Edgar E. Kausel | Pontificia Universidad Catolica de Chile (original) (raw)

Papers by Edgar E. Kausel

Strategic Organization, 2020

We investigate the moderating effect of the business cycle on the positive relationship between C... more We investigate the moderating effect of the business cycle on the positive relationship between CEO overconfidence and firm performance. We propose that the expansion years of the business cycle enhance the positive impact of overconfident CEOs on firms' performance. However, this effect is reduced during recession periods. We analyze the effect of CEO overconfidence on the Return on Equity of publicly listed US firms from 1992 to 2015, a period that includes the bursting of the dot-com bubble in 2001 and the Great Recession of 2008-2009. The empirical findings support the hypotheses that expansion periods increase the positive relationship between overconfident CEOs and firms' performance, but this positive effect weakens during recessions.

Journal of Management, 2020

The present research sought to examine the impact of narcissism, prediction accuracy, and should ... more The present research sought to examine the impact of narcissism, prediction accuracy, and should counterfactual thinking-which includes thoughts such as "I should have done something differ-ent"-on hindsight bias (the tendency to exaggerate in hindsight what one knew in foresight) and perceived learning. To test these effects, we conducted four studies (total n = 727). First, in Study 1 we examined a moderated mediation model, in which should counterfactual thinking mediates the relation between narcissism and hindsight bias, and this mediation is moderated by prediction accuracy such that the relationship is negative when predictions are accurate and positive when predictions are inaccurate after accurate predictions. Second, in Study 2 we examined a moderated sequential mediation model, in which the relation between narcissism and perceived learning is sequentially mediated through should counterfactual thinking and hindsight bias, and importantly, this sequential mediation is moderated by prediction accuracy. In Study 3 we ruled out could coun-terfactual thinking as an alternative explanation for the relationship between narcissism and hind-sight bias. Finally, by manipulating should counterfactual thinking in Study 4, our findings suggest that this type of thinking has a causal effect on hindsight bias. We discuss why exhibiting some hindsight bias can be positive after failure. We also discuss implications for eliciting should coun-terfactual thinking. Our results help explain why narcissists may fail to learn from their experiences.

Journal of Economic Psychology

The outcome bias occurs when people assess others’ decision making process or performance and put... more The outcome bias occurs when people assess others’ decision making process or performance and put an unwarranted weight to their outcomes. This bias has important implications for the judgment and choice as well as the performance appraisal literatures. However, virtually every extant study has been conducted in the lab, likely due to endogeneity concerns in field. Penalty shoot-outs in association football (‘soccer’) offer an interesting way of studying outcome bias, as recent research suggests that their outcome is unrelated to in-game performance. We use Goal (goal.com) to study subjective performance ratings by reporters given to 1157 players in 43 games from important football competitions. Using both multilevel mixed-effects and fixed-effects (within-players design) modeling, we found that winning on penalties was linked to higher performance ratings. This result persisted even after we removed players who took part in the penalty shoot-outs; thus, supporting the idea of outcome bias. We discuss implications for applied settings.

Personality and Individual Differences

Research on escalation of commitment has predominantly been studied in the context of a single de... more Research on escalation of commitment has predominantly been studied in the context of a single decision without consideration for the psychological consequences of escalating. This study sought to examine (a) the extent to which people escalate their commitment to a failing course of action in a sequential decision-making task, (b) confidence and anger as psychological consequences of escalation of commitment, and (c) the reciprocal relationship between escalation of commitment and confidence and anger. Participants were 110 undergraduate students who completed a series of investment decisions regarding a failing endeavor. Results revealed that although a high proportion of individuals escalate through all decisions, the extent to which they escalated decreased with each decision as they were less willing to invest money in the project. Furthermore, as participants escalated, confidence in one's decision decreased and anger increased. Lastly, the analyses revealed that the relationship between escalation and confidence is reciprocal. Escalation was negatively associated with confidence, and confidence predicted escalation in the subsequent decision. These results highlight the importance of considering both the determinants and psychological consequences of escalation of commitment.

https://www.sciencedirect.com/science/article/pii/S0191886918301077, 2018

Several studies have found that facial width-to-height ratio (fWHR) is related to social outcomes... more Several studies have found that facial width-to-height ratio (fWHR) is related to social outcomes, likely due to traits to such as assertiveness and dominance. Other studies have found that assertiveness is important for academic performance, especially in courses evaluated with assessment methods other than exclusively written exams. Building from these studies, we examined whether (a) fWHR was related to academic performance, (b) this relationship was stronger in non-quantitative courses than in quantitative courses, (c) this relationship was stronger for men than for women. We used a sample of 231 students who took 16 courses in order to complete a business and economics degree. Our findings revealed that fWHR predicted academic performance in non-quantitative courses, but did not predict performance in either basic or applied quantitative courses. We also found that this relationship was not moderated by gender. Our findings tend to support the idea that fWHR is related to outcomes typically linked to social traits. We discuss potential mechanisms and avenues for future research.

Overconfidence is an important bias related to the ability to recognize the limits of one’s knowl... more Overconfidence is an important bias related to the ability to recognize the limits of one’s knowledge. The present study examines overconfidence in predictions of job performance for participants presented with information about candidates based solely on standardized tests versus those who also were presented with unstructured interview information. We conducted two studies with individuals responsible for hiring decisions. Results showed that individuals presented with interview information exhibited more overconfidence than individuals presented with test scores only. In a third study, consisting of a betting competition for undergraduate students, larger overconfidence was related to fewer payoffs. These combined results emphasize
the importance of studying confidence and decision-related variables in selection decisions. Furthermore, while previous research has shown that the predictive validity of unstructured interviews is low, this study provides compelling evidence that they not only fail to help personnel selection decisions, but can actually hurt them.

We investigate the role of trait conscientiousness, from the Big Five personality traits, in expl... more We investigate the role of trait conscientiousness, from the Big Five personality traits, in explaining individual saving behavior. Conscientiousness is a disposition to be responsible and pursue non-immediate goals; thus, we expect this trait to positively predict saving behavior. Using a nationally representative survey from Chile, we find the expected effect of conscientiousness on pension and bank savings.

Advice taking is central to making better decisions, but some individuals seem unwilling to use a... more Advice taking is central to making better decisions, but some individuals seem unwilling to use advice.
The present research examined the relationship between narcissism and advice taking. In particular,
we studied the mechanisms that explain why narcissists are dismissive of advice. In three studies, we
found that narcissism and advice taking were negatively related, but only when measuring narcissism
at the state level or when controlling for extraversion at the trait level. We also tested two mechanisms
and found that confidence did not mediate the relationship; disregard for others did. In Study 4, participants
were placed under different accountability pressures to affect self-enhancement. Results showed
that the narcissism–advice taking relationship was strongly negative under process accountability. Taken
together, these results suggest that narcissists eschew advice not because of greater confidence, but
because they think others are incompetent and because they fail to reduce their self-enhancement when
expecting to be assessed.

Purpose – The purpose of this paper is to offer the author’s view about the conceptualization of ... more Purpose – The purpose of this paper is to offer the author’s view about the conceptualization of scholarly impact, and some of the challenges young Iberoamerican scholars face to have an impact. Design/methodology/approach – This is a personal account based on previous theory and the author’s personal experience.
Findings – The paper presents a short critique of the conceptualization and measurement of scholarly impact, and introduces dimensions and challenges of being a scholar in Iberoamerica.
Originality/value – The paper offers an analytical perspective of scholarly impact in Iberoamerica and offers some insights to help overcome different challenges.

International Journal of Selection and Assessment, Dec 2014

Although the field of personnel selection has amounted around 100 years of research, there has be... more Although the field of personnel selection has amounted around 100 years of research, there has been an overrepresentation of American and Western European samples in these studies. In particular, samples from Latin America have been almost entirely absent from industrial and organizational psychology journals. Thus, it is unknown whether well-documented findings, such as the prediction of job performance based on general mental ability and conscientiousness, replicate in this region. This research intended to address this gap in the literature with three studies conducted in Chilean organizations, using different research designs, and different operationalizations of predictors and criteria. Results are generally consistent with previous studies, showing that conscientiousness and general mental ability significantly predict job performance in these Chilean samples.

Jounal of Organizational Behavior, May 2013

This article proposed and tested a multilevel and interactional model of individual innovation in... more This article proposed and tested a multilevel and interactional model of individual innovation in which weekly moods represent a core construct between context, personality, and innovative work behavior. Adopting the circumplex model of affect, innovative work behavior is proposed as resulting from weekly positive and high-activated mood. Furthermore, drawing on the Big Five model of personality and cognitive appraisal theory, openness to experience and support for innovation are proposed as individual and contextual variables, respectively, which interplay in this process. Openness to experience interacts with support for innovation leading to high-activated positive mood. Furthermore, openness interacts with these feelings leading to greater levels of innovative work behavior. Overall, the model entails a moderated mediation process where weekly high-activated positive mood represents a crucial variable for transforming contextual and individual resources into innovative outcomes. These propositions were tested and supported using a diary methodology and multilevel structural equation modeling, on the basis of 893 observations of innovative work behavior and moods nested in 10 weekly waves of data. This information was collected from 92 individuals of diverse occupations employed in 73 distinct companies. Theoretical and practical implications are discussed. Copyright © 2013 John Wiley & Sons, Ltd.

Journal of Organizational Behavior, Feb 2014

This article proposed and tested a multilevel and interactional model of individual innovation in... more This article proposed and tested a multilevel and interactional model of individual innovation in which weekly moods represent a core construct between context, personality and innovative work behavior. Adopting the Valence and Arousal Circumplex Model of Affect innovative work behavior is proposed as resulting from weekly positive and high-activated mood. Furthermore, drawing on the Big Five Model of personality and Cognitive Appraisal Theory, openness to experience and support for innovation are proposed as individual and contextual variables respectively, which interplay in this process. Openness to experience interacts with support for innovation leading to high-activated positive mood. Furthermore, openness interacts with these feelings leading to greater levels of innovative work behavior.
Overall, the model entails a moderated mediation process where weekly positive high activated mood represent a crucial variable for transforming contextual and individual resources into innovative outcomes. These propositions were tested and supported using a diary methodology and multilevel structural equation modeling, based on 893 observations of innovative work behavior and moods nested in 10 weekly waves of data. This
information was collected from 92 individuals of diverse occupations employed in 73 distinct companies. Theoretical and practical implications are discussed.

Judgment and Decision Making at Work (SIOP Organizational Frontiers Series), Sep 5, 2013

The majority of employee selection research is focused on the development, assessment, and relati... more The majority of employee selection research is focused on the development, assessment, and relative predictive efficacy of predictor constructs and methods (e.g., Schmidt & Hunter, 1998). Also receiving considerable research attention are validation support for selection strategies (Schmitt & Sinha, 2011) and applicant reactions to selection systems (Hauskenecht, Day, & Thomas, 2004). Comparatively less work, however, has focused on the decisions that employers make during the selection process. This is despite the fact that virtually all employee selection scenarios come down to decisions about applicants, such as the decision to invite an applicant for an on-site interview, to reject the candidate from further consideration, or to make an employment offer. Thus, the lack of attention to the specific decisions is somewhat unfortunate, both from a scientific perspective and a practical one.
Fortunately, there is an enormous amount of research within the area of judgment and decision making (JDM) that has already begun to provide much insight into employee selection. JDM is an exciting and interdisciplinary field that is highly relevant to employee selection decisions (e.g., Highhouse, 1997, 2001; Dalal, Bonaccio, Ilgen, Highhouse, Mohammed, & Slaughter, 2010). The goal of this chapter is to summarize what we know about decision making that can help us to understand why selection decision makers behave the way they do, as well as the outcomes that result from such behavior. The chapter is divided into three sections. In the first section, we outline some strategies that selection decision makers use and why they use them. People tend to place substantial weight on intuitive judgment, despite a preponderance of evidence that shows that the performance of statistical formulas far exceeds the performance of intuition for predicting job performance (Kleinmutz, 1990). We offer several reasons for why this occurs. In the second section, we discuss some negative consequences of relying on intuition. Finally, in the third section, we discuss some practical considerations: How can we improve employee-selection decision making? We discuss how research findings might be communicated in a manner that is more persuasive to hiring managers, as well as our ideas about how to compensate for the fact that managers are unlikely to fully surrender their use of intuition when making selection decisions.

Journal of Economic Psychology, Feb 2014

The present study examined people’s expectations of how incidental emotions could shape others’ ... more The present study examined people’s expectations of how incidental emotions could shape
others’ reciprocity in trusting situations, whether these expectations affect people’s own
behavior, and how accurate these expectations are. Study 1 explored people’s beliefs about the
effects of different incidental emotions on another person’s trustworthiness in general. In Studies
2 and 3, senders in trust games faced angry, guilty, grateful, or emotionally neutral responders.
Participants who were told about their counterpart’s emotional state acted consistently with their
beliefs about how these emotions would affect the other’s trustworthiness. These beliefs were
not always correct, however. There were significant deviations between the expected behavior of
angry responders and such responders’ actual behavior. These findings raise the possibility that
one player’s knowledge of the other’s emotional state may lead to action choices that yield poor
outcomes for both players.

Judgment and Decision Making, Mar 2013

Two experiments examined the impact on the decoy effect of making salient the possibility of post... more Two experiments examined the impact on the decoy effect of making salient the possibility of post-decision regret, a manipulation that has been shown in several earlier studies to stimulate critical examination and improvement of decision process. Experiment 1 (N = 62) showed that making regret salient eliminated the decoy effect in a personal preference task. Experiment 2 (N = 242) replicated this finding for a different personal preference task and for a prediction task.
It also replicated previous findings that external accountability demands do not reduce, and may exacerbate, the decoy effect. We interpret both effects in terms of decision justification, with different justification standards operating for different audiences. The decoy effect, in this account, turns on accepting a weak justification, which may be seen as adequate for an external audience or one’s own inattentive self but inadequate under the more critical review triggered by
making regret possibilities salient. Seeking justification to others (responding to accountability demands) thus maintains or exacerbates the decoy effect; seeking justification to oneself (responding to regret salience) reduces or eliminates it. The proposed mechanism provides a theoretical account both of the decoy effect itself and of how regret priming provides an effective debiasing procedure for it.

Wiley Interdisciplinary Reviews: Cognitive Science, Jul 2012

Many decisions are interactive; the outcome of one party depends not only on its decisions or on ... more Many decisions are interactive; the outcome of one party depends not only on its decisions or on acts of nature but also on the decisions of others. Standard game theory assumes that individuals are rational, self-interested decision makers—that is, decision makers are selfish, perfect calculators, and flawless executors of their strategies. A myriad of studies shows that these assumptions are problematic, at least when examining decisions made by individuals. In this article, we review the literature of the last 25 years on decision making by groups. Researchers have compared the strategic behavior of groups and individuals in many games: prisoner's dilemma, dictator, ultimatum, trust, centipede and principal–agent games, among others. Our review suggests that results are quite consistent in revealing that group decisions are closer to the game-theoretic assumption of rationality than individual decisions. Given that many real-world decisions are made by groups, it is possible to argue that standard game theory is a better descriptive model than previously believed by experimental researchers. We conclude by discussing future research avenues in this area.

The purpose of this research was to determine whether individuals could use the decoy effect to i... more The purpose of this research was to determine whether individuals could use the decoy effect to influence others' choices. In study 1, undergraduates (n = 50) and executive master's of business administration (EMBA) students (n = 24) read an employee selection scenario in which they were randomly assigned to prefer one of two candidates that were equal in overall attractiveness, but that had different strengths and weaknesses. They were then asked to choose one of three inferior candidates to add to the choice set that would make their preferred candidate more likely to be chosen by other decision makers. The “correct” inferior candidate was asymmetrically dominated—dominated by one of the two existing candidates, but not the other. Participants chose the “correct” decoy candidate at better than chance levels. In study 2, undergraduates and EMBA students (total n = 66) completed a set of four decision tasks, in which they were asked to choose from potential decoy alternatives that would highlight their preferred job candidate or the product they preferred to sell to a customer. Participants again chose the correct option at better than chance levels. When participants provided free-response reasons for their choices, these responses indicated a fairly strong recognition of the influential nature of creating a dominating relationship. Implications for understanding this effect and how it may be used by hiring managers, sales personnel, and others who attempt to influence others people's decisions at work, are discussed.

We investigated the interactive effects of regulatory focus priming and message framing on the pe... more We investigated the interactive effects of regulatory focus priming and message framing on the perceived fairness of unfavorable events. We hypothesized that individuals’ perceptions of fairness are higher when they receive a regulatory focus prime (promotion versus prevention) that is congruent with the framing of an explanation (gain versus loss), as opposed to one that is incongruent. We also hypothesized that these effects are mediated by counterfactual thinking. Three studies revealed that primed regulatory fit (promotion/gain or prevention/loss) led to higher levels of justice perceptions than regulatory misfit (promotion/loss or prevention/gain). Additionally, “could” and “should” counterfactuals partially mediated the relationship between regulatory fit and interactional justice (Study 3).

Organizational Behavior and Human Decision Processes, 2011

Strategic Organization, 2020

Journal of Management, 2020

Journal of Economic Psychology

Personality and Individual Differences

https://www.sciencedirect.com/science/article/pii/S0191886918301077, 2018

International Journal of Selection and Assessment, Dec 2014

Jounal of Organizational Behavior, May 2013

Journal of Organizational Behavior, Feb 2014

This article proposed and tested a multilevel and interactional model of individual innovation in... more This article proposed and tested a multilevel and interactional model of individual innovation in which weekly moods represent a core construct between context, personality and innovative work behavior. Adopting the Valence and Arousal Circumplex Model of Affect innovative work behavior is proposed as resulting from weekly positive and high-activated mood. Furthermore, drawing on the Big Five Model of personality and Cognitive Appraisal Theory, openness to experience and support for innovation are proposed as individual and contextual variables respectively, which interplay in this process. Openness to experience interacts with support for innovation leading to high-activated positive mood. Furthermore, openness interacts with these feelings leading to greater levels of innovative work behavior.
Overall, the model entails a moderated mediation process where weekly positive high activated mood represent a crucial variable for transforming contextual and individual resources into innovative outcomes. These propositions were tested and supported using a diary methodology and multilevel structural equation modeling, based on 893 observations of innovative work behavior and moods nested in 10 weekly waves of data. This
information was collected from 92 individuals of diverse occupations employed in 73 distinct companies. Theoretical and practical implications are discussed.

Judgment and Decision Making at Work (SIOP Organizational Frontiers Series), Sep 5, 2013

Journal of Economic Psychology, Feb 2014

Judgment and Decision Making, Mar 2013

Wiley Interdisciplinary Reviews: Cognitive Science, Jul 2012

Organizational Behavior and Human Decision Processes, 2011