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Price and Quality Decisions by Self-Serving Managers

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  • Halbheer , Daniel
  • Bertini , Marco
  • Koenigsberg, Oded

Abstract

This research studies the possibility that managers attribute firm performance to price and quality decisions in a self-serving manner: they tend to credit success in the market to the product characteristic that matches the commercial orientation of the business, but blame failure on the other. The problem with this reasoning is that managers then carry out adjustments based on biased information, which is suboptimal. The paper first models the phenomenon to clarify the cost of self-serving attributions to a firm. It then reports experiments that provide empirical support for the theory.

Suggested Citation

  • Halbheer , Daniel & Bertini , Marco & Koenigsberg, Oded, 2016. "Price and Quality Decisions by Self-Serving Managers," HEC Research Papers Series 1142, HEC Paris.
    • Handle: RePEc:ebg:heccah:1142
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    References listed on IDEAS

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    Cited by:

    1. Diyana Boteva, 2022. "Price and Distribution Policy of Seaside Holiday Hotels on the Bulgarian Black Sea Coast in the Conditions of the COVID Crisis," Izvestia Journal of the Union of Scientists - Varna. Economic Sciences Series, Union of Scientists - Varna, Economic Sciences Section, vol. 11(1), pages 102-111, April.

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    Keywords

    Causal inference; self-serving bias; managerial decision-making;
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