USC Marshall

This paper examines how people price the resale of durable goods in systematically biased ways. We show across four studies that the anchoring effect of durable goods’ prior sales prices on subsequent valuations is discontinuous at psychologically-salient round number reference points (e.g., $10,000 increments) because these numbers create qualitative differences in how people perceive values below them vs. values at/above them. Resellers set disproportionately larger subsequent prices when previous prices move from just below round-number thresholds (e.g., $349,000) to those at or just above these thresholds (e.g., $351,000). The findings show that buyers who pay a price just below a round number therefore may sacrifice money because they receive disproportionately less when reselling the good. Market forces only partially attenuate this pricing bias, but valuator experience seems to play moderating role. Archival data shows that home buyers who previously paid just under a $10,000 reference point subsequently listed their homes for about 1.8 percent (over $3700) less on average than did buyers selling comparable homes who previously paid at or above a round number threshold. This drop is observable controlling for home characteristics and the general relationship between previous and current prices. Three experimental studies looking at housing and used car markets replicate these findings, highlight the mechanism, and increase confidence in causality. Market mechanisms and the negotiation process attenuate discontinuities by about 30%, but lower initial listing prices persist to final sales prices. We find additional weak evidence suggesting valuator experience may attenuate intergenerational pricing bias.

Victims of many types of transgressions may delay voicing accusations of wrongdoing. Across seven studies and a within-paper meta-analysis, we examine whether these victims pay a social cost and, if so, how they can reduce it. We find that people perceive victims who delay (vs. do not delay) voicing accusations to have less psychological standing to accuse their transgressors. People therefore perceive such victims as lacking in integrity-based trustworthiness and, often, in benevolence-based trustworthiness as well. People consequently report greater intentions to avoid such victims, trust them less in an economic game with money at stake, and are less willing to hire them. The findings collectively highlight the difficulty that victims face in moving from silence to voice. We further draw on the triangle model of excuses (e.g., Schlenker, 1997) to identify attributions that attenuate the social cost of victims’ delayed accusations.

In this research, we challenge the belief that positive signals of morality always increase job candidates’ appeal to interviewers. In four experiments with both experienced and novice interviewers, we find that signals of the candidates’ morality interact with the nature of the industry such that candidates who send signals of morality are less likely to be selected for jobs in a morally tainted industry, compared to neutral candidates. Moderated mediation analyses indicate that this effect is driven by a perceived lack of job fit (Experiments 1 and 2). Results of Experiment 3 indicate that this moderation effect is limited to candidates who signal morality—candidates applying for jobs in morally tainted industries who signal immorality do not enjoy a competitive advantage over moral or morally neutral candidates. Finally, the framing of the organization, that is, whether critical aspects of the organization are presented as more morally or economically oriented, within morally tainted industries helps mitigate the penalizing effects interviewers put on candidates who signal their morality—a moral frame eliminates this negative effect whereas an economic frame does not (Experiment 4). Together, these studies indicate that a job candidate's morality is a complicated and important quality that can profoundly affect his/her ratings of hireability.

Management scholars have typically regarded the widespread instances of hypocrisy across business, religious, and political institutions to be motivated and strategic. We suggest, however, that hypocrisy may stem not only from people’s motivation to interpret and utilize information in a self-serving manner, but also from fundamental differences in people’s access to that information itself. More specifically, we present a multi-stage Theory of Ethical Accounting (TEA) that describes how this differential access to information, specifically about the self vs. others, can create an interrelated series of cognitive distortions in how people account for the same unethical behavior. TEA posits that such distortions can allow people to believe they are being fair and consistent when appraising the morality of the self and others, while actually being inconsistent in how they do so, and describes how this can ultimately make it harder to address not only hypocrisy but unethical behavior more broadly in organizations.

A single transgressor sometimes harms more than just 1 victim. We examine a previously undocumented
social cost of forgiving following these multiple-victim transgressions. We find that nonforgiving victims
believe that other victims who forgive the common transgressor make their decisions to withhold
forgiveness appear ungenerous. Faced with this threat, nonforgiving victims report that other forgiving
(vs. nonforgiving) victims have overclaimed their standing to forgive the common transgressor and
consequently perceive these forgiving victims as demonstrating a lack of benevolence toward them.
Nonforgiving victims also perceive forgiving victims to have relatively little integrity. We test these
social costs of forgiving in the field and in the lab across 7 studies plus a meta-analysis of 5 of those
studies. We also identify 1 route by which forgiving victims can attenuate the social costs they face: they
can affirm other victims’ decisions to withhold forgiveness