Laure Cabantous

This article deals with the impact of governmental assistance on insurance demand under ambiguity, i.e., in situations where probabilities are uncertain. First, using a model of insurance demand under ambiguity, we derive theoretical predictions about the impact of several governmental assistance programmes on optimal insurance demand. For example, governmental assistance through a fixed public support scheme implies that partial insurance is always optimal under fair insurance with ambiguity. Second, we present the results of an experiment designed to test these predictions. We find support for several of our theoretical predictions. For example, the presence of governmental assistance through a fixed public support scheme decreases individuals’ willingness to pay to be fully insured. Finally, we compare these results with those obtained for a risk situation. We find that, regardless of the form of governmental assistance, participants in the ambiguity context are consistently willing to pay more to be fully insured than participants in the risk situation

This paper draws from a case study of Decision Analysis – a discipline rooted in Bayesianism aimed at supporting managerial decision making – to inform the current discussion on the adoption of Bayesian modes of thinking in management research and practice. Relying on concepts from the Science, Technology and Society field of study, and Actor-Network Theory, we approach the production of scientific knowledge as a cultural, practical and material affair. Specifically, we analyze the activities deployed by decision analysts to overcome the challenges of making a discipline built on Bayes’ legacy scientifically acceptable, managerially relevant, and long lasting. As a novel contribution to the discussion on the ‘Bayesian revolution’, our study goes beyond institutional accounts of the legitimation of Bayesianism to highlight the role of politics and material artifacts in past and current attempts at importing Bayesianism. Our study also shows the importance of historical continuity in the promotion of Bayesian methods in management.

This article presents the results of a survey designed to test, with economically sophisticated participants, Ellsberg’s ambiguity aversion hypothesis, and Smithson’s conflict aversion hypothesis. Based on an original sample of 78 professional actuaries (all members of the French Institute of Actuaries), this article provides empirical evidence that ambiguity (i.e. uncertainty about the probability) affect insurers’ decision on pricing insurance. It first reveals that premiums are significantly higher for risks when there is ambiguity regarding the probability of the loss. Second, it shows that insurers are sensitive to sources of ambiguity. The participants indeed, charged a higher premium when ambiguity came from conflict and disagreement regarding the probability of the loss than when ambiguity came from imprecision (imprecise forecast about the probability of the loss). This research thus documents the presence of both ambiguity aversion and conflict aversion in the field of insurance, and discuses economic and psychological rationales for the observed behaviours

John Austin introduced the formulation ‘performative utterance’ in his 1962 Book How to Do Things with Words. This term and the related concept of performativity have subsequently been interpreted in numerous ways by social scientists and philosophers such as Lyotard, Butler, Callon or Barad, leading to the coexistence of several foundational perspectives on performativity. This paper reviews and evaluates critically how organization and management theory (OMT) scholars have used these perspectives, and how the power of performativity has, or has not, stimulated new theory-building. In performing a historical and critical review of performativity in OMT, our analysis reveals the uses, abuses and under-uses of the concept by OMT scholars. It also reveals the lack of both organizational conceptualizations of performativity and analysis of how performativity is organized. Ultimately, our aim is to provoke a ‘performative turn’ in OMT by unleashing the power of the performativity concept to generate new and stronger organizational theories.

Since John Austin introduced the expression “performative utterance” in 1962, the concept of performativity has been subjected to multiple translations by social scientists and philosophers such as Derrida, Butler, Callon, Barad or Lyotard, and each of its sequels has nurtured the development of organizational theory. This chapter provides an account of performativity emergence in Austin’s philosophy of ordinary language and traces the development of four conceptualizations of performativity that are still highly influential in organizational analysis: performativity as constitution through citation (Butler, Derrida), performativity as bringing theory into being (Callon, MacKenzie), performativity as socio-materiality mattering (Barad) and performativity as searching for efficiency (Lyotard). We provide illustrations of the uses of these distinct approaches to performativity by organizational scholars, and explain how their coexistence in the organizational field creates tensions, fuels debates yet also offers an opportunity to provoke a performative turn in organizational theory.

Most decision-making research in economics focuses on individual decisions. Yet, we know, from psychological research in particular, that individual preferences can be sensitive to social pressures. In this paper, we study the impact of a group environment on individual preferences for risky and ambiguous prospects. In our experiment, each participant was invited to make a series of lottery-choice decisions in two different conditions. In the Alone condition, individuals made private choices, whereas in the Group condition, individuals belonged to a three-person group and group members’ choices were aggregated according to either a majority or unanimity rule. This design allows us to study the impact of a group environment on individuals’ attitude towards both risky and ambiguous prospects, while controlling for the decision rule used in the group. Our experimental results show that when individuals are in the Group condition, they tend to be less risk averse and more ambiguity averse than when they are not part of a group. Our experiment also suggests that the decision rule matters as it shows that these two trends tend to be stronger when the group implements a unanimity rule. Specifically, we found that individuals who belong to a group implementing a unanimity rule are significantly less risk averse than individuals who belong to a group that relies on the majority rule. We obtained a similar—but non-significant—result under ambiguity.

Organizational theorists built their knowledge of decision-making through a progressive critique of rational choice theory. Their positioning towards rationality however, is at odds with the observation of rationality persistence in organizational life. This paper addresses this paradox. It proposes a new perspective on rationality that allows the theorizing of the production of rational decisions by organizations. To account for rationality’s éternel retour, we approach rational decision-making as performative praxis – a set of activities that contributes to turning rational choice theory into social reality. We develop a performative praxis framework that explains how theory, actors, and tools together produce rationality within organizations through three mechanisms: rationality conventionalization, rationality engineering, and rationality commodification. This framework offers new avenues of research on rational decision-making and points to the factors that underlie the manufacture of rationality in organizations.