Someone Has to Pay

May 13, 2023

Recruiting Talent Through Entrepreneurs' Social Vision Communication
Timo van Balen & Murat Tarakci
Organization Science, forthcoming 


For-profit social ventures are proliferating. They often communicate social visions, presenting an ideal future where the ventures resolve environmental or societal issues. We study whether social vision communication helps a startup to recruit talent -- a fundamental problem for growth. We argue that jobseekers are less likely to apply to ventures communicating a social vision as they perceive reduced career advancement opportunities. We conducted two complementary studies to test our theory. Study 1 enlisted data from a job board for startups to show that ventures communicating a social vision receive 46.3% fewer job applications. Study 2 replicated this finding in a field experiment that further reveals the underlying mechanism: social vision communication limits jobseekers' perceived career advancement opportunities. Both studies show that higher remuneration can compensate the negative effect of social vision communication. Our findings advance research on purpose-driven organizations, human resources, entrepreneurship, and vision communication to caution entrepreneurs against social vision communication as a recruitment strategy.

Rejections Are More Contagious than Choices: How Another's Decisions Shape Our Own 
Lana Xianglan Nan, Sang Kyu Park & Yang Yang
Journal of Consumer Research, forthcoming 


Every day, we learn about others' decisions from various sources. We perceive some of these decisions as choices and others as rejections. Does the mere perception of another's decision as a choice versus as a rejection influence our own behavior? Are we more likely to conform to another's decision if we view it in one way or the other? The current research investigates the social influence of decision frames. Eight studies, including a field study conducted during a livestreaming event hosted by an influencer with over 1.5 million followers, find that people are more likely to conform to another's decision if it is perceived as a rejection than if it is perceived as a choice. This effect happens because consumers are more likely to attribute another's decision to product quality as opposed to personal preference, when consumers perceive another's decision as a rejection than as a choice. The inference about quality versus personal preference in turn increases conformity. This research bridges the existing literatures on decision framing, social influence, and perceptions of quality and personal preference, and it offers important implications for marketers and influencers.

Learning, Sophistication, and the Returns to Advertising: Implications for Differences in Firm Performance
Steven Tadelis et al.
NBER Working Paper, April 2023 


Why do establishments exhibit wide variation in their productivity and profitability? Can variation in returns to advertising help answer this question? We present results from a large field experiment on Facebook and Instagram that documents variance in advertisers' ability to generate returns to advertising. We focus on campaigns aimed at boosting sales and tie advertising expenses to revenues for each advertiser. We find that spending on advertising led to significant increases in revenues, number of purchases, number of purchasers, and number of conversions. The heterogeneity in these results by expenditure, age, and engagement documents patterns consistent with learning by doing and variance in how sophisticated advertisers are. Advertisers who engage in more learning activities and more sophisticated data collection exhibit the highest returns and are more likely to continue their activities over time, suggesting that differences in advertising effectiveness may account for some of the variance in productivity across firms.

The One-Away Effect: The Pursuit of Mere Completion
Bowen Ruan, Evan Polman & Robin Tanner
Journal of Consumer Research, forthcoming 


A series of controlled studies found that consumers counter-normatively prefer something nearly complete over something complete. We call this phenomenon the "one-away effect" because we find that when consumers are, for example, one stamp away from completing a punch card loyalty program, they value the card more than a completed card. This is because their valuation of the one-away card is influenced by their anticipation of merely completing the card, which generates its own utility, apart from the card's end-reward (a free coffee). To wit, the prospective utility of performing the final action that fulfills completion increases consumers' valuation of the one-away card. Our findings suggest that consumers are motivated to complete goals, tasks, and sets not only to obtain their end-rewards, but also because merely completing things is intrinsically motivating and can be a goal in and of itself. We discuss the theoretical and practical implications of the one-away effect, as well as the general notion of mere completion.

Ali Kakhbod et al.
University of California Working Paper, March 2023 


Tweet-level data from a social media platform reveals low average accuracy and high dispersion in the quality of advice by financial influencers, or "finfluencers": 28% of finfluencers are skilled generating 2.6% monthly abnormal returns, 16% are unskilled, and 56% have negative skill ("antiskill") generating -2.3% monthly abnormal returns. Consistent with homophily shaping finfluencers' social networks, antiskilled have more followers and more influence on retail trading than skilled finfluencers. The advice by antiskilled finfluencers creates overly optimistic beliefs most times and persistent swings in followers' belief bias. Consequently, finfluencers cause excessive trading and inefficient prices such that a contrarian strategy yields 1.2% monthly out-of-sample performance.

Understanding How Music Influences Shopping on Weekdays and Weekends
Carl-Philip Ahlbom et al.
Journal of Marketing Research, forthcoming 


This research investigates how shopping on a weekday or a weekend moderates the impact of music on supermarket sales. Contrary to the intuitive beliefs of interviewed store managers, a meta-analysis, two field studies, and a controlled experimental study indicate that playing pleasant music (vs. no music) in supermarkets on weekdays enhances sales, an effect not found on weekends. Theorizing and interviews with shoppers suggest a potential reason for this week-part difference: Shoppers are more mentally depleted on weekdays (vs. weekends). A final study demonstrates and tests mental depletion as the driving factor for how shoppers are affected by music during different week parts. When consumers are depleted (e.g., on weekdays) music increases affect, which mediates the impact of music on sales. The results of the studies further indicate that week part plays a significant role in determining the impact of in-store music on sales. This article concludes with a discussion of the substantive and theoretical importance of incorporating the impact of week parts to predict in-store marketing effectiveness.


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