STRATEGY AND BUSINESS ECONOMICS


Motivated Optimism and Workplace Risk


Te Economic Journal, 134, 663, October 2024


COLLIN B. RAYMOND ASSOCIATE PROFESSOR


Samuel Curtis Johnson Graduate School of Management


Cornell SC Johnson College of Business Cornell University


LINK TO PAPER LINK TO COLLIN RAYMOND VIDEO


Co-authors • Collin B. Raymond


Associate Professor, Samuel Curtis Johnson Graduate School of Management, Cornell SC Johnson College of Business, Cornell University


• Alain Cohn, University of Michigan • Yesim Orhun, Ross School of Business, University of Michigan


Summary Beliefs about our future prospects and the world around us are more than just


inputs for decisionmaking. Tey directly impact well-being by evoking strong feelings such as hope and anxiety. Anecdotal evidence and intuition suggest that individuals may distort their beliefs about future events to manage these emotions. In this work, the authors provide field evidence that individuals engage in motivated optimism in the face of impending risk.


Using the re-opening of businesses in the United States after the initial wave of COVID-19 lockdowns in late April 2020, this study leverages variation in the time span between the survey and the externally imposed date when workers are required to return to their workplaces. Congruent with a dynamic anticipa- tory utility model, they demonstrate that belief distortions are time and stake dependent. As the work return date approaches, individuals become relatively more optimistic about the increased infection risk associated with going back to the workplace, and about how severely their health may be impacted if they get infected, reflecting the intution that anticipatory emotions may become more prominent as the date of return approaches. Teir model also predicts that the motivation to distorb beliefs is more pronounced when stakes are highter, as when individuals have a higher risk of getting sick or losing their job. Te authors’ results are informative about when and for whom interven- tions will be most effective.


CONTENTS TO MAIN


| RESEARCH WITH IMPACT: CORNELL SC JOHNSON COLLEGE OF BUSINESS • 2024 EDITION


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