Recent Submissions

  • Pharmaceutical net price transparency across European markets: Insights from a multi-agent simulation model

    Riccaboni, Massimo; Swoboda, Torben; Van Dyck, Walter (Health Policy, 2022)
    With pharmaceutical health policy striving for fair and sustainable pricing under increasing budgetary pressures, public stakeholders are more and more willing to be involved in transparent access decision-making related to novel medicines, considered by them to be a societal good. Full net price transparency (NPT) is believed by many to promote price competition and to increase equity by making pharmaceutical products accessible to all. Using agent-based simulations, we find that a full NPT system implemented across EU countries would not be viable. This while, acting as rational economic agents, a group of middle- and lower-income countries would not be willing to give up their confidential agreements with the pharmaceutical industry. Even partial NPT would delay access predominantly in middle- to lower-income countries. Hence, we conclude that implementing net price transparency across Europe would be challenging to reach from a political perspective. Especially in lower-income countries there would remain a plea to be left free to negotiate confidential discounts with drug manufacturers. This while, counterintuitively, in those countries NPT will be seen to be unjust while violating Ramsey pricing and distributive justice principles.
  • What leaders get wrong about data-driven decisions

    de Langhe, Bart; Puntoni, Stefano (MIT Sloan Management Review, 2021)
    Data-driven decision-making has been hailed as an antidote to the biases of human intuition. Companies have more data than ever, but surveys cast doubt on the effectiveness of data-driven decisions in organizations. The majority of executives say their data analytics initiatives produce disappointing results, and only about a quarter of executives say their data analytics projects produce actionable insights. There is a clue to the problem in the name “data-driven decision-making.” It’s data-driven.
  • Do people understand the benefit of diversification?

    Reinholtz, Nicholas; Fernbach, Philip M.; de Langhe, Bart (Management Science, 2021)
    Diversification—investing in imperfectly correlated assets—reduces volatility without sacrificing expected returns. Although the expected return of a diversified portfolio is the weighted average return of its constituent parts, the variance of the portfolio is less than the weighted average variance of its constituent parts. Our results suggest that very few people have correct statistical intuitions about the effects of diversification. The average person in our data sees no benefit of diversification in terms of reducing portfolio volatility. Many people, especially those low in financial literacy, believe diversification actually increases the volatility of a portfolio. These people seem to believe that the unpredictability of individual assets compounds when aggregated together. Additionally, most people believe diversification increases the expected return of a portfolio. Many of these people correctly link diversification with the concept of risk reduction but seem to understand risk reduction to mean greater returns on average. We show that these beliefs can lead people to construct investment portfolios that mismatch investors’ risk preferences. Furthermore, these beliefs may help explain why many investors are underdiversified.
  • No Evidence for Loss Aversion Disappearance and Reversal in Walasek and Stewart (2015)

    Quentin, André; de Langhe, Bart (Journal of Experimental Psychology: General, 2021)
    Loss aversion—the idea that losses loom larger than equivalent gains—is one of the most important ideas in Behavioral Economics. In an influential article published in the Journal of Experimental Psychology: General, Walasek and Stewart (2015) test an implication of decision by sampling theory: Loss aversion can disappear, and even reverse, depending on the distribution of gains and losses people have encountered. In this article, we show that the pattern of results reported in Walasek and Stewart (2015) should not be taken as evidence that loss aversion can disappear and reverse, or that decision by sampling is the origin of loss aversion. It emerges because the estimates of loss aversion are computed on different lotteries in different conditions. In other words, the experimental paradigm violates measurement invariance, and is invalid. We show that analyzing only the subset of lotteries that are common across conditions eliminates the pattern of results. We note that other recently published articles use similar experimental designs, and we discuss general implications for empirical examinations of utility functions.
  • How (Not) To Test Theory with Data: Illustrations from Walasek, Mullett, and Stewart

    Quentin, André; de Langhe, Bart (Journal of Experimental Psychology: General, 2021)
    André and de Langhe (2021) pointed out that Walasek and Stewart (2015) estimated loss aversion on different lotteries in different conditions. Because of this flaw in the experimental design, their results should not be taken as evidence that loss aversion can disappear and reverse, or that decision by sampling is the origin of loss aversion. In their response to André and de Langhe (2021); Walasek et al. (2021) defend the link between decision by sampling and loss aversion. We take their response as an opportunity to emphasize three guiding principles when testing theory with data: (a) Look for data that are uniquely predicted by the theory, (b) Do not ignore data that contradict the theory, and (c) If an experiment is flawed, fix it. In light of these principles, we do not believe that Walasek et al. (2021) provide new insights about the origin and stability of loss aversion.
  • Can consumers learn price dispersion? Evidence for dispersion spillover across categories

    André, Quentin; Reinholtz, Nicholas; de Langhe, Bart (Journal of Consumer Research, 2022)
    Price knowledge is a key antecedent of many consumer judgments and decisions. This article examines consumers' ability to form accurate beliefs about the minimum, the maximum, and the overall variability of prices for multiple product categories. Eight experiments provide evidence for a novel phenomenon we call dispersion spillover : Consumers tend to overestimate price dispersion in a category after encountering another category in which prices are more dispersed (vs. equally or less dispersed). Our experiments show that this dispersion spillover is consequential: It influences the likelihood that consumers will search for (and find) better prices and offers, and how much consumers bid in auctions. Finally, we disentangle two cognitive processes that might underlie dispersion spillover. Our results suggest that judgments of dispersion are not only based on specific prices stored in memory and that dispersion spillover does not simply reflect the inappropriate activation of prices from other categories. Instead, it appears that consumers also form "intuitive statistics" of dispersion: Summary representations that encode the dispersion of prices in the environment but that are insufficiently category specific
  • Introducing an intra-team longitudinal approach in the study of team process dynamics

    Li, Jia; Roe, Robert A. (European Journal of Work and Organizational Psychology, 2012)
    In this article, we introduce an intrateam longitudinal approach to study the temporal dynamics of team processes and its relations to antecedent and consequence variables. We compare this approach with the conventional interteam longitudinal approach (e.g., repeated-measures [M]ANOVA, random coefficient modelling, latent growth modelling) and discuss the conceptual and methodological differences between the two approaches. Whereas the interteam approach follows a sample-to-cases order of inference and assumes random deviances of individual teams' change patterns from the sample-level pattern, the intrateam approach follows a cases-to-sample order of inference and allows for qualitative differences in individual teams' change patterns. In the intrateam approach, each team's change trajectory is directly measured and then used in the next-step multivariate analyses. We argue that the intrateam approach is more compatible with the current conceptualization of team processes as team members' interactions over time (Marks, Mathieu, & Zaccaro, 2001) and with the reasoning underlying the Input–Process–Output (IPO) framework. Next, we illustrate the intrateam approach and apply both approaches in an empirical longitudinal study of team conflict and team satisfaction (N = 42). The results show the contrast between the two approaches and added value of the intrateam approach in the study of team process dynamics.
  • Evolving team cognition: The impact of team situation models on team effectiveness

    van der Haar, Selma; Li, Jia; Segers, Mien; Jehn, Karen A.; Van den Bossche, Piet (European Journal of Work and Organizational Psychology, 2015)
    In a study of 32 real-life on-scene-command teams, we investigated how the early development of team situation models (TSMs, i.e., a shared understanding in teams of which actions to take) influences final team effectiveness. We used both an inter-team longitudinal approach that examines TSM development at the sample level and an intra-team longitudinal approach that examines TSM development at the level of individual teams. We found that overall TSM change at the early stage of team functioning is positively related to team effectiveness at the end measured by quality of actions and goal achievement. Teams with increasing TSM similarity patterns tend to deliver higher team effectiveness than teams with stable TSM patterns but not than teams with decreasing TSM patterns. We discussed the theoretical and methodological contribution of the article to team cognition research and the practical implications to real-life command-and-control teams.
  • On the same side of the faultline: Inclusion in the leader’s subgroup and employee performance

    Meyer, Bertolt; Shemla, Meir; Li, Jia; Wegge, Jürgen (Journal of Management Studies, 2015)
    Extending theory on faultlines and subgroups, we argue that faultlines splitting a team into homogeneous subgroups can have different effects on team members' individual performance, depending on different intra-subgroup processes. Specifically, we propose that the effect of faultline strength on individual performance depends on whether a team member's subgroup includes the team leader. Building on the notion of faultline triggers, we further propose that organizational crises exacerbate this interaction because they make social support by the team leader especially important. We tested these assumptions with objective performance data collected over a period of four years from 3263 financial consultants (325 teams) while controlling for the effects of relational demography. Results showed that in teams with strong faultlines, consultants' performance decreased to a lesser extent in crisis years if the consultants shared a subgroup with their team leader. Thus, faultlines had different effects on team members from different subgroups.
  • Pacing style diversity and team collaboration: The moderating effects of temporal familiarity and action planning

    Gevers, Josette M.P.; Rispens, S.; Li, Jia (Group Dynamics: Theory, Research, and Practice, 2016)
    This study addresses the value of both task- and team-focused processes in dealing with temporal diversity in teams. Particularly, we focus on team diversity in pacing styles (i.e., team members’ differences in how to distribute efforts over the available time in working toward deadlines). In a cross-sectional survey study of 38 consultancy teams, we examined the joint moderating effects of action planning and temporal familiarity on the relationship between pacing style diversity and team collaboration. Pacing style diversity tended to be negatively associated with team collaboration under most levels of action planning and temporal familiarity. Pacing style diversity and team collaboration related positively only when both action planning and temporal familiarity were high. This moderating effect was mediated by temporal consensus (i.e., team members’ shared understanding of the temporal aspects of executing collective tasks). Thus, the co-occurrence of action planning and temporal familiarity is particularly important for temporally heterogeneous teams to collaborate effectively by facilitating a shared perspective on the team’s temporal approach to the task.
  • Dynamics between member replacement and team performance: The role of members’ relative attributes

    Li, Jia; Gevers, Josette M.P. (Applied Psychology: An International Review, 2018)
    Analysing the 367 member replacement acts in the 2014 FIFA World Cup tournament, we uncover important dynamics between member replacement and team performance. We find that poor team performance leads to substitutions with more competence gains (or with less competence loss), that substituting and substituted members' functional background dissimilarity improves subsequent content-related team performance (i.e. scoring more goals), and that their competence superiority is associated with the speed of team performance turnaround (i.e. scoring goals faster). Going beyond contrasts between teams with and without membership change, the paper highlights the importance of substituting and substituted members' relative task-related attributes and provides a more nuanced understanding of the complex phenomenon of team membership change. Furthermore, the paper extends the methodological spectrum of dynamic team composition research from predominantly laboratory experiments with short-lived student groups performing cognitive tasks to field studies with real-life work teams performing action tasks.
  • From being diverse to becoming diverse: A dynamic team diversity theory

    Li, Jia; Meyer, Bertolt; Shemla, Meir; Wegge, Jürgen (Journal of Organizational Behavior, 2018)
    On the basis of the literature of open systems and team diversity, we present a new dynamic team diversity theory that explains the effect of change in team diversity on team functioning and performance in the context of dynamic team composition. Building upon the conceptualization of teams as open systems, we describe the enlargement and decline of team variety, separation, and disparity through member addition, subtraction, and substitution. Then, focusing on diversity enlargement, we theorize the contemporaneous and lasting effects of team diversity change on team performance change and on team processes and states leading to them. Dynamic team diversity theory expands the focus of team diversity research from teams' being more diverse than others to teams' becoming more diverse than before. It aims to advance team diversity research to be better aligned with the organizational reality of dynamic team composition. We also discuss methodological considerations in subsequent empirical testing of the theory and highlight how the theory and future research may help to guide organizational practice in recomposing work teams.
  • How dynamics in perceptual shared cognition and team potency predict team performance

    Gevers, Josette; Li, Jia; Rutte, Christel G.; van Eerde, Wendelien (Journal of Occupational and Organizational Psychology, 2020)
    In a longitudinal field study of 37 professional project teams over almost 2 years, we investigated the dynamic relationship between perceptual shared cognition and team potency in predicting team performance. Our main results show that initial levels and change in perceptual shared cognition explain team performance outcomes through initial levels and change in team potency, respectively. Thereby, our findings confirmed that initial levels and change in team potency operated as an explanatory mechanism for the relationship between shared cognition and team performance. Interestingly, shared cognition change shows larger benefits on team performance outcomes than initial levels. In addition, we show differential relationships of task- and time-related shared cognition with the quality and timeliness criteria of team performance. Whereas shared task cognition predicts team performance in terms of both output quality and timeliness, shared temporal cognition predicts timeliness only. Altogether, this research suggests the unique theoretical value of change in perceptual shared cognition in explaining team performance and of affective-motivational team states as an alternative explanatory mechanism for the impact of shared cognition on team effectiveness.
  • The preventative benefit of group diversification on group performance decline: An investigation with latent growth models

    Li, Jia; Shemla, Meir; Wegge, Jürgen (Journal of Organizational Behavior, 2021)
    ntegrating the open systems perspective of groups and the contingency approach to diversity, we study how group diversification (i.e., a process in which a group becomes more diverse over time as members join and/or leave the group) affects group performance change in an adverse task environment. We argue that diversification benefits performance by reducing group performance decline in times of adversity. Group size increase, however, attenuates this preventative benefit of group diversification. Focusing on organizational tenure and gender, we studied 279 sales groups (3277 individuals) in a large German financial consulting company from 2004 to 2008. In this period, a national legislative change prompted the company to withdraw its star product from the market and presented adversity to the sales groups. Results from latent growth models (LGMs) overall support our arguments. This research extends the (conditional) beneficial view of diversity from a static theoretical space about group being diverse to a dynamic one about group becoming diverse
  • The team causes and consequences of team membership change: A temporal perspective

    Li, Jia; van Knippenberg, Daan (Academy of Management Annals, 2021)
    Membership change—adding, replacing, and losing members—is a common phenomenon in work teams and charts a different theoretical space from prior team research that has assumed stable team membership and shared team properties. Based on a comprehensive review of 133 empirical studies on team membership change since 1948, we propose a temporal framework pertaining to the causes and consequences of membership change. Three key theoretical insights emerge from our evidence-based integration: (a) Membership change first disrupts team cognitive, behavioral, and interpersonal processes and states (e.g., transactive memory systems, coordination) but can benefit team performance after teams adapt to form new processes and states; (b) whether and to what extent team performance benefits from membership change is contingent on the magnitude of membership change, requirements of team communication, member adaptation-related attributes, change in team knowledge, skills, abilities, and other characteristics (KSAOs), and team knowledge work; and (c) poor team experiences motivate member departure and may make it challenging for newcomers to join and teams to adapt to membership change. Our review moves team research into new avenues that do not presume stable team membership and shared team properties in understanding team functioning and performance, and outlines key directions to advance integrative theory.
  • How to combine competing logics in managerial teams? The impact of branch founding team hybridity on the 2 growth of Islamic bank branches in Turkey

    Boone, Christophe; Özcan, Serden; Li, Jia (Journal of Management Studies, 2022)
    Hybrid staffing – i.e., composing a workforce with individuals with oppositional institutional logics – is a strategy organizations can use to navigate through complex institutional environments. We propose that hybrid teams led by individuals with the legitimate logic from the perspective of the target audiences (conformist-led hybrids) will outperform all-conformist, non-hybrid teams, and that hybrid teams led by individuals with the contested logic (alien-led hybrids) will underperform non-hybrid teams. Moreover, the performance advantage of conformist-led hybrids will be attenuated by ideological polarization and demographic stability of the embedding community, and the performance disadvantage of alien-led hybrids will be exacerbated by these two community characteristics. We tested our multilevel contingency model with the newly founded Islamic bank branches in Turkey in 2002–19. We found that the conformist-led hybrids had a growth advantage over non-hybrids, and alien-led hybrids had a growth disadvantage, especially when the embedding communities were ideologically polarized. Theoretical implications are discussed.
  • A prediction model for ranking branch-and-bound procedures for the resource-constrained project scheduling problem

    Guo, Weikang; Vanhoucke, Mario; Coelho, José (European Journal of Operational Research, 2022)
    The branch-and-bound (B&B) procedure is one of the most widely used techniques to get optimal solutions for the resource-constrained project scheduling problem (RCPSP). Recently, various components from the literature have been assembled by Coelho and Vanhoucke (2018) into a unified search algorithm using the best performing lower bounds, branching schemes, search strategies, and dominance rules. However, due to the high computational time, this procedure is only suitable to solve small to medium-sized problems. Moreover, despite its relatively good performance, not much is known about which components perform best, and how these components should be combined into a procedure to maximize chances to solve the problem. This paper introduces a structured prediction approach to rank various combinations of components (configurations) of the integrated B&B procedure. More specifically, two regression methods are used to map project indicators to a full ranking of configurations. The objective is to provide preference information about the quality of different configurations to obtain the best possible solution. Using such models, the ranking of all configurations can be predicted, and these predictions are then used to get the best possible solution for a new project with known network and resource values. A computational experiment is conducted to verify the performance of this novel approach. Furthermore, the models are tested for 48 different configurations, and their robustness is investigated on datasets with different numbers of activities. The results show that the two models are very competitive, and both can generate significantly better results than any single-best configuration.
  • Private debt fund returns, persistence, and market conditions

    Böni, Pascal; Manigart, Sophie (Financial Analysts Journal, 2022)
    This paper examines net-of-fees private debt fund performance, performance persistence across funds managed by the same general partner and a general partner’s ability to time the market. We document that private debt funds outperform bond and equity market benchmarks in the cross-section, with high performance dispersion across strategies and performance quartiles. Lagged performance significantly affects current fund performance. While ex ante and ex post credit market conditions strongly affect fund performance, general partners can only partially time them.
  • The importance of board risk oversight in times of crisis.

    Dupire, Marion; Haddad, Christian; Slagmulder, Regine (Journal of Financial Services Research, 2022)
    This study investigates the relationship between board risk oversight practices at financial institutions in the EU and systemic risk during the sovereign debt crisis. More specifically, we examine whether European banks and insurance companies that had strong board-level risk oversight in place before the onset of the sovereign debt crisis fared better during the crisis. We construct a risk oversight index based on publicly available, hand-collected data, which captures the strength of the institutions' board-level risk governance practices. We find that financial institutions with stronger board risk oversight prior to the crisis were less vulnerable to the sovereign debt crisis, after controlling for other factors. The results are consistent and economically relevant for SRISK, probability of default, and Delta-CoVaR, three measures of systemic risk that are commonly used in the context of financial institutions.
  • The future of the rewards profession: Let the sleeping beauty rise

    Baeten, Xavier; Van Hove, Marthe (The Journal of Total Rewards, 2022)
    This paper presents and discusses the results of a survey among 126 reward professionals dealing with their profession's current and future state. The study looks at reward managers' current time occupations and competencies. It also takes a future perspective by looking at the importance of the different underlying reward principles for the future. Comparing the current with desired future state, the study provides a gap analysis, showing that employee vitality, the employee reward experience, remote working, recognition, reward communication, and data management are the main domains where skill development is needed. It shows that reward management is entering a new era, an era of more employee centricity.

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