• www.duke.edu/˜gpc I n the newsvendor problem a decision maker orders inventory before a one period selling season with stochastic demand. If too much is ordered, stock is left over at the end of the period, whereas if too little is ordered, sales are lost. The expected profit-maximizing order quantity is well known, but little is known about how managers actually make these decisions. We describe two experiments that investigate newsvendor decisions across different profit conditions. Results from these studies demonstrate that choices systematically deviate from those that maximize expected profit. Subjects order too few of high-profit products and too many of low-profit products. These results are not consistent with risk-aversion, risk-seeking preferences, Prospect Theory preferences, waste aversion, stockout aversion, or the consequences of underestimating opportunity costs. Two explanations are consistent with the data. One, subjects behave as if their utility function incorporates a preference to reduce ex-post inventory error, the absolute difference between the chosen quantity and realized demand. Two, subjects suffer from the anchoring and insufficient adjustment bias. Feedback and training did not mitigate inventory order errors. We suggest techniques to improve decision making.

The authors report results from 5 experiments that describe the influence of emotional states on trust. They found that incidental emotions significantly influence trust in unrelated settings. Happiness and gratitude--emotions with positive valence--increase trust, and anger--an emotion with negative valence--decreases trust. Specifically, they found that emotions characterized by other-person control (anger and gratitude) and weak control appraisals (happiness) influence trust significantly more than emotions characterized by personal control (pride and guilt) or situational control (sadness). These findings suggest that emotions are more likely to be misattributed when the appraisals of the emotion are consistent with the judgment task than when the appraisals of the emotion are inconsistent with the judgment task. Emotions do not influence trust when individuals are aware of the source of their emotions or when individuals are very familiar with the trustee.

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The opportunity to profit from dishonesty evokes a motivational conflict between the temptation to cheat for selfish gain and the desire to act in a socially appropriate manner. Honesty may depend on self-control given that self-control is the capacity that enables people to override antisocial selfish responses in favor of socially desirable responses. Two experiments tested the hypothesis that dishonesty would increase when people’s self-control resources were depleted by an initial act of self-control. Depleted participants misrepresented their performance for monetary gain to a greater extent than did non-depleted participants (Experiment 1). Perhaps more troubling, depleted participants were more likely than non-depleted participants to expose themselves to the temptation to cheat, thereby aggravating the effects of depletion on cheating (Experiment 2). Results indicate that dishonesty increases when people’s capacity to exert self-control is impaired, and that people may be particularly vulnerable to this effect because they do not predict it.

Goal setting is one of the most replicated and influential paradigms in the management literature.Hundreds of studies conducted in numerous countries and contexts have consistently demonstrated that setting specific, challenging goals can powerfully drive behavior and boost performance. Advocates of goal setting have had a substantial impact on research, management education, and management practice. In this article, we argue that the beneficial effects of goal setting have been overstated and that systematic harm caused by goal setting has been largely ignored. We identify specific side effects associated with goal setting, including a narrow focus that neglects non-goal areas, a rise in unethical behavior, distorted risk preferences, corrosion of organizational culture, and reduced intrinsic motivation. Rather than dispensing goal setting as a benign, over-the-counter treatment for motivation, managers and scholars need to conceptualize goal setting as a prescription-strength medication that requires careful dosing, consideration of harmful side effects, and close supervision. We offer a warning label to accompany the practice of setting goals.Goals Gone Wild 3 Goals Gone Wild: The Systematic Side Effects of Over-Prescribing Goal Setting For decades, goal setting has been promoted as a halcyon pill for improving employee motivation and performance in organizations. Across hundreds of experiments, dozens of tasks,