The Impact of Behavioral Assumptions on Management Ability: A Test Based on the Earnings of MBA Graduates

Management and Organization Review, 2013, 9(2), 209-32

Universitat Pompeu Fabra, Economics and Business Working Paper Series No. 1157.

41 Pages Posted: 10 Jun 2009 Last revised: 24 Jan 2017

Benito Arruñada

Pompeu Fabra University

Xosé H. Vázquez

University of Vigo

Date Written: June 1, 2009

Abstract

The paper explores the consequences that different behavioral assumptions in the training of managers may have on their future performance. We argue that training with an emphasis on the standard assumptions used in economics (rationality and self-interest) is good for technical posts but may lead future managers to rely excessively on rational and explicit safeguarding, crowding out instinctive relational heuristics and signaling a “bad” human type to potential partners. In contrast, the diverse, implicit and even contradictory nature of behavioral assumptions in management theories does not conflict with innate cooperative tools and may provide a good training ground for using such tools. We present tentative confirmatory evidence by examining how the weight placed on behavioral assumptions in the core courses of the top 100 business schools influences the average salaries of their MBA graduates. Controlling for the self-selected average quality of their students and some other characteristics of schools, average salaries are seen to be significantly greater for MBA programs whose core curriculum contains a larger proportion of management courses.

Keywords: evolutionary psychology, economics, management, contractual heuristics, rationality, self-interest

JEL Classification: A23, B41, D01, D87, M12, M51

Suggested Citation

Arruñada, Benito and Vázquez, Xosé H., The Impact of Behavioral Assumptions on Management Ability: A Test Based on the Earnings of MBA Graduates (June 1, 2009). Management and Organization Review, 2013, 9(2), 209-32; Universitat Pompeu Fabra, Economics and Business Working Paper Series No. 1157. . Available at SSRN: https://ssrn.com/abstract=1154106 or http://dx.doi.org/10.2139/ssrn.1154106

Benito Arruñada (Contact Author)

Pompeu Fabra University ( email )

Ramon Trias Fargas 25-27
Department of Economics and Business
Barcelona, 08005
Spain
+34 93 542 25 72 (Phone)
+34 93 542 17 46 (Fax)

HOME PAGE: http://www.econ.upf.edu/~arrunada

Xosé H. Vázquez

University of Vigo ( email )

Facultade de Ciencias Económicas e Empresariais
Campus das Lagoas Marcosende
Vigo, 36310
Spain
+34 986812479 (Phone)
+34 986812401 (Fax)

HOME PAGE: http://webs.uvigo.es/xhvv

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