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Is this really the ‘most dangerous man in Germany’?IWHThe Spectator, August 23, 2026
This study examines why people engage in unethical pro-organizational behavior (UPB) by focusing on an overlooked mechanism: the mere fact of being a subordinate at the workplace. To establish a causal relationship, we conducted an online experiment with 615 full-time employees. We primed participants with private versus work-related contexts before instructing them to follow a rule that was beneficial for the organization but potentially unethical. We find that individuals high in power distance orientation engage to a greater extent in UPB after being primed on their work-related identity. Our results further emphasize that empowering leadership can mitigate this effect: For participants high in power distance, empowering messages eliminated the priming effect; their UPB levels matched those in the private control group. Thus, our study makes three key contributions: First, we add to the discussion of UPB antecedents. Second, we identify organizations that may be particularly vulnerable. Third, we point to strategies that could reduce UPB.
We study how individuals' perceptions of current and future levels of income inequality change during periods of expansionary fiscal policy. In a randomized controlled trial (RCT), we provide information on fiscal expansion to a representative sample of the German population. Our findings reveal that combining a fact-based (numerical) information treatment with a narrative treatment about fiscal expansion plans reduces inequality expectations among respondents who are ex-ante dissatisfied with the government's economic policy. These effects are more pronounced among respondents without a college degree or with low political interest, highlighting the importance of narrative information for individuals who are likely to benefit most from it. We explore potential mechanisms by examining revisions in macro- and micro-level assessments of future economic conditions and find that respondents primarily update their expectations regarding economic growth and individual layoff risk.
Promoting green (usually more costly) product consumption is one essential element in building a sustainable society. In times of high inflation, not only budget constraints but also the fear that prices will continue to rise might limit the effectiveness of exerted efforts to promote sustainable behaviors. To test this suggestion, we conducted a Germany-wide survey with almost 1200 respondents, followed by a framed field experiment to confirm causality. Our proxy for green consumption is organic food purchases. Survey respondents’ stated organic purchasing behavior is positively correlated with concerns about climate change but negatively correlated with concerns about inflation. The latter result is driven by individuals with a below-median environmental attitude. In the framed field experiment, we use the priming method to manipulate the saliency of inflation concerns. Whereas sizably relaxing the budget constraint has no impact on the share of organic products in participants’ baskets, the priming significantly decreases the share of organic products for individuals with below-median environmental attitude. Using the same inflation priming in a subsequent survey experiment with around 1800 respondents, we find that high inflationary environments affect both the perception of organic being luxury products and the social norm of buying organic. Both effects are more pronounced for individuals with below-median environmental attitude and, hence, they are the likely mechanisms driving the negative effects on organic product consumption.
We study the impact of stricter and more harmonized banking regulation along the income distribution using household survey data for 25 EU countries. Exploiting country-level heterogeneity in the implementation of European Banking Union directives allows us to control for confounders and identify effects. Our results show that these regulatory reforms aimed at increasing financial system resilience affect households heterogeneously and result in a widening of the income distribution. These results are dependent on a country’s ex-ante regulatory stringency, and more pronounced in countries with stronger bank dependence. Furthermore, we find that more stringent regulation reduces income growth for low-income households primarily due to exits from employment, whereas affluent households tend to experience increased growth rates for employee and self-employed income.
We examine whether combining factual information on inflation levels and forecasts with a narrative can persistently shape consumers’ inflation expectations. In a preregistered randomized controlled trial with a representative sample of 3,000 German consumers, participants received either numerical or textual information about inflation rates, with or without an accompanying narrative. All treatments immediately lower inflation expectations, with numerical information eliciting stronger adjustments. Adding a narrative produces no additional immediate effect, confirming that it conveys no new information. However, only the combination of numerical information with a narrative yields a lasting reduction in inflation expectations and forecast uncertainty still observable after four weeks. Our results suggest that combining precise information with a narrative enhances information retention and can lead to more persistent shifts in consumers’ beliefs. The effects are strongest when respondents perceive the narrative as relatable and emotionally engaging, and among those with low financial literacy and limited knowledge of inflation.
We study the procurement patterns of non-listed firms and examine how these often-overlooked, yet pivotal players in global supply chains adjust their sourcing when they anticipate accountability for externalities beyond their organizational boundaries. Using granular customs data and a surprise information release about the German Supply Chain Due Diligence Act, product-level regressions reveal that importing firms are 3.5 percentage points less likely to source a product from countries where the relevant production sector exhibits elevated ESG-related risks, suggesting that firms tend to cut ties with higher-risk suppliers. The effects are concentrated among firms with well-diversified supplier networks for a product and higher profitability, suggesting they have the necessary flexibility to respond quickly to anticipated regulatory pressure. Our findings suggest that mandates requiring firms to incorporate broad sustainability considerations into their operational decisions may have limits, particularly for non-listed firms.
We analyze how the establishment of the Single Supervisory Mechanism (SSM) relates to patterns in banks’ lending activities, risk outcomes, and granular risks within the banking system. Using data on euro area banks from 2010 to 2021, we estimate idiosyncratic shocks to banks’ loan growth to construct a measure of loan growth volatility and to compute the “Banking Granular Residual.” Banks under SSM supervision exhibit lower volatility in loan portfolio growth, indicating more stable lending dynamics. Furthermore, the implementation of the SSM is associated with positive spillover effects on non-SSM banks’ lending and a weaker relationship between granular banking shocks and economic growth.
We examine the contractual evolution of poison pill design, focusing on lower ownership triggers, acting-in-concert provisions, and synthetic equity clauses that tailor pills to defend against shareholder activism. Using novel data on hedge funds' access to SEC filings as a proxy for intervention threats, we find that firms facing heightened activist threats are more likely to adopt anti-activist pills. Relative to comparable firms under activist scrutiny, pill adopters experience fewer subsequent activist interventions and are less likely to pursue activist-favored policies, such as reduced investment and increased buybacks. These findings contribute to policy debates over defensive measures against activist interventions.
We study how individuals’ views on current and future levels of income inequality change during periods of expansionary fiscal policy. In a randomized controlled trial (RCT), we provide information on fiscal expansion to a representative sample of the German population. Our findings reveal that combining a fact-based (numerical) information treatment with a narrative treatment about fiscal expansion plans reduces inequality expectations among respondents who are ex-ante dissatisfied with the government’s economic policy. These effects are more pronounced among respondents without a college degree or with low political interest, highlighting the importance of narrative information for individuals who are likely to benefit most from it. We explore potential mechanisms by examining revisions in macro- and micro-level assessments of future economic conditions and find that respondents primarily update their expectations regarding economic growth and individual layoff risk.
This paper examines how initial public offerings (IPOs) affect firms' internal organization. We find that IPO firms become more hierarchical and standardized organizations, characterized by additional layers, more managers, smaller control spans, and larger administrative functions. These changes occur mostly in preparation for the IPO and can be only partially explained by growth. IPO firms with greater human capital risk experience larger hierarchical changes. Hierarchical changes help firms standardize employee roles and formalize internal processes. Our results suggest that firms reorganize to reduce their dependence on key individuals' human capital when transitioning to public markets.
