Platform governance in the presence of within-complementor interdependencies: evidence from the rideshare industry

Existing studies suggest that platform access restrictions may cause restricted complementors to switch to competing platforms, which will increase complement quantity on competing platforms. We re-examine this prediction by accounting for the impact of economies of scope on complementor responses to platform access restriction. We argue that restricting a complementor’s access on a platform may prevent it from achieving economies of scope from multi-homing, thereby incentivizing it to abandon both the restricted and (unrestricted) competing platforms. Using rideshare data in New York City, we compare the numbers of trips made by Lyft and Uber drivers, respectively, before and after Lyft restricted drivers’ access on its platform. We find that Lyft’s access restriction reduced trip numbers not only on the Lyft platform but also on the Uber platform. In addition, both Lyft’s and Uber’s trip numbers decreased not only during the restricted low-demand periods (e.g., non-rush hours) but also during the unrestricted high-demand periods (e.g., rush hours). In contrast, after a substantial number of multi-homing drivers left both platforms following Lyft’s access restriction, a subsequent access restriction by Uber led to an increase in trip numbers on the Lyft platform. These results highlight the importance of accounting for interdependencies across complementor activities when designing platform governance policies

Seller-Orchestrated Inventory Financing under Bank Capital Regulation

To help small firms secure bank financing, large sellers often orchestrate joint finance programs, linking their small dealers with major banks that lend to all participating dealers based on the information the seller provides. We examine supply chain decisions (pricing and inventory) and lending terms under such seller-orchestrated financing programs. In loan pricing, we highlight a form of financial friction that is of particular importance under such schemes – bank capital regulation. Banks are globally mandated to maintain regulatory capital to mitigate unforeseen loan losses, using either the standardized approach (where regulatory capital is a fixed percentage of the loan amount) or the internal rating-based (IRB) approach (where it depends on the loan's Value-at-Risk). We consider a game-theoretic model consisting of a large seller and multiple capital-constrained newsvendor-type dealers, who obtain financing from banks who are subject to capital regulation. The seller decides the wholesale price and whether to orchestrate a joint finance program for its dealers by collaborating with a bank, and the dealers choose their inventory level and the financing channel. We find that a seller should only orchestrate the joint financing program when the bank adopts the IRB approach and the dealers are of low risk. Such a program is more profitable to the seller when the demand correlation among dealers is low, and there is a large number of dealers. Although always benefiting the seller, these programs may hurt dealers with intermediate risk. Facing dealers with varying financial situations, the terms under the joint finance program should be designed as if the financially strong dealers subsidize the weak ones. Finally, allowing the seller to share part of the loan loss could further enhance the performance of joint financing, but only when the seller's opportunity cost of capital is low. Our findings provide guidance to large sellers on how to orchestrate joint finance schemes, and to small dealers on making their corresponding operational decisions

Historizing the present: Research agenda and implications for consumer behavior

This paper conceptualizes the phenomenon of historizing the present, defined as emphasizing the historical significance of present events and treating the present from the perspective of history. The authors identify four modes of historizing the present (emphasizing that: (1) the present will shape history; (2) the present is a unique moment in history; (3) the present will be remembered in history; (4) the present echoes history) and demonstrate how historizing can be employed by marketers of for‐profit and nonprofit organizations in a variety of contexts. The paper examines the psychological implications of appreciating the historical significance of the present and outlines a research agenda for studying the downstream behavioral consequences of historizing the present across diverse substantive consumer domains. It concludes with an examination of the broader societal implications of historizing the present as well as its implications for consumer well‐being

Motivated counterfactual thinking and moral inconsistency: how we use our imaginations to selectively condemn and condone

People selectively enforce their moral principles, excusing wrongdoing when it suits them. We identify an underappreciated source of this moral inconsistency: the ability to imagine counterfactuals, or alternatives to reality. Counterfactual thinking offers three sources of flexibility that people exploit to justify preferred moral conclusions: People can (a) generate counterfactuals with different content (e.g., consider how things could have been better or worse), (b) think about this content using different comparison processes (i.e., focus on how it is similar to or different than reality), and (c) give the result of these processes different weights (i.e., allow counterfactuals more or less influence on moral judgments). These sources of flexibility help people license unethical behavior and can fuel political conflict. Motivated reasoning may be less constrained by facts than previously assumed; people’s capacity to condemn and condone whom they wish may be limited only by their imaginations

Firm-Level Political Risk and Credit Markets

We take advantage of a new composite measure of political risk (Hassan et al., 2019) to study the effects of firm-level political risk on private debt markets. First, we use panel data tests and exploit the redrawing of US congressional districts to uncover plausibly exogenous variation in firm-level political risk. We show that borrowers’ political risk is linked to interest rates set by lenders. Second, we test for the transmission of political risk from lenders to borrowers. We predict and find that lender-level political risk propagates to borrowers through lending relationships. Our analysis allows for endogenous matching between lenders and borrowers and indicates the presence of network effects in diffusing political risk throughout the economy. Finally, we introduce new text-based methods to analyze the distinct sources of political risk to lenders and borrowers and provide textual evidence of the transmission of political risk from lenders to borrowers

Playing the political game of innovation: An integrative framework and future research directions

Innovation politics impact the development and introduction of innovations, yet knowledge about the influence of specific political behavior or behavioral patterns remains blurred. Based on a literature review and the articles in this Special Issue, we propose a three-part framework that identifies the building blocks of political behavior in innovation: what motivates actors to be political, the different types of political actors, and the effect of various political behaviors on innovation outcomes. Emphasizing the evolving landscape of innovation politics, the framework aims to highlight research gaps and guide future studies toward improving our understanding of the functional and dysfunctional aspects of innovation politics

Using Social Media to Identify the Effects of Congressional Viewpoints on Asset Prices

We use a high-frequency identification approach to document that individual politicians affect asset prices. We exploit the regular flow of viewpoints contained in Congress members’ tweets. Supportive (critical) tweets increase (decrease) the stock prices of the targeted firm and the corresponding industry in minutes around the tweet. The bulk of the stock price effects is concentrated in the tweets revealing news about future legislative action. The effects are amplified around committee meeting days, especially when the tweet originates from committee members and influential politicians. Overall, we show that Congress members’ social media accounts are an important source of political news. (JEL D72, G14

More than meets the eye: the unintended consequence of leader dominance orientation on subordinate ethicality

Leaders play a pivotal role in establishing ethical norms and behaviors within organizations. Across seven studies (three in the Supplementary Information), we explore how subordinates infer their leader’s moral character outside the domain of ethical conduct and document this process’s downstream consequences. Specifically, we focus on the dual-strategies theory, which posits that leaders exert influence and obtain deference via two broad orientations of behaviors and cognitions: dominance and prestige. In a field setting of employees and their managers, we find that leader dominance orientation positively relates to subordinate self-reported unethical behavior, whereas leader prestige is negatively related to the same. In a second sample of working adults, we use a time-lagged study design to show that leader dominance (prestige) positively (negatively) relates to subordinate-reported unethical behavior at work partly because of a belief that the leaders engage in more (less) unethical behaviors, which contributes to a belief that norm-violating behaviors are more (less) acceptable within teams under dominance- (prestige-) oriented leaders. Finally, across four experimental studies, we observe that participants assigned to a dominance-oriented (versus prestige-oriented) leader perceived their leader as having lower moral character and expressed a greater likelihood of engaging in unethical behavior. We also document actual unethical behavior for monetary gain. This effect was mediated by the belief that unethical behavior was normative within the team. Our results highlight the importance of moral (mis)perception by demonstrating the consequences of a leader’s hierarchical orientation on subordinate ethical perceptions and behaviors at work

Perceived Firm-Specific Human Capital: Mobility Constraint or Enhancer?

We explore the relationship between workers’ perceptions of firm-specific human capital (“FSHC”) and turnover. The belief that actual FSHC constrains mobility undergirds its critical role in resource-based theory. However, this rests on a strong assumption of information efficiency that market actors correctly assess how specific an individual’s skills are, and price it appropriately. Emerging theoretical viewpoints dispute this, pointing out labor market imperfections and substantial difficulty in observing FSHC. We therefore develop theory about how perceived FSHC may relate positively to mobility by articulating a role for well-known supply-side mechanisms such as job satisfaction, embeddedness and preference for job autonomy. Using two archival surveys and two primary surveys collected in very different contexts (South Korea and the U.S.), we found support for our theory. Perceptions of firm-specific human capital were associated with increased mobility and this effect was partially mediated by job satisfaction and job embeddedness. The effect was augmented for workers who value autonomy in their jobs (more likely to exit if they perceived their skills as FSHC). Since the effect of perceived FSHC is quite different from extant theory focused on actual FSHC, we explore implications for resource-based and human-capital theories