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Behavioral Assumptions and Management Ability: A Tentative Test

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Author Info
Benito Arruñada ()
Xosé H. Vázquez

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Abstract

The paper explores the consequences that relying on different behavioral assumptions in training 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) leads future managers to rely excessively on rational and explicit safeguarding, crowding out instinctive contractual heuristics and signaling a ‘bad’ type to potential partners. In contrast, human assumptions used in management theories, because of their diverse, implicit and even contradictory nature, do not conflict with the innate set of cooperative tools and may provide a good training ground for such tools. We present tentative confirmatory evidence by examining how the weight given to behavioral assumptions in the core courses of the top 100 business schools influences the average salaries of their MBA graduates. Controlling for the average quality of their students and some other schools’ characteristics, average salaries are significantly greater for those schools whose core MBA courses contain a higher proportion of management courses as opposed to courses based on economics or technical disciplines.

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Publisher Info
Paper provided by Department of Economics and Business, Universitat Pompeu Fabra in its series Economics Working Papers with number 1157.

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Date of creation: Jun 2009
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Handle: RePEc:upf:upfgen:1157

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Related research
Keywords: Evolutionary psychology; economics; management; contractual heuristics; rationality; self-interest;

Other versions of this item:

Find related papers by JEL classification:
A23 - General Economics and Teaching - - Economic Education and Teaching of Economics - - - Graduate
B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
D87 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Neuroeconomics
M12 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - Personnel Management; Executive Compensation
M51 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics - - - Firm Employment Decisions; Promotions

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