Bargaining under the Illusion of Transparency

This paper studies bargaining with noncommon priors where the buyer projects and exaggerates the probability that her private information may leak to the seller. Letting the buyer name her price first, raises the seller’s payoff above his payoff from posting a price. In seller-offer bargaining, projection implies a partial reversal of classic Coasian comparative static results. Weakening price commitment can benefit the seller and, as long as the relative speed at which imaginary information versus offers arrive does not converge to zero too quickly, frictionless bargaining converges to a fast haggling process which allows the seller to extract all surplus from trade. Bargaining under common prior transparency is instead slow and becomes equivalent to simply waiting. The comparative static predictions are consistent with experimental evidence. (JEL C78, D82)

How Egocentric Biases Maintain Social Anxiety: A Literature Review

Biases and heuristics are mental shortcuts that help guide our daily decision making and cognitive processing but can often lead us astray when they account for inaccurate or misinterpreted information. In this review I aim to understand how the spotlight effect (Gilovich et al., 2000), the overestimation of how attentive others are to our actions, and the illusion of transparency (Gilovich et al., 1998), the overestimation of how easily others can discern our internal state, maintain social anxiety by disrupting the anchoring component these shortcuts rely on. Through a detailed analysis of major research conducted by Brown and Stopa (2007) and Haikal and Hong (2010), I was able to synthesize the empirical findings, discuss clinical implications, and propose future directions for research.

The Role and Effectiveness of Corporate Social Responsibility Assurance in a Mandatory Setting: Professional Accountants’ Perceptions

Firms using corporate social responsibility assurance (or CSRA) recruit an external and independent third party to undertake assurance of the corporate social responsibility (CSR) information that they disclose. From a theoretical perspective, CSRA may play a role within two distinct mechanisms: the signaling mechanism, whereby CSRA signals both the quality of the disclosed information and firms’ CSR performance, and the legitimizing mechanism, whereby CSRA is strategically used as a ‘sophisticated’ compliance exercise. Thus, while the signaling theory predicts that CSRA should provide the expected benefits for its intended users, studies based on the legitimacy theory question the effectiveness of CSRA. In an attempt to disentangle which mechanism is dominant, this study investigates how professional accountants, as assurance providers, perceive CSRA and its effectiveness. We use an online questionnaire survey involving a between-subjects experimental design with 104 French professional accountants as participants. The quantitative and qualitative results suggest, in line with legitimacy theory, that CSRA is used more as a compliance exercise than as an effective signal. We advance the idea that in the French setting, in which CSRA is mandatory, it is used by firms to create the illusion of transparency by complying with disclosure requirements. However, we offer an alternative interpretation by arguing that some professional accountants may in fact seek to resist the implementation of mandatory CSRA using a strategy of justification.

The Material Conditions of Representation

Seethrough Mountain interrupts this journal through a physical shift in paper, texture and scale, and thereby proposes a pause or possible site of hesitation where the reader can consider the qualitative and material aspect of what they hold in their hands. The two works, a drawing and a constructed photograph, each creating the illusion of transparency, orient the reader’s attention to the material support of the images, and institute a shock, so that the reader might see through the representations to their material conditions. Seethrough Mountain draws attention to the nature of varying forms of information, and proposes that both sensual and intellectual awareness are necessary to perceive the real.