms are more or less innovative than other organizational forms. Research investigating the innovativeness of family firms has often applied a risk-oriented perspective by identifying socioemotional wealth (SEW) as the main reference that determines firm behavior. Thus, prior research has mainly focused on the organizational context to predict innovation-related family firm behavior and neglected the impact of preferences and the behavior of the chief executive officer (CEO), which have both been shown to affect firm outcomes. Hence, this study aims to extend the previous research by introducing the CEO's disposition to organizational context variables to explain the new product portfolio innovativeness of small and medium-sized family firms. Specifically, this study explores how the organizational context (i.e., ownership by top management team [TMT] family members and generation in charge of the family firm) of family firms interacts with CEO risk-taking propensity to affect new product portfolio innovativeness. Using a sample of 114 German CEOs of small and medium-sized family firms operating in manufacturing industries, the results show that CEO risk-taking propensity has a positive effect on new product portfolio innovativeness. Moreover, the analyses show that the organizational context of family firms impacts the relationship between CEO risk-taking propensity and new product portfolio innovativeness. Specifically, the relationship between CEO risk-taking propensity and new product portfolio innovativeness is weaker if levels of ownership by TMT family members are high (high SEW). Additionally, the effect of CEO risk-taking propensity on new product portfolio innovativeness is stronger in family firms at earlier generational stages (high SEW). This result suggests that if SEW is a strong reference, family firm-specific characteristics can affect individual dispositions and, in turn, the behaviors of executives. Therefore, this study helps extend the knowledge on the determinants of new product portfolio innovativeness of family firms by considering an individual CEO preference and the organizational context variables of family firms simultaneously.

Three essays on prices and selection

Competitive Market Segmentation Abstract In a two-firm model where each firm sells a high-quality and a low-quality version of a product, customers differ with respect to their brand preferences and their attitudes towards quality. We show that the standard result of quality-independent markups crucially depends on the assumption that the customers' valuation of quality is identical across firms. Once we relax this assumption, competition across qualities leads to second-degree price discrimination. We find that markups on low-quality products are higher if consuming a low-quality product involves a firm-specific disutility. Likewise, markups on high-quality products are higher if consuming a high-quality product creates a firm-specific surplus. Selection upon Wage Posting Abstract We discuss a model of a job market where firms announce salaries. Thereupon, they decide through the evaluation of a productivity test whether to hire applicants. Candidates for a job are locked in once they have applied at a given employer. Hence, such a market exhibits a specific form of the bargain-then-ripoff principle. With a single firm, the outcome is efficient. Under competition, what might be called "positive selection" leads to market failure. Thus our model provides a rationale for very small employment probabilities in some sectors. Exclusivity Clauses: Enhancing Competition, Raising Prices Abstract In a setting where retailers and suppliers compete for each other by offering binding contracts, exclusivity clauses serve as a competitive device. As a result of these clauses, firms addressed by contracts only accept the most favorable deal. Thus the contract-issuing parties have to squeeze their final customers and transfer the surplus within the vertical supply chain. We elaborate to what extent the resulting allocation depends on the sequence of play and discuss the implications of a ban on exclusivity clauses.

Ethnic Diversity, Social Trust and the Moderating Role of Integration Policy

Increasing ethnic diversity and whether or not it impacts on trust are highly debated topics. Numerous studies report a negative relationship between diversity and trust, particularly in the US. A growing body of follow-up studies examined the extent to which these findings can be transferred to Europe, but the results remain inconclusive. Moving beyond the discussion of the mere existence or absence of diversity effects on trust, this study is concerned with the moderation of this relationship: It addresses the neglected role of subnational integration policies influencing diversity’s impact on trust. Empirical tests not only indicate that integration policies moderate the relationship, but also suggest that the influence of policies varies substantively according to the specific policy aspect under consideration.

Direct democracy and political trust: Enhancing trust, initiating distrust–or both?

This study investigates the relationship between direct democracy and political trust. We suggest a solution to the controversy in research centering on positive versus negative effects of direct democracy by analytically differentiating between the availability of direct democratic rights and the actual use of those rights. Theoretically, greater availability of direct democratic rights may enhance political trust by increasing citizens’ perception that political authorities can be controlled as well as by incentivizing political authorities to act trustworthily. In contrast, the actual use of the corresponding direct democratic instruments may initiate distrust as it signals to citizens that political authorities do not act in the public’s interest. We test both hypotheses for the very first time with sub-national data of Switzerland. The empirical results seem to support our theoretical arguments.

DAT1 polymorphism determines L-DOPA effects on learning about others' prosociality.

Despite that a wealth of evidence links striatal dopamine to individualś reward learning performance in non-social environments, the neurochemical underpinnings of such learning during social interaction are unknown. Here, we show that the administration of 300 mg of the dopamine precursor L-DOPA to 200 healthy male subjects influences learning about a partners' prosocial preferences in a novel social interaction task, which is akin to a repeated trust game. We found learning to be modulated by a well-established genetic marker of striatal dopamine levels, the 40-bp variable number tandem repeats polymorphism of the dopamine transporter (DAT1 polymorphism). In particular, we found that L-DOPA improves learning in 10/10R genoype subjects, who are assumed to have lower endogenous striatal dopamine levels and impairs learning in 9/10R genotype subjects, who are assumed to have higher endogenous dopamine levels. These findings provide first evidence for a critical role of dopamine in learning whether an interaction partner has a prosocial or a selfish personality. The applied pharmacogenetic approach may open doors to new ways of studying psychiatric disorders such as psychosis, which is characterized by distorted perceptions of others' prosocial attitudes.

Privacy Policies and Users’ Trust: Does Readability Matter?

Over the years, a drastic increase in online information disclosure spurs a wave of concerns from multiple stakeholders. Among others, users resent the “behind the closed doors” processing of their personal data by companies. Privacy policies are supposed to inform users how their personal information is handled by a website. However, several studies have shown that users rarely read privacy policies for various reasons, not least because limitedly readable policy texts are difficult to understand. Based on our online survey with over 440 responses, we examine the objective and subjective readability of privacy policies and investigate their impact on users’ trust in five big Internet services. Our findings show the stronger a user believes in having understood the privacy policy, the higher he or she trusts a web site across all companies we studied. Our results call for making readability of privacy policies more accessible to an average reader.