Niro Sivanathan

Moral hazard involves a context where decision-makers engage in behaviors that prioritize self-interest while allowing the associated risk to be primarily borne by others. Such decision making can lead to catastrophic consequences, as seen in the 2008 global financial crisis after hedge fund managers indiscriminately invested their clients’ money in subprime mortgages. This research examines which decision-makers are most likely to engage in moral hazard decision making and the psychological mechanism driving this behavior. Drawing on the dual model of social influence, we posit that individuals associated with dominance, but not prestige, will engage in greater moral hazard behaviors. We further contend that these behaviors are driven by dominant decision-makers’ enhanced focus on end goals (outcomes) rather than the means (process) that they use to pursue such goals. We find support for our hypotheses across 13 studies (NObservations = 26,880; of which eight were preregistered and six studies are reported in the Supplemental Materials), using both correlational and experimental designs. Additionally, we vary the moral hazard context (e.g., a financial setting, a health and safety issue, etc.) and capture both behavioral intentions and actual behaviors, while also ruling out several alternative explanations. These findings demonstrate that dominant decision-makers engage in moral hazard behaviors because of their tendency to prioritize outcomes over processes.

Leaders play a pivotal role in establishing ethical norms and behaviors within organizations. Across seven studies (three in the Supplementary Information), we explore how subordinates infer their leader’s moral character outside the domain of ethical conduct and document this process’s downstream consequences. Specifically, we focus on the dual-strategies theory, which posits that leaders exert influence and obtain deference via two broad orientations of behaviors and cognitions: dominance and prestige. In a field setting of employees and their managers, we find that leader dominance orientation positively relates to subordinate self-reported unethical behavior, whereas leader prestige is negatively related to the same. In a second sample of working adults, we use a time-lagged study design to show that leader dominance (prestige) positively (negatively) relates to subordinate-reported unethical behavior at work partly because of a belief that the leaders engage in more (less) unethical behaviors, which contributes to a belief that norm-violating behaviors are more (less) acceptable within teams under dominance- (prestige-) oriented leaders. Finally, across four experimental studies, we observe that participants assigned to a dominance-oriented (versus prestige-oriented) leader perceived their leader as having lower moral character and expressed a greater likelihood of engaging in unethical behavior. We also document actual unethical behavior for monetary gain. This effect was mediated by the belief that unethical behavior was normative within the team. Our results highlight the importance of moral (mis)perception by demonstrating the consequences of a leader’s hierarchical orientation on subordinate ethical perceptions and behaviors at work.

Leaders strive to encourage helping behaviors among employees, as it positively affects both organizational and team effectiveness. However, the manner in which a leader influences others can unintentionally limit this desired behavior. Drawing on social learning theory, we contend that a leader’s tendency to influence others via dominance could decrease employees’ interpersonal helping. Dominant leaders, who influence others by being assertive and competitive, shape their subordinates’ cognitive schema of success based on zero-sum thinking. Employees with a zero-sum mindset are more likely to believe that they can only make progress at the expense of others. We further propose that this zero-sum mindset results in less interpersonal helping among subordinates. We test our hypotheses by employing different operationalizations of our key variables in eight studies of which four are reported in the manuscript and another four in supplementary information (SI) across a combined sample of 147,780 observations. These studies include a large archival study, experiments with both laboratory and online samples, and a time-lagged field study with employees from 50 different teams. Overall, this research highlights the unintended consequences that dominant leaders have on their followers’ helping behavior by increasing their zero-sum mindset.

Reciprocity is a fundamental mechanism for sustained social relationships. Escalation-based theories suggest that reciprocity intensifies over time. In contrast, equity-based theories propose that people reciprocate behaviors in kind. We reconcile these conflicting perspectives by examining social exchanges across different cultural contexts. Using three complementary experiments, we investigate when, how, and why individuals in East Asian settings and those in North American settings differentially reciprocate positive versus negative behaviors over time. Study 1 demonstrated that in positively framed exchanges (i.e., giving) Americans escalated their reciprocity, but Singaporeans reciprocated in kind. However, in negatively framed exchanges (i.e., taking), Singaporeans escalated their reciprocity, but Americans reciprocated in kind. Study 2 replicated the results using Hong Kongers and showed that cultural differences in regulatory focus were associated with specific emotions (i.e., anxiety and happiness), which then escalated reciprocity. To establish causality, Study 3 manipulated regulatory focus within one culture and replicated the pattern of results.

When actors transgress social norms, their social status colors the severity with which they are punished. While some argue that high-status transgressors attract severe punishment when accused of ambiguous transgressions, others contend the opposite. In this paper, we attempt to reconcile this theoretical inconsistency. We propose that the capacity for social status to color third-party judgments of transgressions may depend on the status type of high-status actors. Drawing on the evolutionary theory of dominance and prestige as two alternate forms of status within social hierarchies, we suggest that actors associated with dominance-based status will be penalized more harshly than actors whose status is based on prestige. Across multiple studies employing archival field data, controlled lab experiments, and different instantiations of dominance, prestige, and misconduct, we consistently demonstrate that high-status dominant actors are punished more harshly than their prestigious counterparts. Further, we find that attributions of intentionality and lack of moral credentials explain the harsher punishments meted out to dominant (vs. prestigious) high-status actors. In this way, we provide both a parsimonious reconciliation of the inconsistency in the extant literature and a theoretical explanation of how status type of high-status actors differentially impacts the judgment, decisions, and behaviors of third parties.

Jockeying and competing for higher status is an inherent feature of rank-ordered hierarchies. Despite theoretically acknowledging rank changes within hierarchies, the extant literature has ignored the role of competitors’ dynamic movements on a focal actor’s resulting behavior. By using a dynamic lens to examine these movement in competitive situations, we examine how positive change in a competitor’s rank—that is, positive status momentum—affects a focal actor’s psychology and resulting performance. We consider the real-world contexts of 5.2 million observations of chess tournaments and 117,762 observations of professional tennis players and find that a focal actor’s performance in both cognitive and physical competitions is negatively impacted when facing a competitor with positive momentum. Additionally, 4 experimental studies reveal that a competitor’s positive momentum results in the focal actor’s positive projection of the competitor’s future rank, which, in turn, increases the psychological threat for the actor. Collectively, our findings advance the social hierarchy literature by helping to elucidate the manner in which rank-ordered hierarchies are negotiated and disrupted over time.

Direct-to-consumer (DTC) advertising of pharmaceutical drugs is often cited as the culprit for inflated patient demand for advertised drugs. Further to this economic concern, we provide an evidence-based psychological account of another concern that warrants the re-examination of the merits of DTC advertising of prescription drugs. Across six experiments and a sample of 3,059 US participants, we find reliable evidence for the argument dilution effect. Specifically, when commercials list severe side effects along with those that are most frequent (which include both serious and minor side effects), as required by the Food and Drug Administration, it dilutes consumers’ judgements of the overall severity of the side effects, compared with when only the serious side effects are listed. Furthermore, consumers’ reduced judgement of severity leads to greater attraction to those drugs. In regulating pharmaceutical advertisements, the Food and Drug Administration appear to have paradoxically dampened consumers’ judgements of overall severity and risk, and increased the marketability of these drugs.

We examine why dominant/authoritarian leaders attract support despite the presence of other admired/respected candidates. Although evolutionary psychology supports both dominance and prestige as viable routes for attaining influential leadership positions, extant research lacks theoretical clarity explaining when and why dominant leaders are preferred. Across three large-scale studies we provide robust evidence showing how economic uncertainty affects individuals’ psychological feelings of lack of personal control, resulting in a greater preference for dominant leaders. This research offers important theoretical explanations for why, around the globe from the United States and Indian elections to the Brexit campaign, constituents continue to choose authoritarian leaders over other admired/respected leaders.