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Full-Text Articles in Business
Why, How, And When Divergent Perceptions Become Dysfunctional In Organizations: A Motivated Cognition Perspective, Zhanna Lyubykh, Laurie J. Barclay, Marion Fortin, Michael R. Bashshur, Malika Khakhar
Why, How, And When Divergent Perceptions Become Dysfunctional In Organizations: A Motivated Cognition Perspective, Zhanna Lyubykh, Laurie J. Barclay, Marion Fortin, Michael R. Bashshur, Malika Khakhar
Research Collection Lee Kong Chian School Of Business
Decades of research has demonstrated that people can arrive at starkly different perceptions in the same social situations. Divergent perceptions are not inherently dysfunctional. However, if divergent perceptions are not managed effectively, they can have deleterious effects that can undermine functioning in the workplace. Drawing on a motivated cognition perspective, we outline why divergent perceptions may emerge as well as overview the benefits and drawbacks of divergent perceptions in organizational contexts. Next, we highlight the complexities associated with divergent perceptions in the workplace, including why, how, and when divergent perceptions may become dysfunctional. We also showcase theoretical insights from a …
Third Party Moral Hazard And The Problem Of Insurance Externalities, Gideon Parchomovsky, Peter Siegelman
Third Party Moral Hazard And The Problem Of Insurance Externalities, Gideon Parchomovsky, Peter Siegelman
All Faculty Scholarship
Insurance can lead to loss or claim-creation not just by insureds themselves, but also by uninsured third parties. These externalities—which we term “third party moral hazard”—arise because insurance creates opportunities both to extract rents and to recover for otherwise unrecoverable losses. Using examples from health, automobile, kidnap, and liability insurance, we demonstrate that the phenomenon is widespread and important, and that the downsides of insurance are greater than previously believed. We explain the economic, social and psychological reasons for this phenomenon, and propose policy responses. Contract-based methods that are traditionally used to control first-party moral hazard can be welfare-reducing in …