Leadership & Organizational Behavior

Power is often considered the central animating force of human interaction. Who has power, who is affected by power, and how that power is exercised provide the foundation for understanding human relations (Russell 1960). Although it is difficult to give both a parsimonious and a complete definition of power (Fiske and Berdahl 2007; Lukes 1974), power is often defined as the ability to control resources, own and others, a definition rooted in theories of dependency and interdependency (Thibaut and Kelly 1959).

We investigate whether current mid-level and future entry-level managers subjectively value stock options and restricted stock consistent with economic theory. We also investigate whether managers' subjective valuations are sensitive to changes in key characteristics of these equity instruments. We believe our investigation is important for three reasons. First, in recent years firms have granted the vast majority of options to employees who are not senior-level executives.

A criticism of mechanism design theory is that the optimal mechanism designed for one environment can produce drastically different actions, outcomes, and payoffs in a second, even slightly different, environment. In this sense, the theoretically optimal mechanisms usually studied are not "robust." To study robust mechanisms while maintaining an expected utility maximization approach, we study a multiagent model in which the mechanism must be designed before the environment is as well understood as is usually assumed.

Previous research suggests that narrow identification with one's own racial group impedes coalition building among minorities. Consistent with this research, the 2008 Democratic primary was marked by racial differences in voting preferences: Black voters overwhelmingly preferred Barack Obama, a Black candidate, and Latinos and Asians largely favored Hillary Clinton, a White candidate. We investigated one approach to overcoming this divide: highlighting one's negational identity.

Much of the puzzle of underissuance of national bank notes can be resolved for the period 1880–1900 (the period when detailed, bank-level data are available) by disaggregating, taking account of regulatory limits, and considering differences in banks' opportunity costs cross-sectionally and over time. Banks with poor lending opportunities issued more, within regulatory limits. Banks tended to issue more when bond yields (the backing for notes) were high relative to lending opportunities.

Drawing on the motivated cognition literature, we examine how self-affirmation processes influence self-justification needs and escalation decisions. Study 1 found that individuals with a larger pool of affirmational resources (high self-esteem) reduced their escalation compared to those with fewer affirmational resources (low self-esteem). Study 2 extended these findings by demonstrating that individuals also de-escalated their commitments when they were provided an opportunity to affirm on an important value.

Three experiments examine how power affects consumers' spending propensities. By integrating literatures suggesting that (a) powerlessness is aversive, (b) status is one basis of power, and (c) products can signal status, the authors argue that low power fosters a desire to acquire products associated with status to compensate for lacking power. Supporting this compensatory hypothesis, results show that low power increased consumers' willingness to pay for auction items and consumers' reservation prices in negotiations but only when products were status related.

We investigate the effects of babyfaceness on the trustworthiness and judgments of a company's chief executive officer in a public relations crisis. Experiment 1 demonstrates boundary conditions for the babyfaceness-honesty trait inference and its influence on company evaluations. Experiment 2 shows that trait inferences of honesty are drawn spontaneously but are corrected in the presence of situational evidence (a severe crisis) if cognitive resources are available.