London Business School

About: London Business School is a education organization based out in London, England, United Kingdom. It is known for research contribution in the topics: Portfolio & Equity (finance). The organization has 1138 authors who have published 5118 publications receiving 437980 citations. The organization is also known as: LBS.

Playing to win: biological imperatives, self-regulation, and trade-offs in the game of career success

Abstract: The article applies evolutionary theory to the concept of career success, to argue the primacy of objective outcomes, utilities such as status and wealth, and to analyze why the relationship with subjective career success is not stronger. Although there are grounds for expecting subjective evaluations to be sympathetic secondary accompaniments of objective success and failure, there are substantial numbers of paradoxically happy losers and unhappy winners in the career game. These are explored theoretically as adaptive outcomes of self-regulation and sense-making processes. The nature of that game is then explored by a closer examination of the interrelations and decay functions of the major objective success outcomes. This is undertaken as a theoretical exercise, and also by reference to the evidence in the literature. Both approaches support the existence of close linkages among most of these outcomes, though empirical data reveal variations that highlight the importance for careerists to be aware of trade-offs and risks in career strategies. Context mediates these relationships, especially key contingencies such as individual differences, gender, career stage, culture, and business sector. The implications are discussed; in particular the role of careers theory and research in helping to cut through some of the ideological aspects of subjective careers in order to help raise the awareness of actors in the labor market about objective career realities

When cheating would make you a cheater: Implicating the self prevents unethical behavior.

Abstract: In 3 experiments using 2 different paradigms, people were less likely to cheat for personal gain when a subtle change in phrasing framed such behavior as diagnostic of an undesirable identity. Participants were given the opportunity to claim money they were not entitled to at the experimenters’ expense; instructions referred to cheating with either language that was designed to highlight the implications of cheating for the actor’s identity (e.g., “Please don’t be a cheater”) or language that focused on the action (e.g., “Please don’t cheat”). Participants in the “cheating” condition claimed significantly more money than did participants in the “cheater” condition, who showed no evidence of having cheated at all. This difference occurred both in a face-to-face interaction (Experiment 1) and in a private online setting (Experiments 2 and 3). These results demonstrate the power of a subtle linguistic difference to prevent even private unethical behavior by invoking people’s desire to maintain a self-image as good and honest.

Information Policy: Shaping the Value of Agency Relationships

Abstract: We evaluate how changes in information use affect agency relationships. Information asymmetry redistributes value, but imperfect monitoring also encourages agents to take inefficient actions to influence this redistribution, thereby reducing joint agency value. Changing focus, from minimizing principals' costs to maximizing joint agency value, we argue that more monitoring is nof always better, and we explore, through a six-sector framework, how more extensive use of information benefits (or damages) value creation and affects its distribution.

Co‐opetition and Investment for Supply‐Chain Resilience

Abstract: This paper considers the problem of disruption risk management in global supply chains. We consider a supply chain with two participants, who face interdependent losses resulting from supply chain disruptions such as terrorist strikes and natural hazards. The Harsanyi–Selten–Nash bargaining framework is used to model the supply chain participants’ choice of risk mitigation investments. The bargaining approach allows a framing of both joint financing of mitigation activities before the fact and loss-sharing net of insurance payouts after the fact. The disagreement outcome in the bargaining game is assumed to be the result of the corresponding noncooperative game. We describe an incentive-compatible contract that leads to First Best investment and equal ‘‘gain’’ for all players, when the solution is ‘‘interior’’ (as it almost certainly is in practice). A supplier that has superior security practices (i.e., is inherently safer) exploits its informational advantage by extracting an ‘‘information rent’’ in the usual spirit of incomplete information games. We also identify a special case of this contract, which is robust to moral hazard. The role of auditing in reinforcing investment incentives is also examined.

Liquidity and the Post-Earnings-Announcement Drift

Abstract: The post-earnings-announcement-drift is a long standing anomaly that is in conflict with market efficiency. This paper documents that the post-earnings-announcement drift occurs mainly in the highly illiquid stocks. A trading strategy that goes long the high earnings surprise stocks and short the low earnings surprise stocks provides a value-weighted return of 0.14% in the most liquid stocks and 1.60% per month in the most illiquid stocks. The illiquid stocks have high trading costs and market impact costs. Using a multitude of estimates we find that transaction costs account for anywhere from 63% to 100% of the paper profits from the long-short strategy designed to exploit the earnings momentum anomaly. This paper provides support for the argument that transactions costs could be the source of the drift.