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Everyone admires generosity, it is considered a virtue and a worthy facet of anyone’s character. And in times of peace and non-competitive situations individuals want their leaders to demonstrate generosity, that is contributing to the public good.

However, in certain circumstances - in tough and competitive times - generous leaders can be seen as weak leaders. And so when the going gets rough, individuals prefer leaders who are less altruistic and less willing to demonstrate generosity.

Academics Nir Halevy, acting assistant professor of organisational behaviour at Stanford Graduate School of Business along with Robert Livingston, an assistant professor of management and organisations at the Kellogg School of Management at Northwestern University looked at status and how a leader is viewed by a group. they identified two aspects of an individual’s status - prestige and dominance. Prestige status was conferred on “saintly” individuals such as Mother Theresa, whereas Al Capone was deemed to have a dominant status.

In non-competitive situations people who command high prestige are seen as desirable leaders says Prof Livingston. But when circumstances change, for example in periods of competition, those individuals who are less altruistic and giving are believed to be better and more appealing leaders.

“When the going gets tough,” adds Prof Halevy, “[people] want a dominant, power-seeking individual to lead the group”.

After conducting a series of experiments they found that being generous to group members can boost an individual’s prestige within that group, but being universally generous, ie sharing resources with those outside the group decreased perceptions of prestige. Meanwhile, although being selfish damaged respect and prestige, it did foster perceptions of dominance.

When tested with a group of participants, the academics discovered that dominant rather than prestigious leaders were more likely to be elected as a group representative.

“Being too generous often comes at a personal cost to one’s position of strength or power,” adds Prof Livingston.

The study Status conferral in intergroup social dilemmas: behavioral antecedents and consequences of prestige and dominance will be published shortly in the Journal of Personality and Social Psychology.

The report was co-authored by Taya Cohen of Carnegie Mellon University’s Tepper School of Business and Kellogg PhD student Eileen Chou.

● For many people shopping is an enjoyable past time and marketing specialists, eager to promote a brand or encourage consumers to shop more have learned to enhance consumers’ experience. Consequently a complimentary cup of coffee with a manicure or simply pleasant music throughout a store can make the difference to a shopping experience.

But now research from the US, Singapore and Hong Kong suggests that in creating such a pleasant shopping atmosphere, marketing specialists may well have stumbled on additional benefits at well.

Michel Pham a professor of business in the marketing division at Columbia Business School with colleagues Iris Hung of the National University of Singapore and Gerald Gorn of the Hong Kong University of Science and Technology have discovered that when consumers are in a relaxed frame of mind they often increase the monetary value of either products or services, sometimes substantially. Those shoppers who are less relaxed they say do not do this.

To test their theories participants were first shown nature videos or listened to instrumental music before being asked the value of certain items such as a scarf or a tyre pressure gauge. They consistently awarded these products higher values than did those of the control group.

However when the academics asked these relaxed shoppers to think about products in a more practical and concrete way they then found that consumers were not so inclined to increase their value.

The academics were careful to distinguish between consumers merely in a pleasant mood and those that were truly relaxed. What matters they say, is the state of mind at the time of purchase with valuation increasing by as much as 20 per cent when participants were relaxed.

Prof Pham suggests that consumers might be inclined to to pay more for services and products if marketing specialists can discover ways to help these consumers become more relaxed.

Copyright The Financial Times Limited 2017. All rights reserved.
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