The Pygmalion Effect: An Agency Model with Reference Dependent Preferences

We attempt to formulate and explain two types of self-fulfilling prophecy, called the Pygmalion effect (if a supervisor thinks her subordinates will succeed, they are more likely to succeed) and the Galatea effect (if a person thinks he will succeed, he is more likely to succeed). To this purpose, we extend a simple agency model with moral hazard and limited liability by introducing a model of reference dependent preferences (RDP) by Kõszegi and Rabin (2004). We show that the agent with high expectations about his performance can be induced to choose high effort with low-powered incentives. We then show that the principal’s expectation has an important role as an equilibrium selection device.self-fulfilling prophecy, Pygmalion effect, Galatea effect, reference dependent preferences, agency model, moral hazard

Troubling some assumptions: A response to "The role of perceived organziational justice in shaping the outcomes of talent management: a research agenda"

This Commentary is a response to the paper by Gelens, Dries, Hofmans, & Pepermans in this Special Issue on the development of a theoretical framework for talent management. The authors' central argument and hypotheses remain essentially untroubled here as this Commentary instead problematizes a central assumption of their paper which is commonly taken for granted in the talent literature—i.e., that talent is in shortage. In addition, suggestions for theory development are given and a more critical approach to the assumptions upon which talent management is based is advocated

The Impact of Teachers' Expectations on Students' Educational Opportunities in the Life Course

The substantial aim of this paper is to integrate the main idea of 'Pygmalion' or self-fulfilling prophecy research (Rosenthal and Jacobson, 1968; Jussim and Harber, 2005) into the general subjective expected utility framework about inequality in educational opportunities (Breen and Goldthorpe, 1997; Esser, 1999). In the theoretical section, a formal model of the impact of self-fulfilling prophecies on educational transitions is developed. In the empirical section, we test this model to predict both students' educational success (in terms of high school graduation) and their university transitions. Since we assume a conditional dependence of these outcomes, we control for sample selection bias (Heckman, 1979). We find that in our operationalization of self-fulfilling prophecies the latter show significant effects on both educational success and university transitions. However, while the results remain stable in case of educational success, we find that the conditional decision problem of university transitions leads to a selection bias for the estimates in the latter case. In a sensitivity analysis we find that only if unobserved heterogeneity would be disturbingly high, it could also affect the stability of self-fulfilling prophecy estimates.Inequality in Educational Opportunities, Educational Transitions, Subjective Expected Utility Theory, Self-Fulfilling Prophecies, Pygmalion, Selection Bias, Sensitivity Analysis

Role expectation process in building a desirable work culture

Includes bibliographical references