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1 – 10 of over 2000Nicoleta Meslec and Ishani Aggarwal
The purpose of this paper is twofold. First, it aims to isolate a new mechanism (i.e. underestimation judgments) through which gender (percentage of women in a group in…
Abstract
Purpose
The purpose of this paper is twofold. First, it aims to isolate a new mechanism (i.e. underestimation judgments) through which gender (percentage of women in a group in particular) influences group synergy, or the extent to which groups are able to perform better than their composing members. Second, it aims to explore further the extent to which underestimation judgments are prone to change and adjustment as a result of participating in social contexts, such as groups.
Design/methodology/approach
The sample consisted of 278 student participants (161 women), nested within 66 groups. Participants performed a series of cognitive tasks with correct answers and had to rate how confident they were in the answers given.
Findings
Gender composition in terms of percentage of women is positively related to underestimation within groups and this negatively affects group synergy. The data also show that women underestimate less or improve the accuracy of their performance self-evaluation judgments after group interaction, thereby highlighting a factor (group experience) that helps women gain greater accuracy about their performance.
Research limitations/implications
Further research could explore the extent to which underestimation judgments are present in various organizational contexts and the extent to which they are prone to change.
Practical implications
Organizations and universities are invited to reflect on the relevance of self-beliefs (and underestimation in particular) on the accomplishment of cognitive tasks. Practices and policies should be geared toward the enhancement of self-knowledge accuracy, with a particular focus on the female population.
Originality/value
This paper identifies a new mechanism through which gender influences group synergy: underestimation judgments.
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Milton Sousa and Dirk van Dierendonck
The purpose of this paper is to provide a new interpretation of underestimation for the particular case of servant leadership, contending the ideas that underestimation is caused…
Abstract
Purpose
The purpose of this paper is to provide a new interpretation of underestimation for the particular case of servant leadership, contending the ideas that underestimation is caused by lack of self-awareness or low self-esteem, and that self-other agreement is a necessary condition for self-awareness. Additional reflections are provided on the development of servant leadership in organizations.
Design/methodology/approach
A revision of the self-other agreement literature was done, with a focus on underestimation. The theoretical foundations of servant leadership were analysed. The main hypothesis was derived, including a set of supporting propositions. An empirical study was conducted based on a polynomial regression and 3D surface analysis, including 36 managers and 160 followers.
Findings
Underestimation was the strongest predictor of servant leadership effectiveness in generating psychological empowerment amongst followers. The theoretical revision provides arguments to support the claim that servant leaders underestimate themselves because of their humility and valuing of others.
Practical implications
With the increasing adoption of servant leadership, this study supports the need to develop specific processes for detecting, assessing, and developing servant leaders in organizations. Additional care is necessary on the interpretation of self-other ratings through 360-degree instruments in light of the leadership model being considered.
Originality/value
It is the first empirical study within the self-other leadership agreement that incorporates servant leadership. It provides an alternative explanation of underestimation for servant leaders. The paper also provides a reflection on the practical implications of underestimation for developing servant leadership in organizations.
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One component of revenue forecast error has been attributed to the phenomena of consistent underestimation bias due asymmetrical loss. Because underestimation of revenue forecast…
Abstract
One component of revenue forecast error has been attributed to the phenomena of consistent underestimation bias due asymmetrical loss. Because underestimation of revenue forecast results in less loss to forecasters than overestimations, there appears to be a bias for forecasters to underestimate revenue forecasts. This paper confirms this hypothesis. Additionally, with the greater usage of national forecasting organizations that provide economic forecasts on which revenue forecasts are based, a secondary source of forecaster bias may be present in many state level forecasts. This hypothesis is supported by the increase in number of states using such organizations and a decrease in the standard deviation of the annual mean percentage state forecast error.
Bjorn Andersen, Knut Samset and Morten Welde
The purpose of this paper is to adopt an in-depth perspective on cost estimation, from the development of the initial idea until the budget is agreed, to obtain new insights into…
Abstract
Purpose
The purpose of this paper is to adopt an in-depth perspective on cost estimation, from the development of the initial idea until the budget is agreed, to obtain new insights into issues of underestimation at the front-end.
Design/methodology/approach
The study uses a small sample of projects with exceptional increases in cost estimates during the front-end phase. The authors analyzed the magnitude of cost increases and possible reasons for them.
Findings
The paper concludes that underestimation in the front-end phase was significant in the sample and poses a serious problem in that suboptimal projects are approved. The causes of underestimation include underestimating risk, overestimating opportunities, inadequate estimation methods and skills, reliance on weak information, and strategic/deliberate scope creep and division of projects.
Research limitations/implications
The study builds on a small sample, and hence further studies should be undertaken to verify whether the findings are generalizable.
Practical implications
The sample shows that the projects with the most unrealistic early estimates have disputable relevance. The paper suggests a number of recommendations that might help to counter the problem of unrealistic early cost estimates, which in turn, might allow suboptimal projects to be funded.
Originality/value
The underestimation of costs at the front-end is grossly neglected in the literature compared with whether costs comply with the budget. While cost overruns are an indication of failure in terms of the project’s tactical performance, the contention is that the up-front underestimation of costs might result in an inferior project being selected and thus affect the strategic performance of the project.
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Ziang Wang and Toritseju Begho
The global rise in obesity can be closely linked to excessive calorie consumption and misperceptions regarding food intake. Thus, the purpose of this paper is to review the…
Abstract
Purpose
The global rise in obesity can be closely linked to excessive calorie consumption and misperceptions regarding food intake. Thus, the purpose of this paper is to review the existing literature to have a better understanding how heuristic cues – mental shortcuts used for decision-making – impact calorie underestimation and consequently lead to unhealthy eating habits.
Design/methodology/approach
A search was conducted across multiple databases with priority given to studies in developed countries that provided insights into the cognitive processes behind food choices, the application of specific heuristics, and the association with eating behaviours. Articles were also selected based on their methodological quality.
Findings
The main findings are that the dichotomous categorization of foods as healthy or unhealthy can result in underestimating the calorie content in those foods perceived as healthy. Although nutrition claims, health claims and campaigns help in the fight against obesity, there is also the risk that consumers’ reliance on heuristic-based decision-making could aggravate the problem because a misinterpretation or misrepresentation could lead to calorie underestimation and overeating.
Practical implications
To establish effective behavioural interventions for obesity prevalence -, it is critical for interventions and policies to understand how consumers perceive calorie content and how they interpret claims on food marketing or packaging. Recognizing and addressing these heuristic-driven biases and understanding the factors influencing food choices are crucial for encouraging healthier eating habits.
Originality/value
To the best of the authors’ knowledge, this paper is the only review to date that consolidates research on the topic, drawing from multiple disciplines.
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This paper seeks to review the reasons for which Saddam's regime intended to destroy and eliminate Kuwait's entire oil infrastructure before and after the Iraqi invasion of…
Abstract
Purpose
This paper seeks to review the reasons for which Saddam's regime intended to destroy and eliminate Kuwait's entire oil infrastructure before and after the Iraqi invasion of Kuwait. The underestimation of oil wells that would be torched by Iraqi forces is also discussed in this paper.
Design/methodology/approach
To approach the scope of this paper, the intentions and the practical evidence of such sabotage are pointed out. Efforts to rescue Kuwait's oil wells in addition to planning for the expected catastrophe are highlighted. The plausible reasons that made such underestimation unclear are elaborated.
Findings
The instructions included in the Iraqi documents showed undoubtedly that the sabotage operation was not a random last‐minute attempt to destroy the oil wells, but it was a carefully supervised and well planned endeavor to completely destroy Kuwait's oil infrastructure. Owing to those efforts and planning, more than 100 oil wells were rescued throughout Kuwait. Due to such underestimation Kuwait suffered severe losses both to its oil industry and to its ecological system.
Research limitations/implications
Since the reasons for the lower estimates of oil wells, torched by Iraqi troops, to a maximum of 100‐150 wells were unclear, this paper attributes Kuwait's economic losses and environmental degradation to such underestimation and suggests more investigations on this issue.
Practical implications
Kuwait's catastrophe brought the attention to environmental concerns that should receive immediate consideration, while the scorched‐earth tactic applied in Kuwait and the resulting environmental disaster led to a positive reaction by the international community and spawned a new environmental treaty at the regional level.
Originality/value
This is the first paper that addresses the underestimation of Kuwait's oil disaster. The conflagration in Kuwait demonstrated the danger in conducting large‐scale modern combat in an environmentally fragile area, and shows how exposed all oil‐producing nations are to this type of environmental and economic disaster in the future.
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Béatrice Parguel, Annalisa Fraccaro and Sandrine Macé
Going beyond odd and even prices, this paper aims to explore the rationale behind the widespread practice of setting prices ending in “50” or “80” in the luxury industry. The…
Abstract
Purpose
Going beyond odd and even prices, this paper aims to explore the rationale behind the widespread practice of setting prices ending in “50” or “80” in the luxury industry. The authors argue that when they set such prices, managers agree to reduce their profit margin to limit the anticipated guilt luxury consumers associate with luxury shopping while also protecting their brand luxury. The authors label these prices compromise prices and formally define compromise pricing as the practice of choosing a price’s ending so that the price falls below (but not just below) a round number to boost sales without damaging brand luxury.
Design/methodology/approach
Following the observation of the overrepresentation of prices ending in “50” and “80” in the luxury clothing category, an experiment explores the impact of compromise prices on anticipated guilt and brand luxury in the luxury watch category. Then, to identify when luxury pricing managers typically favor compromise prices, multinomial regressions investigate prices collected on two online luxury fashion retailers for the luxury clothing and handbag categories.
Findings
Compromise prices reduce the anticipated guilt luxury consumers associate with luxury shopping compared with even prices while enhancing brand luxury compared with odd prices and interestingly, with even prices also. This finding gives rationale to luxury managers’ preference for compromise prices in the ninth hundred (i.e. €X950, €X980), especially for higher-priced products, i.e. when the potential for price underestimation and/or the risk of damaging brand luxury are more important.
Originality/value
This research contributes to the field of luxury pricing by providing evidence to an original price-ending practice, coined compromise pricing, which consists in agreeing to a slight reduction in prices and unit margin to protect brand luxury.
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Guowei Zhu, George Chryssochoidis and Li Zhou
This paper aims to address how adding food ingredients to a packaged base food affects consumers’ calorie estimation of the new augmented product.
Abstract
Purpose
This paper aims to address how adding food ingredients to a packaged base food affects consumers’ calorie estimation of the new augmented product.
Design/methodology/approach
The four performed experiments and analyses of variance demonstrate an underlying psychological mechanism, explained below.
Findings
Results show that the healthiness of the added food ingredient (AFI) does not matter if the base food is healthy, and consumers’ calorie estimates of the augmented packaged food product are accurate. When, however, the food base is unhealthy, and the AFI is healthy, consumers underestimate the new product calories. This underestimation effect increases further when the healthy ingredients multiply. This underestimation effect endures when these ingredients are presented in a visual form, but it becomes smaller when these ingredients are presented in a verbal form. A justification mechanism is relevant.
Research limitations/implications
Further research should test across the broader range of the food product matrix. There is a great diversity of AFI presentations, and further research may deal with the impact of AFIs of these different forms on consumers’ calorie estimation and healthiness perceptions. Research may also test sensory-arousing mechanisms that can help understand how consumers perceive the calories of the augmented food.
Practical implications
The findings suggest that consumers should be cautious of the judgment bias caused by the presence of an AFI on food packages and raise their awareness regarding nutrition implications and dietary effects. From the perspective of food manufacturers, although adding healthy AFIs to unhealthy base foods may increase consumers’ purchase intention and bring higher profits, it may not be sustainable as a marketing strategy in the long term and has immediate ethical implications.
Social implications
Policymakers should introduce voluntary schemes to monitor and restrict the improper presentation of AFIs, aiming to rule out the abuse of healthy AFIs on unhealthy packaged food.
Originality/value
This work offers three major original and valuable contributions. It explains the effects of AFIs on calorie estimation and consumer healthiness perceptions in a context not studied before, namely, packaged food products. Next, it advances the literature on consumer judgment error and heuristics concerning product package attributes. As adding ingredients is integral to product line extension decisions, the results also clarify how marketing can safeguard firm social responsibility in combating obesity.
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The purpose of this paper is to examine the long-run survival of earnings fixated traders.
Abstract
Purpose
The purpose of this paper is to examine the long-run survival of earnings fixated traders.
Design/methodology/approach
This paper builds a theoretical model of a competitive securities market where both rational traders and earnings fixated traders receive an informational signal about the asset payoff before any trade occurs. Since earnings fixated traders underestimate the mean and variance of the risky asset payoff, earnings fixated traders is shown to make less expected profits than rational traders.
Findings
If traders’ types replicate according to the relative profitability of their trading strategies, then earnings fixated traders will disappear in the long run. The results of this paper provide analytical support to Tinic’s (1990) intuition about the eventual disappearance of earnings fixated traders.
Research limitations/implications
In the literature, the underestimation of risk is popularly viewed as the cause of irrational traders being better able to exploit the misvaluations (created by noise traders) than rational traders. Hence, it favors the survival of irrational traders over rational traders. However, this paper disapproves this intuition in the informational environment of the competitive securities market.
Practical implications
The market environment plays a crucial role in determining the long-run survival of irrational traders.
Originality/value
This paper is the first to present a theoretical result showing that in this informational environment of the competitive securities market, the underestimation of risk by irrational traders does not give them advantage over rational traders in exploiting the misvaluations (created by noise traders) as it does in Callen and Luo (2011) and Hirshleifer and Luo (2001).
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The relationships between moral leadership, transformational, transactional, and laissez‐faire leaderships, and certain outcomes were studied using a sample of 116 managers of a…
Abstract
The relationships between moral leadership, transformational, transactional, and laissez‐faire leaderships, and certain outcomes were studied using a sample of 116 managers of a large manufacturing organization in eastern India. Results reveal that transformational leadership partially mediates moral leadership’s relationship with follower’s extra effort and satisfaction, and leader’s effectiveness, and it fully mediates moral leadership’s relationship with leader’s power. Based on whether leader’s self‐rating was more than, same as, or less than follower’s rating of leader’s transformational leadership, leader‐follower dyads were classified into three categories – overestimation, agreement, and underestimation. Findings show that moral leadership is lower in overestimation than in agreement, and is lower in agreement than in underestimation. Correlation between moral leadership and power is also the highest in the case of underestimation. Leader’s power, however, does not differ across categories.
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