What Were They Thinking? Exploring the Cognitive Underpinnings of How Stakeholders Assess Firms

IABS Conference 2011

10 Pages Posted: 11 Jul 2014 Last revised: 27 Jan 2017

See all articles by Michael L. Barnett

Michael L. Barnett

Rutgers Business School, Newark & New Brunswick

Sohvi Heaton

Date Written: July 11, 2011

Abstract

Aggregated reputation scores and rankings have been rightly criticized for lacking a theoretical basis by which to weight the individual perceptions that form them. The resulting product can be a score or ranking that fails to represent the perceptions of many or even most stakeholders. Little attention has been paid, however, to the reverse. Rather than focus on how individual perceptions can be represented at an aggregate level,herein we focus on how an aggregated reputation can influence individual perceptions. We hypothesize that ratings have a significant influence on stakeholder perceptions,especially where other information is lacking. Through experiments, we find that exposure to reputation ratings provides stakeholders with an anchor point – information about what others think – and their perceptions of the firm are adjusted relative to this anchor. We suggest future work on reputation delve into the heuristics and biases boundedly rational stakeholders deploy when assessing firms.

Suggested Citation

Barnett, Michael L. and Heaton, Sohvi, What Were They Thinking? Exploring the Cognitive Underpinnings of How Stakeholders Assess Firms (July 11, 2011). IABS Conference 2011, Available at SSRN: https://ssrn.com/abstract=2464883

Michael L. Barnett (Contact Author)

Rutgers Business School, Newark & New Brunswick ( email )

NJ
United States

HOME PAGE: http://www.business.rutgers.edu

No contact information is available for Sohvi Heaton

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