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Pannebakker, E.S.; Voskamp, S.; Zanger, W.S. de; Pluut, H. (2020)

Onderweg naar morgen - een inventarisatie van empirische onderzoeksmethoden in juridisch onderwijs. Rapport t.b.v. de Stimuleringsactie Empirical Legal Studies fase II (dossiernummer SGWDB-2018)

External research report

All authors

Pannebakker, E.S.; Voskamp, S.; Zanger, W.S. de; Pluut, H.

Awarding Institution

Coherent Privaatrecht , Rechtsgeleerdheid , Universiteit Leiden & Universiteit Utrecht

Funding

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Onderweg naar morgen - een inventarisatie van empirische onderzoeksmethoden in juridisch onderwijs. Rapport t.b.v. de Stimuleringsactie Empirical Legal Studies fase II (dossiernummer SGWDB-2018) | Scholarly Publications

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Pannebakker, E.S.; Voskamp, S.; Zanger, W.S. de; Pluut, H. (2020) Onderweg naar morgen - een inventarisatie van empirische onderzoeksmethoden in juridisch onderwijs. Rapport t.b.v. de Stimuleringsactie Empirical Legal Studies fase II (dossiernummer SGWDB-2018) External research report All authors Pannebakker, E.S.; Voskamp, S.; Zanger, W.S. de; Pluut, H.

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Publication Strohmaier et al. in Journal of Applied Social Psychology

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Publication Strohmaier et al. in Journal of Applied Social Psychology

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[Correction added on 16 November 2020, after first online publication: Misspelling in abstract corrected from "COVD‐19" to "COVID‐19".]

Abstract

Following a corporate disaster such as bankruptcy, people in general and damaged parties, in particular, want to know what happened and whether the company's directors are to blame. The accurate assessment of directors' liability can be jeopardized by having to judge in hindsight with full knowledge of the adverse outcome. The present study investigates whether professional legal investigators such as judges and lawyers are affected by hindsight bias and outcome bias when evaluating directors' conduct in a bankruptcy case. Additionally, to advance our understanding of the mechanisms underlying these biases, we also examine whether free will beliefs can predict susceptibility to hindsight bias and outcome bias in this context. In two studies (total N = 1,729), we demonstrate that legal professionals tend to judge a director's actions more negatively and perceive bankruptcy as more foreseeable in hindsight than in foresight and that these effects are significantly stronger for those who endorse the notion that humans have free will. This contribution is particularly timely considering the many companies that are currently going bankrupt or are facing bankruptcy amidst the COVID‐19 pandemic.

1 INTRODUCTION

After a disastrous event, public outcry often follows over who is to blame. Think for example of the sinking of the MS Estonia cruise ferry in 1994, the Deepwater Horizon oil spill in the Gulf of Mexico in 2010, or the Ponte Marandi bridge collapse in Genoa (Italy) in 2018, just to name a few. In such cases, people want to know what caused the event and whether there is someone to blame and to be held legally liable for the consequences. In this regard, corporate "disasters" are not much different. After the Enron bankruptcy in 2001, the collapse of Lehman Brothers in 2008, and more recently the Volkswagen emissions scandal, the public (as well as the authorities) demanded thorough investigations and that those to blame were held accountable. Also in less high‐profile cases of business failure do the local communities or creditors typically appeal for a thorough investigation into the causes of the event. In some jurisdictions, an investigation into the causes of a company's failure is even mandatory.

In such investigations, attention often centers on the role of the company's directors to for example determine whether there has been a breach of fiduciary duties, wrongful trading, or gross business misjudgments. 1 If such wrongful conduct is, indeed, proven, directors can be held liable for damages, and creditors thus (partly) reclaim their losses. Investigations into a director's conduct are normally carried out by professionals who have a legal or financial background (or both), such as lawyers, trustees, insolvency practitioners, liquidators, or forensic accountants, possibly in conjunction with an investigating judge/magistrate (in inquisitorial systems).

It is imperative that these legal professionals assess a directors' actions in relation to an adverse event in an objective and reliable manner. Accurate and unbiased assessments are important for general reasons such as predictability of the relevant legislation (i.e., legal certainty) and resultant trust in legal systems, but also because being held liable for a company's downfall can have detrimental effects on a director's personal well‐being (Jenkins et al., 2014; Kesteren et al., 2017; Ucbasaran et al., 2013). Additionally, from a professional point of view, reputations are at risk, and liability for all creditor claims on the bankrupt estate in some cases far exceed insurance coverage and can, therefore, lead to dire financial circumstances in the private sphere. Hence, an accurate assessment of a director's conduct in relation to an adverse event is paramount.

However, there is good reason to believe that the accurate assessment of a director's conduct and its relation to a corporate mishap can be jeopardized by the fact that such assessments are made in hindsight when the investigators and legal decision makers are aware of the adverse outcome. Judgments made in hindsight are notoriously susceptible to hindsight bias, which is the phenomenon of perceiving past events as more foreseeable and/or inevitable than was realistically the case prior to the event's unfolding (Fischhoff, 1975). Additionally, when judging in hindsight people tend to let the consequences of a certain decision or action unjustifiably affect their judgments regarding the quality of that action or decision, such that these are perceived more negatively after a negative outcome than after a positive outcome (i.e., outcome bias; Baron & Hershey, 1988). As a result of hindsight bias and outcome bias, decisions made by a director that seemed reasonable at the time, might in case of a bad outcome (e.g., company going bankrupt) be perceived as negligent.

That being said, it currently remains an open question whether legal professionals who investigate and evaluate a director's conduct are, indeed, affected by hindsight bias and outcome bias. The current paper's primary goal is to address this question, as we posit that previous research on hindsight bias does not fully allow for extrapolation to the current context of directors' liability cases. An additional, more explorative goal of the current paper is to investigate the relationship between legal professionals' beliefs regarding free will and their susceptibility to hindsight bias and outcome bias. We believe investigating this relationship might help improve our understanding of the drivers behind these biases.

1.1 Hindsight bias in legal judgments

Despite this evidence of hindsight bias affecting legal decision making, we believe the question of whether professional legal investigators will succumb to hindsight bias when conducting investigations into directors' conduct warrants further investigation, for several reasons. First, it is unclear to what extent previous research on hindsight bias can be generalized to the current context of directors' liability, as research investigating hindsight bias among legal professionals is scarce, generally suffers from low statistical power, and has shown mixed results. That is, in contrast to the literature discussed so far, some studies did not find any effects of outcome information on legal professionals' judgments. For example, Wistrich et al. ( 2005) observed that judges were able to ignore inadmissible outcome information when assessing probable cause for a police search (see also Rachlinski et al., 2011). Moreover, Hastie and Viscusi ( 1998) found that judges were less affected by hindsight bias than mock jurors. We, therefore, believe the small but growing body of research on hindsight bias in legal decision making could benefit from further, high‐powered research.

Second, the research on hindsight bias among legal professionals so far has focused solely on judges. However, in the current context of directors' liability, other legal professionals such as trustees, insolvency lawyers, and insolvency practitioners play a more prominent role as they most often lead the investigations into directors' conduct. Moreover, whereas judges are typically generalists dealing with a range of different cases in different legal domains, the legal professionals investigating directors' conduct in liability investigations are specialists in the sense that a significant portion of their work focuses on investigations into insolvent businesses and other corporate mishaps that might result in personal liability for directors and officers. We deem it worthwhile, therefore, to investigate whether this specific group of legal professionals is affected by hindsight bias.

Finally, applied research is needed to inform public policy and legislation that aim to address the risk of hindsight bias in directors' liability cases. In the United States, for example, the business judgment rule limits the liability of directors and officers for decisions that turned out badly, as courts recognize that "after the fact litigation is a most imperfect device" and "a reasoned decision may seem a wild hunch viewed years later against a background of perfect knowledge" (Rachlinski, 1998, p. 621; see also Arkes & Schipani, 1994). In Europe, where new legislation is being developed to harmonize insolvency laws across its member states (e.g., European Commission, 2016; Fletcher & Wessels, 2012), discussions concerning the potential effects of hindsight bias are taking place. However, as of yet, no research has directly tested whether legal professionals' evaluations of directors' actions are, indeed, susceptible to hindsight bias. Hence, recent developments in the area of insolvency law in Europe as well as existing regulations across the globe ask for thorough research so as to allow for evidence‐based policies and legislation.

Al in all, we consider it worthwhile to investigate whether legal professionals who investigate directors' conduct in light of a potential liability claim are in fact susceptible to hindsight bias. We, therefore, aim to test the following hypothesis:

Hypothesis 1.Professional legal investigators' ex‐post judgments of the foreseeability of a corporate bankruptcy are higher than their ex‐ante foreseeability judgments.

1.2 Outcome bias in legal judgments

In addition to affecting judgments of foreseeability, judgments made in hindsight might also affect judgments of decision quality. When people evaluate others' actions while knowing its consequences, it is common that the consequences are factored into the evaluation of the actions. As a result, the same action is evaluated more negatively when it results in a negative outcome than when a positive outcome ensues (Bazerman & Sezer, 2016; Gino et al., 2009; Lipshitz & Barak, 1995; Mazzocco et al., 2004; Robbennolt, 2000). Although very similar to hindsight bias in that outcome information unjustifiably affects the evaluation of events in the past, a bias in evaluations of decision quality constitutes outcome bias rather than hindsight bias.

In a recent study investigating outcome bias in legal decision making, judges were found to perceive a particular individual to have acted more intentionally when that person's actions resulted in a severely bad outcome versus a moderately bad outcome (Kneer & Bourgeois‐Gironde, 2017). Hence, outcome information can distort legally relevant judgments even of those who have received extensive training to not let irrelevant factors affect their judgment (see also Anderson et al., 1997; Charron & Lowe, 2008). It, therefore, follows that professional legal investigators who are tasked with evaluating a director's conduct and its relation to incurred damages by the company's shareholders or creditors might also succumb to the bias' influence. For example, when a strategic decision made by a director ends badly, they might erroneously conclude the decision was a poor one even though other factors might have contributed more strongly to the unfortunate outcome. In fact, the unwanted consequences might have happened despite rather than because of the director's actions.

Even though outcome bias in professional legal investigators' judgments might manifest in multiple areas, in the present paper we focus on the two most relevant elements. First, we test whether the strategic decisions made by a director are perceived more negatively in hindsight than in foresight, as this might lead investigators to believe the director made a gross business misjudgment or even breached fiduciary duties toward shareholders and creditors. Second, we test whether ultimately the investigators believe more strongly that a director is legally responsible when they know the business went bankrupt (i.e., hindsight judgment) compared to when they are still ignorant of the company's fate (i.e., foresight judgments). We formulated the following two hypotheses:

Hypothesis 2a.Professional legal investigators' ex‐post evaluations of the quality of a director's actions are more negative than their ex‐ante judgments.

Hypothesis 2b.Professional legal investigators' ex‐post attributions of a director's legal responsibility are higher than their ex‐ante attributions.

1.3 Punitiveness, free will beliefs, and judging in hindsight

Even though the discovery of hindsight bias was already made four decades ago, research is still trying to fully understand its underlying mechanisms. We posit that research on individual differences in hindsight bias might help achieve this goal. Thus far, research on individual differences in hindsight bias is relatively scarce, shows mixed results, and generally suffers from (very) low statistical power (Musch & Wagner, 2007). The same applies to the literature on outcome bias in that little research has been devoted to understanding the underlying mechanisms and no reliable individual differences have been identified. Thus far, factors that have been found to cause outcome bias are failing to sufficiently take into account the decision quality itself (Baron & Hershey, 1988), the process that led to the decision (Brockner & Wiesenfeld, 1996), or an agent's intentions (Sezer et al., 2016). Therefore, a second, more exploratory goal of this study is to investigate individual differences in hindsight bias and outcome bias with the aim of improving our understanding of these biases. Specifically, we investigate whether the desire to blame and punish wrongdoers can predict professional legal investigators' susceptibility to hindsight bias and outcome bias.

Traditionally, it was believed that attributions of blame and punishment are the end product of careful consideration of relevant factors, such as whether an individual intentionally brought about an adverse outcome and whether the outcome was foreseeable (e.g., Malle et al., 2014). However, evidence is accumulating for an alternative position suggesting that blame processes can actually operate in the opposite direction. That is, initial moral judgments and punitive inclinations can affect subsequent sense‐making processes such that these are biased to be consistent with the initial judgment. Such motivated cognition processes entail that one engages in biased sense‐making and information processing with the aim to arrive at thedesired conclusion, all the while being under the illusion of acting objectively (e.g., Kunda, 1990; Nadler & Mueller, 2017; Sood & Darley, 2012).

We, therefore, put forward the possibility that once legal professionals are made aware of a company's downfall and collateral damage, their initial moral reactions might activate blame‐validation and motivated reasoning processes, leading them to judge the director's role in the downfall in such a way that it is coherent with their initial moral reaction. In other words, it may be legal professionals' motivation to blame and punish that drives hindsight bias and outcome bias, such that they judge a director's strategic plans more negatively, the bankruptcy as more foreseeable, and the director to be more responsible for the bankruptcy compared with when they are unaware of the company's downfall. If hindsight bias and outcome bias can, indeed, stem from blame‐validation processes, it follows that people with a stronger tendency to moralize events and condemn and punish wrongdoing should display a stronger bias. We can, therefore, expect an association between people's punitive inclinations (i.e., their motivation to blame and punish) and their susceptibility to hindsight bias and outcome bias.

A useful proxy of people's punitive inclinations is their belief in free will. People with stronger free will beliefs appear to (1) be more intolerant of unethical behavior, (2) be more punitive, and (3) show greater support for severe criminal punishment and retributive punishment (Carey & Paulhus, 2013; Martin et al., 2017; Savani et al., 2011; Shariff et al., 2014; Stroessner & Green, 1990). Indeed, it seems that free will beliefs are closely tied to people's innate needs to hold others morally responsible for their actions and to condemn and punish wrongdoers (Clark et al., 2014). Therefore, if people's punitive desires can, indeed, cause hindsight bias to manifest, a relation between free will beliefs and hindsight bias should be observed.

In hindsight, legal professionals who believe more strongly in free will might show higher ratings of foreseeability, evaluate a director's actions more negatively, and attribute more legal responsibility to the director than those who show less commitment to the notion of free will, due to the former's stronger punitive predispositions. Based on this line of reasoning, we formulated the following hypothesis.

Hypothesis 3.Free will beliefs are positively associated with hindsight bias and outcome bias.

1.4 The present studies

To summarize, the current research aims (1) to investigate whether legal professionals tasked with investigating directors' conduct following a corporate mishap are affected by hindsight bias and outcome bias, and (2) to provide a first test of the potential relationship between people's punitiveness (as measured by their belief in free will) and these biases.

By doing so, we aim to add to the literature in three important ways. First and foremost, we provide a first test of whether professional legal investigators are affected by hindsight bias and outcome bias when investigating a director's conduct in relation to a corporate mishap. Second, we contribute to the small but growing body of research investigating hindsight bias in legal judgments among professionals (rather than lay people), which thus far has shown mixed results. Third, by bringing together the literature on hindsight bias, outcome bias, and free will beliefs, we provide the first study that investigates whether blame processes can drive hindsight bias and outcome bias and thus whether personally held beliefs regarding relatively abstract concepts, such as whether or not humans have free will, can predict susceptibility to these biases.

We test our hypotheses in two experiments. In both studies, participants were presented with a hypothetical bankruptcy case. Using a typical hypothetical hindsight bias research design (Pohl, 2007), half of the participants received the case with no outcome (i.e., participants remain unaware the company went bankrupt) and the other half received the same case but now including the outcome (i.e., the company going bankrupt). Study 2 was largely identical to Study 1 with the addition of a positive outcome condition in which participants learned that the company was saved from bankruptcy. The main purposes of this second study were (1) to replicate and examine the robustness of the findings of Study 1, and (2) to shed light on potential alternative mechanisms through which the moderating role of free will beliefs in hindsight and outcome bias can be explained (i.e., mechanisms other than motivated cognition due to participants' need to punish).

2 STUDY 1

2.1 Method

2.1.1 Participants

We aimed to conduct a highly powered study and determined, using G*Power 3.1 (Faul et al., 2009), that we needed 619 participants to have a power of 0.85 to detect a small effect ( f ² = 0.02; Cohen, 1988). In the end, 727 professionals (553 males; 76.1%) specialized in the areas of insolvency law, business restructuring, and/or recovery participated in our online survey. Participants were members of INSOL Europe, which is the European organization of professionals who specialize in insolvency, business restructuring, and recovery. Participants were approached via e‐mail with an invitation to participate in our study. The e‐mail contained the link to the online survey that was built using Qualtrics ( 2018) online survey software.

Of all participants, 393 reported to work as an insolvency lawyer, 144 as insolvency practitioner, 75 as turnaround consultant/manager, 68 as trustee, 49 as judge, 48 as banker (of which 32 reported to have a legal background), 38 as academic in the legal field and 15 chose "other.". 2 86.7% reported to investigate/decide over directors' liability in their work. The average age was 47.9 ( SD = 10.4) and participants had on average 21.4 years of working experience in their profession. Thirty‐seven different European nationalities are represented in the sample. The three countries with the greatest number of participants are the United Kingdom (34.8%), Germany (9.4%), and Romania (8.9%). Please see Section 1 of the supplementary materials online for a complete overview of the participants' nationalities.

2.1.2 Design and procedure

Participants were randomly assigned to either the No outcome condition or the Negative outcome condition. Participants were first presented with a brief questionnaire to measure their belief in free will, after which they were presented with a business case. After the case, participants were asked questions regarding the three main variables of interest: (1) decision quality, (2) foreseeability, and (3) the CEO's legal responsibility. Finally, several exploratory questions were presented to the participants, 3 after which participants were debriefed.

2.1.3 Materials and measurements

Free will beliefs

Participants' belief in free will was measured using the Free Will Subscale of the Free Will Inventory (FWI; Nadelhoffer et al., 2014). The scale consists of five items (Cronbach's α = 0.80) and includes items such as "How people's lives unfold is completely up to them" and "People always have the ability to do otherwise." Participants indicated to what extent they agreed with each statement on a 7‐point Likert scale, ranging from (1) strongly disagree to (7) strongly agree ( M = 4.42, SD = 1.15).

Business case

The base case (i.e., without outcome information and therefore identical for both conditions; 403 words in length) described a publicly listed company that was in financial difficulties and therefore hired a new CEO ("Cees van Gelder") to turn the tide. In order to do so, the CEO designed a turnaround plan which stated the actions he thought needed to be taken to avoid bankruptcy and resume profitability. The new CEO's turnaround plan was met with skepticism by the shareholders due to the high risks involved. For participants in the No outcome condition, the case stopped here and they remained unaware of how it ended. Participants in the Negative outcome condition received an additional paragraph (63 words) describing the company went bankrupt, emphasizing the calamitous nature of the bankruptcy by stating the company's employees were left without a job, that several of the company's suppliers went bankrupt because they depended on the company, and that many small shareholders saw their assets evaporate. Section 2 of the supplementary material online contains the full case used in Study 1.

Decision quality

Participants' evaluation of the CEO's turnaround plan (i.e., decision quality) was measured by asking participants to judge the CEO's turnaround plan on an 11‐point scale, with 1 labeled as very bad and 11 labeled as very good. Prior to analyses, the values were recorded for ease of interpretation, such that a higher number reflects a more negative evaluation of the turnaround plan.

Foreseeability

Foreseeability was operationalized by measuring the perceived likelihood of bankruptcy. Participants in the No outcome condition were asked how likely they considered it to be that the CEO's turnaround plan would result in bankruptcy, expressed in a percentage between 0% and 100%. In the Negative outcome condition, the same question was asked but here participants were instructed to ignore the information they had regarding the company's bankruptcy and indicate the likelihood of bankruptcy at the time the turnaround plan was presented and the outcome of the case was still unknown.

Legal responsibility

The CEO's legal responsibility for the company going bankrupt was measured using the following four items, which aimed to capture elements relevant for legal responsibility: (1) "Cees van Gelder acted negligently and he is accountable for APG's bankruptcy," (2) "Cees van Gelder should be held liable for APG's bankruptcy," (3) "Cees van Gelder is responsible for APG's bankruptcy," and (4) "Cees van Gelder is the cause of APG's bankruptcy". Participants answered on a 7‐point Likert scale the extent to which they agreed or disagreed (1 = strongly disagree, 7 = strongly agree) with the statements (Cronbach's α = 0.85). In the No outcome condition (i.e., in foresight), participants were asked about the CEO's legal responsibility for the company's downfall, if it, indeed, went bankrupt.

2.2 Results

2.2.1 Data preparation and analysis plan

Participants who did not spend sufficient time reading the case were excluded from the analyses. The required reading time was based on three standard deviations above the average reading speed for reading the case ( M = 228 words per minute, SD = 30; Trauzettel‐Klosinski & Dietz, 2012). Based on this criterion (76.6 s as the cut‐off in the No outcome condition and 88.5 s in the Negative outcome condition) 94 participants (12.9% of the total sample) were excluded from analyses, resulting in a final sample size of 633 participants, providing a statistical power of 0.86 to detect a small effect. 4

2.2.2 Hindsight bias and outcome bias

A Multivariate Analysis of Variance (MANOVA) was conducted to test for differences between the No outcome and Negative outcome conditions on the three dependent variables. Results are presented in Table 1. The multivariate test was significant, F (3, 629) = 24.93, p < .001, = 0.11, and the subsequent univariate tests indicated a significant difference between the two conditions for all three variables. The foreseeability was deemed higher in hindsight than in foresight (confirming H1), the decision quality was rated more negatively in hindsight than in foresight (confirming H2a), and the participants also attributed more responsibility to the CEO in hindsight than in foresight (confirming H2b).

Dependent variables

No outcome (N = 318)

Outcome (N = 315)

F (1, 631)

p

M

(SD)

M

(SD)

Decision quality

4.83

(2.04)

6.19

(2.07)

69.06

<.001

0.10

Foreseeability

48.47

(17.60)

52.08

(16.14)

6.91

.009

0.01

Legal responsibility

2.39

(0.95)

2.82

(1.10)

26.59

<.001

0.04

2.2.3 Free will beliefs moderating hindsight bias and outcome bias

To investigate the moderating role of free will beliefs (FWB), we used Hayes' PROCESS ( 2013) for the moderation analyses (10,000 bootstrap samples). For the predictor variable Outcome Condition, the No outcome condition was coded as 0 and the Negative outcome condition as 1. Significant interaction effects between Outcome Condition and FWB were found for the dependent variables decision quality, Δ R ² = 0.01, Δ F (1, 629) = 6.56, p = .01, b = 0.36, t(629) = 2.56, p = .01, and legal responsibility, Δ R ² = 0.01, Δ F (1, 629) = 5.57, p = .02, b = 0.17, t(639) = 2.36, p = .02.

Probing the interaction effects with simple slopes analyses revealed that for decision quality, the difference between the No outcome and Negative outcome condition was significant for both those with weaker free will beliefs (−1 SD) and those with stronger free will beliefs (+1 SD). However, the difference was almost twice as large for those with stronger free will beliefs, b = 1.79, t(629) = 7.75, p < .001, d = 0.62, than for those with weaker free will beliefs, b = 0.95, t(629) = 4.13, p < .001, d = 0.33.

For judgments of the CEO's legal responsibility, the difference between the two outcome conditions was almost three times as large for those with stronger free will beliefs, b = 0.61, t(629) = 5.28, p < .001, d = 0.42, than for those with weaker free will beliefs, for whom there was no statistically significant effect, b = 0.22, t(629) = 1.94, p = .05, d = 0.15.

Even though the same pattern was observed for the likelihood judgments (i.e., significant hindsight bias for the group with a stronger belief in free will but not for the group with weaker free will beliefs), the interaction between Outcome Condition and free will beliefs did not reach statistical significance here, b = 1.64, t(629) = 1.37, p = .17. Table 2 for the statistics of the moderation and simple slopes analyses. Figure 1 offers a visual representation of the moderating effect of free will beliefs for the bias in judgments of decision quality and the CEO's legal responsibility.

−1 SD FWB

+1 SD FWB

Int. (SE)

t

b (SE)

t

95% CI

b (SE)

t

95% CI

Decision quality

0.95 (0.23)

0.50, 1.40

1.79 (0.23)

1.34, 2.24

0.36 (0.14)

Model: R ² = 0.110, F (3, 629) = 25.97, p < .001

Foreseeability

1.77 (1.95)

0.90

−2.07, 5.60

5.54 (1.95)

1.71, 9.37

1.64 (1.20)

1.37

Model: R ² = 0.014, F (3, 629) = 2.99, p = .03

Legal responsibility

0.22 (0.12)

1.94

−0.00, 0.45

0.61 (0.12)

0.38, 0.84

0.17 (0.07)

Model: R ² = 0.052, F (3, 629) = 11.45, p < .001

Note

"Int. (SE)" represents the regression weights and standard errors for the interaction effect (Outcome Condition × FWB) and 'Model' shows the statistics for the complete model including the interaction term.

* p < .05;

** p < .01;

*** p < .001.

2.3 Discussion

Study 1 demonstrated that professional legal investigators are susceptible to hindsight bias when judging the foreseeability of bankruptcy as well as to outcome bias when judging a director's actions and legal responsibility for the bankruptcy. Moreover, the degree to which these professionals believe humans have free will appears to predict their susceptibility to outcome bias, such that those with stronger free will beliefs demonstrate a larger bias. This was true for the evaluation of the turnaround plan (i.e., decision quality) and the legal responsibility of the CEO, but not for judgments of the foreseeability of the bankruptcy for which free will beliefs did not moderate the effect, although the observed pattern was in the hypothesized direction.

It remains unclear whether the relatively small bias in foreseeability judgments in Study 1 is due to our sample of professionals being less susceptible to hindsight bias or due to the methods used. Specifically, whereas we only asked how likely it was that the company would go bankrupt on a scale from 0% to 100%, previous studies typically presented several possible outcomes and asked participants to rate the likelihood of each in terms of a percentage, with the sum having to be 100%. This might explain why the hindsight bias was relatively small in our study ( d = 0.20; Cohen, 1988), especially compared to previous studies as indicated by two meta‐analyses that found average effect sizes of d = 0.39 (Guilbault et al., 2004) and d = 0.35 (Christensen‐Szalanski & Willham, 1991). It might also be a reason for why the interaction between free will beliefs and hindsight bias in foreseeability judgments did not reach statistical significance. The second study, therefore, adopted the more commonly used method for measuring hindsight bias in foreseeability judgments, by providing participants with multiple scenarios instead of only one.

An important goal of the second study was to test the robustness of the findings in Study 1. Specifically, we aimed to replicate the observed hindsight bias and the moderating role of free will beliefs in a new international sample of legal professionals, while adopting a different way of measuring foreseeability judgments, as discussed.

The second goal of Study 2 was to test the relationship between free will beliefs and hindsight and outcome bias in a more complete and robust design by including a condition in which the case ends positively, allowing us to investigate whether free will beliefs can predict hindsight biases in general, or whether this relationship depends on the valence of the outcome. Specifically, Study 2 compared a No outcome condition with both a Negative outcome condition and a Positive outcome condition. It could for example be that those with stronger free will beliefs are overall more affected by outcome information in their judgments, independent of the valence of the outcome. If this is the case, we should also observe a moderating role of free will beliefs in case the scenario in Study 2 ends positively. In contrast, if we would find that free will beliefs do not moderate outcome effects in case of a positive ending, this would be in line with our proposed notion that those with stronger free will beliefs are more susceptible to hindsight and outcome bias because of heightened punitive inclinations. After all, the need to blame or punish does not come into play when a positive outcome ensued. Hence, adding the Positive outcome condition allowed us to shed more light on the proposed mechanism underlying the relationship between free will beliefs and hindsight bias.

3 STUDY 2

3.1 Method

3.1.1 Participants and design

We aimed to achieve the same power as in Study 1 of 0.85 to detect a small effect ( f ² = 0.02; Cohen, 1988), which meant we needed around 310 participants per condition. With three conditions (No outcome, Negative outcome, Positive outcome) this amounted to 930 participants. In the end, 1,002 legal professionals worldwide specialized in the areas of insolvency law, business restructuring, and/or recovery participated in Study 2. Participants were members of INSOL International, which is a worldwide federation of national associations of professionals who specialize in turnaround and insolvency. Participants were approached via e‐mail with an invitation to participate in our study. Importantly, none of the participants of Study 2 had taken part in Study 1.

The participants' average age was 46.82 ( SD = 11.8) and 766 (76.4%) were male. Participants had an average of 20.6 years of working experience in their profession ( SD = 11.2) and 82.6% reported to investigate/decide over (director) liability in their work. Five‐hundred and nineteen respondents (51.8%) reported to work as (insolvency) lawyer, 210 (21%) as an accountant (of which 87.6% indicated to investigate and/or decide over directors' liability), 112 as turnaround consultant/manager (11.2%), 109 as trustee (10.9%), 45 as insolvency practitioner (4.5%), 45 as a banker (4.5%; of which 28 reported to investigate/decide over directors' liability), 35 as academic in the legal field (3.5%), 28 indicated "other," and 24 reported to work as a judge (2.4%). Fifty‐four different nationalities are represented in the sample, with the majority of the respondents coming from Australia (20.4%), the United Kingdom (14.5%), and Canada (10.9%). Please see Section 4 of the supplemental material online for a complete overview of the participants' nationalities.

Participants were randomly assigned to one of the three conditions: (1) No outcome, (2) Negative outcome, and (3) Positive outcome. In all three conditions, participants were presented with the same base case, but in the two outcome conditions, a paragraph was added to the case describing either a negative ending (Negative outcome condition) or a positive ending (Positive outcome condition).

3.1.2 Procedure, materials, and measurements

Free will beliefs

At the start of the survey, participants received the same instructions and free will scale (Cronbach's α = 0.83) as in Study 1 ( M = 4.56, SD = 1.26). 5

Business case

Participants were presented with the same case as in Study 1, apart from a few minor alterations (e.g., the company's revenue, degree of cost‐cutting listed in the CEO's turnaround plan, and layout of the case). 6 Please see Section 5 of the supplemental material online for the full case as well as the two outcome paragraphs.

Decision quality

After the case, all participants rated the quality of the turnaround plan (i.e., decision quality) on a 7‐point Likert scale, ranging from (1) very bad to (7) very good. Prior to analyses, the scale was recoded such that a higher value reflects a more negative rating.

Legal responsibility and benevolence

Our renewed design with both a Positive outcome and Negative Outcome condition requires two distinct outcomes, namely legal responsibility and benevolence. Participants were asked three questions to judge the CEO's legal responsibility (in case of a negative outcome; Cronbach's α = 0.69, which indicates sufficient internal validity for theory‐testing purposes; see Nunnally & Bernstein, 1994) and three questions to measure their benevolence toward the CEO (in case of a positive outcome; Cronbach's α = 0.74). Benevolence toward the CEO was measured in Study 2 after the positive outcome to provide a counterpart to the legal responsibility measure after the negative outcome.

To measure legal responsibility, participants were asked to indicate on a 7‐point Likert scale the extent to which they agreed with three statements: (1) "[If this is how the case would end,] I believe Cees van Gelder should be held liable for APG's bankruptcy," (2) "[If this is how the case would end,] I believe Cees van Gelder deserves to be blamed for failing to save APG from bankruptcy," and (3) "[If this is how the case would end,] I believe Cees van Gelder's actions are a direct cause of APG's bankruptcy." This three‐item scale differed from the four‐item scale used in Study 1 for two reasons. First, the item used in Study 1 that measured perceived negligence was omitted as some overlap existed with the foreseeability and decision quality measures. That is, acting negligently means failing to act in a reasonable way to prevent foreseeable harms, which combines decision quality and foreseeability. Second, the item measuring responsibility was omitted as responsibility has multiple dimensions (e.g., role responsibility, causal responsibility; Shaver, 1985) and it is uncertain which type of responsibility respondents had in mind when answering this question. The question pertaining to the degree of blame participants felt the CEO deserved was added to the scale in Study 2.

The items measuring benevolence toward the CEO were: (1) "[If this is how the case would end,] the CEO deserves praise for saving the company from bankruptcy," (2) "[If this is how the case would end,] the CEO should win the industry awards for saving the company from bankruptcy," and (3) "[If this is how the case would end,] the CEO's actions are a direct cause of the company's successful turnaround." The order of the questions was randomized. 7

The text in brackets was only presented to participants in the No outcome condition, as to them the outcome of the case was still unknown. In this condition, the paragraph describing the outcome contingent on the question set (i.e., the negative scenario for the legal responsibility question set and the positive outcome for the benevolence question set) was presented above the question set; hence the phrase "if this is how the case would end." Participants were sequentially presented with both questions sets (i.e., measuring legal responsibility and benevolence) and the order was counterbalanced across participants. 8

Foreseeability

The perceived foreseeability of the bankruptcy was measured in two different ways. First, participants were presented with three scenarios describing potential endings to the case: (1) the positive outcome, (2) the negative outcome, and (3) a neutral outcome in which the company did not go bankrupt, but the problems were far from solved and the company's future was still highly insecure. The position of the positive and negative scenario in the list was counterbalanced across participants, such that for half of the participants the positive scenario was listed first and the negative scenario third, and for the other half this order was reversed (the neutral scenario was always presented in the middle). For each scenario, participants were asked to indicate on a 7‐point Likert scale how likely they believed that particular scenario to be (1 = very unlikely, 7 = very likely). Second, on the next screen participants were asked to answer the same question but this time to express the likelihood of each scenario in terms of a percentage (from 0% to 100%), with the sum of the three percentages equaling 100%. Including two likelihood measures (Likert scale and percentages) allows for a more robust test of the hypothesis, as well as alleviate the shortcoming of the measure of the percentage, which implies interdependency of the percentages allocated to each of the three scenarios as the sum of these three had to be 100%.

Before being debriefed, participants were asked whether English was their native language and, if not, to what extent they agreed or disagreed with the following statement: "I understood the case and the questions completely and experienced no difficulties in answering the questions." Participants answered on a 7‐point Likert scale (1 = strongly disagree, 7 = strongly agree) and the mean score was 6.41 (median = 7.00). 9

3.2 Results

3.2.1 Data preparation and analysis plan

Similar to Study 1, participants who did not spend sufficient time reading the case were excluded from the analyses. We again based the exclusion criterion on three standard deviations above the average reading speed. This resulted in the exclusion of 166 participants (16.6% of the total sample), leaving a final sample size of 836 participants. 10

To test whether the order in which the scenarios and subsequent questions were presented in the No outcome condition affected the answers to these questions, a MANOVA was conducted with the scenario order (negative first-positive second vs. positive first-negative second) as between‐subjects factor and the scores for legal responsibility and benevolence as dependent variables. Results showed no significant effect for question order, F (2, 274) = 1.88, p = .16, = 0.01. Consequently, the data were collapsed across this factor.

3.2.2 Hindsight bias and outcome bias

Legal responsibility was measured only following the negative outcome and benevolence only following the positive outcome. Decision quality was, therefore, the only outcome variable that was measured across conditions, allowing for a direct comparison between the three outcome conditions. An ANOVA with Outcome Condition as between‐subjects variable and decision quality as the dependent variable returned a significant effect, F (2, 833) = 173.54, p < .001, = 0.29. Bonferroni‐corrected post hoc comparisons showed that the quality of the CEO's turnaround plan was judged more negatively in the Negative outcome condition ( M = 4.46) than in the No outcome condition ( M = 3.63), p < .001, 95% CI [0.57, 1.08] and the Positive outcome condition ( M = 2.53), p < .001, 95% CI [1.68, 2.18]. The mean difference between the No outcome condition and the Positive outcome condition was also significant, p < .001, 95% CI [0.86, 1.35]. Hence, participants were susceptible to outcome bias when evaluating the director's actions irrespective of the valence of the outcome, further supporting Hypothesis 2a.

To test for outcome effects in foreseeability, legal responsibility, and benevolence, two separate MANOVAs were conducted. The first compared the No outcome condition with the Negative outcome condition for both foreseeability measures and the legal responsibility measure, F (3, 549) = 14.21, p < .001, = 07. The second compared the No outcome condition with the Positive outcome condition for both foreseeability measures and the benevolence measure, F (3, 556) = 12.32, p < .001, = 0.06. Subsequent ANOVAs indicated that there was a significant effect of Outcome Condition (both for the positive and negative outcome) for both foreseeability measures, but not for legal responsibility or benevolence. Thus, participants were susceptible to hindsight bias in that they perceived both the positive and negative outcome scenarios to be more foreseeable in hindsight than in foresight, in support of Hypothesis 1. However, participants did not show an outcome bias when judging either legal responsibility (for the negative outcome) or benevolence (for the positive outcome), contradicting Hypothesis 2b. Table 3 for the descriptive statistics and significance tests for each variable.

DVs

No outcome (N = 277)

Positive outcome (N = 283)

Negative outcome (N = 276)

F

p

M

(SD)

M

(SD)

M

(SD)

3.2.3 Free will beliefs moderating hindsight bias and outcome bias

We again used Hayes' PROCESS (10,000 bootstrap samples) to investigate the relationship between free will beliefs and the two biases. Separate analyses were run comparing the No outcome condition with the Positive outcome condition and the No outcome condition with the Negative outcome condition, both with free will beliefs as the moderator.

Decision quality

Replicating Study 1, a significant moderation effect of free will beliefs was found for decision quality in case of a negative outcome, Δ R ² = 0.01, F (1, 549) = 4.89, p = .027, b = 0.19, t(549) = 2.21, p = .027, such that a stronger belief in free will was associated with a larger outcome bias. The difference between the No outcome and Negative outcome condition was again almost twice as large for those with stronger free will beliefs, b = 1.07, t(549) = 6.96, p < .001, d = 0.59, than for those with weaker free will beliefs, b = 0.59, t(549) = 3.83, p < .001, d = 0.33. Importantly, this moderation effect did not exist for decision quality in case of a positive outcome, Δ R ² < 0.001, F < 1. Please see Figure 2 for a visual presentation of the relationship between free will beliefs and hindsight bias for decision quality for both the negative and positive outcomes.

Foreseeability

In contrast to Study 1, the interaction effect between free will beliefs and Outcome Condition on foreseeability did reach statistical significance in Study 2 in case of a negative outcome, both when measured in percentages, Δ R ² = 0.02, F (1, 549) = 10.16, p = .002, b = 3.46, t(549) = 3.19, p = .002, and when measured using the Likert scale, Δ R ² = 0.01, F (1, 549) = 4.86, p = .028, b = 0.17, t(549) = 2.20, p = .028. Regarding the percentage measure of foreseeability, participants with stronger free will beliefs demonstrated a more than three times larger hindsight bias, b = 12.24, t(549) = 6.35, p < .001, d = 0.51, than those with a relatively weak belief in free will, for whom there was no statistically significant effect, b = 3.54, t(549) = 1.84, p = .067, d = 0.16. For the Likert scale measure of foreseeability, participants with stronger free will beliefs demonstrated a more than twice as large hindsight bias, b = 0.73, t(549) = 5.46, p < .001, d = 0.46, than those with a relatively weak belief in free will, b = 0.31, t(549) = 2.34, p = .020, d = 0.20.

Importantly, free will beliefs did not moderate the hindsight bias for foreseeability in case of a positive outcome when measured in percentages, Δ R ² = 0.001, F < 1, nor when using the Likert scale measure, Δ R ² < 0.001, F < 1. Please see Figures 3 and 4 for a visual representation of the relationship between free will beliefs and hindsight bias for the foreseeability judgments of both the positive and negative outcomes and Table 4 for the statistics of the moderation and simple slopes analyses.

−1 SD FWB

+1 SD FWB

Int. (SE)

t

b (SE)

t

95% CI

b (SE)

t

95% CI

Foreseeability NEG

3.54 (1.93)

1.84

−0.25, 7.33

12.24 (1.93)

8.45, 16.03

3.46 (1.09)

Legal responsibility

−0.06 (0.14)

−0.42

−0.34, 0.22

0.22 (0.14)

1.57

−0.06, 0.50

0.11 (0.08)

1.41

Benevolence

0.05 (0.11)

0.43

−0.16, 0.25

0.12 (0.11)

1.14

−0.09, 0.33

0.03 (0.06)

0.50

Note

'Int. (SE)' represents the regression weight and standard error for the interaction effects (Outcome Condition × FWB) and 'Model' shows the statistics for the complete model including the interaction term.

* p < .05;

** p < .01;

*** p < .001.

Legal responsibility and benevolence

No significant interactions between free will beliefs and Outcome Condition were found for legal responsibility, Δ R ² = 0.004, F = 1.98, p = .16, or benevolence, Δ R ² < 0.001, F < 1.

3.3 Discussion

Study 2 successfully replicated Study 1 in that we again found a bias in the evaluation of the CEO's turnaround plan and the perceived foreseeability of the bankruptcy, providing further evidence that professional legal investigators in the context of directors' liability are affected by outcome information in their judgments. Additionally, the bias in the evaluation of the CEO's turnaround plan was again significantly larger for those with stronger free will beliefs than for those with weaker free will beliefs. Whereas in Study 1, we did not find a moderation effect for hindsight bias in foreseeability judgments, in Study 2, we did find such an effect for both measures of foreseeability. Hence, using a more common way of measuring hindsight bias (i.e., presenting several alternative scenarios), we found a more pronounced hindsight bias in Study 2 relative to Study 1 as well as a significant moderation effect of free will beliefs. Indeed, the effect sizes for hindsight bias in foreseeability judgments in Study 2 ( d = 0.49 for the percentages measure and d = 0.47 for the Likert‐scale measure) were clearly larger than the effect size found in Study 1 ( d = 0.20) and those found in two meta‐analyses ( d = 0.39 by Guilbault et al., 2004; d = 0.35 by Christensen‐Szalanski & Willham, 1991).

Notably, whereas in Study 1, we found a hindsight bias in judgments of legal responsibility, no such effect was found in Study 2. An explanation might be found in the information that was provided to participants in Study 2 regarding the outcome of the case. That is, hindsight bias is best tested when two groups are compared in which one group is completely ignorant of any outcome information and the other group is fully aware of all the details of a particular outcome, as was the case in Study 1. In Study 2, however, participants in both the No outcome and Negative outcome condition were presented with the complete bankruptcy scenario. The only difference between these conditions for the legal responsibility questions was that in the No outcome condition the scenario was presented as hypothetical and participants were asked how they would judge the legal responsibility of the CEO "if this is how the case would end."

Another reason why there might have been diverging findings between Study 1 and Study 2 regarding the hindsight bias in legal responsibility judgments is that the two scales measuring legal responsibility differed. The scale in Study 1 included an item measuring whether the participants believed the CEO acted negligently and that he, therefore, should be held accountable for the company's bankruptcy, which was omitted in Study 2 as there was some conceptual overlap with the decision quality and foreseeability measures. It is, therefore, possible that the bias for legal responsibility judgments in Study 1 was for an important part driven by the negligence measure.

Finally, descriptive statistics on legal responsibility indicated that participants in Study 2 attributed more legal responsibility for the bankruptcy to the director than participants in Study 1, both in foresight ( M = 3.28 vs. 2.39) and in hindsight ( M = 3.32 vs. 2.82). Legal responsibility attributions in the foresight condition of Study 2 were even higher than the hindsight attributions of Study 1. The difference in legal responsibility attributions between the two studies might be caused by slight differences in the business case used in both studies. 11

Give the discussed differences between Study 1 and Study 2, it is unclear what exactly accounts for the inconsistent results of the outcome bias in legal responsibility attributions and the moderating role of free will beliefs. Combined, however, the results from Study 1 and Study 2 do suggest that free will beliefs can reliably predict susceptibility to outcome bias in post‐insolvency evaluations of directors' conduct, as well as to hindsight bias in foreseeability judgments when these are measured using conventional methods.

4 GENERAL DISCUSSION

The present article primarily aimed to investigate hindsight bias and outcome bias in legal judgments made by professional legal investigators in the context of directors' liability. A second, more exploratory goal was whether free will beliefs can predict the degree to which such professionals are susceptible to these biases. Across two studies, we found that learning about a company's bankruptcy causes legal professionals to perceive the adverse outcome as more foreseeable and also to evaluate the company director's actions more negatively compared to when they are unaware the company went bankrupt. Additionally, we found that the degree to which legal professionals believe in free will predicts the extent to which they are affected by outcome information, such that those with stronger free will beliefs demonstrate a larger outcome bias in evaluations of directors' conduct, as well as a larger hindsight bias in foreseeability judgments. We found mixed results regarding outcome bias in legal responsibility attributions, making it difficult to draw any definite conclusions.

In addition to replicating and thus testing the robustness of the findings of Study 1, an important goal of Study 2 was to examine the relationship between free will beliefs and the two biases in further detail by comparing the foresight condition with a hindsight condition in which the case had a positive ending. By doing so, we were able to shed further light on the mechanism underlying the moderating role of free will beliefs in hindsight bias and outcome bias. Considering the absence of any moderating role of free will beliefs in the case of a positive outcome, it seems that the relationship between free will beliefs and hindsight and outcome bias can, indeed, be explained by blame validation and motivated reasoning processes. Due to their tendency to more strongly condemn wrongful behavior and to be more punitive, those with stronger free will beliefs seem to have been (unconsciously) motivated to arrive at the conclusion that the bankruptcy was foreseeable (Studies 1 and 2), that the CEO's turnaround plan was unsatisfactory (Studies 1 and 2), and that the director should be held legally responsible (in Study 1).

4.1 Theoretical and practical implications

Second, we add to the literature on antecedents of hindsight bias and outcome bias by demonstrating that abstract beliefs such as whether or not humans have free will can predict susceptibility to these biases. Similar to previous research highlighting that situational factors such as emotional states can influence legal judgments (for reviews, see Feigenson, 2016; Feigenson & Park, 2006), our finding that (largely) situationally independent individual characteristics such as belief systems are associated with differences in legal judgments is alarming. Ideally, the outcome of a trial is unaffected by the individual characteristics of the judge deciding over the matter. Likewise, in the case of directors' liability, it is undesirable that the chance of a claim against a director being put forward by a trustee, and possibly being granted by a judge, is affected by irrelevant traits of the legal professionals involved, such as their belief in free will and punitive inclinations. Therefore, the current finding that believing in free will is associated with a larger hindsight bias in legal judgments is particularly noteworthy and potentially worrying finding. It is certainly worrying if the need to punish can, indeed, explain the current research findings, as this would imply that with increasingly adverse outcomes, legal professionals would judge increasingly harsh, possibly resulting in unjustified liability assigned to (mostly) blameless actors. However, as mentioned before, legal decisions are not the result of an individual legal professional operating in isolation. It remains an open question, therefore, to what extent free will beliefs and punitive inclinations affect decision making in real‐world cases.

Finally, we contribute to theory and research on the mechanisms underlying hindsight bias and outcome bias. Thus far, the factors that have been identified as responsible for the motivational origins of hindsight bias are people's need for closure, need for control, and the need to maintain or enhance their self‐esteem (Musch, 2003; Musch & Wagner, 2007; Tykocinski, 2001). The current research is the first to suggest (and provide preliminary evidence) that the motivational processes underlying hindsight and outcome bias can also stem from people's need to condemn and punish wrongdoing.

Importantly, we did not directly test punitive inclinations as the underlying mechanism of hindsight and outcome bias but rather measured free will beliefs as a proxy. However, as alluded to in the introduction of this paper, there is ample evidence for the proximal association between free will beliefs and punitiveness and we, therefore, consider free will beliefs to be a useful and valid proxy for people's punitive inclinations. The results of Study 2 lent further support for the notion that punitive inclinations account for the moderating influence of free will beliefs. Here, we did not observe a moderating role of free will beliefs in case of a positive outcome, which refutes an alternative explanation that can be derived from the literature for the observed moderation effect of free will beliefs. That is, beliefs regarding free will have been shown to affect causal reasoning processes, which are deemed essential for hindsight bias to occur. In a series of experiments, Genschow et al. ( 2017) found that a stronger belief in free will is associated with an increase in the correspondence bias, which is the automatic inclination to overemphasize internal over external factors when evaluating the causes of someone's actions (Gilbert & Malone, 1995; also known as the fundamental attribution error; e.g., Ross, 1977). Therefore, those with stronger free will beliefs might be more likely to conclude that directors are to be held causally responsible (and therefore legally responsible) for a company's downfall. However, the correspondence bias cannot account for all of our findings. That is, correspondence bias deals with causal attributions and-on a conceptual level-it can, therefore, have an indirect effect on attributions of legal responsibility (i.e., being causally responsible is a requirement for legal responsibility), but not on judgments of foreseeability or assessments of decision quality. Nonetheless, it would be a worthwhile endeavor for future research to develop a more direct measure of punitiveness for a more comprehensive understanding of the association between punitiveness and susceptibility to hindsight bias and outcome bias.

We, therefore, encourage future research to further investigate (1) whether people's punitive inclinations can, indeed, explain their susceptibility to hindsight bias, (2) how large this potential problem actually is in real‐world legal practice, and (3) what can be done to limit the potential effects of individual characteristics on legal judgments.

4.2 Limitations

The current research is not without its limitations and certain issues remain that should be addressed carefully in research following the findings presented herein. First, even though we consider our large sample of legal professionals from across the globe to be a strength of the current research, the pluriformity in the participants' nationalities does pose a few challenges. For example, differences across countries exist in legislation concerning directors' liability and we are uncertain to what extent this might have affected participants' responses. Unfortunately, in addition to being beyond the scope of the current research, our data set does not allow for analyses comparing participants from (groups of) different nationalities or jurisdictions, as splitting the sample into different groups would result in insufficient statistical power to detect the effects of interest. The same limitation applies to analyses comparing participants with different roles in legal procedures. While the samples of the two studies consisted of for example lawyers, judges, and insolvency practitioners, group‐level analyses are not warranted because of sample size issues. As it is of relevance for legal practice to examine whether the observed effects are more or less pronounced for different groups, we recommend that future research takes into account the sampling requirements for drawing conclusions about differences across groups in the population.

Second, it would be worthwhile to investigate whether the current findings can be replicated using different case materials. That is, the case concerned a Dutch company with a director who had a typically Dutch name (i.e., Cees van Gelder). It might be that for some people this triggered certain stereotypes or other automatic inclinations toward Dutch directors.

A third limitation of the current study is that when doing experimental research, it is generally difficult to establish whether the findings can be generalized to, in this case, real‐life court cases and how large of an effect it might have in such a real‐world context. As alluded to earlier, it could be that courtroom dynamics between the different parties might ultimately neutralize the biases observed in our research. At the same time, there is also the possibility that group dynamics aggravate the psychological processes underlying biased judgments.

Another issue concerns whether the observed findings can be extended beyond the domain of directors' liability in bankruptcy proceedings to for example breach of fiduciary duty tort suits, criminal charges against directors, or to cases that are more high profile with a considerable impact for society. One reason to think that the present findings might not generalize to more severe cases (e.g., fraud, self‐enrichment) is that past a certain threshold of the severity of an offense, most people will probably experience a strong need to punish the offender, regardless of whether they believe in free will or not. Indeed, Krueger and colleagues ( 2014) have shown that when people are asked to punish an offender in a low‐affect case (e.g., property theft), people believing more strongly in free will punished harsher than those who were more skeptical of free will. When people were asked how harsh they would punish an offender in a high‐affect case (e.g., murder), no difference based on free will beliefs was found. Hence, if it is, indeed, true that free will beliefs can predict the degree of hindsight bias due to a higher need to punish and resulting motivated cognition on behalf of those with stronger free will beliefs, it could be that in high‐affect criminal law cases (or other more high‐affect cases such as a high‐profile bankruptcy case with severe consequences for society) the moderating role of free will beliefs would disappear.

CONFLICT OF INTEREST

The authors have no conflicts of interest to disclosure.

The data that support the findings of this study are openly available in OSF at http://doi.org/10.17605/OSF.IO/CVS9R.

ETHICAL STATEMENT
The research has been conducted in accordance with the authors' institutions' ethics guidelines.

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Abstract

Following a corporate disaster such as bankruptcy, people in general and damaged parties, in particular, want to know what happened and whether the company's directors are to blame. The accurate assessment of directors' liability can be jeopardized by having to judge in hindsight with full knowledge of the adverse outcome. The present study investigates whether professional legal investigators such as judges and lawyers are affected by hindsight bias and outcome bias when evaluating directors' conduct in a bankruptcy case. Additionally, to advance our understanding of the mechanisms underlying these biases, we also examine whether free will beliefs can predict susceptibility to hindsight bias and outcome bias in this context. In two studies (total N = 1,729), we demonstrate that legal professionals tend to judge a director's actions more negatively and perceive bankruptcy as more foreseeable in hindsight than in foresight and that these effects are significantly stronger for those who endorse the notion that humans have free will. This contribution is particularly timely considering the many companies that are currently going bankrupt or are facing bankruptcy amidst the COVID‐19 pandemic.

1 INTRODUCTION

After a disastrous event, public outcry often follows over who is to blame. Think for example of the sinking of the MS Estonia cruise ferry in 1994, the Deepwater Horizon oil spill in the Gulf of Mexico in 2010, or the Ponte Marandi bridge collapse in Genoa (Italy) in 2018, just to name a few. In such cases, people want to know what caused the event and whether there is someone to blame and to be held legally liable for the consequences. In this regard, corporate "disasters" are not much different. After the Enron bankruptcy in 2001, the collapse of Lehman Brothers in 2008, and more recently the Volkswagen emissions scandal, the public (as well as the authorities) demanded thorough investigations and that those to blame were held accountable. Also in less high‐profile cases of business failure do the local communities or creditors typically appeal for a thorough investigation into the causes of the event. In some jurisdictions, an investigation into the causes of a company's failure is even mandatory.

In such investigations, attention often centers on the role of the company's directors to for example determine whether there has been a breach of fiduciary duties, wrongful trading, or gross business misjudgments. 1 If such wrongful conduct is, indeed, proven, directors can be held liable for damages, and creditors thus (partly) reclaim their losses. Investigations into a director's conduct are normally carried out by professionals who have a legal or financial background (or both), such as lawyers, trustees, insolvency practitioners, liquidators, or forensic accountants, possibly in conjunction with an investigating judge/magistrate (in inquisitorial systems).

It is imperative that these legal professionals assess a directors' actions in relation to an adverse event in an objective and reliable manner. Accurate and unbiased assessments are important for general reasons such as predictability of the relevant legislation (i.e., legal certainty) and resultant trust in legal systems, but also because being held liable for a company's downfall can have detrimental effects on a director's personal well‐being (Jenkins et al., 2014; Kesteren et al., 2017; Ucbasaran et al., 2013). Additionally, from a professional point of view, reputations are at risk, and liability for all creditor claims on the bankrupt estate in some cases far exceed insurance coverage and can, therefore, lead to dire financial circumstances in the private sphere. Hence, an accurate assessment of a director's conduct in relation to an adverse event is paramount.

However, there is good reason to believe that the accurate assessment of a director's conduct and its relation to a corporate mishap can be jeopardized by the fact that such assessments are made in hindsight when the investigators and legal decision makers are aware of the adverse outcome. Judgments made in hindsight are notoriously susceptible to hindsight bias, which is the phenomenon of perceiving past events as more foreseeable and/or inevitable than was realistically the case prior to the event's unfolding (Fischhoff, 1975). Additionally, when judging in hindsight people tend to let the consequences of a certain decision or action unjustifiably affect their judgments regarding the quality of that action or decision, such that these are perceived more negatively after a negative outcome than after a positive outcome (i.e., outcome bias; Baron & Hershey, 1988). As a result of hindsight bias and outcome bias, decisions made by a director that seemed reasonable at the time, might in case of a bad outcome (e.g., company going bankrupt) be perceived as negligent.

That being said, it currently remains an open question whether legal professionals who investigate and evaluate a director's conduct are, indeed, affected by hindsight bias and outcome bias. The current paper's primary goal is to address this question, as we posit that previous research on hindsight bias does not fully allow for extrapolation to the current context of directors' liability cases. An additional, more explorative goal of the current paper is to investigate the relationship between legal professionals' beliefs regarding free will and their susceptibility to hindsight bias and outcome bias. We believe investigating this relationship might help improve our understanding of the drivers behind these biases.

1.1 Hindsight bias in legal judgments

Despite this evidence of hindsight bias affecting legal decision making, we believe the question of whether professional legal investigators will succumb to hindsight bias when conducting investigations into directors' conduct warrants further investigation, for several reasons. First, it is unclear to what extent previous research on hindsight bias can be generalized to the current context of directors' liability, as research investigating hindsight bias among legal professionals is scarce, generally suffers from low statistical power, and has shown mixed results. That is, in contrast to the literature discussed so far, some studies did not find any effects of outcome information on legal professionals' judgments. For example, Wistrich et al. ( 2005) observed that judges were able to ignore inadmissible outcome information when assessing probable cause for a police search (see also Rachlinski et al., 2011). Moreover, Hastie and Viscusi ( 1998) found that judges were less affected by hindsight bias than mock jurors. We, therefore, believe the small but growing body of research on hindsight bias in legal decision making could benefit from further, high‐powered research.

Second, the research on hindsight bias among legal professionals so far has focused solely on judges. However, in the current context of directors' liability, other legal professionals such as trustees, insolvency lawyers, and insolvency practitioners play a more prominent role as they most often lead the investigations into directors' conduct. Moreover, whereas judges are typically generalists dealing with a range of different cases in different legal domains, the legal professionals investigating directors' conduct in liability investigations are specialists in the sense that a significant portion of their work focuses on investigations into insolvent businesses and other corporate mishaps that might result in personal liability for directors and officers. We deem it worthwhile, therefore, to investigate whether this specific group of legal professionals is affected by hindsight bias.

Finally, applied research is needed to inform public policy and legislation that aim to address the risk of hindsight bias in directors' liability cases. In the United States, for example, the business judgment rule limits the liability of directors and officers for decisions that turned out badly, as courts recognize that "after the fact litigation is a most imperfect device" and "a reasoned decision may seem a wild hunch viewed years later against a background of perfect knowledge" (Rachlinski, 1998, p. 621; see also Arkes & Schipani, 1994). In Europe, where new legislation is being developed to harmonize insolvency laws across its member states (e.g., European Commission, 2016; Fletcher & Wessels, 2012), discussions concerning the potential effects of hindsight bias are taking place. However, as of yet, no research has directly tested whether legal professionals' evaluations of directors' actions are, indeed, susceptible to hindsight bias. Hence, recent developments in the area of insolvency law in Europe as well as existing regulations across the globe ask for thorough research so as to allow for evidence‐based policies and legislation.

Al in all, we consider it worthwhile to investigate whether legal professionals who investigate directors' conduct in light of a potential liability claim are in fact susceptible to hindsight bias. We, therefore, aim to test the following hypothesis:

Hypothesis 1.Professional legal investigators' ex‐post judgments of the foreseeability of a corporate bankruptcy are higher than their ex‐ante foreseeability judgments.

1.2 Outcome bias in legal judgments

In addition to affecting judgments of foreseeability, judgments made in hindsight might also affect judgments of decision quality. When people evaluate others' actions while knowing its consequences, it is common that the consequences are factored into the evaluation of the actions. As a result, the same action is evaluated more negatively when it results in a negative outcome than when a positive outcome ensues (Bazerman & Sezer, 2016; Gino et al., 2009; Lipshitz & Barak, 1995; Mazzocco et al., 2004; Robbennolt, 2000). Although very similar to hindsight bias in that outcome information unjustifiably affects the evaluation of events in the past, a bias in evaluations of decision quality constitutes outcome bias rather than hindsight bias.

In a recent study investigating outcome bias in legal decision making, judges were found to perceive a particular individual to have acted more intentionally when that person's actions resulted in a severely bad outcome versus a moderately bad outcome (Kneer & Bourgeois‐Gironde, 2017). Hence, outcome information can distort legally relevant judgments even of those who have received extensive training to not let irrelevant factors affect their judgment (see also Anderson et al., 1997; Charron & Lowe, 2008). It, therefore, follows that professional legal investigators who are tasked with evaluating a director's conduct and its relation to incurred damages by the company's shareholders or creditors might also succumb to the bias' influence. For example, when a strategic decision made by a director ends badly, they might erroneously conclude the decision was a poor one even though other factors might have contributed more strongly to the unfortunate outcome. In fact, the unwanted consequences might have happened despite rather than because of the director's actions.

Even though outcome bias in professional legal investigators' judgments might manifest in multiple areas, in the present paper we focus on the two most relevant elements. First, we test whether the strategic decisions made by a director are perceived more negatively in hindsight than in foresight, as this might lead investigators to believe the director made a gross business misjudgment or even breached fiduciary duties toward shareholders and creditors. Second, we test whether ultimately the investigators believe more strongly that a director is legally responsible when they know the business went bankrupt (i.e., hindsight judgment) compared to when they are still ignorant of the company's fate (i.e., foresight judgments). We formulated the following two hypotheses:

Hypothesis 2a.Professional legal investigators' ex‐post evaluations of the quality of a director's actions are more negative than their ex‐ante judgments.

Hypothesis 2b.Professional legal investigators' ex‐post attributions of a director's legal responsibility are higher than their ex‐ante attributions.

1.3 Punitiveness, free will beliefs, and judging in hindsight

Even though the discovery of hindsight bias was already made four decades ago, research is still trying to fully understand its underlying mechanisms. We posit that research on individual differences in hindsight bias might help achieve this goal. Thus far, research on individual differences in hindsight bias is relatively scarce, shows mixed results, and generally suffers from (very) low statistical power (Musch & Wagner, 2007). The same applies to the literature on outcome bias in that little research has been devoted to understanding the underlying mechanisms and no reliable individual differences have been identified. Thus far, factors that have been found to cause outcome bias are failing to sufficiently take into account the decision quality itself (Baron & Hershey, 1988), the process that led to the decision (Brockner & Wiesenfeld, 1996), or an agent's intentions (Sezer et al., 2016). Therefore, a second, more exploratory goal of this study is to investigate individual differences in hindsight bias and outcome bias with the aim of improving our understanding of these biases. Specifically, we investigate whether the desire to blame and punish wrongdoers can predict professional legal investigators' susceptibility to hindsight bias and outcome bias.

Traditionally, it was believed that attributions of blame and punishment are the end product of careful consideration of relevant factors, such as whether an individual intentionally brought about an adverse outcome and whether the outcome was foreseeable (e.g., Malle et al., 2014). However, evidence is accumulating for an alternative position suggesting that blame processes can actually operate in the opposite direction. That is, initial moral judgments and punitive inclinations can affect subsequent sense‐making processes such that these are biased to be consistent with the initial judgment. Such motivated cognition processes entail that one engages in biased sense‐making and information processing with the aim to arrive at thedesired conclusion, all the while being under the illusion of acting objectively (e.g., Kunda, 1990; Nadler & Mueller, 2017; Sood & Darley, 2012).

We, therefore, put forward the possibility that once legal professionals are made aware of a company's downfall and collateral damage, their initial moral reactions might activate blame‐validation and motivated reasoning processes, leading them to judge the director's role in the downfall in such a way that it is coherent with their initial moral reaction. In other words, it may be legal professionals' motivation to blame and punish that drives hindsight bias and outcome bias, such that they judge a director's strategic plans more negatively, the bankruptcy as more foreseeable, and the director to be more responsible for the bankruptcy compared with when they are unaware of the company's downfall. If hindsight bias and outcome bias can, indeed, stem from blame‐validation processes, it follows that people with a stronger tendency to moralize events and condemn and punish wrongdoing should display a stronger bias. We can, therefore, expect an association between people's punitive inclinations (i.e., their motivation to blame and punish) and their susceptibility to hindsight bias and outcome bias.

A useful proxy of people's punitive inclinations is their belief in free will. People with stronger free will beliefs appear to (1) be more intolerant of unethical behavior, (2) be more punitive, and (3) show greater support for severe criminal punishment and retributive punishment (Carey & Paulhus, 2013; Martin et al., 2017; Savani et al., 2011; Shariff et al., 2014; Stroessner & Green, 1990). Indeed, it seems that free will beliefs are closely tied to people's innate needs to hold others morally responsible for their actions and to condemn and punish wrongdoers (Clark et al., 2014). Therefore, if people's punitive desires can, indeed, cause hindsight bias to manifest, a relation between free will beliefs and hindsight bias should be observed.

In hindsight, legal professionals who believe more strongly in free will might show higher ratings of foreseeability, evaluate a director's actions more negatively, and attribute more legal responsibility to the director than those who show less commitment to the notion of free will, due to the former's stronger punitive predispositions. Based on this line of reasoning, we formulated the following hypothesis.

Hypothesis 3.Free will beliefs are positively associated with hindsight bias and outcome bias.

1.4 The present studies

To summarize, the current research aims (1) to investigate whether legal professionals tasked with investigating directors' conduct following a corporate mishap are affected by hindsight bias and outcome bias, and (2) to provide a first test of the potential relationship between people's punitiveness (as measured by their belief in free will) and these biases.

By doing so, we aim to add to the literature in three important ways. First and foremost, we provide a first test of whether professional legal investigators are affected by hindsight bias and outcome bias when investigating a director's conduct in relation to a corporate mishap. Second, we contribute to the small but growing body of research investigating hindsight bias in legal judgments among professionals (rather than lay people), which thus far has shown mixed results. Third, by bringing together the literature on hindsight bias, outcome bias, and free will beliefs, we provide the first study that investigates whether blame processes can drive hindsight bias and outcome bias and thus whether personally held beliefs regarding relatively abstract concepts, such as whether or not humans have free will, can predict susceptibility to these biases.

We test our hypotheses in two experiments. In both studies, participants were presented with a hypothetical bankruptcy case. Using a typical hypothetical hindsight bias research design (Pohl, 2007), half of the participants received the case with no outcome (i.e., participants remain unaware the company went bankrupt) and the other half received the same case but now including the outcome (i.e., the company going bankrupt). Study 2 was largely identical to Study 1 with the addition of a positive outcome condition in which participants learned that the company was saved from bankruptcy. The main purposes of this second study were (1) to replicate and examine the robustness of the findings of Study 1, and (2) to shed light on potential alternative mechanisms through which the moderating role of free will beliefs in hindsight and outcome bias can be explained (i.e., mechanisms other than motivated cognition due to participants' need to punish).

2 STUDY 1

2.1 Method

2.1.1 Participants

We aimed to conduct a highly powered study and determined, using G*Power 3.1 (Faul et al., 2009), that we needed 619 participants to have a power of 0.85 to detect a small effect ( f ² = 0.02; Cohen, 1988). In the end, 727 professionals (553 males; 76.1%) specialized in the areas of insolvency law, business restructuring, and/or recovery participated in our online survey. Participants were members of INSOL Europe, which is the European organization of professionals who specialize in insolvency, business restructuring, and recovery. Participants were approached via e‐mail with an invitation to participate in our study. The e‐mail contained the link to the online survey that was built using Qualtrics ( 2018) online survey software.

Of all participants, 393 reported to work as an insolvency lawyer, 144 as insolvency practitioner, 75 as turnaround consultant/manager, 68 as trustee, 49 as judge, 48 as banker (of which 32 reported to have a legal background), 38 as academic in the legal field and 15 chose "other.". 2 86.7% reported to investigate/decide over directors' liability in their work. The average age was 47.9 ( SD = 10.4) and participants had on average 21.4 years of working experience in their profession. Thirty‐seven different European nationalities are represented in the sample. The three countries with the greatest number of participants are the United Kingdom (34.8%), Germany (9.4%), and Romania (8.9%). Please see Section 1 of the supplementary materials online for a complete overview of the participants' nationalities.

2.1.2 Design and procedure

Participants were randomly assigned to either the No outcome condition or the Negative outcome condition. Participants were first presented with a brief questionnaire to measure their belief in free will, after which they were presented with a business case. After the case, participants were asked questions regarding the three main variables of interest: (1) decision quality, (2) foreseeability, and (3) the CEO's legal responsibility. Finally, several exploratory questions were presented to the participants, 3 after which participants were debriefed.

2.1.3 Materials and measurements

Free will beliefs

Participants' belief in free will was measured using the Free Will Subscale of the Free Will Inventory (FWI; Nadelhoffer et al., 2014). The scale consists of five items (Cronbach's α = 0.80) and includes items such as "How people's lives unfold is completely up to them" and "People always have the ability to do otherwise." Participants indicated to what extent they agreed with each statement on a 7‐point Likert scale, ranging from (1) strongly disagree to (7) strongly agree ( M = 4.42, SD = 1.15).

Business case

The base case (i.e., without outcome information and therefore identical for both conditions; 403 words in length) described a publicly listed company that was in financial difficulties and therefore hired a new CEO ("Cees van Gelder") to turn the tide. In order to do so, the CEO designed a turnaround plan which stated the actions he thought needed to be taken to avoid bankruptcy and resume profitability. The new CEO's turnaround plan was met with skepticism by the shareholders due to the high risks involved. For participants in the No outcome condition, the case stopped here and they remained unaware of how it ended. Participants in the Negative outcome condition received an additional paragraph (63 words) describing the company went bankrupt, emphasizing the calamitous nature of the bankruptcy by stating the company's employees were left without a job, that several of the company's suppliers went bankrupt because they depended on the company, and that many small shareholders saw their assets evaporate. Section 2 of the supplementary material online contains the full case used in Study 1.

Decision quality

Participants' evaluation of the CEO's turnaround plan (i.e., decision quality) was measured by asking participants to judge the CEO's turnaround plan on an 11‐point scale, with 1 labeled as very bad and 11 labeled as very good. Prior to analyses, the values were recorded for ease of interpretation, such that a higher number reflects a more negative evaluation of the turnaround plan.

Foreseeability

Foreseeability was operationalized by measuring the perceived likelihood of bankruptcy. Participants in the No outcome condition were asked how likely they considered it to be that the CEO's turnaround plan would result in bankruptcy, expressed in a percentage between 0% and 100%. In the Negative outcome condition, the same question was asked but here participants were instructed to ignore the information they had regarding the company's bankruptcy and indicate the likelihood of bankruptcy at the time the turnaround plan was presented and the outcome of the case was still unknown.

Legal responsibility

The CEO's legal responsibility for the company going bankrupt was measured using the following four items, which aimed to capture elements relevant for legal responsibility: (1) "Cees van Gelder acted negligently and he is accountable for APG's bankruptcy," (2) "Cees van Gelder should be held liable for APG's bankruptcy," (3) "Cees van Gelder is responsible for APG's bankruptcy," and (4) "Cees van Gelder is the cause of APG's bankruptcy". Participants answered on a 7‐point Likert scale the extent to which they agreed or disagreed (1 = strongly disagree, 7 = strongly agree) with the statements (Cronbach's α = 0.85). In the No outcome condition (i.e., in foresight), participants were asked about the CEO's legal responsibility for the company's downfall, if it, indeed, went bankrupt.

2.2 Results

2.2.1 Data preparation and analysis plan

Participants who did not spend sufficient time reading the case were excluded from the analyses. The required reading time was based on three standard deviations above the average reading speed for reading the case ( M = 228 words per minute, SD = 30; Trauzettel‐Klosinski & Dietz, 2012). Based on this criterion (76.6 s as the cut‐off in the No outcome condition and 88.5 s in the Negative outcome condition) 94 participants (12.9% of the total sample) were excluded from analyses, resulting in a final sample size of 633 participants, providing a statistical power of 0.86 to detect a small effect. 4

2.2.2 Hindsight bias and outcome bias

A Multivariate Analysis of Variance (MANOVA) was conducted to test for differences between the No outcome and Negative outcome conditions on the three dependent variables. Results are presented in Table 1. The multivariate test was significant, F (3, 629) = 24.93, p < .001, = 0.11, and the subsequent univariate tests indicated a significant difference between the two conditions for all three variables. The foreseeability was deemed higher in hindsight than in foresight (confirming H1), the decision quality was rated more negatively in hindsight than in foresight (confirming H2a), and the participants also attributed more responsibility to the CEO in hindsight than in foresight (confirming H2b).

Dependent variables

No outcome (N = 318)

Outcome (N = 315)

F (1, 631)

p

M

(SD)

M

(SD)

Decision quality

4.83

(2.04)

6.19

(2.07)

69.06

<.001

0.10

Foreseeability

48.47

(17.60)

52.08

(16.14)

6.91

.009

0.01

Legal responsibility

2.39

(0.95)

2.82

(1.10)

26.59

<.001

0.04

2.2.3 Free will beliefs moderating hindsight bias and outcome bias

To investigate the moderating role of free will beliefs (FWB), we used Hayes' PROCESS ( 2013) for the moderation analyses (10,000 bootstrap samples). For the predictor variable Outcome Condition, the No outcome condition was coded as 0 and the Negative outcome condition as 1. Significant interaction effects between Outcome Condition and FWB were found for the dependent variables decision quality, Δ R ² = 0.01, Δ F (1, 629) = 6.56, p = .01, b = 0.36, t(629) = 2.56, p = .01, and legal responsibility, Δ R ² = 0.01, Δ F (1, 629) = 5.57, p = .02, b = 0.17, t(639) = 2.36, p = .02.

Probing the interaction effects with simple slopes analyses revealed that for decision quality, the difference between the No outcome and Negative outcome condition was significant for both those with weaker free will beliefs (−1 SD) and those with stronger free will beliefs (+1 SD). However, the difference was almost twice as large for those with stronger free will beliefs, b = 1.79, t(629) = 7.75, p < .001, d = 0.62, than for those with weaker free will beliefs, b = 0.95, t(629) = 4.13, p < .001, d = 0.33.

For judgments of the CEO's legal responsibility, the difference between the two outcome conditions was almost three times as large for those with stronger free will beliefs, b = 0.61, t(629) = 5.28, p < .001, d = 0.42, than for those with weaker free will beliefs, for whom there was no statistically significant effect, b = 0.22, t(629) = 1.94, p = .05, d = 0.15.

Even though the same pattern was observed for the likelihood judgments (i.e., significant hindsight bias for the group with a stronger belief in free will but not for the group with weaker free will beliefs), the interaction between Outcome Condition and free will beliefs did not reach statistical significance here, b = 1.64, t(629) = 1.37, p = .17. Table 2 for the statistics of the moderation and simple slopes analyses. Figure 1 offers a visual representation of the moderating effect of free will beliefs for the bias in judgments of decision quality and the CEO's legal responsibility.

−1 SD FWB

+1 SD FWB

Int. (SE)

t

b (SE)

t

95% CI

b (SE)

t

95% CI

Decision quality

0.95 (0.23)

0.50, 1.40

1.79 (0.23)

1.34, 2.24

0.36 (0.14)

Model: R ² = 0.110, F (3, 629) = 25.97, p < .001

Foreseeability

1.77 (1.95)

0.90

−2.07, 5.60

5.54 (1.95)

1.71, 9.37

1.64 (1.20)

1.37

Model: R ² = 0.014, F (3, 629) = 2.99, p = .03

Legal responsibility

0.22 (0.12)

1.94

−0.00, 0.45

0.61 (0.12)

0.38, 0.84

0.17 (0.07)

Model: R ² = 0.052, F (3, 629) = 11.45, p < .001

Note

"Int. (SE)" represents the regression weights and standard errors for the interaction effect (Outcome Condition × FWB) and 'Model' shows the statistics for the complete model including the interaction term.

* p < .05;

** p < .01;

*** p < .001.

2.3 Discussion

Study 1 demonstrated that professional legal investigators are susceptible to hindsight bias when judging the foreseeability of bankruptcy as well as to outcome bias when judging a director's actions and legal responsibility for the bankruptcy. Moreover, the degree to which these professionals believe humans have free will appears to predict their susceptibility to outcome bias, such that those with stronger free will beliefs demonstrate a larger bias. This was true for the evaluation of the turnaround plan (i.e., decision quality) and the legal responsibility of the CEO, but not for judgments of the foreseeability of the bankruptcy for which free will beliefs did not moderate the effect, although the observed pattern was in the hypothesized direction.

It remains unclear whether the relatively small bias in foreseeability judgments in Study 1 is due to our sample of professionals being less susceptible to hindsight bias or due to the methods used. Specifically, whereas we only asked how likely it was that the company would go bankrupt on a scale from 0% to 100%, previous studies typically presented several possible outcomes and asked participants to rate the likelihood of each in terms of a percentage, with the sum having to be 100%. This might explain why the hindsight bias was relatively small in our study ( d = 0.20; Cohen, 1988), especially compared to previous studies as indicated by two meta‐analyses that found average effect sizes of d = 0.39 (Guilbault et al., 2004) and d = 0.35 (Christensen‐Szalanski & Willham, 1991). It might also be a reason for why the interaction between free will beliefs and hindsight bias in foreseeability judgments did not reach statistical significance. The second study, therefore, adopted the more commonly used method for measuring hindsight bias in foreseeability judgments, by providing participants with multiple scenarios instead of only one.

An important goal of the second study was to test the robustness of the findings in Study 1. Specifically, we aimed to replicate the observed hindsight bias and the moderating role of free will beliefs in a new international sample of legal professionals, while adopting a different way of measuring foreseeability judgments, as discussed.

The second goal of Study 2 was to test the relationship between free will beliefs and hindsight and outcome bias in a more complete and robust design by including a condition in which the case ends positively, allowing us to investigate whether free will beliefs can predict hindsight biases in general, or whether this relationship depends on the valence of the outcome. Specifically, Study 2 compared a No outcome condition with both a Negative outcome condition and a Positive outcome condition. It could for example be that those with stronger free will beliefs are overall more affected by outcome information in their judgments, independent of the valence of the outcome. If this is the case, we should also observe a moderating role of free will beliefs in case the scenario in Study 2 ends positively. In contrast, if we would find that free will beliefs do not moderate outcome effects in case of a positive ending, this would be in line with our proposed notion that those with stronger free will beliefs are more susceptible to hindsight and outcome bias because of heightened punitive inclinations. After all, the need to blame or punish does not come into play when a positive outcome ensued. Hence, adding the Positive outcome condition allowed us to shed more light on the proposed mechanism underlying the relationship between free will beliefs and hindsight bias.

3 STUDY 2

3.1 Method

3.1.1 Participants and design

We aimed to achieve the same power as in Study 1 of 0.85 to detect a small effect ( f ² = 0.02; Cohen, 1988), which meant we needed around 310 participants per condition. With three conditions (No outcome, Negative outcome, Positive outcome) this amounted to 930 participants. In the end, 1,002 legal professionals worldwide specialized in the areas of insolvency law, business restructuring, and/or recovery participated in Study 2. Participants were members of INSOL International, which is a worldwide federation of national associations of professionals who specialize in turnaround and insolvency. Participants were approached via e‐mail with an invitation to participate in our study. Importantly, none of the participants of Study 2 had taken part in Study 1.

The participants' average age was 46.82 ( SD = 11.8) and 766 (76.4%) were male. Participants had an average of 20.6 years of working experience in their profession ( SD = 11.2) and 82.6% reported to investigate/decide over (director) liability in their work. Five‐hundred and nineteen respondents (51.8%) reported to work as (insolvency) lawyer, 210 (21%) as an accountant (of which 87.6% indicated to investigate and/or decide over directors' liability), 112 as turnaround consultant/manager (11.2%), 109 as trustee (10.9%), 45 as insolvency practitioner (4.5%), 45 as a banker (4.5%; of which 28 reported to investigate/decide over directors' liability), 35 as academic in the legal field (3.5%), 28 indicated "other," and 24 reported to work as a judge (2.4%). Fifty‐four different nationalities are represented in the sample, with the majority of the respondents coming from Australia (20.4%), the United Kingdom (14.5%), and Canada (10.9%). Please see Section 4 of the supplemental material online for a complete overview of the participants' nationalities.

Participants were randomly assigned to one of the three conditions: (1) No outcome, (2) Negative outcome, and (3) Positive outcome. In all three conditions, participants were presented with the same base case, but in the two outcome conditions, a paragraph was added to the case describing either a negative ending (Negative outcome condition) or a positive ending (Positive outcome condition).

3.1.2 Procedure, materials, and measurements

Free will beliefs

At the start of the survey, participants received the same instructions and free will scale (Cronbach's α = 0.83) as in Study 1 ( M = 4.56, SD = 1.26). 5

Business case

Participants were presented with the same case as in Study 1, apart from a few minor alterations (e.g., the company's revenue, degree of cost‐cutting listed in the CEO's turnaround plan, and layout of the case). 6 Please see Section 5 of the supplemental material online for the full case as well as the two outcome paragraphs.

Decision quality

After the case, all participants rated the quality of the turnaround plan (i.e., decision quality) on a 7‐point Likert scale, ranging from (1) very bad to (7) very good. Prior to analyses, the scale was recoded such that a higher value reflects a more negative rating.

Legal responsibility and benevolence

Our renewed design with both a Positive outcome and Negative Outcome condition requires two distinct outcomes, namely legal responsibility and benevolence. Participants were asked three questions to judge the CEO's legal responsibility (in case of a negative outcome; Cronbach's α = 0.69, which indicates sufficient internal validity for theory‐testing purposes; see Nunnally & Bernstein, 1994) and three questions to measure their benevolence toward the CEO (in case of a positive outcome; Cronbach's α = 0.74). Benevolence toward the CEO was measured in Study 2 after the positive outcome to provide a counterpart to the legal responsibility measure after the negative outcome.

To measure legal responsibility, participants were asked to indicate on a 7‐point Likert scale the extent to which they agreed with three statements: (1) "[If this is how the case would end,] I believe Cees van Gelder should be held liable for APG's bankruptcy," (2) "[If this is how the case would end,] I believe Cees van Gelder deserves to be blamed for failing to save APG from bankruptcy," and (3) "[If this is how the case would end,] I believe Cees van Gelder's actions are a direct cause of APG's bankruptcy." This three‐item scale differed from the four‐item scale used in Study 1 for two reasons. First, the item used in Study 1 that measured perceived negligence was omitted as some overlap existed with the foreseeability and decision quality measures. That is, acting negligently means failing to act in a reasonable way to prevent foreseeable harms, which combines decision quality and foreseeability. Second, the item measuring responsibility was omitted as responsibility has multiple dimensions (e.g., role responsibility, causal responsibility; Shaver, 1985) and it is uncertain which type of responsibility respondents had in mind when answering this question. The question pertaining to the degree of blame participants felt the CEO deserved was added to the scale in Study 2.

The items measuring benevolence toward the CEO were: (1) "[If this is how the case would end,] the CEO deserves praise for saving the company from bankruptcy," (2) "[If this is how the case would end,] the CEO should win the industry awards for saving the company from bankruptcy," and (3) "[If this is how the case would end,] the CEO's actions are a direct cause of the company's successful turnaround." The order of the questions was randomized. 7

The text in brackets was only presented to participants in the No outcome condition, as to them the outcome of the case was still unknown. In this condition, the paragraph describing the outcome contingent on the question set (i.e., the negative scenario for the legal responsibility question set and the positive outcome for the benevolence question set) was presented above the question set; hence the phrase "if this is how the case would end." Participants were sequentially presented with both questions sets (i.e., measuring legal responsibility and benevolence) and the order was counterbalanced across participants. 8

Foreseeability

The perceived foreseeability of the bankruptcy was measured in two different ways. First, participants were presented with three scenarios describing potential endings to the case: (1) the positive outcome, (2) the negative outcome, and (3) a neutral outcome in which the company did not go bankrupt, but the problems were far from solved and the company's future was still highly insecure. The position of the positive and negative scenario in the list was counterbalanced across participants, such that for half of the participants the positive scenario was listed first and the negative scenario third, and for the other half this order was reversed (the neutral scenario was always presented in the middle). For each scenario, participants were asked to indicate on a 7‐point Likert scale how likely they believed that particular scenario to be (1 = very unlikely, 7 = very likely). Second, on the next screen participants were asked to answer the same question but this time to express the likelihood of each scenario in terms of a percentage (from 0% to 100%), with the sum of the three percentages equaling 100%. Including two likelihood measures (Likert scale and percentages) allows for a more robust test of the hypothesis, as well as alleviate the shortcoming of the measure of the percentage, which implies interdependency of the percentages allocated to each of the three scenarios as the sum of these three had to be 100%.

Before being debriefed, participants were asked whether English was their native language and, if not, to what extent they agreed or disagreed with the following statement: "I understood the case and the questions completely and experienced no difficulties in answering the questions." Participants answered on a 7‐point Likert scale (1 = strongly disagree, 7 = strongly agree) and the mean score was 6.41 (median = 7.00). 9

3.2 Results

3.2.1 Data preparation and analysis plan

Similar to Study 1, participants who did not spend sufficient time reading the case were excluded from the analyses. We again based the exclusion criterion on three standard deviations above the average reading speed. This resulted in the exclusion of 166 participants (16.6% of the total sample), leaving a final sample size of 836 participants. 10

To test whether the order in which the scenarios and subsequent questions were presented in the No outcome condition affected the answers to these questions, a MANOVA was conducted with the scenario order (negative first-positive second vs. positive first-negative second) as between‐subjects factor and the scores for legal responsibility and benevolence as dependent variables. Results showed no significant effect for question order, F (2, 274) = 1.88, p = .16, = 0.01. Consequently, the data were collapsed across this factor.

3.2.2 Hindsight bias and outcome bias

Legal responsibility was measured only following the negative outcome and benevolence only following the positive outcome. Decision quality was, therefore, the only outcome variable that was measured across conditions, allowing for a direct comparison between the three outcome conditions. An ANOVA with Outcome Condition as between‐subjects variable and decision quality as the dependent variable returned a significant effect, F (2, 833) = 173.54, p < .001, = 0.29. Bonferroni‐corrected post hoc comparisons showed that the quality of the CEO's turnaround plan was judged more negatively in the Negative outcome condition ( M = 4.46) than in the No outcome condition ( M = 3.63), p < .001, 95% CI [0.57, 1.08] and the Positive outcome condition ( M = 2.53), p < .001, 95% CI [1.68, 2.18]. The mean difference between the No outcome condition and the Positive outcome condition was also significant, p < .001, 95% CI [0.86, 1.35]. Hence, participants were susceptible to outcome bias when evaluating the director's actions irrespective of the valence of the outcome, further supporting Hypothesis 2a.

To test for outcome effects in foreseeability, legal responsibility, and benevolence, two separate MANOVAs were conducted. The first compared the No outcome condition with the Negative outcome condition for both foreseeability measures and the legal responsibility measure, F (3, 549) = 14.21, p < .001, = 07. The second compared the No outcome condition with the Positive outcome condition for both foreseeability measures and the benevolence measure, F (3, 556) = 12.32, p < .001, = 0.06. Subsequent ANOVAs indicated that there was a significant effect of Outcome Condition (both for the positive and negative outcome) for both foreseeability measures, but not for legal responsibility or benevolence. Thus, participants were susceptible to hindsight bias in that they perceived both the positive and negative outcome scenarios to be more foreseeable in hindsight than in foresight, in support of Hypothesis 1. However, participants did not show an outcome bias when judging either legal responsibility (for the negative outcome) or benevolence (for the positive outcome), contradicting Hypothesis 2b. Table 3 for the descriptive statistics and significance tests for each variable.

DVs

No outcome (N = 277)

Positive outcome (N = 283)

Negative outcome (N = 276)

F

p

M

(SD)

M

(SD)

M

(SD)

3.2.3 Free will beliefs moderating hindsight bias and outcome bias

We again used Hayes' PROCESS (10,000 bootstrap samples) to investigate the relationship between free will beliefs and the two biases. Separate analyses were run comparing the No outcome condition with the Positive outcome condition and the No outcome condition with the Negative outcome condition, both with free will beliefs as the moderator.

Decision quality

Replicating Study 1, a significant moderation effect of free will beliefs was found for decision quality in case of a negative outcome, Δ R ² = 0.01, F (1, 549) = 4.89, p = .027, b = 0.19, t(549) = 2.21, p = .027, such that a stronger belief in free will was associated with a larger outcome bias. The difference between the No outcome and Negative outcome condition was again almost twice as large for those with stronger free will beliefs, b = 1.07, t(549) = 6.96, p < .001, d = 0.59, than for those with weaker free will beliefs, b = 0.59, t(549) = 3.83, p < .001, d = 0.33. Importantly, this moderation effect did not exist for decision quality in case of a positive outcome, Δ R ² < 0.001, F < 1. Please see Figure 2 for a visual presentation of the relationship between free will beliefs and hindsight bias for decision quality for both the negative and positive outcomes.

Foreseeability

In contrast to Study 1, the interaction effect between free will beliefs and Outcome Condition on foreseeability did reach statistical significance in Study 2 in case of a negative outcome, both when measured in percentages, Δ R ² = 0.02, F (1, 549) = 10.16, p = .002, b = 3.46, t(549) = 3.19, p = .002, and when measured using the Likert scale, Δ R ² = 0.01, F (1, 549) = 4.86, p = .028, b = 0.17, t(549) = 2.20, p = .028. Regarding the percentage measure of foreseeability, participants with stronger free will beliefs demonstrated a more than three times larger hindsight bias, b = 12.24, t(549) = 6.35, p < .001, d = 0.51, than those with a relatively weak belief in free will, for whom there was no statistically significant effect, b = 3.54, t(549) = 1.84, p = .067, d = 0.16. For the Likert scale measure of foreseeability, participants with stronger free will beliefs demonstrated a more than twice as large hindsight bias, b = 0.73, t(549) = 5.46, p < .001, d = 0.46, than those with a relatively weak belief in free will, b = 0.31, t(549) = 2.34, p = .020, d = 0.20.

Importantly, free will beliefs did not moderate the hindsight bias for foreseeability in case of a positive outcome when measured in percentages, Δ R ² = 0.001, F < 1, nor when using the Likert scale measure, Δ R ² < 0.001, F < 1. Please see Figures 3 and 4 for a visual representation of the relationship between free will beliefs and hindsight bias for the foreseeability judgments of both the positive and negative outcomes and Table 4 for the statistics of the moderation and simple slopes analyses.

−1 SD FWB

+1 SD FWB

Int. (SE)

t

b (SE)

t

95% CI

b (SE)

t

95% CI

Foreseeability NEG

3.54 (1.93)

1.84

−0.25, 7.33

12.24 (1.93)

8.45, 16.03

3.46 (1.09)

Legal responsibility

−0.06 (0.14)

−0.42

−0.34, 0.22

0.22 (0.14)

1.57

−0.06, 0.50

0.11 (0.08)

1.41

Benevolence

0.05 (0.11)

0.43

−0.16, 0.25

0.12 (0.11)

1.14

−0.09, 0.33

0.03 (0.06)

0.50

Note

'Int. (SE)' represents the regression weight and standard error for the interaction effects (Outcome Condition × FWB) and 'Model' shows the statistics for the complete model including the interaction term.

* p < .05;

** p < .01;

*** p < .001.

Legal responsibility and benevolence

No significant interactions between free will beliefs and Outcome Condition were found for legal responsibility, Δ R ² = 0.004, F = 1.98, p = .16, or benevolence, Δ R ² < 0.001, F < 1.

3.3 Discussion

Study 2 successfully replicated Study 1 in that we again found a bias in the evaluation of the CEO's turnaround plan and the perceived foreseeability of the bankruptcy, providing further evidence that professional legal investigators in the context of directors' liability are affected by outcome information in their judgments. Additionally, the bias in the evaluation of the CEO's turnaround plan was again significantly larger for those with stronger free will beliefs than for those with weaker free will beliefs. Whereas in Study 1, we did not find a moderation effect for hindsight bias in foreseeability judgments, in Study 2, we did find such an effect for both measures of foreseeability. Hence, using a more common way of measuring hindsight bias (i.e., presenting several alternative scenarios), we found a more pronounced hindsight bias in Study 2 relative to Study 1 as well as a significant moderation effect of free will beliefs. Indeed, the effect sizes for hindsight bias in foreseeability judgments in Study 2 ( d = 0.49 for the percentages measure and d = 0.47 for the Likert‐scale measure) were clearly larger than the effect size found in Study 1 ( d = 0.20) and those found in two meta‐analyses ( d = 0.39 by Guilbault et al., 2004; d = 0.35 by Christensen‐Szalanski & Willham, 1991).

Notably, whereas in Study 1, we found a hindsight bias in judgments of legal responsibility, no such effect was found in Study 2. An explanation might be found in the information that was provided to participants in Study 2 regarding the outcome of the case. That is, hindsight bias is best tested when two groups are compared in which one group is completely ignorant of any outcome information and the other group is fully aware of all the details of a particular outcome, as was the case in Study 1. In Study 2, however, participants in both the No outcome and Negative outcome condition were presented with the complete bankruptcy scenario. The only difference between these conditions for the legal responsibility questions was that in the No outcome condition the scenario was presented as hypothetical and participants were asked how they would judge the legal responsibility of the CEO "if this is how the case would end."

Another reason why there might have been diverging findings between Study 1 and Study 2 regarding the hindsight bias in legal responsibility judgments is that the two scales measuring legal responsibility differed. The scale in Study 1 included an item measuring whether the participants believed the CEO acted negligently and that he, therefore, should be held accountable for the company's bankruptcy, which was omitted in Study 2 as there was some conceptual overlap with the decision quality and foreseeability measures. It is, therefore, possible that the bias for legal responsibility judgments in Study 1 was for an important part driven by the negligence measure.

Finally, descriptive statistics on legal responsibility indicated that participants in Study 2 attributed more legal responsibility for the bankruptcy to the director than participants in Study 1, both in foresight ( M = 3.28 vs. 2.39) and in hindsight ( M = 3.32 vs. 2.82). Legal responsibility attributions in the foresight condition of Study 2 were even higher than the hindsight attributions of Study 1. The difference in legal responsibility attributions between the two studies might be caused by slight differences in the business case used in both studies. 11

Give the discussed differences between Study 1 and Study 2, it is unclear what exactly accounts for the inconsistent results of the outcome bias in legal responsibility attributions and the moderating role of free will beliefs. Combined, however, the results from Study 1 and Study 2 do suggest that free will beliefs can reliably predict susceptibility to outcome bias in post‐insolvency evaluations of directors' conduct, as well as to hindsight bias in foreseeability judgments when these are measured using conventional methods.

4 GENERAL DISCUSSION

The present article primarily aimed to investigate hindsight bias and outcome bias in legal judgments made by professional legal investigators in the context of directors' liability. A second, more exploratory goal was whether free will beliefs can predict the degree to which such professionals are susceptible to these biases. Across two studies, we found that learning about a company's bankruptcy causes legal professionals to perceive the adverse outcome as more foreseeable and also to evaluate the company director's actions more negatively compared to when they are unaware the company went bankrupt. Additionally, we found that the degree to which legal professionals believe in free will predicts the extent to which they are affected by outcome information, such that those with stronger free will beliefs demonstrate a larger outcome bias in evaluations of directors' conduct, as well as a larger hindsight bias in foreseeability judgments. We found mixed results regarding outcome bias in legal responsibility attributions, making it difficult to draw any definite conclusions.

In addition to replicating and thus testing the robustness of the findings of Study 1, an important goal of Study 2 was to examine the relationship between free will beliefs and the two biases in further detail by comparing the foresight condition with a hindsight condition in which the case had a positive ending. By doing so, we were able to shed further light on the mechanism underlying the moderating role of free will beliefs in hindsight bias and outcome bias. Considering the absence of any moderating role of free will beliefs in the case of a positive outcome, it seems that the relationship between free will beliefs and hindsight and outcome bias can, indeed, be explained by blame validation and motivated reasoning processes. Due to their tendency to more strongly condemn wrongful behavior and to be more punitive, those with stronger free will beliefs seem to have been (unconsciously) motivated to arrive at the conclusion that the bankruptcy was foreseeable (Studies 1 and 2), that the CEO's turnaround plan was unsatisfactory (Studies 1 and 2), and that the director should be held legally responsible (in Study 1).

4.1 Theoretical and practical implications

Second, we add to the literature on antecedents of hindsight bias and outcome bias by demonstrating that abstract beliefs such as whether or not humans have free will can predict susceptibility to these biases. Similar to previous research highlighting that situational factors such as emotional states can influence legal judgments (for reviews, see Feigenson, 2016; Feigenson & Park, 2006), our finding that (largely) situationally independent individual characteristics such as belief systems are associated with differences in legal judgments is alarming. Ideally, the outcome of a trial is unaffected by the individual characteristics of the judge deciding over the matter. Likewise, in the case of directors' liability, it is undesirable that the chance of a claim against a director being put forward by a trustee, and possibly being granted by a judge, is affected by irrelevant traits of the legal professionals involved, such as their belief in free will and punitive inclinations. Therefore, the current finding that believing in free will is associated with a larger hindsight bias in legal judgments is particularly noteworthy and potentially worrying finding. It is certainly worrying if the need to punish can, indeed, explain the current research findings, as this would imply that with increasingly adverse outcomes, legal professionals would judge increasingly harsh, possibly resulting in unjustified liability assigned to (mostly) blameless actors. However, as mentioned before, legal decisions are not the result of an individual legal professional operating in isolation. It remains an open question, therefore, to what extent free will beliefs and punitive inclinations affect decision making in real‐world cases.

Finally, we contribute to theory and research on the mechanisms underlying hindsight bias and outcome bias. Thus far, the factors that have been identified as responsible for the motivational origins of hindsight bias are people's need for closure, need for control, and the need to maintain or enhance their self‐esteem (Musch, 2003; Musch & Wagner, 2007; Tykocinski, 2001). The current research is the first to suggest (and provide preliminary evidence) that the motivational processes underlying hindsight and outcome bias can also stem from people's need to condemn and punish wrongdoing.

Importantly, we did not directly test punitive inclinations as the underlying mechanism of hindsight and outcome bias but rather measured free will beliefs as a proxy. However, as alluded to in the introduction of this paper, there is ample evidence for the proximal association between free will beliefs and punitiveness and we, therefore, consider free will beliefs to be a useful and valid proxy for people's punitive inclinations. The results of Study 2 lent further support for the notion that punitive inclinations account for the moderating influence of free will beliefs. Here, we did not observe a moderating role of free will beliefs in case of a positive outcome, which refutes an alternative explanation that can be derived from the literature for the observed moderation effect of free will beliefs. That is, beliefs regarding free will have been shown to affect causal reasoning processes, which are deemed essential for hindsight bias to occur. In a series of experiments, Genschow et al. ( 2017) found that a stronger belief in free will is associated with an increase in the correspondence bias, which is the automatic inclination to overemphasize internal over external factors when evaluating the causes of someone's actions (Gilbert & Malone, 1995; also known as the fundamental attribution error; e.g., Ross, 1977). Therefore, those with stronger free will beliefs might be more likely to conclude that directors are to be held causally responsible (and therefore legally responsible) for a company's downfall. However, the correspondence bias cannot account for all of our findings. That is, correspondence bias deals with causal attributions and-on a conceptual level-it can, therefore, have an indirect effect on attributions of legal responsibility (i.e., being causally responsible is a requirement for legal responsibility), but not on judgments of foreseeability or assessments of decision quality. Nonetheless, it would be a worthwhile endeavor for future research to develop a more direct measure of punitiveness for a more comprehensive understanding of the association between punitiveness and susceptibility to hindsight bias and outcome bias.

We, therefore, encourage future research to further investigate (1) whether people's punitive inclinations can, indeed, explain their susceptibility to hindsight bias, (2) how large this potential problem actually is in real‐world legal practice, and (3) what can be done to limit the potential effects of individual characteristics on legal judgments.

4.2 Limitations

The current research is not without its limitations and certain issues remain that should be addressed carefully in research following the findings presented herein. First, even though we consider our large sample of legal professionals from across the globe to be a strength of the current research, the pluriformity in the participants' nationalities does pose a few challenges. For example, differences across countries exist in legislation concerning directors' liability and we are uncertain to what extent this might have affected participants' responses. Unfortunately, in addition to being beyond the scope of the current research, our data set does not allow for analyses comparing participants from (groups of) different nationalities or jurisdictions, as splitting the sample into different groups would result in insufficient statistical power to detect the effects of interest. The same limitation applies to analyses comparing participants with different roles in legal procedures. While the samples of the two studies consisted of for example lawyers, judges, and insolvency practitioners, group‐level analyses are not warranted because of sample size issues. As it is of relevance for legal practice to examine whether the observed effects are more or less pronounced for different groups, we recommend that future research takes into account the sampling requirements for drawing conclusions about differences across groups in the population.

Second, it would be worthwhile to investigate whether the current findings can be replicated using different case materials. That is, the case concerned a Dutch company with a director who had a typically Dutch name (i.e., Cees van Gelder). It might be that for some people this triggered certain stereotypes or other automatic inclinations toward Dutch directors.

A third limitation of the current study is that when doing experimental research, it is generally difficult to establish whether the findings can be generalized to, in this case, real‐life court cases and how large of an effect it might have in such a real‐world context. As alluded to earlier, it could be that courtroom dynamics between the different parties might ultimately neutralize the biases observed in our research. At the same time, there is also the possibility that group dynamics aggravate the psychological processes underlying biased judgments.

Another issue concerns whether the observed findings can be extended beyond the domain of directors' liability in bankruptcy proceedings to for example breach of fiduciary duty tort suits, criminal charges against directors, or to cases that are more high profile with a considerable impact for society. One reason to think that the present findings might not generalize to more severe cases (e.g., fraud, self‐enrichment) is that past a certain threshold of the severity of an offense, most people will probably experience a strong need to punish the offender, regardless of whether they believe in free will or not. Indeed, Krueger and colleagues ( 2014) have shown that when people are asked to punish an offender in a low‐affect case (e.g., property theft), people believing more strongly in free will punished harsher than those who were more skeptical of free will. When people were asked how harsh they would punish an offender in a high‐affect case (e.g., murder), no difference based on free will beliefs was found. Hence, if it is, indeed, true that free will beliefs can predict the degree of hindsight bias due to a higher need to punish and resulting motivated cognition on behalf of those with stronger free will beliefs, it could be that in high‐affect criminal law cases (or other more high‐affect cases such as a high‐profile bankruptcy case with severe consequences for society) the moderating role of free will beliefs would disappear.

CONFLICT OF INTEREST

The authors have no conflicts of interest to disclosure.

The data that support the findings of this study are openly available in OSF at http://doi.org/10.17605/OSF.IO/CVS9R.

ETHICAL STATEMENT
The research has been conducted in accordance with the authors' institutions' ethics guidelines.

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Hindsight bias and outcome bias in judging directors' liability and the role of free will beliefs

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Correction added on 16 November 2020, after first online publication: Misspelling in abstract corrected from "COVD‐19" to "COVID‐19".] Following a corporate disaster such as bankruptcy, people in general and damaged parties, in particular, want to know what happened and whether the company's directors are to blame.

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Niek (10-11) and Helen (08-12) each gave seminar in HC Law course 'Onderzoek naar Recht in de Samenleving'

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Niek (10-11) and Helen (08-12) each gave seminar in HC Law course 'Onderzoek naar Recht in de Samenleving'

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It is feared that over 1 million Muslim Uyghurs are being held in facilities in Xinjiang, China, undergoing systematic forced labour for the supply chains of international brands. Time to take a stand.

The use of concentration camps to detain religious minorities is a practice from another era - a dark time in history we all learned about in school to make sure the same mistakes were not repeated. Yet, today, according to a report by the Australian Strategic Policy Institute (ASPI) Uyghurs for sale, it is believed that over 1 million Uyghurs are being held captive in facilities in Xinjiang, China. Investigations have revealed that Uyghurs are being detained to undergo systematic forced labour in supply chains of international brands. This article looks at the implications of the ongoing forced labour in these camps.

Multinationals as accomplice: The limits of corporate social responsibility

The numbers are striking. One out of five cotton garments sold globally contains cotton from the Xinjiang region which means they are most likely to be tainted with forced labour. No fewer than 83 multinationals outsource part of their production in this region and are identified by ASPI as benefiting, directly or indirectly, from the use of Uyghur workers through abusive labour programmes. These include brands such as Amazon, Apple, Zara, Nike, Google.

Some multinationals have responded to these claims when questioned about their activities in this region. In September 2020, for instance, H&M ended their indirect relationship with a cotton supplier in the Xinjiang region after evidence emerged of the use of forced labour by the supplier. Conversely, Apple responded to these allegations by claiming that no evidence has been found of forced labour in their supply chain. This contradicts a US investigation, which has blacklisted one of Apple's key suppliers due to human rights abuses involving Uyghur Muslims.

The violation of minimum labour standards in the supply chains of multinationals actually goes against the ethical publicity of many of these companies, which publicly claim that their suppliers respect labour rights. In their codes of conduct, companies have set minimum standards of labour conditions to be implemented throughout the supply chain. Once again, this social scandal casts doubt on the effectiveness of corporate social responsibility (CSR) and proves to the world that codes of conduct can be mere window dressing. The fact that companies can and want to profit from Chinese detention camps proves how flawed the current global production system is. As a PhD candidate investigating the effectiveness of the code of conduct on work conditions in the supply chain of multinationals, this situation demonstrates how far we still have to go to motivate companies to behave ethically. It is clear that self-regulation of workers' rights by companies is inadequate and it is time for the international legal framework to step up.

What role for the international community?

The dramatic human rights violation stated above demonstrates the urgency for a global regulatory response to take a strong stance against modern slavery. Multinationals still benefit from legal impunity on a global scale, since international treaties only bind States and not private actors. Although some documents, such as the UN Global Compact and the UN Principles on Business and Human Rights, directly target companies, these norms remain voluntary and unsanctioned when violated.

An international response to the Chinese persecution has arisen, especially in the last few months. For example, UN officials have demanded access to the camps and the EU has called on China to respect religious freedom. Civil society and NGOs have raised their voice in global coalition campaigns. They call for the immediate closure of the reeducation camps, by appealing to the clothing industry and by hashtagging on social media with #freeuyghurs. At the European level, European Parliamentarian Raphael Glucksmann has been the lead and spokesperson for the citizen campaign.

Surprisingly, the strongest stand against the situation in China has been taken by US President Donald Trump. With a blacklist of companies prohibiting the import of goods manufactured in the Xinjiang region on US soil, retaliation for brands profiting from forced labour has been immediate. Although this blacklist serves political objectives far removed from the protection of human rights, it has successfully deterred multinationals from engaging with suppliers that use forced labour.

The EU is attempting to follow this regulatory movement by imposing more obligations on companies that outsource their production. A progressive legislative proposal has been announced by Commissioner for Justice Didier Reynders. This initiative, imposing an EU-wide duty of due diligence, would definitely improve the required standards of production. Hopefully, it will plant the seed for a better implementation of minimum labour standards in the supply chain. As discussed during the European consultation on this topic, the draft legislation goes far beyond the mere adoption of an import ban based on economic retaliation. It would create a level playing field for all companies operating on the EU market and establish effective enforcement of the duty of companies to take responsibility for their supply chains. Drifting from the voluntary approach of CSR, this law would finally make multinationals accountable at the supra-national level. However, despite the ambitious plan to have it adopted by 2021, it is still early days for this draft law.

As long as legal sanctions targeting private actors are not put in place applying on all territories, multinationals are free to profit from unethical labour conditions. One question that is currently debated is whether importing countries could set boundaries as to what is acceptable, and what human dignity standards they decide to implement on the production of goods they consume. If no strong stand is taken, importing countries, including those in Europe, are ultimately an accomplice to the most massive religious detention of the 21 st century and to benefitting from forced labour. Silence and ignorance are no longer valid excuses.

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Uyghur forced labour: Who will take a stand?

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It is feared that over 1 million Muslim Uyghurs are being held in facilities in Xinjiang, China, undergoing systematic forced labour for the supply chains of international brands. Time to take a stand.

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E-commerce is booming and big data has allowed companies to engage in more personalised online marketing communication with consumers. Can regulatory initiatives keep up?

As consumers, we are spending an increasing amount of time and money online, browsing through all that the Internet has to offer. During these online shopping sprees, we also frequently cross (digital) borders. In 2019, global e-commerce sales amounted to $3.5 trillion, with an expected amount of sales of $4.2 trillion in 2020: quite a market.

The COVID-19 crisis has been a catalyst for the growth of our online presence and shopping behaviour. Our physical interactions are significantly limited and traditional brick-and-mortar stores have imposed strict measures to avoid further contagion. A recently published report by the OECD highlights a clear growth in e-commerce in the time of COVID-19. Especially during these times, e-commerce allows consumers access to an extensive range of products and services, while respecting all current measures.

Personalisation

Unsurprisingly, while we browse away, companies are constantly looking for ways to reach us. One of the main trends that has emerged over the years is personalisation. Personalised advertising, newsletters, discounts, and recommendations are all strategies employed by companies to court their (prospective) clients. Indeed, we often tend to react well to those initiatives, especially when they facilitate our online experience or provide us with a good deal. After all, who says no to a bargain?

From a company perspective, of course, there is an economic interest tied to such advances. Targeting those consumers that you know will react positively to your offer seems to be a surefire way to optimise revenue. However, companies also have an inherent interest in actually understanding consumer behaviour. What works and what does not? They are naturally curious about their clientele and constantly innovating in order to engage effectively with their customer base. Though this is definitely no new phenomenon, the current dynamics between seller and buyer are subject to technological advancements that are moving at a swift pace.

Digital footprint

This is where our current online environment comes in. As we go through our days, often glued to our smartphones and laptops, we leave behind a so-called digital footprint: traces that give away our characteristics, behaviour, and preferences. This footprint consists of many different data points, submitted both actively and passively. Think of your likes and activity on social media, your browsing history, and your purchase history. Online, we do not have the relative anonymity that we have in the offline world when facing a seller.

Enabled by technological advancements, companies are increasingly able to collect large amounts of such data of existing and potential customers. Just like we compare websites and offers, companies 'compare' us, based on the data we give away. What's more, this data collection and analysis is facilitated by data brokers: companies that collect, analyse, and share information about consumers, without interacting directly with the consumers. These advancements amount to the information asymmetry between companies and consumers, where companies often tend to know more about us than we actually know about ourselves.

It is not only a matter of collecting data, but also what is done with that data. Sophisticated technologies powered by automated algorithms, such as data mining and profiling, enable companies to interpret and analyse large amounts of data that are often too complex or too extensive to be eligible for manual (human) processing. Such technologies could offer unprecedented opportunities to improve and facilitate decision-making procedures for companies and governments.

Legal concerns

From a legal perspective, concerns have been raised regarding the current state of the art, as well as the direction that technological advancements are heading in. Though a lot can be said for the benefits of personalisation, there are potential risks tied to the future of e-commerce and the interaction between companies and consumers.

We are less rational and sensible than we think. Plagued by different biases and the information overload experienced online, consumers are prone to certain pitfalls in their decision-making. Earlier this year, the ACM (the Dutch Authority for Consumers and Markets) published guidelines (in Dutch), elaborating on the protection of consumers in relation to online persuasion tactics. Companies can use their consumer insights to counteract pitfalls, guiding us to make the 'right' choice. However, these same insights can be used to exploit consumer weaknesses.

In addition to consumer protection law, other fields of law are intimately linked to the concerns raised in relation to e-commerce and consumer data. For example, data protection law, competition law, and anti-discrimination law, all raise legitimate questions as to the direction in which we seem to be heading.

Regulation

In late 2019, the European Parliament introduced Directive 2019/2161 (the 'Omnibus' Directive), which will be enforced from 28 May 2022 onwards. The Directive is aimed at effectuating better enforcement and modernisation of consumer protection rules, as well as making consumers more resilient when navigating through the online environment. For example, the Directive includes a requirement to disclose to consumers whether the price shown is personalised based on automated decision-making. Such a disclosure requirement follows the line of past regulatory undertakings, also ultimately aimed at empowering consumers in their decision-making process.

The complexity of the online environment as well as the rapid speed at which it is developing, begs the question whether such regulatory initiatives will succeed in their aims. It is uncertain whether 'classic' legal regulation will be sufficient. Technology is developing at a rapid pace, often in complex ways that legal regulation cannot fully grasp. More insights into the current state of the art, as well as (empirical) insights into consumer psychology and company perspectives are needed in order to assess whether, and how, we will be able to regulate our ever-changing digital market.

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E-commerce and consumer data: Is regulation needed?

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E-commerce is booming and big data has allowed companies to engage in more personalised online marketing communication with consumers. Can regulatory initiatives keep up? As consumers, we are spending an increasing amount of time and money online, browsing through all that the Internet has to offer.

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Op vrijdag 11 december 2020 vond het eindejaarsseminar van Empirical Legal Studies plaats, uiteraard geheel coronaproof online. Via dit seminar konden collega's en andere geïnteresseerden op een laagdrempelige manier meer te weten komen over het toepassen van empirische onderzoeksmethoden in de rechtswetenschap.

Na het welkomstwoord van Helen Pluut werd het seminar afgetrapt door Jouke Tegelaar, promovenda bij Financieel Recht. Zij begon met een presentatie getiteld 'Experimenteel onderzoek naar een eenvoudiger verklaringsformulier bij derdenbeslag'.

Jouke gaf met haar presentatie aan op welke manier empirisch onderzoek antwoorden kan geven op juridische vraagstukken. Via een persoonlijke ervaring met een derdenbeslag werd zij geconfronteerd met de ingewikkelde formulieren die daarmee gepaard gaan. In het kader van 'dit kan beter' heeft zij met Willem van Boom een experiment opgestart. Via dit experiment hebben zij de ervaringen bij het lezen en invullen van alternatieve formulieren gemeten. Hun bevindingen en aanbevelingen hebben zij beschreven in een artikel voor NJB. Een mooi succesverhaal, want de aanbevelingen zijn grotendeels opgevolgd in een wetswijziging.

Onregelmatigheden in faillissementen

Daarna volgde een duo-presentatie van promovenda Jessie Pool en universitair docent Niek Strohmaier, die allebei empirisch onderzoek doen binnen het bestuurdersaansprakelijkheidsrecht. Jessie gaf aan de hand van haar eigen kwalitatieve onderzoek naar de rol van de curator bij het signaleren en redresseren van onregelmatigheden in faillissementen een aantal praktische tips voor het doen van interviews. Niek ging in op het fenomeen hindsight bias. Zijn kwantitatieve onderzoeksresultaten tonen aan dat juridische professionals zich laten beïnvloeden door uitkomstinformatie bij het beoordelen van het gedrag en functioneren van bestuurders in zwaar weer.

De veelbelovende jonge onderzoekers wisten via hun presentaties te inspireren. Op een heldere en enthousiaste manier bespraken zij de kansen en uitdagingen van het doen van empirisch-juridisch onderzoek. Er was veel interactie met het publiek en na de presentaties werd verder kennisgemaakt en gediscussieerd in een virtuele ruimte van Wonder.

Enthousiast om meer te leren over Empirical Legal Studies? Op 5 februari 2021 wordt een landelijk congres georganiseerd! Hier lees je daar meer over.

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Inspirerend en interactief eindejaarsseminar Empirical Legal Studies

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Op vrijdag 11 december 2020 vond het eindejaarsseminar van Empirical Legal Studies plaats, uiteraard geheel coronaproof online. Via dit seminar konden collega's en andere geïnteresseerden op een laagdrempelige manier meer te weten komen over het toepassen van empirische onderzoeksmethoden in de rec...

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Artikel Niek Strohmaier, Willem van Boom e.a.

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Artikel Niek Strohmaier, Willem van Boom e.a.

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"Discursieve motivering is in de mode. In (delen van) de rechtspraak en rechtswetenschap leeft de gedachte dat discursieve motivering de acceptatie van rechterlijke uitspraken in de maatschappij ten goede komt. In dit onderzoek hebben we onderzocht of, en zo ja, in hoeverre, de gehanteerde motiveringsstijl de maatschappelijke aanvaarding van rechterlijke uitspraken beïnvloedt. Uit onze studie blijkt dat men de invloed van een discursieve motiveringsstijl op de acceptatie van rechtspraak niet dient te overschatten. Dat is een belangrijke nuance in het debat over de wenselijkheid van bepaalde motiveringsstijlen. Vanuit het oogpunt van aanvaardbaarheid van rechtspraak voor de justitiabele is discursieve motivering niet per se noodzakelijk."

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2021 De Jong Strohmaier VanBoom Giesen NTBR

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Pluut e.a. statistiek in het rechtencurriculum_AA

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Blogpost Niek Strohmaier en Willem van Boom 22-01-2021

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Blogpost Niek Strohmaier en Willem van Boom 22-01-2021

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"De rechter dient zijn uitspraak te motiveren, mede omdat die motivering van belang is voor de maatschappelijke acceptatie van rechtspraak. Bij sommigen leeft de gedachte dat de ene motiveringsstijl deze acceptatie meer ten goede zou komen dan de andere.

In het bijzonder zou de discursieve motiveringsstijl een (positieve) invloed hebben op de maatschappelijke acceptatie van rechtspraak. Maar in hoeverre is dat daadwerkelijk het geval?"

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De rechter dient zijn uitspraak te motiveren, mede omdat die motivering van belang is voor de maatschappelijke acceptatie van rechtspraak. Bij sommigen leeft de gedachte dat de ene motiveringsstijl deze acceptatie meer ten goede zou komen dan de andere.

In het bijzonder zou de discursieve motiveringsstijl een (positieve) invloed hebben op de maatschappelijke acceptatie van rechtspraak. Maar in hoeverre is dat daadwerkelijk het geval?

Een Utrechts-Leids team, bestaande uit Willem van Boom en Niek Strohmaier van de Universiteit Leiden, en Ivo Giesen en Elbert de Jong van de Universiteit Utrecht, deed empirisch onderzoek naar de vraag in hoeverre de gehanteerde motiveringsstijl de maatschappelijke aanvaarding van rechtspraak beïnvloedt. In het Nederlands Tijdschrift voor Burgerlijk Recht verschenen de resultaten van die studie. In dit blog lichten wij een klein tipje van de sluier op.

Discursieve motivering = meer acceptatie van rechtspraak?

De relatie tussen de motivering en maatschappelijke acceptatie van rechtspraak, speelt met name in de context van procedures waarin maatschappelijk gevoelige (rechts)vragen voorliggen. Denk voor het civiele aansprakelijkheidsrecht, het deelterrein waarop wij hier focussen, onder meer aan kwesties over de aansprakelijkheid van het ziekenhuis en/of de arts in wrongful life en wrongful birth procedures, de aansprakelijkheid van de Staat voor onjuistheden in de verblijfsvergunningsprocedure voor vluchtelingen, de aansprakelijkheid van de Staat voor de massamoord in Srebrenica, het gaswinningsdossier en de verantwoordelijkheid en aansprakelijkheid van private en publieke actoren ten aanzien van klimaatverandering. Met name in relatie tot deze kwesties bestaat behoefte aan een rechter die oog heeft voor zijn maatschappelijke positie en de maatschappelijke impact van zijn rechtspraak. In (delen van) de rechtspraak en rechtswetenschap leeft de gedachte dat hij dit het beste kan doen door zich te bedienen van een discursieve motiveringsstijl. Daarmee wordt bedoeld dat de rechter inzicht verschaft in welke verschillende juridische en rechtspolitieke overwegingen

relevant zijn geweest voor zijn oordeelsvorming, alsmede welke waarde hij (niet) aan die overwegingen heeft toegekend. Indien deze overwegingen richting verschillende uitkomsten wijzen, dan geeft de rechter ook inzicht in hoe hij deze overwegingen heeft gewikt en gewogen.

Drie getoetste motiveringstijlen

In de ogen van sommigen zou discursieve motivering onder meer wenselijk zijn omdat deze de acceptatie van rechterlijke uitspraken in de maatschappij ten goede zou komen. Wij hebben empirisch onderzocht in welke mate dat zo is. Om dat te kunnen doen hebben wij verschillende motiveringsstijlen van elkaar onderscheiden, zodat wij een eventuele invloed van de discursieve motiveringsstijl op de maatschappelijke acceptatie van rechtspraak konden afzetten tegen de invloed van andere motiveringstijlen. Wij kwamen uit op drie motiveringsstijlen. Allereerst een technisch-juridische motiveringsstijl. Bij deze stijl wordt een beslissing alleen gemotiveerd aan de hand van overwegingen die voortvloeien uit bronnen met juridisch gezag, zoals wetgeving, wetsgeschiedenis en rechtspraak. Vervolgens is er de, wat wij noemen, sacrale motiveringsstijl. Bij deze stijl brengt de rechter zijn morele overtuiging over wat (maatschappelijk) rechtvaardig is naar voren. Kenmerkend aan deze stijl is evenwel dat deze overweging, in de ogen van de rechter, gezag geniet juist omdat deze van een fundamenteel morele aard is, en daarmee in een zekere zin ook hoger wordt aangeslagen dan overwegingen die stoelen op bronnen van juridisch gezag. Ten derde valt de hiervoor al beschreven discursieve motiveringsstijl te onderscheiden.

Andere factoren die acceptatie beïnvloeden

De motivering is (natuurlijk) niet de enige factor die van belang is voor de acceptatie van rechtspraak. In onze studie hebben we ook andere factoren meegenomen die daarvoor van belang zijn. In het artikel gaan we hier nader op in. Voor deze blog zijn in het bijzonder het 'morele mandaat' en de 'institutionele loyaliteit' van belang. Het morele mandaat ziet op de overeenkomst óf discrepantie tussen de inhoudelijke beslissing enerzijds en de morele (of religieuze) overtuigingen van een persoon ten aanzien van die beslissing anderzijds. In het bijzonder lijkt het erop dat indien men een sterke morele overtuiging over een bepaald vraagstuk heeft, men minder open staat voor alternatieve uitkomsten en argumenten. Een belangrijke vraag in dit verband is of men uitspraken waarmee men het oneens is, meer acceptabel acht indien een discursieve motiveringsstijl wordt gehanteerd. Institutionele loyaliteit kan worden begrepen als het basisniveau van 'loyaliteit' aan, ofwel: vertrouwen in, de rechterlijke instanties. Institutionele loyaliteit, en de mate waarin deze aan- of afwezig is, geeft aan in welke mate burgers rechtspraak accepteren ongeacht hun waardering (of juist afkeuring) van de inhoudelijke uitkomst in een specifiek geval. Dit basisvertrouwen is veerkrachtig en wordt niet (direct) substantieel aangetast door één

onwelgevallige uitspraak. De werking van institutionele loyaliteit suggereert dat hoe hoger de mate van institutionele loyaliteit is, hoe minder de gehanteerde motiveringsstijl van invloed is op de mate van acceptatie van een uitspraak. De vraag is of dit ook andersom werkt: wordt bij een lagere mate van institutionele loyaliteit de motiveringsstijl belangrijker?

Empirische studie

In het uiteindelijke empirische onderzoek zijn aan juridisch (uiteindelijk: 277) en niet-juridisch (uiteindelijk: 738) geschoolde participanten drie verschillende casussen met de drie verschillende motiveringsstijlen voorgelegd. Die casussen gingen over de aansprakelijkheid van een gynaecoloog voor wrongful life, de schadevergoedingsplicht van de Staat jegens vluchtelingen in geval van een onrechtmatige weigering om een vergunning te verlenen, en de aansprakelijkheid van een automobilist die een dronken fietser aanrijdt. Het vonnis van de casus werd gemotiveerd middels één van de drie verschillende stijlen: discursief, sacraal, of technisch-juridisch. Gegeven de drie casussen en de drie verschillende stijlen waren er dus negen verschillende combinaties. Iedere participant kreeg willekeurig één van deze mogelijke combinaties voorgeschoteld. Met behulp van een vragenlijst is vervolgens onderzocht in welke mate de verschillende motiveringsstijlen de acceptatie van de uitspraak beïnvloeden.

Resultaten

Uit de studie blijkt dat de gehanteerde motivering weinig tot geen invloed heeft op de mate waarin de respondenten de uitspraak accepteren. De belangrijkste factor voor acceptatie lijkt simpelweg te zijn of men het eens is met de uitspraak (i.e., het morele mandaat). Daarnaast heeft institutionele loyaliteit ook een voorspellende waarde voor de mate van acceptatie van een vonnis, zij het in mindere mate dan het morele mandaat. Een interessant inzicht is nog wel dat de schrijfstijl waarmee het vonnis is opgeschreven (let op: het betreft hier dus niet de motiveringsstijl), significant correleert met de acceptatie, het morele mandaat, en de institutionele loyaliteit. Dit wil zeggen dat naarmate de stijl als prettiger wordt ervaren, het morele mandaat groter is, alsook de institutionele loyaliteit en de acceptatie van het vonnis. Het betreft hier echter correlaties en niet per se causale verbanden. De invloed kan dus ook tegenovergesteld zijn: het kan bijvoorbeeld ook zo zijn dat men uitspraken waarmee men het eens is (d.w.z. die een hoog moreel mandaat hebben) tevens positiever beoordeelt in termen van schrijfstijl. Een interessante correlatie is ook nog dat zij die meer analytisch denken (in plaats van intuïtief), zowel juristen als niet-juristen, een hogere mate van institutionele loyaliteit rapporteren, en dus meer getrouw zijn aan instituties zoals de rechtspraak. Tot slot lijken ook kenmerken van individuen een rol te spelen bij de mate van acceptatie. Zo vertoonden de juristen in dit onderzoek over het geheel genomen een hogere mate van acceptatie dan de niet-juristen, al kan niet met

zekerheid vastgesteld worden dat dit te maken heeft met het volgen van een studie rechtsgeleerdheid. Immers, beide groepen verschilden ook op andere kenmerken, zoals leeftijd en opleidingsniveau.

Wat betekent dit voor de discursieve motiveringsstijl?

Uiteraard zijn er goede redenen om over te gaan tot discursieve motivering. Zo lijkt een discursieve motivering de leesbaarheid van de uitspraak voor juristen te verbeteren. Bovendien kan, althans in theorie, een discursieve motivering de voorspelbaarheid van het recht voor de rechtspraktijk ten goede komen. Echter, vanuit het oogpunt van maatschappelijke aanvaardbaarheid van rechtspraak is discursieve motivering géén absolute must, zo leert onze studie. Om de maatschappij te bereiken lijken eerder andere mechanismen dan de schriftelijke motivering aangewezen.

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Beïnvloedt de motiveringsstijl de maatschappelijke acceptatie van rechtspraak?

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De rechter dient zijn uitspraak te motiveren, mede omdat die motivering van belang is voor de maatschappelijke acceptatie van rechtspraak. Bij sommigen leeft de gedachte dat de ene motiveringsstijl deze acceptatie meer ten goede zou komen dan de andere. In het bijzonder zou de discursieve motiveringsstijl een (positieve) invloed hebben op de maatschappelijke acceptatie van rechtspraak.

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Podcast 'The Law of Tech' on Online Price Discrimination and EU Data Protection Law

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Podcast 'The Law of Tech' on Online Price Discrimination and EU Data Protection Law

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25 January 2021

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05-02-2021

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On Friday 5 February 2021 the online conference of the Dutch Platform of Empirical Legal Studies (ELS) took place. This conference served as a platform to bring young, enthusiastic and driven ELS scholars together in a research community and enable them to learn more about and discuss empirical research in a legal context. Participants from universities outside of the Netherlands could also attend the conference since the spoken language was English.

The various universities participating in the ELS Platform introduced themselves and their research groups via a short video. The more than 80 participants were then welcomed by Rianka Rijnhout (Utrecht University) and Helen Pluut (Leiden University). Jessie Pool, PhD candidate and member of the ELS team at Leiden Law School, kicked off the conference. She gave a short presentation about ELS and introduced three research themes with problem statements. The participants had to work with these themes in parallel breakout rooms, which were moderated by assistant professors. The aim was to come up with a relevant research question and choose appropriate empirical methodology. The workshops led to creative ideas that were exchanged in a plenary session.

After these interactive workshops, the participants could enjoy a lunch delivered to their homes. The afternoon session started with a presentation by Nina Holvast, Erasmus University, entitled 'Researching a hidden actor: the role and influence of judicial assistants in Dutch courts'. In her presentation, she took the participants through the process of her recently published research and discussed the results. She elaborately discussed the various empirical research methods that she had used.

After a short break, Shosha Wiznitzer, PhD student at Utrecht University, gave a presentation entitled: 'Combining surveys and interviews in a defensive medicine study: Why, how, and what (not) to do'. She discussed openly the challenges she encountered in her research and how she responded to them. A very instructive presentation for starting ELS researchers!

The last part of the programme was a live data analysis by Helen Pluut and Rianka Rijnhout. At the beginning of the conference, they had asked the participants to complete a short survey. They analysed the data on the spot by sharing their screens and discussed the preliminary results of the survey. It offered the participants a very insightful and accessible introduction to SPSS and NVivo.

It was an inspiring conference day with many different elements. Despite the online environment, there was a lot of interaction with and between the participants, creative ideas were exchanged, and interesting discussions took place. After the presentations, there was an opportunity to connect and get to know each other. In a virtual Wonder room, the participants enthusiastically joined in a pubquiz team battle while enjoying snacks and beverages that were delivered to their homes. The winning team received Kees van den Bos' book Empirical Legal Research: A primer.

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National conference for and by starting empirical legal scholars

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On Friday 5 February 2021 the online conference of the Dutch Platform of Empirical Legal Studies (ELS) took place. This conference served as a platform to bring young, enthusiastic and driven ELS scholars together in a research community and enable them to learn more and discuss about empirical research...

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Blogpost Healthy University by Helen 16-02-2021

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Blogpost Healthy University by Helen 16-02-2021

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Afgelopen zomer, tijdens de 1e golf van COVID-19, voerden wij een studie uit onder ruim 800 werkende mensen in Nederland. Aanleiding hiervoor was het verplichte thuiswerken voor velen van ons en een van de belangrijkste gevolgen daarvan, namelijk het vervagen van de scheidslijn tussen werk en privé.

De werk-privébalans is voor staf van universiteiten altijd een uitdaging geweest; de hoge werkdruk vraagt dat we er veel uren aan wijden, het is niet het soort werk dat we makkelijk loslaten en de flexibiliteit en bereikbaarheidsverwachtingen maken het moeilijk los te koppelen van werk wanneer het daar eigenlijk tijd voor is. Nu we thuiswerken en online met elkaar verbonden zijn, lopen werk en privé nog meer door elkaar heen. En dat heeft belangrijke gevolgen, zo blijkt uit ons onderzoek.

Wij hebben onderzocht wat de impact is van de coronamaatregelen op werkattitudes en welzijn. Onder de respondenten waren veel medewerkers van de universiteit. Niet geheel verrassend is dat de meerderheid van de respondenten sinds de invoering van de coronamaatregelen vaker vermoeid is vanwege het vele videobellen ( videocall fatigue noemen we dat). Verder rumineren zij meer en lukt het hen een stuk minder goed dan voorheen om los te koppelen van werk. Mensen ervaren meer onderbrekingen en afleidingen tijdens het werk en zijn (wellicht daardoor) minder productief. Ze hebben minder plezier en voelen zich minder bevlogen in hun werk. Het gevoel van sociale verbondenheid is voor velen afgenomen. Wel ervaren mensen meer autonomie, al bleek dit eigenlijk alleen te gelden voor de groep die geen kinderen heeft. Van de verschillende factoren die we onderzocht hebben, vertoont de vervaging van de grenzen tussen werken en privé de grootste verandering, in dit geval een toename. Dat wil zeggen dat velen moeite hebben om werk te scheiden van de privésfeer. Zij hebben te maken met zogenaamde blurred boundaries.

We hebben ook stilgestaan bij gezondheid en geluk. Onder onze respondenten waren nauwelijks veranderingen in mentale en fysieke gezondheid waar te nemen. Wel gaven mensen aan tijdens de crisis gelukkiger te zijn dan voorheen. Als we vervolgens kijken naar leefstijl, dan ontstaat een ander beeld. Men is bij de eerste lockdown veel meer sedentair gedrag gaan vertonen. Ook zijn mensen minder (goed) gaan slapen, bewegen ze minder en nemen ze iets minder tijd voor ontspanning. Positief is dat men gezonder is gaan eten en iets minder alcohol is gaan drinken tijdens de eerste lockdown. Maar het moge duidelijk zijn dat over het algemeen de leefstijl en daarmee het welzijn van mensen erop achteruit is gegaan. Een oorzaak daarvan is te vinden in de blurred boundaries en de emotionele uitputting (een element van burn-out) die voor velen daarbij komt kijken. Degenen die een vervaging van de scheidslijn tussen werk en privé ervaren en daar emotioneel uitgeput van raken, zijn slechter gaan slapen, minder gaan bewegen, ongezonder gaan eten en minder gaan ontspannen.

Deze verslechtering in leefstijlgedrag is wellicht een gevolg van het thuiswerken waar we ons niet zo van bewust zijn. Het belang van leefstijl verdient volgens ons in de huidige tijd speciale aandacht. Uit onze studie volgt dat belang namelijk heel duidelijk. Enerzijds hangt leefstijl (in termen van slaap, voeding, beweging en ontspanning) positief samen met geluk, gezondheid en productiviteit. Anderzijds - en dat is misschien nog wel belangrijker in een tijd dat de balans tussen werk en privé zoekraakt - maakt een gezonde leefstijl weerbaar door te beschermen tegen de negatieve gevolgen van blurred boundaries en emotionele uitputting. Uit onze studie is gebleken dat degenen die tijdens de lockdown volgens de norm bewogen (elke dag minimaal een half uur matig intensief), aten (voldoende groente en fruit) en sliepen (tussen de 7 en 9 uur van goede kwaliteit), minder last hadden van die negatieve effecten. Een gezonde leefstijl werkt dus als het ware als een buffer en zorgt voor behoud van geluk en welzijn.

Dat roept de vraag op: wie is er verantwoordelijk voor jouw gezondheid? Die verantwoordelijkheid wordt misschien nog te veel bij het individu gelegd. Leefstijl is in principe een privéaangelegenheid, maar de maatschappij en de inrichting van je werkplek bepalen voor een groot deel de keuzes die jij maakt en dus jouw leefstijlgedrag. Bovendien laat onderzoek keer op keer zien hoe groot de invloed is van werk op de privésfeer. Daarbij kunnen we denken aan leefstijlgedrag, maar ook aan de dynamiek tussen partners thuis. Een paradoxaal resultaat zoals in onze studie - dat een gezonde leefstijl belangrijk is om met blurred boundaries om te gaan maar tegelijkertijd door die blurred boundaries wordt bemoeilijkt - hebben we eerder gevonden in eigen onderzoek naar tweeverdieners: vermoeidheid door werk vraagt dat partners elkaar thuis van sociale steun voorzien, maar dat is nu net moeilijker na een harde dag werken. Wanneer we zo'n grote invloed zien van werk op het privédomein, hoe privé is dat domein dan nog? Het lijkt dan ook te makkelijk om te zeggen dat werkgevers zich niet moeten bemoeien met wat er achter de voordeur van hun werknemers speelt.

Sinds COVID-19 is de werkomgeving dusdanig veranderd dat ook ons leefstijlgedrag veranderd is. We staan daar in ieder geval voor uitdagingen. Voor degenen die vervaging van de grenzen tussen werk en privé ervaren, is het juist belangrijk om gezond te leven, en vooral om goed te slapen en regelmatig te bewegen. Echter blijken we op de vervaagde grenzen te reageren met ongezond gedrag. Deze reactie kan gezien worden als maladaptief en dysfunctioneel. We kunnen het coronavirus de schuld geven en we moeten in de spiegel kijken, maar de verantwoordelijkheid ligt niet alleen bij het individu. We kunnen het simpelweg niet alleen.

Langs deze weg willen we daarom een oproep doen aan iedereen op de universiteit. Laten we de handen ineenslaan om een organisatiecultuur of werkklimaat te creëren waarin we voor elkaar zorgen en gezond gedrag stimuleren. Een werkomgeving waarin overwerken niet de norm is, waarin we elkaar stimuleren om regelmatig van de stoel op te staan en proberen te korten op het zittend vergaderen, waarin we af en toe een lunchwandelingetje maken en waarin we het recht hebben om onbereikbaar te zijn én dat van elkaar respecteren. Als werkgever kan de universiteit daar nog veel meer haar verantwoordelijkheid in pakken. De Universiteit Leiden profileert zich als Healthy University en erkent daarmee de rol die zij heeft in het helpen van medewerkers bij het leiden van een gezond leven. Denk daarbij aan het aanbod van de restaurants in de universiteitsgebouwen of de aanwezigheid van een fruitschaal op de gang versus een snoeppot of snackautomaat. Er zijn al veel mooie initiatieven onder de noemer van Healthy University, maar we hebben als universiteit nog een flinke slag te maken in het uitdragen van gezonde waarden en normen, het aanbieden van informatie en workshops over een gezonde leefstijl, het daadwerkelijke aanbod van en de toegang tot gezonde opties en tot slot de communicatie over dit alles op de werkvloer.

Het thuiswerken blijft nog wel even de norm. Probeer elkaar daarom te steunen en te motiveren in een gezonde leefstijl. Enkele tips zijn:

Wandel 's ochtends en/of 's middags (het liefst vóór de maaltijd) een rondje in de buitenlucht.

Kies voor groenten en/of fruit tijdens je lunch en eet ook 's avonds gezond.

Vind een avondroutine om goede slaap te bevorderen; op tijd naar bed, geen werk laat in de avond, geen alcohol en cafeïne in de avond, niet meer eten twee uur voordat je naar bed gaat en geen blauw licht van de tv, computer of telefoon in de uren voordat je gaat slapen.

Plan elke dag een momentje in om te ontspannen.

Vraag je leidinggevende en collega's maar ook de mensen in je privéomgeving om hulp en geef hun praktische en sociale steun waar nodig.

Het is belangrijk te onthouden dat de verschillende leefstijlfactoren samenhangen. Zo zal je waarschijnlijk beter slapen als je overdag voldoende hebt bewogen. Juist in deze tijden van thuiswerken is het belangrijk om een gezonde leefstijl een prioriteit te maken en te voorkomen dat je welzijn aan het kortste eind trekt. Ons advies is om je leefstijl proactief aan de thuiswerksituatie aan te passen in plaats van het thuiswerken jouw leefstijl (negatief) te laten beïnvloeden.

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Afgelopen zomer, tijdens de 1e golf van COVID-19, voerden wij een studie uit onder ruim 800 werkende mensen in Nederland. Aanleiding hiervoor was het verplichte thuiswerken voor velen van ons en een van de belangrijkste gevolgen daarvan, namelijk het vervagen van de scheidslijn tussen werk en privé.

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24-02-2021

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Empirical Legal Studies Lab @Leiden | LinkedIn

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Empirical Legal Studies Lab @Leiden | 97 followers on LinkedIn. Exploring new frontiers in empirical legal research on market regulation and behaviour | The Empirical Legal Studies Lab @Leiden is a platform that brings together legal scholars and social scientists to collaboratively explore important questions related to behavioral aspects of market regulation.

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Kick-off topic group Global Governance Gap

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Kick-off topic group Global Governance Gap

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26-02-2021

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Presentatie bijdrage Mark Noort 02-03-2021

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Presentatie bijdrage Mark Noort 02-03-2021

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Deze bijdrage raakt ELS en is een reactie op een presentatie van Dr. Tom Reader (https://www.lse.ac.uk/Events/LSE-Festival/Post-Covid-World/Shorts/20200302/risk)

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LSE Festival | Shaping the Post-COVID World | 1-6 March 2021

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The online home of your LSE Festival. Join us for live events and exclusive content every day during Festival week.

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Guest appearance by Merel on ELS in LUC course Legal Methods Lab

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Guest appearance by Merel on ELS in LUC course Legal Methods Lab

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09-03-2021

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L&L on March 12th 2021

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Topic Lunch & Learn

Lunch & Learns are informal, interactive sessions where we discuss a controversial statement relating to an ELS-themed topic. It is an opportunity to share our opinion and experiences with regard to doing empirical legal research and to learn from peers. This Lunch & Learn will be on the topic of law in the books versus law in action, with the following statement:

"Legal scholars should (not) be concerned with the actual effects of law and regulation"

Join us for this informal session; everyone is welcome to share their opinions, no matter your level of expertise. Interested to join? Sign up via the following form and you will receive a link to the Lunch & Learn: https://cutt.ly/gzedAG9.

ELS Lab Meetings

The Empirical Legal Studies Lab @Leiden is organizing a new series of sessions, for researchers interested in empirical legal research. Are you looking to learn more about empirical methods and/or engage in lively discussions on ELS? Join the upcoming ELS lab meetings!

Ranging from the informal Lunch & Learn to more in-depth paper discussions, the ELS lab meetings cover a wide range of empirical research methods and ELS-related topics. We offer a possibility to learn about each other's research and experience, test out ideas and receive feedback on work in progress. You're welcome to join, regardless of your degree of experience with ELS. Our upcoming sessions are below. Sign up via the following link: https://cutt.ly/gzedAG9

About ELS Lab @Leiden

Empirical Legal Studies is one of the legal science themes of the Leiden Law School as part of the Law Sector Plan, together with Institutions for Conflict Resolution. The Empirical Legal Studies project receives funding from the Dutch Ministry of Education, Culture and Science (OCW) through the multi-year Law Sector Plan. For any questions, please contact Helen Pluut (h.pluut@law.leidenuniv.nl).

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ELS Lab Meetings - Lunch & Learn: Law in the books versus law in action

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Lunch & Learns are informal, interactive sessions where we discuss a controversial statement relating to an ELS-themed topic. It is an opportunity to share our opinion and experiences with regard to doing empirical legal research and to learn from peers. This Lunch & Learn will be on the...

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Publicatie Mens & Maatschappij - Rotshuizen, Helen en Willem

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Publicatie Mens & Maatschappij - Rotshuizen, Helen en Willem

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March 2021

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Mens & Maatschappij, opgericht in 1925, publiceert artikelen representatief voor het hele onderzoeksgebied van de sociale wetenschappen, ongeacht richting of stroming, en altijd met een scherp oog voor kwaliteit en maatschappelijke relevantie. Een grondige en opbouwende reviewprocedure is onderdeel van het publicatieproces.

Behalve reguliere nummers verschijnt ieder jaar een themanummer waarin specialisten op uitnodiging van de redactie schrijven over een actueel thema.

In de etalage
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Factoren die een rol spelen bij het denken over rechtvaardige ver...: Ingenta Connect

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Mens & Maatschappij, opgericht in 1925, publiceert artikelen representatief voor het hele onderzoeksgebied van de sociale wetenschappen, ongeacht richting of stroming, en altijd met een scherp oog voor kwaliteit en maatschappelijke relevantie. Een grondige en opbouwende reviewprocedure is onderdeel van het publicatieproces.

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Publicatie Mark Noort: Noort, M. C., Reader, T. W., & Gillespie, A. (2021). Safety voice and safety listening during aviation accidents: Cockpit voice recordings reveal that speaking-up to power is not enough. Safety Science, 139, 105260.

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Publicatie Mark Noort: Noort, M. C., Reader, T. W., & Gillespie, A. (2021). Safety voice and safety listening during aviation accidents: Cockpit voice recordings reveal that speaking-up to power is not enough. Safety Science, 139, 105260.

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April 2021; deze bijdrage raakt ELS

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Publicatie Mark Noort: Noort, M. C., Reader, T. W., & Gillespie, A. (2021). The sounds of safety silence: Interventions and temporal patterns unmute unique safety voice content in speech. Safety Science, 140, 105289.

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Publicatie Mark Noort: Noort, M. C., Reader, T. W., & Gillespie, A. (2021). The sounds of safety silence: Interventions and temporal patterns unmute unique safety voice content in speech. Safety Science, 140, 105289.

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April 2021; deze bijdrage raakt ELS

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Conference: International investment law through the prism of ethics (FR)

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Conference: International investment law through the prism of ethics (FR)

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26-04-2021

Presentation: Impact of companies' ethical reputation on its investors. (Chapter in a collaborative book to be published September 2021)
French - Université de Bourgogne

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SCP - Gitta's presentation on ELS for the Private Law Department

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SCP - Gitta's presentation on ELS for the Private Law Department

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30 April 2021

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Publicatie Helen Pluut in Stress & Health on working from home

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Publicatie Helen Pluut in Stress & Health on working from home

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April 2021; deze bijdrage raakt ELS

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Publicatie Niek Strohmaier, Helen Pluut et al. in Journal of Applied Social Psychology

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Publicatie Niek Strohmaier, Helen Pluut et al. in Journal of Applied Social Psychology

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5-5-2021

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Abstract

For entrepreneurs in financial distress, it is of vital importance that investors and bankers accurately assess the viability of their business, free of unwanted biases that bear no relevance to the assessment of the chance of survival. Despite the prevalence of entrepreneurs facing financial distress, little research has yet investigated the role of cognitive biases in funding decisions in this important context. The current research attends to this issue and investigated whether entrepreneurs who are perceived by a banker as more similar are more likely to receive capital to save their business from bankruptcy than entrepreneurs who are perceived as less similar to the banker. Additionally, we investigated whether similarity bias affected bankers' attributions of what caused the financial distress as well as their perceptions of entrepreneurs' trustworthiness. Using an experimental research design, we found a similarity bias in bankers' causal attributions and trustworthiness judgments, but not in their credit decisions. We contrast our findings with similarity bias research among equity investors and discuss the implications for theory and practice.

1 INTRODUCTION

Throughout entrepreneurs' professional life span, external parties judge the growth potential and viability of their ventures in relation to possible investments or for the extension of credit by financial institutions such as banks. This is true in the start‐up phase, in times of significant growth, and also when a venture is in decline and experiencing financial distress. During such periods of substantial decline, entrepreneurs typically require additional funding from investors and/or shareholders, or additional credit from their bank to finance a turnaround or to survive a loss‐making phase. When entrepreneurs are unable to fulfill their duties toward their bank and require additional credit or a deferment on their loan payments, it is the duty of the bank's representative to assess the viability of the distressed venture. If the banker judges positively, ensuing support from the bank can be expected. If the banker judges negatively, however, bankruptcy might follow. Hence, the entrepreneur's future depends for an important part on the banker's assessment of the venture's future prospects.

For entrepreneurs the consequences of bankruptcy can be detrimental, both professionally and personally (Jenkins et al., 2014; Kesteren et al., 2017; Ucbasaran et al., 2013). Furthermore, banks and other creditors can also suffer major losses in case of bankruptcy. Consequently, for both entrepreneurs and bankers involved, but possibly most eminently for the entrepreneurs, it is of utmost importance that the viability of their businesses is accurately assessed. Fortunately, bankers are trained to be objective, are experts in the industries their clients operate in, and are aware of (macro‐)economic trends that influence the chances of a company's survival. It, therefore, stands to reason that bankers are in a good position to objectively and accurately assess the likelihood that a distressed company will be able to perform a successful turnaround and resume profitability.

At the same time, however, assessing a venture's viability is a complex matter and humans are notoriously vulnerable to cognitive biases when making judgments under uncertainty (Baron, 2014; Kahneman, 2011; Kahneman et al., 1982; Tversky & Kahneman, 1974). Indeed, research suggests that bankers can, in fact, succumb to the effects of cognitive biases such as the hindsight bias (i.e., the feeling that after the fact someone "knew all along" something would happen) (Biais & Weber, 2009) and the status quo bias (i.e., the tendency to stick to a current and known position or previously chosen position) (Burmeister & Schade, 2007). However, to the best of our knowledge no research has been conducted investigating the extent to which biases affect judgments and (credit) decisions made by bankers regarding the future of struggling entrepreneurs.

This is surprising for two reasons. First, given the relatively high failure rates of new start‐ups where typically only 50% survives the first 5 years of being in business (BLS, 2019), entrepreneurs will almost invariably face financial distress at some point in their careers and will then have to liaise with their financiers to find a solution in order to survive. Moreover, amidst the current COVID‐19 pandemic, business owners worldwide are increasingly facing substantial financial distress and many are currently entering insolvency proceedings, or their businesses already seized to exist. To prevent as much economic loss as possible and facilitate a rapid recovery of global economies, it is important that relevant stakeholders are able to correctly identify those businesses that have a good chance to survive and those that do not. A risk of cognitive biases in the context of financial distress (including the distress that stems from the current pandemic) is that such important judgments are erroneously affected by irrelevant factors, ultimately resulting in a degree of randomness in terms of which businesses are subjected to rescue efforts and which are left for dead.

Second, cognitive biases typically surface under conditions characterized by uncertainty, time pressure, and emotional turmoil (e.g., Tversky & Kahneman, 1974). Indeed, for several biases it has been demonstrated that these exert stronger effects when the situation at hand is increasingly precarious (e.g., Kneer & Bourgeois‐Gironde, 2017; Schkade & Kilbourne, 1991). Hence, the risk of financiers succumbing to unwanted cognitive biases is particularly high in the context of financial distress. We consider the lack of research on cognitive biases in key financing decisions in the context of financial distress a critical gap to fill.

The goal of our research is, therefore, twofold. First, we aim to draw attention to this important yet understudied area of biases in financial decision making in the context of financial distress. Second, we aim to provide a first empirical test of whether bankers are affected by biases in their credit decisions when confronted with an entrepreneur in financial distress. More specifically, drawing from research on biases in early‐stage funding decisions (e.g., venture capital), we test whether similarity bias affects bankers in such a way that they will attribute the cause of an entrepreneur's decline to external factors rather than to the entrepreneur and also whether bankers have more trust in the entrepreneur when the entrepreneur is perceived to be similar to the banker. Finally, we test whether ultimately there is a relationship between perceived similarity and credit decisions. In what follows, we first briefly review the literature on similarity bias and explain why this bias is particularly interesting in this context. Next, we introduce two alternative hypotheses regarding the susceptibility of bankers to similarity bias. Finally, we provide a first empirical test of whether bankers are indeed affected by similarity bias when evaluating the cause of a business' decline, the trustworthiness of an entrepreneur, and when making credit decisions.

1.1 Similarity bias

Importantly, as discussed, whether bankers in the specific context of credit decisions for entrepreneurs in financial distress are also affected by similarity bias remains an open question. That is, are entrepreneurs facing bankruptcy more likely to receive additional capital from their bank if a banker perceives the entrepreneur as more similar to him/herself?

1.2 Alternative hypotheses on similarity bias in bankers' credit decisions

Two alternative hypotheses can be put forward regarding the question whether bankers dealing with distressed credit are affected by similarity bias. The first is that bankers might be affected by similarity bias to the same extent, or perhaps more strongly so, as any other person. The second is that elements unique to funding decisions by bankers in the context of financial distress render this group of financiers immune to the effects of similarity bias.

As for the second hypothesis, important differences exist between early‐stage investment decisions by equity investors (e.g., VCs), among whom similarity biases have been identified, and decisions made by bankers in the context of financial distress, and these differences might suggest bankers are less susceptible to similarity bias or perhaps even not at all. Even though both situations are similar in the sense that both VCs and bankers are faced with uncertainty and have to assess the likelihood a company will ultimately succeed, the differences between the two center around (1) the nature of the relationship between the financiers and entrepreneurs, and (2) information asymmetry.

Regarding the relationship with entrepreneurs, VCs typically acquire an equity stake in a company and take board seats, in that sense becoming part of the entrepreneurial team. In contrast, banks typically extend secured loans (e.g., collateralized loans) instead of acquiring an equity stake and as a result their relationship with the owners is more distant. To reduce the risk and moral hazards, and to make sure they will be aligned with their future business partners (i.e., the company owners), VCs might have a stronger incentive to focus on a venture's entrepreneurial team than do bankers. Hence, the different nature of the relationships VCs and bankers have with entrepreneurs possibly makes VCs more focused on the characteristics (e.g., personalities, management styles, history, etc.) of the entrepreneurs when assessing an investment opportunity. This increased focus on entrepreneurs might ultimately make VCs more susceptible to similarity bias.

This leaves us with two hypotheses that we pit against each other in the current paper. To briefly recap, on the one hand, it could be argued that the heuristics and biases in human cognition are so innate and automatic that we can safely assume that, similar to equity investors, bankers dealing with distressed companies will most likely also succumb to the effects of similarity bias, especially since many cognitive biases are aggravated amidst dire circumstances. On the other hand, it might be that bankers dealing with distressed credit are actually less susceptible to similarity bias, given that bankers dealing with distressed credit suffer less from information asymmetry than equity investors in early‐stage funding, and considering the evidence showing that bankers are more focused on the financial aspects of a potential transaction, rather than analyzing the company owners. An important goal of this study is, therefore, to provide a first test of similarity bias among professional bankers specialized in distressed credit.

We also aim to contribute to the literature on financial decision making and similarity bias by drawing attention to the important topic of lending decisions in the context of financial distress and the role of cognitive biases in such decisions more specifically. As argued, many entrepreneurs will at some point face strong financial decline and will therefore need to liaise with their financiers to work out a solution. Despite this context of financial and emotional turmoil providing all the ingredients for biases to manifest, no research (to the best of our knowledge) has yet empirically tested whether biases affect bankers' sensemaking process when faced with a struggling entrepreneur, or their subsequent credit decisions (for an overview of research on biases among different types of financiers and entrepreneurs outside the context of financial decline, see Zhang & Cueto, 2017). We, therefore, think it is important to empirically study whether bankers in the highly relevant context of financial distress are affected by similarity biases.

2 THE CURRENT STUDY

We tested whether bankers who are confronted with an entrepreneur in financial distress and who perceive an entrepreneur to be similar to themselves (1) are more likely to attribute the cause of the distress to external factors and, therefore, do not hold the entrepreneur accountable, (2) are more likely to trust the entrepreneur to be able to turn the company around, and (3) are more likely to extend additional credit. In what follows, we briefly elaborate on each of these three issues.

2.1 Similarity bias and causal attributions

A noteworthy aspect of the banker-entrepreneur relationship in the context of near insolvency is that a sensemaking process is likely to take place in which the banker aims to understand the cause of a company's financial decline. If a banker believes the entrepreneur is the primary cause of the decline (maybe even under ideal market conditions), this will likely affect the banker's trust in the entrepreneur's ability to turn their company around. Likewise, if a banker believes the decline is due to external circumstances, this will likely not affect the trust the banker might have in the owner.

We ask whether perceived similarity with an entrepreneur in financial distress is associated with external causal attributions regarding the cause of the financial distress. That is, will a banker who is faced with an entrepreneur who requires additional credit for her/his struggling business be more inclined to attribute the cause of the entrepreneur's financial problems to external factors (e.g., economic downturn, new laws/regulations, etc.), rather than to internal factors (e.g., entrepreneurial skills and leadership), when the entrepreneur is perceived as similar to the banker? A wide body of research outside the realm of financial decision making found that following an adverse event seemingly caused by a certain actor, people are inclined to attribute the adversity to internal factors (i.e., to the actor) when the actor is dissimilar or part of an out‐group, and more to external factors (i.e., to the situation) when the actor is perceived as similar or as part of their in‐group (e.g., Banks, 1976; Burger, 1981; Kouabenan et al., 2001; Shaver, 1970). To test whether a similar bias can be observed in the present context, we formulated the following hypothesis:

Hypothesis 1.Perceived similarity is positively related to external causal attributions.

2.2 Similarity bias, trustworthiness, and credit decisions

Outside the context of financial decision making, a relationship has been found between perceived similarity and perceived trustworthiness. For example, it has been shown that similarity in terms of facial features leads to heightened perceived trustworthiness (L. M DeBruine, 2005; Farmer et al., 2014) and cooperation (DeBruine, 2002; Kret et al., 2015; Krupp et al., 2008). Within the context of mergers and acquisitions, it has been shown that higher degrees of similarity between the senior management of two firms influenced post‐acquisition trust toward the acquiring firm (Yildiz, 2014). Hence, it might be that entrepreneurs who are perceived to be similar by a banker will also be perceived as more trustworthy by that banker and are also more likely to receive credit. To test this, we formulated the following hypotheses:

Hypothesis 2.Perceived similarity is positively related to the perceived trustworthiness of an entrepreneur.

Hypothesis 3.Perceived similarity is positively related to the likelihood of extending additional credit.

3 METHOD

We tested the hypotheses outlined above using an experimental research design. We chose this specific method in large part to avoid the typical problems associated with more post hoc methodologies in which participants are required to retrospectively indicate why they made certain decisions (e.g., Baddeley, 1979). Such methods can be sub‐optimal as memories may be inaccurate and overall validity may be low (e.g., Trochim, 2001; Van Der Vaart et al., 1995). It will, for example, be difficult for bankers to accurately remember to what extent they perceived an entrepreneur they dealt with at some point in time to be similar to themselves and to what extent they trusted the entrepreneur. Moreover, it would be hard to also take into account all the differences that exist across real‐life cases to be able to isolate the influence of perceived similarity on credit decisions.

While we recognize the limitations of using vignettes in experimental research, such as potential threats to the external validity and thus generalizability following from difficulties in recreating a realistic banker-entrepreneur context, overall we consider the chosen methodology appropriate and useful for the current study. Specifically, the combination of an experimental research design with a realistic scenario (the case was developed in collaboration with a senior banker) improves the external validity, while at the same time allowing for controlling key variables and drawing causal inferences. That is, using vignettes we can keep all variables that are not of interest for the current studies fixed and, therefore, isolate the potential effect of similarity (for a review of the experimental vignette methodology, including best practices, see Aguinis & Bradley, 2014).

We asked participants to read a business case describing an entrepreneur whose business was in financial distress and for which the entrepreneur required additional capital to finance a turnaround. Participants were asked (1) to what extent they perceived the entrepreneur to be similar to themselves, (2) what they believed to be the cause of the decline (i.e., internal or external cause), (3) how trustworthy they perceived the entrepreneur to be, and finally (4) how likely they believed it to be they would comply with the entrepreneur's request and provide the additional capital necessary to avoid bankruptcy. To add to the realism of the case, we designed a case involving an entrepreneur who is active in the commercial real estate business and who can therefore offer collateral when requesting additional capital, thereby simulating the typical situation in which a bank will have a relatively secured position. Moreover, an issue facing many entrepreneurs in financial distress is the difficulty of paying their costly real estate leases, which often triggers the insolvency proceedings. Additionally, an issue facing the owners of the real estate is the steep increase of defaults on the leases and the difficulty of finding new commercial tenants. The case used in the current study is modeled after these common dynamics and can be found in the Supporting Information available online.

3.1 Participants

In this study, 146 bankers participated and were either recruited with the cooperation of several major Dutch banks or via an e‐mail invitation. Of the total sample, 121 (82.9%) were male. The average age was 43.8 ( SD = 9.5) and the average number of years of professional experience was 9.7 ( SD = 7.3). This specific group of bankers all specialized in distressed credit and worked at their banks' departments that deal with businesses in distress.

3.2 Procedure

The study was built and administered using Qualtrics online survey software and participants received a link that directed them to the survey. At the start of the survey, participants were informed that the goal of the study was to investigate judgment and decision making processes in the context of distressed credit and that their participation was completely anonymous. Participants first answered several demographic questions regarding their sex, age, profession, and years of experience. Next, participants were presented with a business case and asked to read the case thoroughly before proceeding to the next stage. Prior to reading the specifics of the case, participants were asked to adopt the perspective of the banker who had to decide over the business case in which a struggling entrepreneur required additional capital to finance a turnaround.

After the case, participants were asked questions that aimed to measure the variables in the following order: (1) perceived similarity, (2) causal attributions, (3) perceived trustworthiness of the entrepreneur, and (4) likelihood of extending credit. Before being asked to answer the main question regarding the likelihood of extending credit, participants were once again presented with the case and thus given the opportunity to read it once more. 1

3.3 Business case

The case concerned an entrepreneur who had started in the commercial real estate business only a few years ago and who now owned five properties for commercial lease. One of the rental contracts was abruptly ended due to a bankruptcy of the business that was leasing one of the five properties. It should be noted that such a concrete external event does not by definition mean that the cause of the entrepreneur's financial distress was outside of the entrepreneur's control. One could easily argue that an entrepreneur in the commercial real estate business should have a sufficient financial cushion to at least survive the default of one of its tenants. As a result of the default, the entrepreneur's revenue dropped and he could no longer meet his obligations toward his bank, which is why the entrepreneur was transferred to the department dealing with distressed credit. The entrepreneur felt that in order to be able to rent out that fifth property again, the property needed to be thoroughly renovated. Without the renovation, bankruptcy (both professional and personal) was imminent. The entrepreneur had no personal funds left and, therefore, needed the bank to finance the renovation. The amount required was substantial and amounted to 5% of the credit already outstanding. The full case can be found in the Supporting Information online. Participants were asked to what extent they considered the case to be realistic on a scale ranging from 1 (very unrealistic) to 7 (very realistic). The average score was 6.25 ( SD = 2.21).

3.4 Independent variables

3.4.1 Perceived similarity

Three items about the participants' client (i.e., the entrepreneur) aimed to measure the perceived similarity with this client (Cronbach's α = .82). Participants were asked to what extent they agreed with the following three statements: (1) "I believe to have a similar character as my client, [client name]," (2) "I believe to have similar norms and values as my client, [client name]," and (3) "I believe to be generally similar to my client, [client name]." Participants answered on a 7‐point Likert scale, ranging from Strongly disagree (1) to Strongly agree (7). The answers to these questions were averaged to create a single score for perceived similarity.

3.4.2 Actual similarity

This study also experimentally manipulated actual similarity between the participant and the entrepreneur as described in the case. Specifically, participants were randomly assigned to either the "similar" condition or the "dissimilar" condition. At the beginning of the experiment, after the general introduction, and before the business case was presented, participants were asked several demographic questions concerning for example age, gender, and professional experience. The respondents' age was then used in the similarity manipulation. Specifically, at the beginning of the case, a brief description was provided of the entrepreneur that differed based on the assigned condition on the following dimensions: (1) age, (2) professional background, (3) educational background, and (4) socioeconomic status. In the similar condition, the entrepreneur was of the same age as the participant (e.g., "in his thirties," "in his forties" etc.), had a professional background in financial services before starting their own business, completed a university degree, and had a first and last name that corresponded to names that are more common among elite families (Onland & Bloothooft, 2008). We assumed that the majority of the participating bankers had obtained a university degree and were part of higher socioeconomic groups, which is why it was expected that they would perceive the entrepreneur in this condition as more similar than they would in the dissimilar condition. In the dissimilar condition, the entrepreneur was as far removed as possible in terms of age (i.e., "in his sixties" if participant's age < 45; "in his late twenties" if participant's age > 45), had a professional background as a communication advisor in the cultural sector, completed no formal schooling, and had a first and last name that corresponded to names that are more common among lower socioeconomic groups (Onland & Bloothooft, 2008).

Combined, we assumed that altering the entrepreneur's age, professional and educational background, and implicitly his socioeconomic status, would suffice to manipulate the similarity with the participant. Such a similarity manipulation based on only few factors such as age and background has been used in previous research and proven successful (e.g., Shaver, 1970). Indeed, age has been shown to be an important factor when categorizing individuals (Brewer & Lui, 1989). Also, based on the minimal group paradigm (Tajfel, 1970), it should be expected that information regarding age and (professional) background are sufficient to attribute group membership toward individuals.

Nonetheless, despite the successful manipulation of similarity in previous studies using only a limited number of factors, there are many other studies that found no effect of actual similarity, but only of perceived similarity (e.g., Ferris & Judge, 1991; Strauss et al., 2001; Tidwell et al., 2013; Turban & Jones, 1988). This is in accordance with work by Byrne ( 1972), who suggested that for the proposed similar‐to‐me effect to be manifested, an observer must first actually perceive the other as similar. As we included both perceived and actual similarity in this study, we were able to compare effects relating to each factor.

3.5 Dependent variables

3.5.1 Causal attribution

Participants' perceptions of the cause of the entrepreneur's dire situation were measured using the following two items: (1) "[Name client] is [himself/herself] the primary cause of the imminent bankruptcy of [his/her] business" and (2) "External factors outside of [name client]'s control are the primary cause of [his/her] company's imminent bankruptcy." Participants answered on a 7‐point Likert scale, ranging from Strongly disagree (1) to Strongly agree (7). The first item measured internal attributions and the second measured external attributions. We reverse scored the internal attribution item and then averaged the two items to get a single causal attribution score representing the extent to which participants believed the cause of the entrepreneur's difficult situation was largely due to external factors (reflected by a higher score) rather than due to the entrepreneur him/herself (reflected by a lower score).

3.5.2 Perceived trustworthiness

To measure the perceived trustworthiness of the entrepreneur, three items were administered (Cronbach's α = .70). Following the work of Mayer and colleagues ( 1995), each of these items aimed to capture a specific dimension of trustworthiness: (1) ability, (2) benevolence, and (3) integrity. For ability, the item was: "I trust that my client, [client name], has the ability to make [his/her] company financially healthy again." The item measuring benevolence was: "I trust that my client, [client name], will act in a benevolent manner toward me." The item measuring trust in the entrepreneur's integrity was: "I trust that my client, [client name], is a person of integrity who delivers on [his/her] promises and who is honest toward me." All items were answered on a 7‐point Likert scale, ranging from Strongly disagree (1) to Strongly agree (7).

Mayer et al. ( 1995) created a questionnaire consisting of five to six items to measure each of these components of trustworthiness. In this study, however, we limited the scale to a single item per component for the following reasons. First, based on a pilot study in which we included all 17 items from Mayer et al.'s ( 1995) trustworthiness scale, we learned that the participants considered it to be difficult to answer a large number of questions about a person they did not know and of whom they had only received a brief description. Second, we wanted to use items that were relevant for the present context and focused on trustworthiness in relation to entrepreneurship, while most items developed by Mayer et al. ( 1995) are more generic.

3.5.3 Likelihood of extending credit

We measured participants' behavioral intentions regarding the entrepreneur's request for additional capital. Specifically, the participants were asked, if they were the banker deciding over this particular case, how likely it was that they would provide the entrepreneur with the required funds to finance the property's renovation. This variable was measured by asking participants the following question: "How likely do you believe it to be that you would comply with [client name]'s request for additional funding for the renovation?" Participants answered on a 7‐point Likert scale, ranging from Very unlikely (1) to Very likely (7).

4 RESULTS

4.1 Data preparation

We thought it important that participants properly read the case as this was vital for being able to answer the subsequent questions. Therefore, participants who spent less than 60 s on the case were excluded from the analyses. This cut‐off criterion that we chose is purposefully lenient as reading the case that consisted of 447 words in 60 s would require a reading speed of 7.3 standard deviations above the average reading speed ( M = 228 words per minute, SD = 20; Trauzettel‐Klosinski & Dietz, 2012). Hence, it is safe to assume we only excluded those who indeed did not devote sufficient attention to the case. In total, six participants were excluded from the analyses and doing so did not affect any of the findings as similar effects and significance levels were found when the complete sample was analyzed. 2

4.2 Similarity bias

First, we tested whether participants in the similar condition indeed perceived the entrepreneur to be more similar than participants in the dissimilar condition. We found a statistically significant difference in the expected direction, t(138) = 4.08, p < .001, d = 0.70, such that those in the similar condition ( M = 3.72, SD = 1.13) perceived the entrepreneur to be more similar to themselves than those in the dissimilar condition ( M = 3.02, SD = 0.91).

Next, two separate analyses were conducted to test for similarity bias in the participants' causal attributions, trustworthiness judgments, and ultimate credit decision. We conducted a Multivariate Analysis of Variance (MANOVA) to test whether manipulated similarity affected the dependent variables. The results showed a multivariate effect of manipulated similarity, F(3,136) = 6.23, p = .001, = .121. Subsequent univariate analyses revealed that manipulated similarity affected only the perceived trustworthiness of the entrepreneur, F(1,138) = 10.46, p = .002, = .070, such that entrepreneurs were deemed to be more trustworthy by those in the similar condition ( M = 4.76, SD = 0.85) than by those in the dissimilar condition ( M = 4.31, SD = 0.79). No effect was found for causal attributions, F(1,138) = 0.72, p = .398, = .005, or for the final credit decision, F(1,138) = 1.35, p = 0.248, = .010. Please see Table 1 for the results.

Dissimilar condition

Similar condition

F(1,138)

p

M

SD

M

SD

In addition to manipulated similarity, we conducted correlation analyses to see whether perceived similarity correlated with any of the dependent variables. As Table 2 shows, perceived similarity was significantly correlated with external causal attributions (Pearson r = .195, p = .021) and perceived trustworthiness (Pearson r = .305, p < .001), but not with the likelihood of extending credit (Pearson r = .106, p = .214).

M

SD

Sim. (manip.)

Sim. (perc.)

Causal attr.

Trustworth.

Credit decis.

Similarity (manipulated)

-

.07

−.10

Similarity (perceived)

3.33

1.07

-

.11

Causal attribution

4.03

1.07

-

Trustworthiness

4.51

0.85

-

4.3 Exploratory analyses

For exploratory purposes, we tested whether the study variables were related in such a way that the relationship between perceived similarity and the likelihood of extending credit was mediated in a serial manner by causal attributions and perceived trustworthiness. Specifically, we hypothesized that the relationship between perceived similarity and the likelihood a banker will extend credit to a struggling entrepreneur is mediated in serial by causal attributions and perceived trustworthiness, such that high levels of perceived similarity lead to more external causal attributions, which increase the perceived trustworthiness of the entrepreneur, ultimately resulting in a higher chance of extending the required capital by the banker (see Figure 1).

To investigate the exploratory hypothesis that perceived similarity predicts the final credit decision through causal attributions and perceived trustworthiness, we performed a serial mediation analysis using Hayes' ( 2013) PROCESS (10.000 bootstraps). The analyses of the mediation paths revealed that perceived trustworthiness mediates the relationship between perceived similarity and the final credit decision (see also Table 3), as indicated by a significant indirect effect, b = .11, 95% CI [0.03, 0.21]. Furthermore, the mediation path from perceived similarity through causal attributions to the final credit decision was also significant, b = .08, 95% CI [0.01, 0.18], as well as the total serial mediation model, b = .02, 95% CI [0.004, 0.05]. A comparison of the regression weights of the different indirect effects shows that the indirect effect through perceived trustworthiness accounted for the majority of the variance (see Table 4).

M ₁

M ₂

Y (Credit decision)

b

SE

p

b

SE

p

b

SE

p

X (Sim. Perc.)

.19

.08

.021

.20

.06

.002

−.06

.11

.59

M ₁ (Causal attr.)

-

-

-

.23

.06

<.001

.37

.11

.001

M ₂ (Trustw.)

-

-

-

-

-

-

.54

.14

<.001

Constant

3.39

.29

<.001

2.92

.31

<.001

.83

.66

.59

R ² = .038

R ² = .172

R ² = .219

F(1,138) = 5.46, p = .021

F(2, 137) = 14.24, p < .001

F(3,136) = 12.68, p < .001

Path

b

SE

95% CI

Sim. → Cause → DV

.072

.037

0.01, 0.15

Sim. → Trustworthiness → DV

.107

.046

0.03, 0.21

Sim. → Cause → Trustworthiness → DV

.024

.013

0.004, 0.05

5 DISCUSSION

We set out to draw attention to the important yet understudied topic of decision making processes in the context of financial decline. Additionally, we aimed to provide a first empirical test of whether bankers dealing with distressed credit succumb to similarity bias when confronted with an entrepreneur in financial distress who requires additional capital to save his/her business. The data showed that bankers appear to succumb only partly to the effects of similarity bias in that they attribute the cause of the distress to external factors rather than to the entrepreneur and also consider the entrepreneur to be more trustworthy when the entrepreneur is perceived as more similar to the banker than when the entrepreneur is perceived as dissimilar. Importantly, however, similarity with the entrepreneur (manipulated or perceived) was not significantly (directly) related to the likelihood of extending credit. This finding suggests that ultimately bankers might not be affected by similarity bias when deciding whether or not to extend additional credit to an entrepreneur in financial distress.

We note that perceived similarity was in fact associated with external causal attributions and increased perceived trustworthiness of the entrepreneur. It seems, therefore, that in line with the discussed literature on similarity bias, bankers are similar to other financial professionals in the sense that perceived similarity does affect their causal attributions and perceptions of trustworthiness, but just not their ultimate inclination to extend credit to entrepreneurs in financial distress. With this data, we provide the first evidence for the idea that, given the idiosyncrasies of bankers dealing with distressed credit (e.g., less information asymmetry, increased focus on "hard" financial data, etc.), this particular subset of financial professionals might be less susceptible to similarity bias (compared to other financial professionals such as equity investors) when deciding over lending requests.

Despite the absence of an overall relationship between perceived similarity and the credit decision (i.e., no total effect), exploratory mediation analyses revealed that causal attributions and trustworthiness judgments mediated the relationship between perceived similarity and the decision to extend credit in a sequential manner. Moreover, we also found that perceived similarity predicted causal attributions and perceived trustworthiness of the entrepreneur, which then predicted the likelihood of extending the requested capital. The indirect effect from perceived similarity to the likelihood of extending credit through perceived trustworthiness was the strongest.

The existence of a significant indirect effect in the absence of a total effect can suggest the existence of a suppression effect (e.g., Mackinnon et al., 2010; Rucker et al., 2011) in which one or more suppressor variables that were not included in the model suppressed the positive indirect effect, resulting in a net effect of zero. However, as of yet scholars are unsure what exactly can explain the existence of an indirect (albeit small) effect in the absence of a total effect. Regardless, the conclusion concerning bankers being less affected by similarity bias remains the same. That is, bankers were affected by similarity bias in their causal attributions and trustworthiness judgments, but this ultimately did not influence their credit decisions.

5.1 Theoretical implications

Our findings have several theoretical implications in light of previous research. First, the current study adds to the literature on biases in financial decision making by providing the first investigation of similarity bias among bankers dealing with entrepreneurs in financial distress. We consider this study to be of added value as we questioned whether previous research on similarity bias among VCs could be generalized to the specific context of bankers facing lending requests from entrepreneurs in financial distress. The finding that bankers in our study were less affected by similarity bias when deciding whether or not to provide new capital to an entrepreneur in financial distress contradicts previous research that did find a similarity bias in financial decision making among VCs (e.g., Becker et al., 2019; Franke et al., 2006; Murnieks et al., 2011). We encourage future research to build on the present work and use the inherent differences across financial professionals and institutions to shed more light on when biases are more (or less) likely to occur and among which group. Doing so may result in useful insights that can ultimately be used to reduce the unwanted impact of biases in financial decision making. Considering that research on debiasing in entrepreneurship research is rather limited (Zhang & Cueto, 2017), the suggested route might prove useful for further work on debiasing methods.

Finally, we provide support for and extend Tomlinson and Mayer's ( 2009) model of trust repair. Specifically, in line with their model, we found that in situations involving an adverse event (in their model a trust violation), causal attributions indeed matter for perceptions of trustworthiness. Moreover, we found support for the link from causal attributions via perceived trustworthiness to trusting behavior (i.e., extending credit). Additionally, we extend the model of trust repair by including perceived similarity as a factor. Indeed, perceived similarity affected both perceived trustworthiness and causal attributions, which in turn predicted the likelihood of extending credit.

These contributions are particularly timely considering the current COVID‐19 pandemic, which threatens the existence of many businesses and that calls for prudent financial decision making to prevent unnecessary damage to the global economy.

5.2 Practical implications

It is encouraging that we did not find strong evidence for a similarity bias in bankers' credit decisions. If our findings hold true, research should focus on examining what exactly makes bankers less susceptible to similarity bias, as these insights could help other financial professionals such as equity investors to protect themselves from this bias. For example, it has been suggested that relative to equity investors, bankers have a more standardized and structured approach to their credit decisions, resulting in consistency in their judgments (Mason & Stark, 2004). Therefore, equity players might benefit from adopting similar approaches in analyzing their investment opportunities in order to limit the potential effect of similarity bias from weighing too heavily on their decision. Also, once research has identified what exactly protects bankers from similarity bias, bankers themselves can more effectively home in on those elements and further limit the effects of the bias.

However, we did find evidence for similarity bias in bankers' assessments of the causes of a company's decline, as well as in their judgments of the entrepreneur's trustworthiness. Since these two components are particularly important in the context of business failure, there is a risk that biased causal attributions and trustworthiness judgments ultimately find their way to the final credit decisions. Banks, and in particular their departments dealing with distressed credit, should therefore take note and find ways to limit the effects similarity bias might have on their client‐facing staff.

5.3 Limitations and future research

Some issues remain with this study, and these should be studied carefully in research following the findings presented herein. First, even though we did find an effect of the similarity condition on levels of perceived similarity, manipulated similarity only affected the perceived trustworthiness of the entrepreneur and not causal attributions, whereas perceived similarity was associated with both variables. This begs the question whether the similarity manipulation was perhaps largely unsuccessful. Despite there being a significant difference between the two conditions in perceived similarity with the entrepreneur, participants in the similar condition still did not really perceive the entrepreneur to be very similar to themselves, as indicated by an average score below the midpoint of the 7‐point scale ( M = 3.72, SD = 1.13). The finding that perceived similarity was a better predictor of the variables in this study is in line with previous research that found no effect of actual similarity, but only of perceived similarity (e.g., Ferris & Judge, 1991; Strauss et al., 2001; Tidwell et al., 2013; Turban & Jones, 1988). Such a discrepancy between the effects of actual and perceived similarity is in accordance with Byrne ( 1972), who suggested that for the proposed similar‐to‐me effect to be manifested, an observer must first actually perceive the other as similar. As our data also shows, participants did not consider the entrepreneur to be very similar to themselves, regardless of the condition they were assigned to. In the end, only the age of the participant was used to manipulate the similarity with the entrepreneur and it is possible that the sample in our study was less homogenous in terms of their professional background, educational background, and socioeconomic status (i.e., the other factors used in the description of the entrepreneur) than we assumed a priori. It might, therefore, be worthwhile to more closely match characteristics of participants with those of the protagonist of a case in future studies, as this might result in a more successful similarity manipulation.

Second, even though we found robust evidence for the notion that perceived similarity in the banker-entrepreneur relationship has relevant consequences for causal attributions and perceived trustworthiness, the finding that perceived similarity was ultimately unrelated to credit decisions in bankers warrants further scrutiny. First of all, the methods used have some limitations. As is inherent to the methodology of experimental vignettes, it remains uncertain to what extent the findings can be generalized to real‐life cases. Even though the case was developed in collaboration with bankers and was perceived as realistic, an online study is different from actually interacting with entrepreneurs and having to make consequential decisions. It would, therefore, be worthwhile to build on the current research using different methods.

Moreover, the scales we used for measuring causal attributions and perceived trustworthiness were based on previous research, but with the purpose of keeping the study as short as possible to increase conversion rates, we significantly reduced the number of items used (two for causal attributions and three for perceived trustworthiness) and also made them context specific. As a result, despite having high face validity and acceptable internal consistencies, the shortened scales we used were not validated and may thus lack construct validity.

Overall, the materials we used were relatively idiosyncratic, and before drawing strong conclusions it would be necessary to replicate the findings using different materials, populations, and methods. Specifically, we (1) used a sample of Dutch bankers, (2) presented these bankers with a very specific scenario of a struggling entrepreneur in the real estate sector, and (3) used self‐report measures for the expected likelihood of extending credit rather than measuring actual behavior. Combined, these points warrant a careful assessment of the generalizability of the present findings to other, real‐world settings. This case focused on an entrepreneur in the commercial real estate sector. Even though we purposefully chose this sector to add to the realism and timeliness of the case, it is possible that credit decisions in this context are different from those in other contexts.

Moreover, the current sample was predominantly male (%), which therefore did not allow for a comparison between male and female bankers. Given the finding in previous research that male and female loan officers adhere to slightly different criteria in assessing loan applications, as well as the finding that men and women use different negotiation strategies (Carter et al., 2007), it would be worthwhile for future research to take gender into account.

Furthermore, it might be that the finding of bankers not being affected by similarity bias might be confined to the specific context of companies in financial distress. It might, therefore, be that when bankers have to decide whether or not to extend credit to an entrepreneur with whom the bank does not have a prior history, bankers will be equally incentivized to closely observe and analyze the company owners to gather as much "soft" information as they can to base their decision on, possibly making it more likely for similarity bias to have an effect. There is already some evidence that suggests that in initial lending applications, the behavior entrepreneurs display (i.e., voluntary information disclosure) affects bankers' perceptions of entrepreneurial competence, suggesting that at least in the absence of an existing relationship, bankers might actively evaluate entrepreneurs to reduce the risk associated with extending credit (Moro et al., 2014).

Having said that, relative to equity investors, bankers are less likely to provide credit in the initial stages of venture formation and growth, precisely because there is too little information available on the business' viability (making lending too risky). Whereas bankers are unlikely to invest in the earliest stages, equity investors might find themselves in a similar position as bankers dealing with distressed credit when a company they invested in faces substantial decline and requires additional capital to survive a loss‐making phase. Hence, it would be interesting to see whether equity investors are also less affected by similarity bias when they too have access to "hard" quantitative data in addition to soft data, both acquired over a prolonged period of working together. In other words, did we find a lack of similarity bias among bankers primarily because of unique features of this group, or can the results also be explained by differences in the amount of hard and soft information available at different stages of the financier-entrepreneur relationship?

In sum, following the current research it remains unknown whether the lack of similarity bias among bankers can be generalized to real‐world contexts, and if so what exactly can explain the absence of this bias. Nonetheless, we consider the findings of the current research to be of added value to the literature and encourage future research to study differences in cognitive biases in different types of financial professionals in different phases of the entrepreneurial life cycle, as this can ultimately lead to invaluable insights on how to reduce cognitive bias in the crucial context of assessing a business' potential.

ACKNOWLEDGMENTS

The authors thank Johan Jol for his assistance in developing the study materials, Michiel van Dijk and Jean‐Pierre van der Rest for their help in liaising with the banks and the data acquisition process, and Eric van Dijk for his valuable feedback throughout the process and his feedback on previous versions of the manuscript.

The data that support the findings of this study are openly available in OSF at http://doi.org/10.17605/OSF.IO/MNBF2.

Early View
Online Version of Record before inclusion in an issue

Abstract

For entrepreneurs in financial distress, it is of vital importance that investors and bankers accurately assess the viability of their business, free of unwanted biases that bear no relevance to the assessment of the chance of survival. Despite the prevalence of entrepreneurs facing financial distress, little research has yet investigated the role of cognitive biases in funding decisions in this important context. The current research attends to this issue and investigated whether entrepreneurs who are perceived by a banker as more similar are more likely to receive capital to save their business from bankruptcy than entrepreneurs who are perceived as less similar to the banker. Additionally, we investigated whether similarity bias affected bankers' attributions of what caused the financial distress as well as their perceptions of entrepreneurs' trustworthiness. Using an experimental research design, we found a similarity bias in bankers' causal attributions and trustworthiness judgments, but not in their credit decisions. We contrast our findings with similarity bias research among equity investors and discuss the implications for theory and practice.

1 INTRODUCTION

Throughout entrepreneurs' professional life span, external parties judge the growth potential and viability of their ventures in relation to possible investments or for the extension of credit by financial institutions such as banks. This is true in the start‐up phase, in times of significant growth, and also when a venture is in decline and experiencing financial distress. During such periods of substantial decline, entrepreneurs typically require additional funding from investors and/or shareholders, or additional credit from their bank to finance a turnaround or to survive a loss‐making phase. When entrepreneurs are unable to fulfill their duties toward their bank and require additional credit or a deferment on their loan payments, it is the duty of the bank's representative to assess the viability of the distressed venture. If the banker judges positively, ensuing support from the bank can be expected. If the banker judges negatively, however, bankruptcy might follow. Hence, the entrepreneur's future depends for an important part on the banker's assessment of the venture's future prospects.

For entrepreneurs the consequences of bankruptcy can be detrimental, both professionally and personally (Jenkins et al., 2014; Kesteren et al., 2017; Ucbasaran et al., 2013). Furthermore, banks and other creditors can also suffer major losses in case of bankruptcy. Consequently, for both entrepreneurs and bankers involved, but possibly most eminently for the entrepreneurs, it is of utmost importance that the viability of their businesses is accurately assessed. Fortunately, bankers are trained to be objective, are experts in the industries their clients operate in, and are aware of (macro‐)economic trends that influence the chances of a company's survival. It, therefore, stands to reason that bankers are in a good position to objectively and accurately assess the likelihood that a distressed company will be able to perform a successful turnaround and resume profitability.

At the same time, however, assessing a venture's viability is a complex matter and humans are notoriously vulnerable to cognitive biases when making judgments under uncertainty (Baron, 2014; Kahneman, 2011; Kahneman et al., 1982; Tversky & Kahneman, 1974). Indeed, research suggests that bankers can, in fact, succumb to the effects of cognitive biases such as the hindsight bias (i.e., the feeling that after the fact someone "knew all along" something would happen) (Biais & Weber, 2009) and the status quo bias (i.e., the tendency to stick to a current and known position or previously chosen position) (Burmeister & Schade, 2007). However, to the best of our knowledge no research has been conducted investigating the extent to which biases affect judgments and (credit) decisions made by bankers regarding the future of struggling entrepreneurs.

This is surprising for two reasons. First, given the relatively high failure rates of new start‐ups where typically only 50% survives the first 5 years of being in business (BLS, 2019), entrepreneurs will almost invariably face financial distress at some point in their careers and will then have to liaise with their financiers to find a solution in order to survive. Moreover, amidst the current COVID‐19 pandemic, business owners worldwide are increasingly facing substantial financial distress and many are currently entering insolvency proceedings, or their businesses already seized to exist. To prevent as much economic loss as possible and facilitate a rapid recovery of global economies, it is important that relevant stakeholders are able to correctly identify those businesses that have a good chance to survive and those that do not. A risk of cognitive biases in the context of financial distress (including the distress that stems from the current pandemic) is that such important judgments are erroneously affected by irrelevant factors, ultimately resulting in a degree of randomness in terms of which businesses are subjected to rescue efforts and which are left for dead.

Second, cognitive biases typically surface under conditions characterized by uncertainty, time pressure, and emotional turmoil (e.g., Tversky & Kahneman, 1974). Indeed, for several biases it has been demonstrated that these exert stronger effects when the situation at hand is increasingly precarious (e.g., Kneer & Bourgeois‐Gironde, 2017; Schkade & Kilbourne, 1991). Hence, the risk of financiers succumbing to unwanted cognitive biases is particularly high in the context of financial distress. We consider the lack of research on cognitive biases in key financing decisions in the context of financial distress a critical gap to fill.

The goal of our research is, therefore, twofold. First, we aim to draw attention to this important yet understudied area of biases in financial decision making in the context of financial distress. Second, we aim to provide a first empirical test of whether bankers are affected by biases in their credit decisions when confronted with an entrepreneur in financial distress. More specifically, drawing from research on biases in early‐stage funding decisions (e.g., venture capital), we test whether similarity bias affects bankers in such a way that they will attribute the cause of an entrepreneur's decline to external factors rather than to the entrepreneur and also whether bankers have more trust in the entrepreneur when the entrepreneur is perceived to be similar to the banker. Finally, we test whether ultimately there is a relationship between perceived similarity and credit decisions. In what follows, we first briefly review the literature on similarity bias and explain why this bias is particularly interesting in this context. Next, we introduce two alternative hypotheses regarding the susceptibility of bankers to similarity bias. Finally, we provide a first empirical test of whether bankers are indeed affected by similarity bias when evaluating the cause of a business' decline, the trustworthiness of an entrepreneur, and when making credit decisions.

1.1 Similarity bias

Importantly, as discussed, whether bankers in the specific context of credit decisions for entrepreneurs in financial distress are also affected by similarity bias remains an open question. That is, are entrepreneurs facing bankruptcy more likely to receive additional capital from their bank if a banker perceives the entrepreneur as more similar to him/herself?

1.2 Alternative hypotheses on similarity bias in bankers' credit decisions

Two alternative hypotheses can be put forward regarding the question whether bankers dealing with distressed credit are affected by similarity bias. The first is that bankers might be affected by similarity bias to the same extent, or perhaps more strongly so, as any other person. The second is that elements unique to funding decisions by bankers in the context of financial distress render this group of financiers immune to the effects of similarity bias.

As for the second hypothesis, important differences exist between early‐stage investment decisions by equity investors (e.g., VCs), among whom similarity biases have been identified, and decisions made by bankers in the context of financial distress, and these differences might suggest bankers are less susceptible to similarity bias or perhaps even not at all. Even though both situations are similar in the sense that both VCs and bankers are faced with uncertainty and have to assess the likelihood a company will ultimately succeed, the differences between the two center around (1) the nature of the relationship between the financiers and entrepreneurs, and (2) information asymmetry.

Regarding the relationship with entrepreneurs, VCs typically acquire an equity stake in a company and take board seats, in that sense becoming part of the entrepreneurial team. In contrast, banks typically extend secured loans (e.g., collateralized loans) instead of acquiring an equity stake and as a result their relationship with the owners is more distant. To reduce the risk and moral hazards, and to make sure they will be aligned with their future business partners (i.e., the company owners), VCs might have a stronger incentive to focus on a venture's entrepreneurial team than do bankers. Hence, the different nature of the relationships VCs and bankers have with entrepreneurs possibly makes VCs more focused on the characteristics (e.g., personalities, management styles, history, etc.) of the entrepreneurs when assessing an investment opportunity. This increased focus on entrepreneurs might ultimately make VCs more susceptible to similarity bias.

This leaves us with two hypotheses that we pit against each other in the current paper. To briefly recap, on the one hand, it could be argued that the heuristics and biases in human cognition are so innate and automatic that we can safely assume that, similar to equity investors, bankers dealing with distressed companies will most likely also succumb to the effects of similarity bias, especially since many cognitive biases are aggravated amidst dire circumstances. On the other hand, it might be that bankers dealing with distressed credit are actually less susceptible to similarity bias, given that bankers dealing with distressed credit suffer less from information asymmetry than equity investors in early‐stage funding, and considering the evidence showing that bankers are more focused on the financial aspects of a potential transaction, rather than analyzing the company owners. An important goal of this study is, therefore, to provide a first test of similarity bias among professional bankers specialized in distressed credit.

We also aim to contribute to the literature on financial decision making and similarity bias by drawing attention to the important topic of lending decisions in the context of financial distress and the role of cognitive biases in such decisions more specifically. As argued, many entrepreneurs will at some point face strong financial decline and will therefore need to liaise with their financiers to work out a solution. Despite this context of financial and emotional turmoil providing all the ingredients for biases to manifest, no research (to the best of our knowledge) has yet empirically tested whether biases affect bankers' sensemaking process when faced with a struggling entrepreneur, or their subsequent credit decisions (for an overview of research on biases among different types of financiers and entrepreneurs outside the context of financial decline, see Zhang & Cueto, 2017). We, therefore, think it is important to empirically study whether bankers in the highly relevant context of financial distress are affected by similarity biases.

2 THE CURRENT STUDY

We tested whether bankers who are confronted with an entrepreneur in financial distress and who perceive an entrepreneur to be similar to themselves (1) are more likely to attribute the cause of the distress to external factors and, therefore, do not hold the entrepreneur accountable, (2) are more likely to trust the entrepreneur to be able to turn the company around, and (3) are more likely to extend additional credit. In what follows, we briefly elaborate on each of these three issues.

2.1 Similarity bias and causal attributions

A noteworthy aspect of the banker-entrepreneur relationship in the context of near insolvency is that a sensemaking process is likely to take place in which the banker aims to understand the cause of a company's financial decline. If a banker believes the entrepreneur is the primary cause of the decline (maybe even under ideal market conditions), this will likely affect the banker's trust in the entrepreneur's ability to turn their company around. Likewise, if a banker believes the decline is due to external circumstances, this will likely not affect the trust the banker might have in the owner.

We ask whether perceived similarity with an entrepreneur in financial distress is associated with external causal attributions regarding the cause of the financial distress. That is, will a banker who is faced with an entrepreneur who requires additional credit for her/his struggling business be more inclined to attribute the cause of the entrepreneur's financial problems to external factors (e.g., economic downturn, new laws/regulations, etc.), rather than to internal factors (e.g., entrepreneurial skills and leadership), when the entrepreneur is perceived as similar to the banker? A wide body of research outside the realm of financial decision making found that following an adverse event seemingly caused by a certain actor, people are inclined to attribute the adversity to internal factors (i.e., to the actor) when the actor is dissimilar or part of an out‐group, and more to external factors (i.e., to the situation) when the actor is perceived as similar or as part of their in‐group (e.g., Banks, 1976; Burger, 1981; Kouabenan et al., 2001; Shaver, 1970). To test whether a similar bias can be observed in the present context, we formulated the following hypothesis:

Hypothesis 1.Perceived similarity is positively related to external causal attributions.

2.2 Similarity bias, trustworthiness, and credit decisions

Outside the context of financial decision making, a relationship has been found between perceived similarity and perceived trustworthiness. For example, it has been shown that similarity in terms of facial features leads to heightened perceived trustworthiness (L. M DeBruine, 2005; Farmer et al., 2014) and cooperation (DeBruine, 2002; Kret et al., 2015; Krupp et al., 2008). Within the context of mergers and acquisitions, it has been shown that higher degrees of similarity between the senior management of two firms influenced post‐acquisition trust toward the acquiring firm (Yildiz, 2014). Hence, it might be that entrepreneurs who are perceived to be similar by a banker will also be perceived as more trustworthy by that banker and are also more likely to receive credit. To test this, we formulated the following hypotheses:

Hypothesis 2.Perceived similarity is positively related to the perceived trustworthiness of an entrepreneur.

Hypothesis 3.Perceived similarity is positively related to the likelihood of extending additional credit.

3 METHOD

We tested the hypotheses outlined above using an experimental research design. We chose this specific method in large part to avoid the typical problems associated with more post hoc methodologies in which participants are required to retrospectively indicate why they made certain decisions (e.g., Baddeley, 1979). Such methods can be sub‐optimal as memories may be inaccurate and overall validity may be low (e.g., Trochim, 2001; Van Der Vaart et al., 1995). It will, for example, be difficult for bankers to accurately remember to what extent they perceived an entrepreneur they dealt with at some point in time to be similar to themselves and to what extent they trusted the entrepreneur. Moreover, it would be hard to also take into account all the differences that exist across real‐life cases to be able to isolate the influence of perceived similarity on credit decisions.

While we recognize the limitations of using vignettes in experimental research, such as potential threats to the external validity and thus generalizability following from difficulties in recreating a realistic banker-entrepreneur context, overall we consider the chosen methodology appropriate and useful for the current study. Specifically, the combination of an experimental research design with a realistic scenario (the case was developed in collaboration with a senior banker) improves the external validity, while at the same time allowing for controlling key variables and drawing causal inferences. That is, using vignettes we can keep all variables that are not of interest for the current studies fixed and, therefore, isolate the potential effect of similarity (for a review of the experimental vignette methodology, including best practices, see Aguinis & Bradley, 2014).

We asked participants to read a business case describing an entrepreneur whose business was in financial distress and for which the entrepreneur required additional capital to finance a turnaround. Participants were asked (1) to what extent they perceived the entrepreneur to be similar to themselves, (2) what they believed to be the cause of the decline (i.e., internal or external cause), (3) how trustworthy they perceived the entrepreneur to be, and finally (4) how likely they believed it to be they would comply with the entrepreneur's request and provide the additional capital necessary to avoid bankruptcy. To add to the realism of the case, we designed a case involving an entrepreneur who is active in the commercial real estate business and who can therefore offer collateral when requesting additional capital, thereby simulating the typical situation in which a bank will have a relatively secured position. Moreover, an issue facing many entrepreneurs in financial distress is the difficulty of paying their costly real estate leases, which often triggers the insolvency proceedings. Additionally, an issue facing the owners of the real estate is the steep increase of defaults on the leases and the difficulty of finding new commercial tenants. The case used in the current study is modeled after these common dynamics and can be found in the Supporting Information available online.

3.1 Participants

In this study, 146 bankers participated and were either recruited with the cooperation of several major Dutch banks or via an e‐mail invitation. Of the total sample, 121 (82.9%) were male. The average age was 43.8 ( SD = 9.5) and the average number of years of professional experience was 9.7 ( SD = 7.3). This specific group of bankers all specialized in distressed credit and worked at their banks' departments that deal with businesses in distress.

3.2 Procedure

The study was built and administered using Qualtrics online survey software and participants received a link that directed them to the survey. At the start of the survey, participants were informed that the goal of the study was to investigate judgment and decision making processes in the context of distressed credit and that their participation was completely anonymous. Participants first answered several demographic questions regarding their sex, age, profession, and years of experience. Next, participants were presented with a business case and asked to read the case thoroughly before proceeding to the next stage. Prior to reading the specifics of the case, participants were asked to adopt the perspective of the banker who had to decide over the business case in which a struggling entrepreneur required additional capital to finance a turnaround.

After the case, participants were asked questions that aimed to measure the variables in the following order: (1) perceived similarity, (2) causal attributions, (3) perceived trustworthiness of the entrepreneur, and (4) likelihood of extending credit. Before being asked to answer the main question regarding the likelihood of extending credit, participants were once again presented with the case and thus given the opportunity to read it once more. 1

3.3 Business case

The case concerned an entrepreneur who had started in the commercial real estate business only a few years ago and who now owned five properties for commercial lease. One of the rental contracts was abruptly ended due to a bankruptcy of the business that was leasing one of the five properties. It should be noted that such a concrete external event does not by definition mean that the cause of the entrepreneur's financial distress was outside of the entrepreneur's control. One could easily argue that an entrepreneur in the commercial real estate business should have a sufficient financial cushion to at least survive the default of one of its tenants. As a result of the default, the entrepreneur's revenue dropped and he could no longer meet his obligations toward his bank, which is why the entrepreneur was transferred to the department dealing with distressed credit. The entrepreneur felt that in order to be able to rent out that fifth property again, the property needed to be thoroughly renovated. Without the renovation, bankruptcy (both professional and personal) was imminent. The entrepreneur had no personal funds left and, therefore, needed the bank to finance the renovation. The amount required was substantial and amounted to 5% of the credit already outstanding. The full case can be found in the Supporting Information online. Participants were asked to what extent they considered the case to be realistic on a scale ranging from 1 (very unrealistic) to 7 (very realistic). The average score was 6.25 ( SD = 2.21).

3.4 Independent variables

3.4.1 Perceived similarity

Three items about the participants' client (i.e., the entrepreneur) aimed to measure the perceived similarity with this client (Cronbach's α = .82). Participants were asked to what extent they agreed with the following three statements: (1) "I believe to have a similar character as my client, [client name]," (2) "I believe to have similar norms and values as my client, [client name]," and (3) "I believe to be generally similar to my client, [client name]." Participants answered on a 7‐point Likert scale, ranging from Strongly disagree (1) to Strongly agree (7). The answers to these questions were averaged to create a single score for perceived similarity.

3.4.2 Actual similarity

This study also experimentally manipulated actual similarity between the participant and the entrepreneur as described in the case. Specifically, participants were randomly assigned to either the "similar" condition or the "dissimilar" condition. At the beginning of the experiment, after the general introduction, and before the business case was presented, participants were asked several demographic questions concerning for example age, gender, and professional experience. The respondents' age was then used in the similarity manipulation. Specifically, at the beginning of the case, a brief description was provided of the entrepreneur that differed based on the assigned condition on the following dimensions: (1) age, (2) professional background, (3) educational background, and (4) socioeconomic status. In the similar condition, the entrepreneur was of the same age as the participant (e.g., "in his thirties," "in his forties" etc.), had a professional background in financial services before starting their own business, completed a university degree, and had a first and last name that corresponded to names that are more common among elite families (Onland & Bloothooft, 2008). We assumed that the majority of the participating bankers had obtained a university degree and were part of higher socioeconomic groups, which is why it was expected that they would perceive the entrepreneur in this condition as more similar than they would in the dissimilar condition. In the dissimilar condition, the entrepreneur was as far removed as possible in terms of age (i.e., "in his sixties" if participant's age < 45; "in his late twenties" if participant's age > 45), had a professional background as a communication advisor in the cultural sector, completed no formal schooling, and had a first and last name that corresponded to names that are more common among lower socioeconomic groups (Onland & Bloothooft, 2008).

Combined, we assumed that altering the entrepreneur's age, professional and educational background, and implicitly his socioeconomic status, would suffice to manipulate the similarity with the participant. Such a similarity manipulation based on only few factors such as age and background has been used in previous research and proven successful (e.g., Shaver, 1970). Indeed, age has been shown to be an important factor when categorizing individuals (Brewer & Lui, 1989). Also, based on the minimal group paradigm (Tajfel, 1970), it should be expected that information regarding age and (professional) background are sufficient to attribute group membership toward individuals.

Nonetheless, despite the successful manipulation of similarity in previous studies using only a limited number of factors, there are many other studies that found no effect of actual similarity, but only of perceived similarity (e.g., Ferris & Judge, 1991; Strauss et al., 2001; Tidwell et al., 2013; Turban & Jones, 1988). This is in accordance with work by Byrne ( 1972), who suggested that for the proposed similar‐to‐me effect to be manifested, an observer must first actually perceive the other as similar. As we included both perceived and actual similarity in this study, we were able to compare effects relating to each factor.

3.5 Dependent variables

3.5.1 Causal attribution

Participants' perceptions of the cause of the entrepreneur's dire situation were measured using the following two items: (1) "[Name client] is [himself/herself] the primary cause of the imminent bankruptcy of [his/her] business" and (2) "External factors outside of [name client]'s control are the primary cause of [his/her] company's imminent bankruptcy." Participants answered on a 7‐point Likert scale, ranging from Strongly disagree (1) to Strongly agree (7). The first item measured internal attributions and the second measured external attributions. We reverse scored the internal attribution item and then averaged the two items to get a single causal attribution score representing the extent to which participants believed the cause of the entrepreneur's difficult situation was largely due to external factors (reflected by a higher score) rather than due to the entrepreneur him/herself (reflected by a lower score).

3.5.2 Perceived trustworthiness

To measure the perceived trustworthiness of the entrepreneur, three items were administered (Cronbach's α = .70). Following the work of Mayer and colleagues ( 1995), each of these items aimed to capture a specific dimension of trustworthiness: (1) ability, (2) benevolence, and (3) integrity. For ability, the item was: "I trust that my client, [client name], has the ability to make [his/her] company financially healthy again." The item measuring benevolence was: "I trust that my client, [client name], will act in a benevolent manner toward me." The item measuring trust in the entrepreneur's integrity was: "I trust that my client, [client name], is a person of integrity who delivers on [his/her] promises and who is honest toward me." All items were answered on a 7‐point Likert scale, ranging from Strongly disagree (1) to Strongly agree (7).

Mayer et al. ( 1995) created a questionnaire consisting of five to six items to measure each of these components of trustworthiness. In this study, however, we limited the scale to a single item per component for the following reasons. First, based on a pilot study in which we included all 17 items from Mayer et al.'s ( 1995) trustworthiness scale, we learned that the participants considered it to be difficult to answer a large number of questions about a person they did not know and of whom they had only received a brief description. Second, we wanted to use items that were relevant for the present context and focused on trustworthiness in relation to entrepreneurship, while most items developed by Mayer et al. ( 1995) are more generic.

3.5.3 Likelihood of extending credit

We measured participants' behavioral intentions regarding the entrepreneur's request for additional capital. Specifically, the participants were asked, if they were the banker deciding over this particular case, how likely it was that they would provide the entrepreneur with the required funds to finance the property's renovation. This variable was measured by asking participants the following question: "How likely do you believe it to be that you would comply with [client name]'s request for additional funding for the renovation?" Participants answered on a 7‐point Likert scale, ranging from Very unlikely (1) to Very likely (7).

4 RESULTS

4.1 Data preparation

We thought it important that participants properly read the case as this was vital for being able to answer the subsequent questions. Therefore, participants who spent less than 60 s on the case were excluded from the analyses. This cut‐off criterion that we chose is purposefully lenient as reading the case that consisted of 447 words in 60 s would require a reading speed of 7.3 standard deviations above the average reading speed ( M = 228 words per minute, SD = 20; Trauzettel‐Klosinski & Dietz, 2012). Hence, it is safe to assume we only excluded those who indeed did not devote sufficient attention to the case. In total, six participants were excluded from the analyses and doing so did not affect any of the findings as similar effects and significance levels were found when the complete sample was analyzed. 2

4.2 Similarity bias

First, we tested whether participants in the similar condition indeed perceived the entrepreneur to be more similar than participants in the dissimilar condition. We found a statistically significant difference in the expected direction, t(138) = 4.08, p < .001, d = 0.70, such that those in the similar condition ( M = 3.72, SD = 1.13) perceived the entrepreneur to be more similar to themselves than those in the dissimilar condition ( M = 3.02, SD = 0.91).

Next, two separate analyses were conducted to test for similarity bias in the participants' causal attributions, trustworthiness judgments, and ultimate credit decision. We conducted a Multivariate Analysis of Variance (MANOVA) to test whether manipulated similarity affected the dependent variables. The results showed a multivariate effect of manipulated similarity, F(3,136) = 6.23, p = .001, = .121. Subsequent univariate analyses revealed that manipulated similarity affected only the perceived trustworthiness of the entrepreneur, F(1,138) = 10.46, p = .002, = .070, such that entrepreneurs were deemed to be more trustworthy by those in the similar condition ( M = 4.76, SD = 0.85) than by those in the dissimilar condition ( M = 4.31, SD = 0.79). No effect was found for causal attributions, F(1,138) = 0.72, p = .398, = .005, or for the final credit decision, F(1,138) = 1.35, p = 0.248, = .010. Please see Table 1 for the results.

Dissimilar condition

Similar condition

F(1,138)

p

M

SD

M

SD

In addition to manipulated similarity, we conducted correlation analyses to see whether perceived similarity correlated with any of the dependent variables. As Table 2 shows, perceived similarity was significantly correlated with external causal attributions (Pearson r = .195, p = .021) and perceived trustworthiness (Pearson r = .305, p < .001), but not with the likelihood of extending credit (Pearson r = .106, p = .214).

M

SD

Sim. (manip.)

Sim. (perc.)

Causal attr.

Trustworth.

Credit decis.

Similarity (manipulated)

-

.07

−.10

Similarity (perceived)

3.33

1.07

-

.11

Causal attribution

4.03

1.07

-

Trustworthiness

4.51

0.85

-

4.3 Exploratory analyses

For exploratory purposes, we tested whether the study variables were related in such a way that the relationship between perceived similarity and the likelihood of extending credit was mediated in a serial manner by causal attributions and perceived trustworthiness. Specifically, we hypothesized that the relationship between perceived similarity and the likelihood a banker will extend credit to a struggling entrepreneur is mediated in serial by causal attributions and perceived trustworthiness, such that high levels of perceived similarity lead to more external causal attributions, which increase the perceived trustworthiness of the entrepreneur, ultimately resulting in a higher chance of extending the required capital by the banker (see Figure 1).

To investigate the exploratory hypothesis that perceived similarity predicts the final credit decision through causal attributions and perceived trustworthiness, we performed a serial mediation analysis using Hayes' ( 2013) PROCESS (10.000 bootstraps). The analyses of the mediation paths revealed that perceived trustworthiness mediates the relationship between perceived similarity and the final credit decision (see also Table 3), as indicated by a significant indirect effect, b = .11, 95% CI [0.03, 0.21]. Furthermore, the mediation path from perceived similarity through causal attributions to the final credit decision was also significant, b = .08, 95% CI [0.01, 0.18], as well as the total serial mediation model, b = .02, 95% CI [0.004, 0.05]. A comparison of the regression weights of the different indirect effects shows that the indirect effect through perceived trustworthiness accounted for the majority of the variance (see Table 4).

M ₁

M ₂

Y (Credit decision)

b

SE

p

b

SE

p

b

SE

p

X (Sim. Perc.)

.19

.08

.021

.20

.06

.002

−.06

.11

.59

M ₁ (Causal attr.)

-

-

-

.23

.06

<.001

.37

.11

.001

M ₂ (Trustw.)

-

-

-

-

-

-

.54

.14

<.001

Constant

3.39

.29

<.001

2.92

.31

<.001

.83

.66

.59

R ² = .038

R ² = .172

R ² = .219

F(1,138) = 5.46, p = .021

F(2, 137) = 14.24, p < .001

F(3,136) = 12.68, p < .001

Path

b

SE

95% CI

Sim. → Cause → DV

.072

.037

0.01, 0.15

Sim. → Trustworthiness → DV

.107

.046

0.03, 0.21

Sim. → Cause → Trustworthiness → DV

.024

.013

0.004, 0.05

5 DISCUSSION

We set out to draw attention to the important yet understudied topic of decision making processes in the context of financial decline. Additionally, we aimed to provide a first empirical test of whether bankers dealing with distressed credit succumb to similarity bias when confronted with an entrepreneur in financial distress who requires additional capital to save his/her business. The data showed that bankers appear to succumb only partly to the effects of similarity bias in that they attribute the cause of the distress to external factors rather than to the entrepreneur and also consider the entrepreneur to be more trustworthy when the entrepreneur is perceived as more similar to the banker than when the entrepreneur is perceived as dissimilar. Importantly, however, similarity with the entrepreneur (manipulated or perceived) was not significantly (directly) related to the likelihood of extending credit. This finding suggests that ultimately bankers might not be affected by similarity bias when deciding whether or not to extend additional credit to an entrepreneur in financial distress.

We note that perceived similarity was in fact associated with external causal attributions and increased perceived trustworthiness of the entrepreneur. It seems, therefore, that in line with the discussed literature on similarity bias, bankers are similar to other financial professionals in the sense that perceived similarity does affect their causal attributions and perceptions of trustworthiness, but just not their ultimate inclination to extend credit to entrepreneurs in financial distress. With this data, we provide the first evidence for the idea that, given the idiosyncrasies of bankers dealing with distressed credit (e.g., less information asymmetry, increased focus on "hard" financial data, etc.), this particular subset of financial professionals might be less susceptible to similarity bias (compared to other financial professionals such as equity investors) when deciding over lending requests.

Despite the absence of an overall relationship between perceived similarity and the credit decision (i.e., no total effect), exploratory mediation analyses revealed that causal attributions and trustworthiness judgments mediated the relationship between perceived similarity and the decision to extend credit in a sequential manner. Moreover, we also found that perceived similarity predicted causal attributions and perceived trustworthiness of the entrepreneur, which then predicted the likelihood of extending the requested capital. The indirect effect from perceived similarity to the likelihood of extending credit through perceived trustworthiness was the strongest.

The existence of a significant indirect effect in the absence of a total effect can suggest the existence of a suppression effect (e.g., Mackinnon et al., 2010; Rucker et al., 2011) in which one or more suppressor variables that were not included in the model suppressed the positive indirect effect, resulting in a net effect of zero. However, as of yet scholars are unsure what exactly can explain the existence of an indirect (albeit small) effect in the absence of a total effect. Regardless, the conclusion concerning bankers being less affected by similarity bias remains the same. That is, bankers were affected by similarity bias in their causal attributions and trustworthiness judgments, but this ultimately did not influence their credit decisions.

5.1 Theoretical implications

Our findings have several theoretical implications in light of previous research. First, the current study adds to the literature on biases in financial decision making by providing the first investigation of similarity bias among bankers dealing with entrepreneurs in financial distress. We consider this study to be of added value as we questioned whether previous research on similarity bias among VCs could be generalized to the specific context of bankers facing lending requests from entrepreneurs in financial distress. The finding that bankers in our study were less affected by similarity bias when deciding whether or not to provide new capital to an entrepreneur in financial distress contradicts previous research that did find a similarity bias in financial decision making among VCs (e.g., Becker et al., 2019; Franke et al., 2006; Murnieks et al., 2011). We encourage future research to build on the present work and use the inherent differences across financial professionals and institutions to shed more light on when biases are more (or less) likely to occur and among which group. Doing so may result in useful insights that can ultimately be used to reduce the unwanted impact of biases in financial decision making. Considering that research on debiasing in entrepreneurship research is rather limited (Zhang & Cueto, 2017), the suggested route might prove useful for further work on debiasing methods.

Finally, we provide support for and extend Tomlinson and Mayer's ( 2009) model of trust repair. Specifically, in line with their model, we found that in situations involving an adverse event (in their model a trust violation), causal attributions indeed matter for perceptions of trustworthiness. Moreover, we found support for the link from causal attributions via perceived trustworthiness to trusting behavior (i.e., extending credit). Additionally, we extend the model of trust repair by including perceived similarity as a factor. Indeed, perceived similarity affected both perceived trustworthiness and causal attributions, which in turn predicted the likelihood of extending credit.

These contributions are particularly timely considering the current COVID‐19 pandemic, which threatens the existence of many businesses and that calls for prudent financial decision making to prevent unnecessary damage to the global economy.

5.2 Practical implications

It is encouraging that we did not find strong evidence for a similarity bias in bankers' credit decisions. If our findings hold true, research should focus on examining what exactly makes bankers less susceptible to similarity bias, as these insights could help other financial professionals such as equity investors to protect themselves from this bias. For example, it has been suggested that relative to equity investors, bankers have a more standardized and structured approach to their credit decisions, resulting in consistency in their judgments (Mason & Stark, 2004). Therefore, equity players might benefit from adopting similar approaches in analyzing their investment opportunities in order to limit the potential effect of similarity bias from weighing too heavily on their decision. Also, once research has identified what exactly protects bankers from similarity bias, bankers themselves can more effectively home in on those elements and further limit the effects of the bias.

However, we did find evidence for similarity bias in bankers' assessments of the causes of a company's decline, as well as in their judgments of the entrepreneur's trustworthiness. Since these two components are particularly important in the context of business failure, there is a risk that biased causal attributions and trustworthiness judgments ultimately find their way to the final credit decisions. Banks, and in particular their departments dealing with distressed credit, should therefore take note and find ways to limit the effects similarity bias might have on their client‐facing staff.

5.3 Limitations and future research

Some issues remain with this study, and these should be studied carefully in research following the findings presented herein. First, even though we did find an effect of the similarity condition on levels of perceived similarity, manipulated similarity only affected the perceived trustworthiness of the entrepreneur and not causal attributions, whereas perceived similarity was associated with both variables. This begs the question whether the similarity manipulation was perhaps largely unsuccessful. Despite there being a significant difference between the two conditions in perceived similarity with the entrepreneur, participants in the similar condition still did not really perceive the entrepreneur to be very similar to themselves, as indicated by an average score below the midpoint of the 7‐point scale ( M = 3.72, SD = 1.13). The finding that perceived similarity was a better predictor of the variables in this study is in line with previous research that found no effect of actual similarity, but only of perceived similarity (e.g., Ferris & Judge, 1991; Strauss et al., 2001; Tidwell et al., 2013; Turban & Jones, 1988). Such a discrepancy between the effects of actual and perceived similarity is in accordance with Byrne ( 1972), who suggested that for the proposed similar‐to‐me effect to be manifested, an observer must first actually perceive the other as similar. As our data also shows, participants did not consider the entrepreneur to be very similar to themselves, regardless of the condition they were assigned to. In the end, only the age of the participant was used to manipulate the similarity with the entrepreneur and it is possible that the sample in our study was less homogenous in terms of their professional background, educational background, and socioeconomic status (i.e., the other factors used in the description of the entrepreneur) than we assumed a priori. It might, therefore, be worthwhile to more closely match characteristics of participants with those of the protagonist of a case in future studies, as this might result in a more successful similarity manipulation.

Second, even though we found robust evidence for the notion that perceived similarity in the banker-entrepreneur relationship has relevant consequences for causal attributions and perceived trustworthiness, the finding that perceived similarity was ultimately unrelated to credit decisions in bankers warrants further scrutiny. First of all, the methods used have some limitations. As is inherent to the methodology of experimental vignettes, it remains uncertain to what extent the findings can be generalized to real‐life cases. Even though the case was developed in collaboration with bankers and was perceived as realistic, an online study is different from actually interacting with entrepreneurs and having to make consequential decisions. It would, therefore, be worthwhile to build on the current research using different methods.

Moreover, the scales we used for measuring causal attributions and perceived trustworthiness were based on previous research, but with the purpose of keeping the study as short as possible to increase conversion rates, we significantly reduced the number of items used (two for causal attributions and three for perceived trustworthiness) and also made them context specific. As a result, despite having high face validity and acceptable internal consistencies, the shortened scales we used were not validated and may thus lack construct validity.

Overall, the materials we used were relatively idiosyncratic, and before drawing strong conclusions it would be necessary to replicate the findings using different materials, populations, and methods. Specifically, we (1) used a sample of Dutch bankers, (2) presented these bankers with a very specific scenario of a struggling entrepreneur in the real estate sector, and (3) used self‐report measures for the expected likelihood of extending credit rather than measuring actual behavior. Combined, these points warrant a careful assessment of the generalizability of the present findings to other, real‐world settings. This case focused on an entrepreneur in the commercial real estate sector. Even though we purposefully chose this sector to add to the realism and timeliness of the case, it is possible that credit decisions in this context are different from those in other contexts.

Moreover, the current sample was predominantly male (%), which therefore did not allow for a comparison between male and female bankers. Given the finding in previous research that male and female loan officers adhere to slightly different criteria in assessing loan applications, as well as the finding that men and women use different negotiation strategies (Carter et al., 2007), it would be worthwhile for future research to take gender into account.

Furthermore, it might be that the finding of bankers not being affected by similarity bias might be confined to the specific context of companies in financial distress. It might, therefore, be that when bankers have to decide whether or not to extend credit to an entrepreneur with whom the bank does not have a prior history, bankers will be equally incentivized to closely observe and analyze the company owners to gather as much "soft" information as they can to base their decision on, possibly making it more likely for similarity bias to have an effect. There is already some evidence that suggests that in initial lending applications, the behavior entrepreneurs display (i.e., voluntary information disclosure) affects bankers' perceptions of entrepreneurial competence, suggesting that at least in the absence of an existing relationship, bankers might actively evaluate entrepreneurs to reduce the risk associated with extending credit (Moro et al., 2014).

Having said that, relative to equity investors, bankers are less likely to provide credit in the initial stages of venture formation and growth, precisely because there is too little information available on the business' viability (making lending too risky). Whereas bankers are unlikely to invest in the earliest stages, equity investors might find themselves in a similar position as bankers dealing with distressed credit when a company they invested in faces substantial decline and requires additional capital to survive a loss‐making phase. Hence, it would be interesting to see whether equity investors are also less affected by similarity bias when they too have access to "hard" quantitative data in addition to soft data, both acquired over a prolonged period of working together. In other words, did we find a lack of similarity bias among bankers primarily because of unique features of this group, or can the results also be explained by differences in the amount of hard and soft information available at different stages of the financier-entrepreneur relationship?

In sum, following the current research it remains unknown whether the lack of similarity bias among bankers can be generalized to real‐world contexts, and if so what exactly can explain the absence of this bias. Nonetheless, we consider the findings of the current research to be of added value to the literature and encourage future research to study differences in cognitive biases in different types of financial professionals in different phases of the entrepreneurial life cycle, as this can ultimately lead to invaluable insights on how to reduce cognitive bias in the crucial context of assessing a business' potential.

ACKNOWLEDGMENTS

The authors thank Johan Jol for his assistance in developing the study materials, Michiel van Dijk and Jean‐Pierre van der Rest for their help in liaising with the banks and the data acquisition process, and Eric van Dijk for his valuable feedback throughout the process and his feedback on previous versions of the manuscript.

The data that support the findings of this study are openly available in OSF at http://doi.org/10.17605/OSF.IO/MNBF2.

# data[].attributes.attachment_link.title
Similarity bias in credit decisions for entrepreneurs on the brink of bankruptcy

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For entrepreneurs in financial distress, it is of vital importance that investors and bankers accurately assess the viability of their business, free of unwanted biases that bear no relevance to the assessment of the chance of survival. Despite the prevalence of entrepreneurs facing financial distress, little research has yet investigated the role of cognitive biases in funding decisions in this important context.

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Niek presented his hindsight bias research at an INSOL ERA virtual coffee session

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Niek presented his hindsight bias research at an INSOL ERA virtual coffee session

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Date?

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Start of second series of ELS lab meetings

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Start of second series of ELS lab meetings

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May 7 Lunch & Learn

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Topic Lunch & Learn

Lunch & Learns are informal, interactive sessions where we discuss a controversial statement relating to an ELS-themed topic. It is an opportunity to share your opinion and experiences with regard to doing empirical legal research and to learn from peers.

This Lunch & Learn will be on the topic of "From Fact to Norm", with the following statement:

"Findings from empirical research can(not) be translated into legal norms."

Lisa Ansems will tell us about her experiences with bridging the gap between empirical facts and legal norms in her research in Criminal Law, after which there will be room for an informal discussion on our own experiences and questions on how to bridge the gap.

Join us for this informal session; everyone is welcome to share their opinions, no matter your level of expertise. Interested to join? Sign up via the following form and you will receive a link to the Lunch & Learn: https://cutt.ly/gzedAG9.

ELS Lab Meetings

The Empirical Legal Studies Lab @Leiden is organizing a new series of sessions, for researchers interested in empirical legal research. Are you looking to learn more about empirical methods and/or engage in lively discussions on ELS? Join the upcoming ELS lab meetings!

Ranging from the informal Lunch & Learn to more in-depth paper discussions, the ELS lab meetings cover a wide range of empirical research methods and ELS-related topics. We offer a possibility to learn about each other's research and experience, test out ideas and receive feedback on work in progress. You're welcome to join, regardless of your degree of experience with ELS. Our upcoming sessions are below. Sign up via the following link: https://cutt.ly/gzedAG9

About ELS Lab @Leiden

Empirical Legal Studies is one of the legal science themes of the Leiden Law School as part of the Law Sector Plan, together with Institutions for Conflict Resolution. The Empirical Legal Studies project receives funding from the Dutch Ministry of Education, Culture and Science (OCW) through the multi-year Law Sector Plan. For any questions, please contact Helen Pluut (h.pluut@law.leidenuniv.nl).

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ELS Lab Meetings - Lunch & Learn: From Fact to Norm

# data[].attributes.attachment_link.description
Lunch & Learns are informal, interactive sessions where we discuss a controversial statement relating to an ELS-themed topic. It is an opportunity to share your opinion and experiences with regard to doing empirical legal research and to learn from peers. This Lunch & Learn will...

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Subsidieaanvraag Open Science Fund (NWO) voor ELS Academy 

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Subsidieaanvraag Open Science Fund (NWO) voor ELS Academy 

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Submission May 17 - Helen as main applicant
(niet gehonoreerd)

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ELS Academy application NWO - Open Science Fund

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Publicatie Jessie en Helen in Recht der Werkelijkheid

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Publicatie Jessie en Helen in Recht der Werkelijkheid

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May 2021 OPEN ACCESS

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Publicatie Helen en collega's civil law in Recht der Werkelijkheid

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Publicatie Helen en collega's civil law in Recht der Werkelijkheid

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May 2021

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Empirical Legal Studies in het juridisch onderwijs_RdW 2021 Pannebakker et al.

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Presentation Kimia on Online Price Discrimination, current research and the importance of ELS

21 May 2021

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https://www.sciencedirect.com/science/article/pii/S2352340921004704

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Abstract

Transcribed text from simulated hazards contains important content relevant for preventing harm. By capturing and analysing the content of speech when people raise (safety voice) or withhold safety concerns (safety silence), communication patterns may be identified for when individuals perceive risk, and safety management may be improved through identifying potential antecedents. This dataset contains transcribed speech from 404 participants (n students = 377; n female = 277, Age M(sd) = 22.897(5.386)) engaged in a simulated hazardous scenario (walking across an unsafe plank), capturing 18,078 English words (M(sd) = 46.117(37.559)). The data was collected through the Walking the plank paradigm (Noort et al, 2019), which provides a validated laboratory experiment designed for the direct observation of communication in response to hazardous scenarios that elicit safety concerns. Three manipulations were included in the design: hazard salience (salient vs not salient), responsibilities (clear vs diffuse) and encouragements (encouraged vs discouraged). Speech between two set timepoints in the hazardous scenario was transcribed based on video recordings and coded in terms of the extent to which speech involved safety voice or safety silence. Files contain i) a .csv containing the raw data, ii) a .csv providing variable description, iii) a Jupyter notebook (v. 3.7) providing the statistical code for the accompanying research article, iv) a .html version of the Jupyter notebook, v) a .html file providing the graph for the .html Jupyter notebook, vi) speech dictionaries, and vii) a copy of the electronic questionnaire. The data and supplemental files enable future research through providing a dataset in which participants can be distinguished in terms of the extent to which they are concerned and raise or withhold this. It enables speech and conversation analyses and the Jupyter notebook may be adapted to enable the parsing and coding of text using provided, existing and custom dictionaries. This may lead to the identification of communication patterns and potential interventions for unmuting safety voice. This data-in-brief is published alongside the research article: M. C. Noort, T.W. Reader, A. Gillespie. (2021). The sounds of safety silence: Interventions and temporal patterns unmute unique safety voice content in speech. Safety Science.

Keywords

communication, hazards, speech analysis, experiments

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Sounds of silence: Data for analysing muted safety voice in speech

# data[].attributes.attachment_link.description
Transcribed text from simulated hazards contains important content relevant for preventing harm. By capturing and analysing the content of speech when people raise (safety voice) or withhold safety concerns (safety silence), communication patterns may be identified for when individuals perceive risk, and safety management may be improved through identifying potential antecedents.

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Conference: International and comparative business ethics news - Legal perspectives (EN)

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Conference: International and comparative business ethics news - Legal perspectives (EN)

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21-06-2021

Presentation: Legislative updates on Corporate Mandatory Due Diligence
Presentation held in english - Organised by the Observatoire de l'Ethique Publique

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Gitta's presentation on ELS for the Europa Institute

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Gitta's presentation on ELS for the Europa Institute

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23-6-2021

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Publication of the country report as part of the Study for the preparation of an Implementation Report of the GPSD

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Publication of the country report as part of the Study for the preparation of an Implementation Report of the GPSD

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19-20 July 2021 in Apeldoorn

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Legal Philosophy publication by Niek in Cognitive Science

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Legal Philosophy publication by Niek in Cognitive Science

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Augustus 2021

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Abstract

Despite pervasive variation in the content of laws, legal theorists and anthropologists have argued that laws share certain abstract features and even speculated that law may be a human universal. In the present report, we evaluate this thesis through an experiment administered in 11 different countries. Are there cross-cultural principles of law? In a between-subjects design, participants ( N = 3,054) were asked whether there could be laws that violate certain procedural principles (e.g., laws applied retrospectively or unintelligible laws), and also whether there are any such laws. Confirming our preregistered prediction, people reported that such laws cannot exist, but also (paradoxically) that there are such laws. These results document cross-culturally and -linguistically robust beliefs about the concept of law which defy people's grasp of how legal systems function in practice.

1 Introduction

Laws vary remarkably from one jurisdiction to the next. Even within jurisdictions, legislative changes are frequent and shift the legal status of various practices over time. These changes in legality accompany fluctuations in the prevailing morality (Ofosu, Chambers, Chen, & Hehman, 2019), perhaps even helping to precipitate shifts in public opinion. Despite the abrupt historical change and cultural diversity in the content of legal norms, theorists in law (Finnis, 1980; Fuller, 1964) and anthropology (Brown, 1991) have speculated that certain features of their form may be universal. Yet, no research to date has examined whether people across cultures share intuitions about what laws fundamentally are. In the present work, we sought to fill this gap in our understanding of the cognitive science of law.

In the neighboring disciplines of moral psychology and behavioral economics, extensive research agendas have now documented robust patterns in people's moral (Cushman, Young, & Hauser, 2006; Rozin, Lowery, Imada, & Haidt, 1999) and economic (Boyer & Pedersen, 2018) preferences across various cultures (Hannikainen et al., 2019). These research programs have uncovered various universal ethical principles, for instance, the role of intent in moral blameworthiness (Barrett et al., 2016), the distinction between personal and impersonal forms of harm (Awad, Dsouza, Shariff, Rahwan, & Bonnefon, 2020), the tendency to uphold taboos related to bodily purity and sanctity (Graham, Haidt, & Nosek, 2009), such as norms proscribing sibling incest (Haidt, Koller, & Dias, 1993), and systematic deviations from self-interest, such as the tendency to exact costly punishment (Henrich et al., 2005).

Theorists in the legal domain have argued that this palette of moral sentiments forms the basis for an "intuitive jurisprudence" (Mikhail, 2007; Sznycer & Patrick, 2020), according to which the structure and content of criminal legal codes crystallize basic aspects of our moral sense. In one recent study (Sznycer & Patrick, 2020), participants were asked to consider a series of ancient laws, drawn from the Tang Code (such as gratuitously killing one's slave) and the Laws of Eshnunna (such as liability for one's goring ox), and reported their moral reactions-for example, of perceived shame and wrongness-in response to hypothetical violations of these dated laws. Strikingly, the intensity of participants' reactions predicted the magnitude of legal punishment, whether in the form of a fine or prison time, stipulated in these millennia-old criminal codes. This universalist paradigm-implicating our basic moral sensibilities in the genesis of legal doctrines-would also help explain the near-universal emergence of certain criminal laws (e.g., regarding murder, see Mikhail, 2009) and of legal institutions as a basic property of social groups (Brown, 1991; Hoebel, 1954; Nader, 1965).

In our present study, we pursue a related prediction: namely, that people around the world share an intuitive grasp of the formal properties of law-as well as its content. The view that laws must observe certain procedural principles has come to be associated most strongly with the work of American philosopher Lon Fuller. His famous (1964) book told the tale of a hypothetical king, Rex, who-through a sequence of failures-gradually discovered the eight procedural principles capable of transforming his imperatives and royal wishes into what could be properly referred to as a legal system. For instance, at first, Rex did not publicly proclaim the rules of his kingdom, but instead kept them secret in his diary. As a result, the populace could not possibly know Rex's rules-which taught Rex his first lesson: that laws need to be publicly promulgated.

Philosophers of law have recurrently debated the question of whether laws must meet certain procedural requirements, but the corresponding body of empirical evidence examining whether the concept of law exhibits such constraints is meager. One recent study-which inspired the present attempt at cross-cultural generalization-did reveal that lawyers and laypeople in the United States consider the procedural principles illustrated in Fuller's ( 1964) writings to be, in a paradoxical sense, essential to the law (Donelson & Hannikainen, 2020).

The paradox lies in the way participants reacted to different linguistic formulations of the same procedural principles:

One group of participants was asked to assess whether, in their experience, laws observe or violate each of the procedural principles (e.g., whether or not there are laws "punishing people for acts that were legal at the time they were performed "). Looking across all eight procedural principles, participants were divided on whether actual laws abide by these procedural principles.

According to most systems of modal logic, if there exists even a single retrospective law, it follows that retrospective laws certainly could exist-in virtue of axiom M. A separate group of participants were asked precisely this question: Could the laws of a hypothetical nation violate each of the procedural principles (e.g., whether there could be any laws "punishing people for acts that were legal at the time they were performed")? Both lawyers and nonlawyers reported the opposite pattern of responses: namely, that there could not be any retrospective laws (even though there actually are). A very similar pattern emerged when considering the remaining procedural principles: for example, that laws be announced publicly, made intelligible to the vast majority, changed infrequently at most, and so on.

Did this effect arise simply because participants did not grasp the relevant axiom of modal logic (i.e., that if a law exhibits property P, then laws necessarily could exhibit property P)? A follow-up study spoke against this explanation: When asked to simultaneously consider actual and possible laws, participants reported that laws often abide by the procedural principles, though it would be possible for laws to violate them-reversing the direction of the difference between conditions.

In sum, this preliminary evidence reveals an apparent contradiction: that laws need to observe certain procedural constraints, even though actual laws routinely violate them. One question this raises is: If, from their empirical knowledge of what laws are like, people conclude that there are no procedural principles that laws generally abide by; then how might they form the inconsistent judgment that laws could not possibly violate those same principles?

One possibility is that this judgment stems from a mental representation or concept of "law" (Margolis & Laurence, 1999). Such a concept could be a prototype, or essentialized belief-arising from the simpler concepts of "norm," "fairness," and " punishment," for example-and which depends weakly on one's experience with actual laws. This hypothesis yields a further empirical prediction: that the tendency to ascribe these procedural properties to law should emerge across cultures, despite fundamental variation in the particularities of each legal system and its manifestation.

To examine this prediction, we sampled from what comparative law scholars describe as the two primary legal systems: that is, common (e.g., United States and India) and civil law (e.g., Brazil and Poland; see Dainow, 1966). The former tradition evolved in England and characteristically places greater weight on judge-made law (i.e., previous judicial decisions and precedential cases); the latter originated in mainland Europe and places greater weight on statutory law (i.e., codified law written by legislators). This distinction, however, is sometimes seen as overly coarse (see Merryman & Pérez-Perdomo, 2020). Additionally, we ascertained that the 11 jurisdictions in our study varied in the strength of the rule of law (see World Justice Project, 2020).

Finally, we administered the study in the local language for each field site, helping to establish whether the effect of modal reasoning on beliefs about the law arises across different language families (from Romance, Germanic, and Balto-Slavic, to Indic and Austroasiatic families).

This cross-cultural and -linguistic approach enables us to sidestep a widespread limitation of previous research in psychological science: Various reports have highlighted the discipline's ethnocentric bias (e.g., Thalmayer, Toscanelli, & Arnett, 2021) in advancing claims about human psychology on the basis of evidence derived almost exclusively from Western, English-speaking samples.

2 Methods

2.1 Field sites and participants

We selected 11 different field sites for data collection on the basis of (i) linguistic and cultural diversity, and (ii) variation in the strength of the rule of law. To ensure a balance of strong and weak rule of law, we consulted the Rule of Law Index 2020 (World Justice Project, 2020). The Rule of Law Index draws on thousands of household and expert surveys worldwide to quantify the strength of the rule of law across nations along eight complementary dimensions: constraints on government, absence of corruption and " revolving doors," open government (guaranteeing information and civic participation), fundamental rights (e.g., absence of discrimination and freedom of expression and assembly), order and security (low levels of crime and political violence), regulatory enforcement, civil justice, and criminal justice. The Netherlands and Germany were rated as having very strong rule of law-appearing among the top 10 countries. Some other countries (including Brazil, India, Colombia, and Cambodia) were classified as having a weak rule of law, and spanned the bottom half of the global ranking.

The minimum target sample size per site was established at 100 participants per condition and field site (i.e., target n = 200/site), and was met everywhere except Cambodia (see Table 1). This sample size provides adequate statistical power ( β = .20) to detect an odds ratio ≥ 1.40 setting α at .05.

Country

N

Age Mean (SD)

Gender (% women)

Recruitment method

Total

3,054

36.0 (14.0)

48.5%

-

2.2 Materials

The stimuli were adapted from Donelson and Hannikainen ( 2020) and translated into eight additional languages by native speakers: Dutch, German, Hindi, Khmer, Lithuanian, Polish, Portuguese, and Spanish. Site collaborators were asked to iteratively compare oral back-translations (into English) against the original materials.

The main task was made up of eight pairs of statements with an affirmation (e.g., " Some laws change very frequently") and a negation (e.g., " No laws change very frequently") in each pair. These items could be worded as either existential statements, or modal statements as shown in Figure 1.

Thus, the difference between conditions was the inclusion of an auxiliary verb transforming the existential statements into modal statements. In each language, we sought to employ auxiliary verbs that primarily denote possibility and necessity (i.e., alethic modality; see Table 2).

Language

auxiliary verb (count)

English

could (14), would (4), might (1).

Dutch

kan/zouden kunnen (14), moeten/zouden moeten (3), mogelijk (1).

German

könnte/könnten (10), kann (7), können (1).

Hindi

सकना ( sakanā; 15), होना ( honā; 3), चाहिए ( cāhiye; 1).

Khmer

អាច ( ach; 19), នឹង ( nung; 4).

Lithuanian

(ne)galėtų (14), turėtų (4), gali (1).

Polish

może/mogą (15), muszą (4).

Portuguese

poderia/poderiam (14), teria/teriam (3).

Spanish

podría/podrían (16), tendría/tendrían (3).

The post-experiment test consisted of three questions, assessing how participants had interpreted the task. On a seven-point scale anchored at -3: "Not at all" and 3: "Completely," reported whether they were thinking about:

1. "what laws are usually like, in your experience" (i.e., empirical interpretation),

2. "what laws have to be like, as in the requirements for something to count as law" (i.e., alethic interpretation)

3. "what laws should be like, according to your beliefs about right and wrong" (i.e., deontic interpretation).

Materials in every language are available on the Open Science Framework at: https://osf.io/hn8m5/.

2.3 Procedure

In a between-subjects design, participants were randomly assigned to either the Actual or the Possible condition, and read the following introduction:

You will be shown eight pairs of statements regarding what laws are like. For each pair of statements, please take a moment to think about which statement better reflects your opinion about what laws are like.

In each condition, the statement pairs were presented in a random order across participants. In the Actual condition, participants read an existential statement and its negation in each pair. Meanwhile, in the Possible condition, each pair contained a modal statement employing an auxiliary verb and its negation. Participants were asked to endorse one statement from each pair. On the following page, participants were asked a set of three questions about their interpretation of the task.

Lastly, participants provided demographic information: age (in years), gender ( Male, Female, Nonbinary), and legal background ( Law student, Legal professional, Neither). Subgroup analyses are reported in Supplementary Analysis 1.

2.4 Predictions and analysis plan

Our primary prediction, sample size determination, and analysis plan were preregistered at https://aspredicted.org/zt4jr.pdf. Inspired by previous findings (Donelson & Hannikainen, 2020), we hypothesized greater endorsement of procedural principles in the Possible condition than in the Actual condition.

We coded endorsement as 1 if participants reported that a principle obtains, for example, selected "The law as enforced does not [/ could not] differ from the law as formally announced." Endorsement was coded as 0 if participants stated that a principle was or could be violated, that is, selected "The law as enforced differs [/ could differ] from the law as formally announced." In the analyses below, we conducted logistic regression models predicting the probability ( p̂) that participants endorse the procedural principle(s).

We tested our primary prediction in a mixed-effects logistic regression model entering experimental condition as fixed effect, and participant and principle as crossed random effects. Generalized linear mixed-models were conducted with the lme4 (Bates, Maechler, Bolker, & Walker, 2015) package. Predicted probabilities (notated as p̂) are calculated in the emmeans package in R version 3.6.2. Data and an accompanying R script are available at: https://osf.io/hn8m5/.

3 Results

3.1 Preregistered analyses

Participants in the Actual condition were more likely to report that laws violated procedural principles ( Actual: p̂ = .54, 95% CI asymptotic [.40, .68]) than participants in the Possible condition were to say that those same principles could be violated ( Possible: p̂ = .81, 95% CI asymptotic [.72, .89]), OR = 3.74, 95% CI [3.41, 4.09], z = 28.43, p < .001.

Treating country as a fixed factor, we observed a main effect of country, χ ²(10) = 115.0, condition, χ ²(1) = 823.7, as well as a country×condition interaction, χ ²(10) = 169.6, all ps < .001. The country×condition interaction revealed variation in the magnitude of the effect across cultures, with modest effects emerging in India and the United Kingdom (ORs < 1.60) and large effects in Brazil and Poland (ORs > 7.50). Still, the simple effect of condition was significant in every country when analyzed separately (all ps < .010). Similarly, treating principle as a fixed factor revealed a main effect of principle, χ ²(7) = 1877.4, and a principle×condition interaction, χ ²(7) = 598.4 (while accounting for the effect of condition, χ ²[1] = 710.8) all ps < .001. The interaction indicated that the magnitude of the effect varied significantly across principles, going from small for the generality principle (OR = 1.79) to large for the consistency principle (OR = 13.97; see also Figure 1). Nonetheless, the simple effect of condition was statistically significant for each of the eight principles individually, all p s < .001.

Additionally, our preregistered prediction emerged robustly across age groups and genders, and among lawyers and nonlawyers alike (as detailed in Supplementary Analysis 1). In sum, generalizing the findings of Donelson and Hannikainen ( 2020), participants in the Possible condition tended to report that laws could not violate various procedural principles even while participants in the Actual condition recognized that they often do.

3.2 Exploratory analyses

3.2.1 Manipulation check

Modal language is employed primarily to represent necessity and possibility. For instance, the question "Could there be life on Mercury?" concerns a physical possibility, just as the assertion that "There could not be any married bachelors" expresses a logical impossibility. Collectively, these are referred to as alethic modals, insofar as they purport to assess questions of necessity and possibility. In some contexts, however, modal language can also be employed to denote so-called deontic properties-that is, permission and obligation. For instance, the question "Could I sit next to you?" does not, generally speaking, inquire whether the action in question is physically possible. Rather, it requests permission from the listener, asking whether the action (i.e., sitting next to the listener) is allowed or forbidden, desirable or undesirable, from the perspective of the listener.

Though these varieties of modality are easily distinguished in thought, natural languages tend to offer imperfect ways of doing so-raising the possibility that participants interpreted the statements in our experiment as deontic rather than alethic modals.

To examine this possibility, we probed participants' interpretations of the task through a set of three post-test questions. In mixed-effects linear regression models with country as a random effect, we examined the effect of condition on each interpretation measure (see Table 3). As expected, participants viewed the existential construction ("There are laws...") as inviting an empirical assessment about "what laws are usually like in [their] experience" ( z = -3.96, p = .003). Meanwhile, the modal construction ("There could be laws...") was interpreted as describing both what laws "must be like in order to count as law" (an alethic interpretation; z = 3.38, p = .008) and what laws "should be like ideally, according to [one's] beliefs about right and wrong" (a deontic interpretation; z = 3.61, p = .006).

Marginal means [95% CI]

Fixed effect (condition)

Random effects (country)

Actual

Possible

z

p

(int.)

(slope)

Alethic

1.01

[0.73, 1.29]

1.44

[1.23, 1.64]

3.38

.008

0.39

0.37

Deontic

0.71

[0.33, 1.10]

1.24

[1.03, 1.45]

3.61

.006

0.55

0.43

Empirical

1.24

[1.05, 1.43]

0.68

[ 0.32, 1.04]

-3.96

.003

0.25

0.43

3.2.2 Effects of task interpretation

The measures of participants' interpretation of the task were moderately correlated in each condition (see Table 4). As such, estimating the impact of task interpretation via moderation analyses could be jeopardized by the presence of multicollinearity (but see Supplementary Analysis 3). Instead, to examine whether our primary finding depended on participants' interpretation of the task (and, particularly, of the modal construction in the Possible condition), we conducted latent profile analyses (Collins & Lanza, 2009) identifying patterns of interpretation (or latent profiles) across the three items in each condition.

(1)

(2)

(3)

(1)Alethic
-

[.31, .40]

[.44, .52]

(2)Deontic
-

[.44, .52]

[.09, .20]

(3)Empirical
.03

.01

-

[-.02, .09]

[-.05, .06]

These person-centered analyses revealed that differences in task interpretation were driven by a minority profile in each condition: In the Actual condition, one-in-five ( n = 352) participants reported reflecting on the empirical facts about law ( M empirical = 1.59, 95% CI [1.43, 1.74], SD = 1.50), but not its necessary ( M alethic = -0.32, 95% CI [-0.53, -0.12], SD = 1.98) or deontic ( M deontic = -2.07, 95% CI [-2.16, -1.97], SD = 0.92) properties. Meanwhile, the majority reported a fairly indiscriminate, hybrid interpretation (1.19 < all Ms < 1.47, 1.14 < all SDs < 1.42). Similarly, a minority in the Possible condition ( n = 237) reported focusing on the necessary properties of law ( M alethic = 0.56, 95% CI [0.22, 0.67], SD = 2.07; M empirical = 0.30, 95% CI [-0.06, 0.37], SD = 1.97), but not its deontic properties ( M deontic = -1.84, 95% CI [-1.97, -1.71], SD = 1.02)-while again a large majority reported a hybrid interpretation (0.82 < all Ms < 1.79, 1.05 < all SD s < 1.58).

Still, our primary prediction (concerning the effect of condition on endorsement) was borne out even among participants in the minority profiles-who reported a selective interpretation ( Actual: p̂ = .50, 95% CI asymptotic [.36, .64]; Possible: p̂ = .78, 95% CI asymptotic [.65, .86]), OR = 3.46, z = 11.65, p < .001. This result rules out one particular explanation for the primary finding: namely, that participants interpreted the modal in a deontic manner, asking themselves whether laws should observe the procedural principles in question (or be allowed to violate them); and therefore that the difference between conditions reflects the recognition that laws occasionally violate certain principles that ideally they ought to observe.

4 Discussion

Countries and jurisdictions differ substantially in the extent to which their legal systems observe fundamental principles of the rule of law (World Justice Project, 2020). One might expect that this variation would lead to cultural differences in people's concept of law. Yet, our present findings suggest that there is a remarkable level of agreement about the procedural constraints on law-observable throughout the adult life span, across highly dissimilar cultures and languages, and in lawyers and laypeople alike. People consistently believe that laws necessarily abide by a series of procedural principles: they could not retroactively punish past conduct, be kept secret, or be incomprehensible to most, for instance. Yet, people also acknowledge that laws in practice violate these very principles.

The legal systems of the 11 countries in the study vary in large and significant ways; the sample includes civil law and common law systems, countries with varying degrees of religious influence on their laws, and countries with diverse political, representational, and legislative systems. These features are obviously relevant to other important legal and political questions, but it is noteworthy that laypeople-across all of these different legal systems-share common intuitions about the concept of law.

Although our study provided clear evidence of the phenomenon in question, it afforded limited insight into the psychological processes that engender conflicting beliefs about actual versus possible laws.

A growing body of evidence demonstrates mutual influences between descriptive and prescriptive reasoning: Descriptive considerations-such as whether a behavior is common or rare-can sometimes be vested with normative weight, for example, when people punish nonconformity to group norms (Roberts, Gelman, & Ho, 2017; Roberts, Ho, & Gelman, 2019). Similarly, prescriptive considerations-such as whether a particular conduct is morally good or evil-can shape descriptive judgments, for example, about whether such conduct is even possible (Goldring & Heiphetz, 2020; Phillips & Cushman, 2017).

Our present findings could be understood as a manifestation of the latter phenomenon: When prompted to reason about whether laws necessarily exhibit certain procedural constraints, most participants also considered whether such constraints would be desirable or undesirable. And yet, in both person-centered and variable-centered analyses (see Supplementary Analysis 3), even those who interpreted the modals in a purely alethic fashion demonstrated a comparable effect. As such, our study provided at least some negative evidence concerning the mechanism: that is, that the effect is not driven by the ambiguity that pervades modality in natural languages.

Since we assessed participants' engagement in prescriptive thinking through their explicit reports, this still leaves open unconscious pathways from prescriptive considerations to judgments of necessity and possibility. In previous research, the tendency to interpret immoral states of affairs as impossible arose mostly strongly in conditions favoring a quick and intuitive assessment (i.e., under time pressure, see Phillips & Cushman, 2017). Therefore, future work could investigate whether a broader, intuitive association between immorality and impossibility undergirds people's endorsement of procedural constraints on law.

A long tradition of research on essentialist thinking has demonstrated that people infer category membership-for instance, whether something is a tiger (Gelman & Wellman, 1991), or a work of art (Liao, Meskin, & Knobe, 2020)-on the basis of abstract, and even unobservable, qualities which constitute its essence (Gelman, 2004; Keil, 1989). This tendency toward essentialization has also been observed in the legal context, when explaining stigma surrounding criminals (i.e., as criminality is attributed to an intrinsic property of criminals; see Dunlea & Heiphetz, 2020). Our present results can also be seen in this light: that is, as revealing the qualities that people consider the essence of law, and which readily come to mind when considering prototypical category members.

Relatedly, recent work reveals that various abstract concepts, such as love, friendship, or art (Del Pinal & Reuter, 2017; Knobe, Prasada, & Newman, 2013; Liao et al., 2020), also demonstrate certain trademarks of essentialist thinking: Building on the notion of dual character concepts, these studies demonstrate that being a true friend or a true artist depends on the instantiation of deeper criteria for category membership, even when the superficial criteria may be absent (Newman & Knobe, 2019; Rose & Nichols, 2020). This body of evidence points toward a promising avenue for further research: Potentially, by comparison to empirical reasoning about actual laws, modal reasoning about possible laws draws attention toward deeper criteria for category membership (i.e., could true laws lack these procedural properties?), such as the purpose of laws (Rose & Nichols, 2020; Struchiner, Hannikainen, & de Almeida, 2020) or their moral dimension (Flanagan & Hannikainen, 2020; Knobe et al., 2013).

Finally, we must note that the magnitude of the effect varied substantially across countries, which may imply some degree of cultural variability. Relatedly, our sampling methods differed substantially across sites; so variation in the magnitude of the effect might also reflect differences in sample composition, attentiveness, or even acquiescence (see Heine, Lehman, Peng, & Greenholtz, 2002).

Cognitive science has made ample progress in drawing the contours of the moral (Cushman et al., 2006; Graham et al., 2009) and economic (Boyer & Pedersen, 2018; Henrich et al., 2005) mind-while comparatively neglecting to investigate the psychological and cultural bases of legal concepts. The present work represents an early step in this research program, and provides evidence of cross-cultural convergence in people's understanding of the nature of law. We reveal a striking degree of universality in beliefs about the essential properties of law, despite abundant historical and regional variation in the way actual laws manifest.

Author contributions

IRH and RD conceived the study concept. IRH, KPT, GA, VD, MK, and NS developed and designed the study. All authors were involved in data collection and stimuli development. IRH wrote the first draft with substantial contributions from KPT. All authors provided critical revisions and approved the final version of the manuscript for submission.

This article has earned Open Data and Open Materials badges. Data and materials are available at https://osf.io/sk2z4/ and https://osf.io/vrp85/.

This article has earned Open Data and Open Materials badges. Data and materials are available at https://osf.io/sk2z4/ and https://osf.io/vrp85/.

Abstract

Despite pervasive variation in the content of laws, legal theorists and anthropologists have argued that laws share certain abstract features and even speculated that law may be a human universal. In the present report, we evaluate this thesis through an experiment administered in 11 different countries. Are there cross-cultural principles of law? In a between-subjects design, participants ( N = 3,054) were asked whether there could be laws that violate certain procedural principles (e.g., laws applied retrospectively or unintelligible laws), and also whether there are any such laws. Confirming our preregistered prediction, people reported that such laws cannot exist, but also (paradoxically) that there are such laws. These results document cross-culturally and -linguistically robust beliefs about the concept of law which defy people's grasp of how legal systems function in practice.

1 Introduction

Laws vary remarkably from one jurisdiction to the next. Even within jurisdictions, legislative changes are frequent and shift the legal status of various practices over time. These changes in legality accompany fluctuations in the prevailing morality (Ofosu, Chambers, Chen, & Hehman, 2019), perhaps even helping to precipitate shifts in public opinion. Despite the abrupt historical change and cultural diversity in the content of legal norms, theorists in law (Finnis, 1980; Fuller, 1964) and anthropology (Brown, 1991) have speculated that certain features of their form may be universal. Yet, no research to date has examined whether people across cultures share intuitions about what laws fundamentally are. In the present work, we sought to fill this gap in our understanding of the cognitive science of law.

In the neighboring disciplines of moral psychology and behavioral economics, extensive research agendas have now documented robust patterns in people's moral (Cushman, Young, & Hauser, 2006; Rozin, Lowery, Imada, & Haidt, 1999) and economic (Boyer & Pedersen, 2018) preferences across various cultures (Hannikainen et al., 2019). These research programs have uncovered various universal ethical principles, for instance, the role of intent in moral blameworthiness (Barrett et al., 2016), the distinction between personal and impersonal forms of harm (Awad, Dsouza, Shariff, Rahwan, & Bonnefon, 2020), the tendency to uphold taboos related to bodily purity and sanctity (Graham, Haidt, & Nosek, 2009), such as norms proscribing sibling incest (Haidt, Koller, & Dias, 1993), and systematic deviations from self-interest, such as the tendency to exact costly punishment (Henrich et al., 2005).

Theorists in the legal domain have argued that this palette of moral sentiments forms the basis for an "intuitive jurisprudence" (Mikhail, 2007; Sznycer & Patrick, 2020), according to which the structure and content of criminal legal codes crystallize basic aspects of our moral sense. In one recent study (Sznycer & Patrick, 2020), participants were asked to consider a series of ancient laws, drawn from the Tang Code (such as gratuitously killing one's slave) and the Laws of Eshnunna (such as liability for one's goring ox), and reported their moral reactions-for example, of perceived shame and wrongness-in response to hypothetical violations of these dated laws. Strikingly, the intensity of participants' reactions predicted the magnitude of legal punishment, whether in the form of a fine or prison time, stipulated in these millennia-old criminal codes. This universalist paradigm-implicating our basic moral sensibilities in the genesis of legal doctrines-would also help explain the near-universal emergence of certain criminal laws (e.g., regarding murder, see Mikhail, 2009) and of legal institutions as a basic property of social groups (Brown, 1991; Hoebel, 1954; Nader, 1965).

In our present study, we pursue a related prediction: namely, that people around the world share an intuitive grasp of the formal properties of law-as well as its content. The view that laws must observe certain procedural principles has come to be associated most strongly with the work of American philosopher Lon Fuller. His famous (1964) book told the tale of a hypothetical king, Rex, who-through a sequence of failures-gradually discovered the eight procedural principles capable of transforming his imperatives and royal wishes into what could be properly referred to as a legal system. For instance, at first, Rex did not publicly proclaim the rules of his kingdom, but instead kept them secret in his diary. As a result, the populace could not possibly know Rex's rules-which taught Rex his first lesson: that laws need to be publicly promulgated.

Philosophers of law have recurrently debated the question of whether laws must meet certain procedural requirements, but the corresponding body of empirical evidence examining whether the concept of law exhibits such constraints is meager. One recent study-which inspired the present attempt at cross-cultural generalization-did reveal that lawyers and laypeople in the United States consider the procedural principles illustrated in Fuller's ( 1964) writings to be, in a paradoxical sense, essential to the law (Donelson & Hannikainen, 2020).

The paradox lies in the way participants reacted to different linguistic formulations of the same procedural principles:

One group of participants was asked to assess whether, in their experience, laws observe or violate each of the procedural principles (e.g., whether or not there are laws "punishing people for acts that were legal at the time they were performed "). Looking across all eight procedural principles, participants were divided on whether actual laws abide by these procedural principles.

According to most systems of modal logic, if there exists even a single retrospective law, it follows that retrospective laws certainly could exist-in virtue of axiom M. A separate group of participants were asked precisely this question: Could the laws of a hypothetical nation violate each of the procedural principles (e.g., whether there could be any laws "punishing people for acts that were legal at the time they were performed")? Both lawyers and nonlawyers reported the opposite pattern of responses: namely, that there could not be any retrospective laws (even though there actually are). A very similar pattern emerged when considering the remaining procedural principles: for example, that laws be announced publicly, made intelligible to the vast majority, changed infrequently at most, and so on.

Did this effect arise simply because participants did not grasp the relevant axiom of modal logic (i.e., that if a law exhibits property P, then laws necessarily could exhibit property P)? A follow-up study spoke against this explanation: When asked to simultaneously consider actual and possible laws, participants reported that laws often abide by the procedural principles, though it would be possible for laws to violate them-reversing the direction of the difference between conditions.

In sum, this preliminary evidence reveals an apparent contradiction: that laws need to observe certain procedural constraints, even though actual laws routinely violate them. One question this raises is: If, from their empirical knowledge of what laws are like, people conclude that there are no procedural principles that laws generally abide by; then how might they form the inconsistent judgment that laws could not possibly violate those same principles?

One possibility is that this judgment stems from a mental representation or concept of "law" (Margolis & Laurence, 1999). Such a concept could be a prototype, or essentialized belief-arising from the simpler concepts of "norm," "fairness," and " punishment," for example-and which depends weakly on one's experience with actual laws. This hypothesis yields a further empirical prediction: that the tendency to ascribe these procedural properties to law should emerge across cultures, despite fundamental variation in the particularities of each legal system and its manifestation.

To examine this prediction, we sampled from what comparative law scholars describe as the two primary legal systems: that is, common (e.g., United States and India) and civil law (e.g., Brazil and Poland; see Dainow, 1966). The former tradition evolved in England and characteristically places greater weight on judge-made law (i.e., previous judicial decisions and precedential cases); the latter originated in mainland Europe and places greater weight on statutory law (i.e., codified law written by legislators). This distinction, however, is sometimes seen as overly coarse (see Merryman & Pérez-Perdomo, 2020). Additionally, we ascertained that the 11 jurisdictions in our study varied in the strength of the rule of law (see World Justice Project, 2020).

Finally, we administered the study in the local language for each field site, helping to establish whether the effect of modal reasoning on beliefs about the law arises across different language families (from Romance, Germanic, and Balto-Slavic, to Indic and Austroasiatic families).

This cross-cultural and -linguistic approach enables us to sidestep a widespread limitation of previous research in psychological science: Various reports have highlighted the discipline's ethnocentric bias (e.g., Thalmayer, Toscanelli, & Arnett, 2021) in advancing claims about human psychology on the basis of evidence derived almost exclusively from Western, English-speaking samples.

2 Methods

2.1 Field sites and participants

We selected 11 different field sites for data collection on the basis of (i) linguistic and cultural diversity, and (ii) variation in the strength of the rule of law. To ensure a balance of strong and weak rule of law, we consulted the Rule of Law Index 2020 (World Justice Project, 2020). The Rule of Law Index draws on thousands of household and expert surveys worldwide to quantify the strength of the rule of law across nations along eight complementary dimensions: constraints on government, absence of corruption and " revolving doors," open government (guaranteeing information and civic participation), fundamental rights (e.g., absence of discrimination and freedom of expression and assembly), order and security (low levels of crime and political violence), regulatory enforcement, civil justice, and criminal justice. The Netherlands and Germany were rated as having very strong rule of law-appearing among the top 10 countries. Some other countries (including Brazil, India, Colombia, and Cambodia) were classified as having a weak rule of law, and spanned the bottom half of the global ranking.

The minimum target sample size per site was established at 100 participants per condition and field site (i.e., target n = 200/site), and was met everywhere except Cambodia (see Table 1). This sample size provides adequate statistical power ( β = .20) to detect an odds ratio ≥ 1.40 setting α at .05.

Country

N

Age Mean (SD)

Gender (% women)

Recruitment method

Total

3,054

36.0 (14.0)

48.5%

-

2.2 Materials

The stimuli were adapted from Donelson and Hannikainen ( 2020) and translated into eight additional languages by native speakers: Dutch, German, Hindi, Khmer, Lithuanian, Polish, Portuguese, and Spanish. Site collaborators were asked to iteratively compare oral back-translations (into English) against the original materials.

The main task was made up of eight pairs of statements with an affirmation (e.g., " Some laws change very frequently") and a negation (e.g., " No laws change very frequently") in each pair. These items could be worded as either existential statements, or modal statements as shown in Figure 1.

Thus, the difference between conditions was the inclusion of an auxiliary verb transforming the existential statements into modal statements. In each language, we sought to employ auxiliary verbs that primarily denote possibility and necessity (i.e., alethic modality; see Table 2).

Language

auxiliary verb (count)

English

could (14), would (4), might (1).

Dutch

kan/zouden kunnen (14), moeten/zouden moeten (3), mogelijk (1).

German

könnte/könnten (10), kann (7), können (1).

Hindi

सकना ( sakanā; 15), होना ( honā; 3), चाहिए ( cāhiye; 1).

Khmer

អាច ( ach; 19), នឹង ( nung; 4).

Lithuanian

(ne)galėtų (14), turėtų (4), gali (1).

Polish

może/mogą (15), muszą (4).

Portuguese

poderia/poderiam (14), teria/teriam (3).

Spanish

podría/podrían (16), tendría/tendrían (3).

The post-experiment test consisted of three questions, assessing how participants had interpreted the task. On a seven-point scale anchored at -3: "Not at all" and 3: "Completely," reported whether they were thinking about:

1. "what laws are usually like, in your experience" (i.e., empirical interpretation),

2. "what laws have to be like, as in the requirements for something to count as law" (i.e., alethic interpretation)

3. "what laws should be like, according to your beliefs about right and wrong" (i.e., deontic interpretation).

Materials in every language are available on the Open Science Framework at: https://osf.io/hn8m5/.

2.3 Procedure

In a between-subjects design, participants were randomly assigned to either the Actual or the Possible condition, and read the following introduction:

You will be shown eight pairs of statements regarding what laws are like. For each pair of statements, please take a moment to think about which statement better reflects your opinion about what laws are like.

In each condition, the statement pairs were presented in a random order across participants. In the Actual condition, participants read an existential statement and its negation in each pair. Meanwhile, in the Possible condition, each pair contained a modal statement employing an auxiliary verb and its negation. Participants were asked to endorse one statement from each pair. On the following page, participants were asked a set of three questions about their interpretation of the task.

Lastly, participants provided demographic information: age (in years), gender ( Male, Female, Nonbinary), and legal background ( Law student, Legal professional, Neither). Subgroup analyses are reported in Supplementary Analysis 1.

2.4 Predictions and analysis plan

Our primary prediction, sample size determination, and analysis plan were preregistered at https://aspredicted.org/zt4jr.pdf. Inspired by previous findings (Donelson & Hannikainen, 2020), we hypothesized greater endorsement of procedural principles in the Possible condition than in the Actual condition.

We coded endorsement as 1 if participants reported that a principle obtains, for example, selected "The law as enforced does not [/ could not] differ from the law as formally announced." Endorsement was coded as 0 if participants stated that a principle was or could be violated, that is, selected "The law as enforced differs [/ could differ] from the law as formally announced." In the analyses below, we conducted logistic regression models predicting the probability ( p̂) that participants endorse the procedural principle(s).

We tested our primary prediction in a mixed-effects logistic regression model entering experimental condition as fixed effect, and participant and principle as crossed random effects. Generalized linear mixed-models were conducted with the lme4 (Bates, Maechler, Bolker, & Walker, 2015) package. Predicted probabilities (notated as p̂) are calculated in the emmeans package in R version 3.6.2. Data and an accompanying R script are available at: https://osf.io/hn8m5/.

3 Results

3.1 Preregistered analyses

Participants in the Actual condition were more likely to report that laws violated procedural principles ( Actual: p̂ = .54, 95% CI asymptotic [.40, .68]) than participants in the Possible condition were to say that those same principles could be violated ( Possible: p̂ = .81, 95% CI asymptotic [.72, .89]), OR = 3.74, 95% CI [3.41, 4.09], z = 28.43, p < .001.

Treating country as a fixed factor, we observed a main effect of country, χ ²(10) = 115.0, condition, χ ²(1) = 823.7, as well as a country×condition interaction, χ ²(10) = 169.6, all ps < .001. The country×condition interaction revealed variation in the magnitude of the effect across cultures, with modest effects emerging in India and the United Kingdom (ORs < 1.60) and large effects in Brazil and Poland (ORs > 7.50). Still, the simple effect of condition was significant in every country when analyzed separately (all ps < .010). Similarly, treating principle as a fixed factor revealed a main effect of principle, χ ²(7) = 1877.4, and a principle×condition interaction, χ ²(7) = 598.4 (while accounting for the effect of condition, χ ²[1] = 710.8) all ps < .001. The interaction indicated that the magnitude of the effect varied significantly across principles, going from small for the generality principle (OR = 1.79) to large for the consistency principle (OR = 13.97; see also Figure 1). Nonetheless, the simple effect of condition was statistically significant for each of the eight principles individually, all p s < .001.

Additionally, our preregistered prediction emerged robustly across age groups and genders, and among lawyers and nonlawyers alike (as detailed in Supplementary Analysis 1). In sum, generalizing the findings of Donelson and Hannikainen ( 2020), participants in the Possible condition tended to report that laws could not violate various procedural principles even while participants in the Actual condition recognized that they often do.

3.2 Exploratory analyses

3.2.1 Manipulation check

Modal language is employed primarily to represent necessity and possibility. For instance, the question "Could there be life on Mercury?" concerns a physical possibility, just as the assertion that "There could not be any married bachelors" expresses a logical impossibility. Collectively, these are referred to as alethic modals, insofar as they purport to assess questions of necessity and possibility. In some contexts, however, modal language can also be employed to denote so-called deontic properties-that is, permission and obligation. For instance, the question "Could I sit next to you?" does not, generally speaking, inquire whether the action in question is physically possible. Rather, it requests permission from the listener, asking whether the action (i.e., sitting next to the listener) is allowed or forbidden, desirable or undesirable, from the perspective of the listener.

Though these varieties of modality are easily distinguished in thought, natural languages tend to offer imperfect ways of doing so-raising the possibility that participants interpreted the statements in our experiment as deontic rather than alethic modals.

To examine this possibility, we probed participants' interpretations of the task through a set of three post-test questions. In mixed-effects linear regression models with country as a random effect, we examined the effect of condition on each interpretation measure (see Table 3). As expected, participants viewed the existential construction ("There are laws...") as inviting an empirical assessment about "what laws are usually like in [their] experience" ( z = -3.96, p = .003). Meanwhile, the modal construction ("There could be laws...") was interpreted as describing both what laws "must be like in order to count as law" (an alethic interpretation; z = 3.38, p = .008) and what laws "should be like ideally, according to [one's] beliefs about right and wrong" (a deontic interpretation; z = 3.61, p = .006).

Marginal means [95% CI]

Fixed effect (condition)

Random effects (country)

Actual

Possible

z

p

(int.)

(slope)

Alethic

1.01

[0.73, 1.29]

1.44

[1.23, 1.64]

3.38

.008

0.39

0.37

Deontic

0.71

[0.33, 1.10]

1.24

[1.03, 1.45]

3.61

.006

0.55

0.43

Empirical

1.24

[1.05, 1.43]

0.68

[ 0.32, 1.04]

-3.96

.003

0.25

0.43

3.2.2 Effects of task interpretation

The measures of participants' interpretation of the task were moderately correlated in each condition (see Table 4). As such, estimating the impact of task interpretation via moderation analyses could be jeopardized by the presence of multicollinearity (but see Supplementary Analysis 3). Instead, to examine whether our primary finding depended on participants' interpretation of the task (and, particularly, of the modal construction in the Possible condition), we conducted latent profile analyses (Collins & Lanza, 2009) identifying patterns of interpretation (or latent profiles) across the three items in each condition.

(1)

(2)

(3)

(1)Alethic
-

[.31, .40]

[.44, .52]

(2)Deontic
-

[.44, .52]

[.09, .20]

(3)Empirical
.03

.01

-

[-.02, .09]

[-.05, .06]

These person-centered analyses revealed that differences in task interpretation were driven by a minority profile in each condition: In the Actual condition, one-in-five ( n = 352) participants reported reflecting on the empirical facts about law ( M empirical = 1.59, 95% CI [1.43, 1.74], SD = 1.50), but not its necessary ( M alethic = -0.32, 95% CI [-0.53, -0.12], SD = 1.98) or deontic ( M deontic = -2.07, 95% CI [-2.16, -1.97], SD = 0.92) properties. Meanwhile, the majority reported a fairly indiscriminate, hybrid interpretation (1.19 < all Ms < 1.47, 1.14 < all SDs < 1.42). Similarly, a minority in the Possible condition ( n = 237) reported focusing on the necessary properties of law ( M alethic = 0.56, 95% CI [0.22, 0.67], SD = 2.07; M empirical = 0.30, 95% CI [-0.06, 0.37], SD = 1.97), but not its deontic properties ( M deontic = -1.84, 95% CI [-1.97, -1.71], SD = 1.02)-while again a large majority reported a hybrid interpretation (0.82 < all Ms < 1.79, 1.05 < all SD s < 1.58).

Still, our primary prediction (concerning the effect of condition on endorsement) was borne out even among participants in the minority profiles-who reported a selective interpretation ( Actual: p̂ = .50, 95% CI asymptotic [.36, .64]; Possible: p̂ = .78, 95% CI asymptotic [.65, .86]), OR = 3.46, z = 11.65, p < .001. This result rules out one particular explanation for the primary finding: namely, that participants interpreted the modal in a deontic manner, asking themselves whether laws should observe the procedural principles in question (or be allowed to violate them); and therefore that the difference between conditions reflects the recognition that laws occasionally violate certain principles that ideally they ought to observe.

4 Discussion

Countries and jurisdictions differ substantially in the extent to which their legal systems observe fundamental principles of the rule of law (World Justice Project, 2020). One might expect that this variation would lead to cultural differences in people's concept of law. Yet, our present findings suggest that there is a remarkable level of agreement about the procedural constraints on law-observable throughout the adult life span, across highly dissimilar cultures and languages, and in lawyers and laypeople alike. People consistently believe that laws necessarily abide by a series of procedural principles: they could not retroactively punish past conduct, be kept secret, or be incomprehensible to most, for instance. Yet, people also acknowledge that laws in practice violate these very principles.

The legal systems of the 11 countries in the study vary in large and significant ways; the sample includes civil law and common law systems, countries with varying degrees of religious influence on their laws, and countries with diverse political, representational, and legislative systems. These features are obviously relevant to other important legal and political questions, but it is noteworthy that laypeople-across all of these different legal systems-share common intuitions about the concept of law.

Although our study provided clear evidence of the phenomenon in question, it afforded limited insight into the psychological processes that engender conflicting beliefs about actual versus possible laws.

A growing body of evidence demonstrates mutual influences between descriptive and prescriptive reasoning: Descriptive considerations-such as whether a behavior is common or rare-can sometimes be vested with normative weight, for example, when people punish nonconformity to group norms (Roberts, Gelman, & Ho, 2017; Roberts, Ho, & Gelman, 2019). Similarly, prescriptive considerations-such as whether a particular conduct is morally good or evil-can shape descriptive judgments, for example, about whether such conduct is even possible (Goldring & Heiphetz, 2020; Phillips & Cushman, 2017).

Our present findings could be understood as a manifestation of the latter phenomenon: When prompted to reason about whether laws necessarily exhibit certain procedural constraints, most participants also considered whether such constraints would be desirable or undesirable. And yet, in both person-centered and variable-centered analyses (see Supplementary Analysis 3), even those who interpreted the modals in a purely alethic fashion demonstrated a comparable effect. As such, our study provided at least some negative evidence concerning the mechanism: that is, that the effect is not driven by the ambiguity that pervades modality in natural languages.

Since we assessed participants' engagement in prescriptive thinking through their explicit reports, this still leaves open unconscious pathways from prescriptive considerations to judgments of necessity and possibility. In previous research, the tendency to interpret immoral states of affairs as impossible arose mostly strongly in conditions favoring a quick and intuitive assessment (i.e., under time pressure, see Phillips & Cushman, 2017). Therefore, future work could investigate whether a broader, intuitive association between immorality and impossibility undergirds people's endorsement of procedural constraints on law.

A long tradition of research on essentialist thinking has demonstrated that people infer category membership-for instance, whether something is a tiger (Gelman & Wellman, 1991), or a work of art (Liao, Meskin, & Knobe, 2020)-on the basis of abstract, and even unobservable, qualities which constitute its essence (Gelman, 2004; Keil, 1989). This tendency toward essentialization has also been observed in the legal context, when explaining stigma surrounding criminals (i.e., as criminality is attributed to an intrinsic property of criminals; see Dunlea & Heiphetz, 2020). Our present results can also be seen in this light: that is, as revealing the qualities that people consider the essence of law, and which readily come to mind when considering prototypical category members.

Relatedly, recent work reveals that various abstract concepts, such as love, friendship, or art (Del Pinal & Reuter, 2017; Knobe, Prasada, & Newman, 2013; Liao et al., 2020), also demonstrate certain trademarks of essentialist thinking: Building on the notion of dual character concepts, these studies demonstrate that being a true friend or a true artist depends on the instantiation of deeper criteria for category membership, even when the superficial criteria may be absent (Newman & Knobe, 2019; Rose & Nichols, 2020). This body of evidence points toward a promising avenue for further research: Potentially, by comparison to empirical reasoning about actual laws, modal reasoning about possible laws draws attention toward deeper criteria for category membership (i.e., could true laws lack these procedural properties?), such as the purpose of laws (Rose & Nichols, 2020; Struchiner, Hannikainen, & de Almeida, 2020) or their moral dimension (Flanagan & Hannikainen, 2020; Knobe et al., 2013).

Finally, we must note that the magnitude of the effect varied substantially across countries, which may imply some degree of cultural variability. Relatedly, our sampling methods differed substantially across sites; so variation in the magnitude of the effect might also reflect differences in sample composition, attentiveness, or even acquiescence (see Heine, Lehman, Peng, & Greenholtz, 2002).

Cognitive science has made ample progress in drawing the contours of the moral (Cushman et al., 2006; Graham et al., 2009) and economic (Boyer & Pedersen, 2018; Henrich et al., 2005) mind-while comparatively neglecting to investigate the psychological and cultural bases of legal concepts. The present work represents an early step in this research program, and provides evidence of cross-cultural convergence in people's understanding of the nature of law. We reveal a striking degree of universality in beliefs about the essential properties of law, despite abundant historical and regional variation in the way actual laws manifest.

Author contributions

IRH and RD conceived the study concept. IRH, KPT, GA, VD, MK, and NS developed and designed the study. All authors were involved in data collection and stimuli development. IRH wrote the first draft with substantial contributions from KPT. All authors provided critical revisions and approved the final version of the manuscript for submission.

This article has earned Open Data and Open Materials badges. Data and materials are available at https://osf.io/sk2z4/ and https://osf.io/vrp85/.

This article has earned Open Data and Open Materials badges. Data and materials are available at https://osf.io/sk2z4/ and https://osf.io/vrp85/.

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Are There Cross‐Cultural Legal Principles? Modal Reasoning Uncovers Procedural Constraints on Law

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Despite pervasive variation in the content of laws, legal theorists and anthropologists have argued that laws share certain abstract features and even speculated that law may be a human universal. In the present report, we evaluate this thesis through an experiment administered in 11 different countries. Are there cross-cultural principles of law?

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6-9-2021

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Online prijsdiscriminatie - Heidary & Custers 2021

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Gitta's presentation on ELS for themabijeenkomst Staats- en Bestuursrecht

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Gitta's presentation on ELS for themabijeenkomst Staats- en Bestuursrecht

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21-09-2021

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Kees Kraaijveld as guest presenter in lab

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Kees Kraaijveld as guest presenter in lab

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24-09-2021

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1 October 2021 - ILS/ELS mini-conference for students

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1 October 2021 - ILS/ELS mini-conference for students

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Gitta Veldt & Jessie Pool

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October 2021

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Speerpunten

Binnen verschillende speerpunten investeren de rechtenfaculteiten van 10 Nederlandse universiteiten komende jaren in de rechtswetenschap in al haar vormen. Dit hebben ze met elkaar vastgelegd in het Sectorplan Rechtsgeleerdheid. De plannen worden gefinancierd door het Minsterie van OCW.

Er zijn 5 speerpunten waarbinnen verschillende faculteiten samenwerken. Aan de twee speerpunten 'Vergroten en versterken van de aanwas van jonge onderzoekers' en 'Diversiteit/Inclusie' hebben alle faculteiten zich verbonden.

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Binnen verschillende speerpunten investeren de rechtenfaculteiten van 10 Nederlandse universiteiten komende jaren in de rechtswetenschap in al haar vormen. Dit hebben ze met elkaar vastgelegd in het Sectorplan Rechtsgeleerdheid. De plannen worden gefinancierd door het Minsterie van OCW. Er zijn 5 speerpunten waarbinnen verschillende faculteiten samenwerken.

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First edition of the ELS bulletin sent out

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First edition of the ELS bulletin sent out

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15-10-2021

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Dear colleague,

Thank you for showing interest in our brand new ELS Bulletin! This is where we share the most recent ELS Lab @Leiden updates on publications, activities and other interesting news. We are well on our way in the new academic year and are hoping to meet you in our ELS activities. And of course we hope that you'll enjoy reading this bulletin!

Empirical Legal Studies is one of the legal science themes of the Leiden Law School as part of the Law Sector Plan . The ELS Lab @Leiden provides a platform that brings together legal scholars and social scientists to collaboratively explore legally relevant questions related to market regulation. Our purpose is to shape and strengthen expertise on law and behavior in a market context . Using both quantitative and qualitative methods, we do research on law in action and examine what works in the regulation of behavior in order to achieve the goals of the legislator.

The ELS Lab meetings are back! Our lab is organizing a new series of sessions for researchers interested in empirical legal research.

When? 21 October, 12:00-13:00. Where? KOG, B2M07 and online. Topic? From legal scholar to empirical legal scholar. Will lunch be served? Yes! For catering purposes, please let us know if you are attending using our e-mail address elslab@law.leidenuniv.nl.

When? 12 November, 10:00-11:00. Where? KOG, B2M07 and online. Topic? Niek Strohmaier and Sofia de Jong will present their work on character evidence and procedural justice.

When? 3 December, 10:00-11:00. Where? KOG, B2M07 and online . Topic? Vignette studies based on Shosha Wiznitzer's dissertation 'Defensieve dokters'.

The ELS lab meetings cover a wide range of empirical research methods and ELS-related topics. We offer a possibility to learn about each other's research and experience, test out ideas and receive feedback on work in progress. You're welcome to join, regardless of your degree of experience with ELS.

Our empirical studies collectively aim to uncover how regulations and legislation can shape markets in fair and just ways. Recently, the following articles were published by members of our lab. Do reach out to explore collaborations!

"Belemmeringen bij de aanpak van onregelmatigheden door de curator" by Jessie Pool and Helen Pluut with Reinout Vriesendorp. The paper, which can you can find here , reports on a mixed-methods study on private enforcement and the constraints that insolvency practitioners experience in sanctioning directors' misconduct.

"Online prijsdiscriminatie: Algoritmische prijspersonalisatie in het licht van het discriminatieverbod en consumentenbescherming" by Kimia Heidary with Bart Custers. The paper, which you can find here , discusses the implications of online price discrimination for Dutch law, in particular non-discrimination law and consumer protection law.

"Are there cross-cultural legal principles? Modal reasoning uncovers procedural constraints on law" by Niek Strohmaier and collaborators. The paper, which you can find here , empirically tests assumptions in the long standing legal philosophical debate on "what is law?" by surveying people from 11 different countries.

On October 1st, we organized a student conference on 'empirical legal research and private law'. Read all about it here . Our lab has also published work about the role of ELS in legal education.

"Statistiek in het rechtencurriculum: Nut en noodzaak" by Helen Pluut, Jessie Pool, Niek Strohmaier and Gitta Veldt in Ars Aequi .

"Empirical Legal Studies in het juridisch onderwijs: waar staat Nederland en hoe nu verder?" by Helen Pluut and collaborators in Recht der Werkelijkheid . This paper discusses the state of the art with regard to attention for empirical research methods in the law school curriculum and is based on a report that is publicly available .

Do reach out to us if you have any ideas for ELS in the domain of teaching or if you could use some help.

In every issue of our bulletin, we would like to congratulate one of our colleagues with an ELS milestone. Do you know of any achievements, initiatives, or efforts related to ELS? We would love to hear and include them in a next bulletin, so please share!

Congratulations to Lisa Ansems on her successful doctoral defense last month! Her dissertation is on perceived procedural justice among defendants in criminal cases. In her research, Lisa combined qualitative methods (interviews) with quantitative methods (survey, experiment) and related these empirical findings to (legal) normative reflections. Inspiring work!

As an aspiring ELS scholar, you probably have tons of questions... and it's not always easy to get a quick answer that makes sense. We want your questions! Ask your ELS-related question by clicking on the button below and we will try to address them in upcoming activities and communication.

And for whatever else is holding you back, we've got a first aid kit! Be aware of the side effects when following the prescriptions. They might cause severe feelings of affection for ELS, eventually distracting you from your usual field of interest.

In the Kamerlingh Onnes Building, on the second floor between the B and C wings, you'll find an open library full of relevant books for ELS-minded colleagues! Come and have a look and borrow a book - the check-out sheet is waiting for you. On the recommended reading list are amongst others:

Nederlandse encyclopedie Empirical Legal Studies (2020, red. Bijleveld e.a.)

Empirical legal research: A primer (2020, Kees van den Bos, also available in Dutch)

Advanced introduction to empirical legal research (2021, Herbert M. Kritzer)

Law is too important to leave to lawyers (2021, Marijke Malsch)

Methoden van systematische rechtspraakanalyse (2021, red. Paul Verbruggen)

This is your bulletin! We do our best to cover what interests you, but we need your input. We welcome contributions - for instance, accounts of work in progress, conference announcements, reports of symposia, initiatives in education and/or research, and other efforts that deserve the spotlight. If you have a contribution, just send it to elslab@law.leidenuniv.nl.

Do you want to recommend the ELS Bulletin to colleagues? You can send them this link to sign up: http://eepurl.com/hIird1

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Dear colleague, Thank you for showing interest in our brand new ELS Bulletin! This is where we share the most recent ELS Lab @Leiden updates on publications, activities and other interesting news. We are well on our way in the new academic year and are hoping to meet you in our ELS activities.

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19 October 2021 - feedback session on his Vidi proposal on post-Brexit law compliance

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500 million+ members | Manage your professional identity. Build and engage with your professional network. Access knowledge, insights and opportunities.

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Start of third series of ELS lab meetings 

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Start of third series of ELS lab meetings 

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20 October 2021 - Lunch & Learn, for the first time an in-person lab meeting!

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Helen on multilevel analysis - Empirical Methods in Legal Research

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Helen on multilevel analysis - Empirical Methods in Legal Research

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18-11-2021

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17-12-2021

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20 december 2021

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Honours College Law Course 'Onderzoek naar recht in de samenleving' - Niek Strohmaier

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Honours College Law Course 'Onderzoek naar recht in de samenleving' - Niek Strohmaier

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Several presentations of lab members:
- Niek
- Kimia & Jessie on interviews
- Helen on surveys and diary studies
- Sarah & Jaap Baaij on quantitative content analysis

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http://deeplinking.kluwer.nl/?param=00DA03DB&cpid=WKNL-LTR-Nav2

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Navigator - dé website voor de jurist en fiscalist

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Navigator biedt onmisbare informatie voor de fiscale, juridische, en financiële professional

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Lab member Niek Strohmaier part of Kifid’s arbitration committee

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Lab member Niek Strohmaier part of Kifid’s arbitration committee

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As per January 1st, Niek Strohmaier is part of Kifid's arbitration committee.

Kifid is the Dutch Institute for Financial Disputes and offers easy access and expert advice to consumers, small businesses and self-employed persons without employees (zzp-ers) who have a complaint against a financial services provider. Kifid helps to solve problems between consumers, their bank, insurer, intermediary or other financial services provider. The support offered by Kifid takes the form of mediation or a decision by its Arbitration Commission, which is legally binding (in most cases).

Niek's role within the arbitration committee is to particularly use his background in behavioral science to better understand the consumers' perspectives, and also to apply his expertise regarding the psychology of legal decision making, which is the primary focus of his current research. Niek Strohmaier: "I am very excited about this opportunity, where I can combine my legal knowledge with my behavioral science background to help Kifid's arbitration committee. I am grateful to Kifid for granting me the opportunity to apply my research in this impactful real-world setting. I am also eager to learn from the highly experienced members of the committee, and to continue developing myself on the cross-section of law and psychology."

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Lab member Niek Strohmaier part of Kifid's arbitration committee

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As per January 1st, Niek Strohmaier is part of Kifid's arbitration committee. Kifid is the Dutch Institute for Financial Disputes and offers easy access and expert advice to consumers, small businesses and self-employed persons without employees (zzp-ers) who have a complaint against a financial services provider.

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Publication Helen et al. in The Law Teacher

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Publication Helen et al. in The Law Teacher

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ABSTRACT

ABSTRACT
This paper describes and discusses the portfolio of courses in which empirical legal research skills are currently taught to law students in the Netherlands. It results from an in-depth country-wide study we undertook as part of a project supported by the Dutch Research Council (NWO) in view of the growing attention to empirical legal studies (ELS). The paper concludes with a reflection on the future of ELS education in the Netherlands.

1. Introduction

In legal academia, attention to empirical legal studies (ELS) is growing.¹ In the Netherlands, recent publications have addressed the definition of the term "empirical legal studies" and its scope, the value of empirical legal research, the role of theory in ELS, and the relationship between ELS and various "law and ... " approaches.² The recently published Encyclopaedia of Empirical Legal Studies provides an overview of empirical legal research conducted in the Netherlands during the last 25 years. It defines ELS as a field of study in which empirical data is used to answer questions relevant to law.³ Scholars in this field rely on quantitative and/or quantitative methods to study (a) the assumptions behind the law, (b) the way in which the law is applied, and (c) the impact of law on society.⁴ ELS has been encouraged by the Dutch government, which gave it a prominent role in the Sector Plan for Law⁵ through which funds are made available to enhance research and education in the legal discipline.

Attention to ELS in legal academia went along with attention to education in the field of ELS, which in the Netherlands took the form of two stimulation actions. The report following the first stimulation action contained several conclusions and recommendations.⁶ One conclusion was that law students in the Netherlands had no systematic education in empirical research methods. Therefore, it was recommended to (i) educate empirical legal scholars⁷ so that they can conduct empirical research and translate the obtained findings into implications for law, and (ii) (re)design the regular law school curriculum so that law students and law school graduates understand empirical findings and can translate them into implications for practice and legal norms. We have taken an active part in the follow-up of the first stimulation action. The main objective of the second stimulation action draws on the recommendation to bring in a focus on empirical skills in the regular law school curriculum so as to ensure that law school graduates are prepared to either conduct empirical legal research themselves or, at least, interpret and make use of empirical findings. However, prior to taking concrete steps towards this objective, one should have a clear overview of the ELS education currently offered at the law schools in the Netherlands.

At this point, it is important to outline the Dutch legal education system. The main way to be admitted to a Dutch university for studying law at bachelor's level is by having completed six years of pre-university education ( vwo), which leads to a " vwo diploma". Another way to be admitted is by successfully completing the first year (propaedeutic phase or " propedeuse") at a university of applied sciences, also called higher professional education. In line with the Bologna system,⁸ once admitted to a Dutch university, students can obtain a bachelor's degree (LLB), after which they can follow a master's programme and obtain an LLM. This is not to say that any law school graduate has the so-called " civiel effect", a qualification that is a necessary but not a sufficient prerequisite for being licensed to practise law as an attorney, a notary, a judge, or a (public) prosecutor in the Netherlands. A specific set of bachelor's and master's courses are mandatory to obtain this qualification. To be admitted as an attorney to the Dutch Bar, in addition to having civiel effect, an LLM graduate has to follow the additional post-academic study " Beroepsopleiding Advocaten" as an attorney-intern at a law firm (" advocaat-stagiair"). For the judiciary and notarial practice, students must also graduate with civiel effect and in addition they are required to follow specific education, and special selection criteria apply for each of these professions.

Importantly, our study focuses on the role of ELS in the law school curricula, and therefore does not cover specific forms of professional education (see also section 2.5). Much is already being done when it comes to ELS education in the Netherlands. However, to date, an accurate overview of university courses in which ELS is taught has been missing. Therefore, we inquired into the regular curricula of Dutch law schools and provided a country-wide overview of the courses with an ELS component currently taught in the Netherlands. The inquiry began in 2019 and resulted in a report (in Dutch) published in the summer of 2020.⁹ The current paper presents our findings and discusses those in the context of current debates. We conclude with a reflection on how (under)graduate and postgraduate legal education at universities can prepare the upcoming generation of practitioners of law and legal scholars in the Netherlands for undertaking and understanding empirical research in law.

To introduce the study, we briefly discuss the concept of empirical legal studies, clarify the working definition of ELS education used for the purpose of the study, and describe our focus and methodology ( section 2). Next, we present the main findings by charting the extent to which ELS is taught within the regular curricula at the bachelor's, master's, and PhD levels at nine university law schools in the Netherlands ( section 3). This is followed by a reflection on the findings ( section 4) and on the future of ELS education, considering current debates in the Netherlands ( section 5).

2. Overview of ELS education - focus and method

2.1 The concept of ELS

The concept of empirical legal studies originates from the US, where empirical legal research has been around for over a century.¹⁰ The term "empirical legal studies" became widely known after the founding of the Journal of Empirical Legal Studies.¹¹ Owing to this journal's strong focus on quantitative methods, the term ELS in the narrow sense is confined to studies based on quantitative methods. In English language literature, the term ELS has been frequently used in this narrow sense. However, it has also been used in a broader sense, which covers not only quantitative but also qualitative studies.¹² In the Netherlands, scholars called for an inclusive and methodologically eclectic approach to ELS.¹³ The current approach in the Netherlands is exactly that, as illustrated by the quantitative and qualitative studies featuring in the Dutch encylopaedia.¹⁴ This is not to say there is consensus regarding the definition of ELS. Although the main building blocks of the Dutch approach to empirical legal research have been crystallised,¹⁵ ELS remains a broad concept, defined in different ways.¹⁶ This makes international comparisons somewhat complicated.¹⁷

While the concept of ELS in the field of research covers both quantitative and qualitative studies, no generally accepted definition of ELS in the field of education has been formulated. Taking the definition of ELS in research as the starting point, we assumed that affinity with empirical research methods is inherent to ELS. This view corresponds to the twofold objective of the second stimulation action, namely (1) educating prospective practitioners of law who can interpret empirical results and (2) educating legal scholars who can apply empirical methods in their legal research. Therefore, in our view, a course should at least incorporate a focus on empirical research methods in order for it to be characterised as ELS education. As alluded to earlier, these methods can be of quantitative or qualitative nature. For the purpose of the overview, we have defined ELS education (or ELS courses) as education in which students acquire knowledge on the application of empirical methods to research questions in the field of law.

2.2 Method courses and substantive law-oriented courses

Empirical legal research skills can be taught in two types of courses: (i) courses entirely dedicated to studying scientific research methods and (ii) courses with a focus on substantive law. Courses of the first type are entirely dedicated to the study of various research methods that can be applied in legal research and practice. Along with various other methods, such courses cover empirical methods, including questionnaires and experiments. We refer to such courses as method-oriented courses. For example, the Research Methods Seminars (Erasmus University Rotterdam) is a method-oriented course with ELS components. The courses Quantitative Empirical Research Methods in Law and Qualitative Empirical Research Methods in Law (both Leiden University) are method-oriented courses entirely dedicated to empirical research methods. In method-oriented courses, students are trained in empirical research skills in the context of legally relevant research questions. Courses of the second type are focused on substantive (positive) law but introduce an empirical perspective as one of the ways to look at positive law, for example the course Labour Law in Socio-Economic Context (Tilburg University). We refer to such courses as substantive law-oriented courses. In such courses, students study the content of law, but at the same time they are taught to critically analyse (the role of) empirical findings related to law or carry out empirical research themselves.

2.3 Active and passive ELS skills

Various degrees of attention to ELS are possible; that is to say, not all courses deal with ELS to the same degree. Our overview is focused on (and confined to) those courses in which students are trained in empirical legal research methods, including courses with the following degrees of attention to ELS:

1. courses in which students are taught to design, set up, and conduct empirical legal research;

2. courses in which students are taught to understand and critically analyse the results of existing empirical legal studies and the methods used therein.

The courses in the first category lead to active skills or knowledge: students can conduct research in the field of ELS, whereas the courses in the second category lead to passive skills or knowledge: students understand and can analyse empirical legal methods applied in an existing study.

In courses aimed at providing active knowledge in the field of ELS, students learn to conduct empirical legal research in a scientifically sound manner. They become familiar with possible methodological choices and pitfalls. Active knowledge implies that students acquire the skills needed to independently carry out an empirical legal study or to develop a research design (without eventually undertaking the designed research). Active knowledge of ELS is a critical learning outcome for those graduates who want to become legal scholars. Not only will they be prepared to undertake empirical legal research, but they will also be equipped to teach a next generation of law students about empirical research, thereby overcoming the issue of a self-perpetuating cycle.¹⁸ Research-based teaching allows students to learn about the process of doing empirical research in law and they may even get involved in the empirical legal research of their professors. For those graduates who become practitioners of law, active knowledge of ELS may help them carry out empirical work,¹⁹ yet it is more common in the Netherlands for attorneys and judges to leave such efforts to others. Hence, active knowledge of ELS as a learning outcome is valuable in particular for legal scholars and to a lesser extent for practitioners of law.

Passive knowledge, on the other hand, implies that students can critically reflect on empirical legal studies that others consider doing or have conducted. Such critical reflections may concern the representativeness of the sample, the reliability and validity of research findings, and the choice for a particular method. In this way, students become familiar with the strengths and weaknesses of empirical research projects in law. Some graduates will become practitioners of law and will be presented with empirical evidence in their daily work.²⁰ Their work might then involve interpretation and evaluation of statistics and probabilities in reports, for instance those created by DNA experts in criminal cases.²¹ Passive knowledge of ELS as a learning outcome enables practitioners of law to consume empirical evidence, thereby contributing to the professionalisation of how court cases are handled. As for legal scholars, passive knowledge enables them to engage in a critical manner with the existing body of empirical legal research in order to appropriately discuss or use the findings in their own research and teaching. Thus, passive knowledge of ELS as a learning outcome is valuable for practitioners of law and legal scholars alike.

It is possible that a course leads to both passive and active ELS skills (for example, by progressively building up the skills), and both active and passive skills can be taught in a method-oriented course as well as in a substantive law-oriented course.

2.4 Grey areas

The twofold focus on method courses and substantive law-oriented courses in which students obtain active or passive ELS skills (as defined above) implies that some courses remain in a grey area. The contours of ELS education in the sense of our inquiry become fainter as less attention is being paid to ELS methodology. The more passive the required student's attitude to empirical research, the fewer reasons to qualify the course as ELS education. It is possible that a substantive law-oriented course includes an empirical component; for example, students discuss empirical findings, but this empirical component does not include any critical discussion of the empirical research methods applied to obtain these findings. We qualify such courses as passive-passive. While the results of existing empirical research are discussed, students are not taught to develop an understanding of the empirical method on which the research relies (in other words, students obtain no skills in doing or understanding ELS). Therefore, it was decided to exclude passive-passive courses from the definition of ELS education. Moreover, it is possible that a course extends students' empirical toolkit but does not deal with a question in the field of legal research. Such courses also fall outside our definition of ELS education. For example, in the course Business Analytics (Leiden University), students become familiar with empirical methods, but the methods are not applied to a legally relevant research question. In short, if a course involves empirical findings but does not imply an understanding of the empirical method or the empirical methods are not applied to a legal research question, this course falls outside our definition of ELS education.

Depending on the scope of the concept of ELS education, it may cover various "law and ... " and other interdisciplinary courses, including sociology of law, psychology of law, and legal anthropology. Any such course falls under our definition of ELS education if it involves obtaining skills in the application of empirical methods to questions relevant to legal research (in either an active or a passive way, as discussed earlier). However, we have not characterised the "law and ... " and interdisciplinary courses as ELS education by default. Therefore, a course that extends the student's interdisciplinary toolkit (or contributes to interdisciplinary knowledge by providing insights from other disciplines) may fall outside our definition of ELS education. The reason for this is most often that empirical methods are not applied to legal questions.²² Nevertheless, interdisciplinary courses are important because they incorporate various matters that typically go beyond students' knowledge of positive law, which enables students to consider legal research questions from an interdisciplinary perspective (for example, by using insights from behavioural science).

The chosen approach to the grey areas has implications for the study's findings, especially the conclusions about the extent to which ELS is currently taught within the regular legal curriculum. If a less restrictive definition of the concept of ELS education had been adopted, the overview would have included more courses, in particular those that we have labelled as passive-passive. The study's focus needed to be sharpened and the contours of ELS education needed to be drawn to keep the study feasible and the findings clear, so that the overview could contribute in achieving the main objective of the second stimulation action.

The scope of the current study is depicted in Figure 1, which contains the reasoning scheme applied in the assessment of each course. As our study progressed, the focus became increasingly sharp and we could be more selective in charting the courses offered in-house at nine Dutch law schools, although it is inherent to the grey areas that there are nuances and it can be difficult to characterise the courses in the border area.

Empirical legal studies in the law school curriculum in the Netherlands: what is the state of the art and where do we go from here?

2.5 Focus on law schools

Our study focuses on the regular curricula at the various law schools in the Netherlands, that is, academic legal education which leads to a bachelor's and master's degree in law as well as postgraduate (PhD) education. In line with the goal and focus of the second stimulation action and the Dutch Sector Plan for Law, we wanted to examine the state of affairs in the law school curricula as a basis for further development of ELS in legal education.

Therefore, courses that are not taught at the law schools fall outside our inquiry's scope. An example would be the curricula of the universities of applied sciences. Furthermore, the overview does not include courses or education that some university graduates may follow after obtaining an LLM degree in order to get access to a specific profession. As noted earlier, in order to become an attorney and be admitted to the Dutch Bar, a university graduate with a master's degree with " civiel effect" must follow a number of courses as part of the education called " Beroepsopleiding Advocaten".²³ In order to become a judge, other additional education should be followed as prescribed by the Dutch judiciary, although dependent on the prior experience of the candidate.²⁴ While we acknowledge that this education may include training in empirical research methods, it falls outside the scope of our inquiry. The same applies to specialised forms of training that practitioners of law receive and that provide them with skills that are not purely empirical skills, but that do in fact equip them for empirical investigations. For example, interns at law firms may be taught by senior staff to interview clients. We limit our focus to courses and training offered in the regular curricula of law schools available to all university graduates and PhD candidates.²⁵

2.6 Methodology

The second step consisted of explorative research based on the pre-selection. In the first half of 2019, we visited each law school and spoke to the teaching staff, coordinators, and directors of education involved in teaching the pre-selected courses. The main objective of these conversations was to verify the online selection results. Furthermore, these conversations were used as an opportunity to snowball. We asked respondents whether they could point us to other courses that we overlooked during the online selection and courses for which no online course description was available. We also asked them for recommendations on which other colleagues at the faculty to approach.

Based on the outcome of the explorative research, several pre-selected courses were excluded from the selection (false positives) and many courses were added (false negatives). At the beginning of 2020, we returned to the teaching staff and coordinators involved in the respective courses to validate the new selection. We sent them an email asking them to confirm whether the selected course, in which they were involved, could be characterised as ELS. This validation email was accompanied by the reasoning scheme shown in Figure 1. The 115 emails that we sent resulted in an average response rate of 73% across law schools, with a standard deviation of approximately 13. The final overview consisted of 96 courses.

3. Overview of ELS education in the Netherlands

3.1 General findings

At bachelor's level, the law schools' portfolios of ELS education are relatively diverse and fragmented. In some regular bachelor's programmes, all first- or second-year students were introduced to empirical legal research. However, most regular bachelor's curricula include no specific courses dedicated to the ELS methodology. Instead, the teaching of empirical legal methods is incorporated into interdisciplinary courses, minors, and elective courses. A relevant development in this regard is the recent emergence of new ELS-oriented bachelor's programmes, honours courses and related tracks, in which students are trained to conduct and critically analyse empirical legal research and obtain active and passive ELS skills.

The regular master's programmes incorporate no systematic education in passive or active knowledge in the field of ELS. In contrast, most research master's programmes include one or more specific method-oriented courses that cover empirical legal methods. Sometimes they overlap with the education at the PhD level, for example, when research master students and PhD candidates follow the same course together.

At the doctoral (PhD) level, active or passive knowledge of various quantitative and qualitative methods is taught to PhD candidates at all law schools. Either a regular course is offered or a tailor-made training is initiated on demand. To meet the needs of the particular PhD candidate, the universities call on appropriately trained teaching staff and outside experts who provide tailor-made supervision.

3.2 ELS education at each law school

At the Faculty of Law of Leiden University, at bachelor's level (Bachelor Law, Bachelor Notarial Law, and Bachelor Tax Law), ELS components are incorporated in the elective courses. For example, passive knowledge in the field of ELS is taught in the courses Socio-Legal Studies, Criminology for Lawyers, Law and Culture, Law and Governance in Asia, and Law in the Multicultural Society. In these courses, students become familiar with the basics of empirical research and learn to critically evaluate empirical findings. Undergraduate students can also be introduced to empirical research methods by taking part in Honours College Law - a set of courses for selected excellent students. At the master's level, the curricula of various master's programmes offered at Leiden University sporadically contain courses that deal with the ELS methodology and result in passive knowledge in the field of ELS. An exception is provided by the courses of the recently established master Law and Society. Within this master's programme, active ELS skills are taught. At the doctoral level, methods of empirical legal research are taught in two specific courses: Quantitative Empirical Research Methods in Law and Qualitative Empirical Research Methods in Law. These courses aim to develop passive and active knowledge in the field of ELS; in the former course, students get knowledge on quantitative methods, and in the latter, they get knowledge on qualitative methods. In both courses, the study of methods is closely tied to the specific research project of each PhD candidate. It can be concluded that, at Leiden University, the focus on ELS lies mainly with PhD education. It is also to be found in elective courses that are closely related to the specific expertise of the teaching staff who carry out empirical legal research themselves.

At the Faculty of Law of Utrecht University, research methods play a prominent role in the curriculum, in which Context and Method is one of the learning outcomes. This learning outcome covers inter alia education in ELS methodology. Within the regular bachelor's programmes, some elective courses and mandatory courses incorporate teaching of passive ELS skills. The regular bachelor's programme (Bachelor Dutch Law) includes no mandatory courses in which students would learn to (actively) conduct empirical legal research. At the master's level, empirical research methods are taught in the Legal Research Master. Furthermore, within the master Law and Economics, the course Methodologies of Law and Economics devotes attention to empirical research methods. All law school PhD candidates follow a mandatory course, Introduction to Research Methods & Techniques. This course includes ELS methodology; students acquire passive and active knowledge of quantitative and qualitative empirical research methods.

The Faculty of Law of the University of Groningen has a centre of expertise in empirical legal research - the Groningen Centre for Empirical Legal Research. This centre has a research and a teaching component. The focus of ELS education is with the Bachelor Legal Governance. Within this programme, active ELS knowledge is taught inter alia in the course Research Project in Legal Governance. Other courses, such as the courses Methods of Socio-Legal Research and Introduction into Sociology of Law, combine passive and active ELS skills. The course Introduction into Sociology of Law may be followed by the students of the regular Bachelor Dutch Law as an elective in the third year. Within the regular bachelor's programme, the (second-year) course Legal Research Skills 2 provides students with passive knowledge of various research methods, including empirical methods. Students of this course also get an opportunity to actively adopt an empirical approach when they conduct their own research. Within the Research Master's programme, active ELS skills are taught in two courses that build on each other: Introduction to Empirical Legal Research and Empirical Legal Research Lab. The master's programme Law and Governance, specialisation Legal Governance, contains several ELS components. Doctoral education in Groningen includes no mandatory courses dedicated to empirical research methods. Instead, law school students attend regular meetings with a special focus. The focus varies: the meeting can be on qualitative methods one time, and, another time, on quantitative methods, depending on the PhD candidates' needs and wishes. Furthermore, PhD candidates may attend ELS courses offered by the Winter School of the Graduate School of Law and may join courses taught within the Research Master.

At Erasmus School of Law (Erasmus University Rotterdam), bachelor's students are offered an opportunity to study empirical research methods in the course Sociology of Law and in a set of courses that form the minor Criminology. At the master's level, in the Master Legal Theory and Socio-Legal Studies, active knowledge in the field of ELS is built up in two courses: Socio-Legal Studies and the follow-up course Advanced Socio-Legal Studies. The curriculum of the European Master in Law and Economics includes a mandatory course Empirical Legal Studies. At the doctoral level, education in empirical legal methods is incorporated in the course Research Lab offered by the Erasmus Graduate School of Law (EGSL). This course consists of regular coaching and peer-review meetings organised during one academic year. Furthermore, PhD candidates follow the course Research Methods Seminars, which includes one seminar dedicated to empirical research methods. During this seminar, students get information about existing methods and are challenged to elaborate on the possibility of using empirical methods in their own research. Furthermore, Erasmus University Rotterdam takes part in an international programme called the European Doctorate in Law and Economic s (EDLE). EDLE candidates have the possibility to choose the EDLE Empirical Track, offered in cooperation with foreign universities.

At the Faculty of Law of Radboud University Nijmegen, regular bachelor's programmes focus primarily on positive law, while education in the field of ELS is available in elective courses, for example, in the courses Sociology of Law and Criminology. Two research master's programmes are offered: Entrepreneurship & Law and Public Law. In these programmes, some attention is devoted to empirical research. In the Research Master Entrepreneurship & Law, ELS is incorporated in the course Research Methodology, and the students of the Research Master Public Law follow the course Law and Society. At the master's level, the specialisation Criminal Law includes the course Empirics of Criminal Procedure, which contains ELS components. It offers students at the master's level the possibility to follow courses with a focus on empirical methods, although they are not required to do so (except the research master's students). Doctoral education includes no courses with an ELS component. Instead, PhD candidates attend meetings organised on demand and dedicated to various topics, such as data management, conducting interviews, or how to do quantitative research.

At the Faculty of Law of Maastricht University, empirical research methods have received increasing attention. The law school has chosen to focus on data-driven (quantitative) research on digital information processing. At bachelor's level, all first-year students of the regular bachelor's programme (Dutch Law) follow a mandatory course, Skills for Lawyers. Part B of this course provides active and passive knowledge in the field of ELS. Furthermore, attention to empirical research methods can be found in three elective bachelor's courses: Research Methods, Legal Decision-Making and Neurosciences, and Law and Neurosciences. Bachelor's students who participate in the Maastricht University Law College and in a programme entitled "MaRBLe@LAW" can also receive training in ELS. At the master's level, they are trained in passive and active ELS in elective courses, such as Legal Analytics and Computational Science of Taxation. Furthermore, students can be selected for participation in honours programmes at the master's level, where they can follow the course Empirical Legal Research. The content of this course can be linked to the writing of the master thesis, if the student chooses to use an empirical research method for the master thesis. The content of the education offered to PhD candidates is flexible and not defined in advance. Yet one course is mandatory for all PhD candidates - The Art of Doing Research, which highlights the different stages of a research project.

At the Faculty of Law of the University of Amsterdam, ELS education is primarily incorporated in bachelor's courses and elective minor programmes (a minor is a set of elective courses with an overarching theme or in a particular field of law). The first encounter with ELS takes place in the course Law and Human Behaviour. The course is mandatory for all first-year students of the regular Bachelor and the Bachelor Tax Law (approximately 1000 students). Attention to empirical legal research is also paid in the minor Rule of Law, Professional Ethics and Integrity for Lawyers, and in the minor Law and Economics. At the master's level, the curricula sporadically include courses with ELS components. For example, the course Individual Research Project European Public Law and Governance is taught in the Master International and European Law. Students of the Research Master Information Law and of the Research Master Public International Law used to have the possibility to follow any course offered at the doctoral level. However, the University of Amsterdam no longer offers these research master's programmes. At the doctoral level, ELS education is incorporated into two courses: Philosophy of Legal Research and Research Design and Methods. The latter is a three-day course with a focus on qualitative and quantitative methods. Finally, "socio-legal research" is discussed as part of the course Research Seminar Series (the course includes seven seminars on doctrinal research, historical research, critical perspectives, socio-legal research, normative research, law and economics, and on law, language and interpretation).

Legal education offered at Free University Amsterdam (Vrije Universiteit Amsterdam) approaches law from the perspective of current developments in society. Therefore, considerable attention in the curriculum has been devoted to insights from empirical studies. In the regular bachelor's programme, there is only limited room for the development of empirical research skills, although some courses incorporate a discussion of empirical insights into legal questions. One development is highly relevant for ELS education, namely the recent launch of a new interdisciplinary bachelor's programme, Law and Society. This internationally oriented programme in English aims to educate students broadly as lawyers who have a background in ELS. At the master's level, a Research Talent Track has been open since 2019-2020 for (selected) talented students interested in (conducting) empirical legal research. At the doctoral level, the Graduate School offers the course Methodology Option 1: Empirical Research Design. In this way, empirical research methods form a mandatory component of doctoral education. PhD candidates can also follow an elective course How to Do a Scientific Interview, in which active ELS skills can be gained.

At the Faculty of Law of Tilburg University, law is taught from the perspective of current developments in society. In the regular bachelor's curriculum, empirical research methods are presented in the course Methods and Techniques of Research. The course prepares students to write a bachelor's thesis, for which the students may adopt an empirical approach. The course Law and Society is an example of a "law in context" course. It aims to enrich students' conception of law from an external perspective, based on empirics and social science. The international bachelor's programme Global Law includes two courses in which students are trained in passive ELS skills. At the master's level, various courses incorporate ELS components. For instance, students of the regular master's programme may follow an elective course, Labour Law in Socio-Economic Context. This course aims to introduce law students to empirical insights from the socio-economic and socio-legal disciplines. The course Introduction to Social Sciences and Research Methods provides students with (passive) knowledge of the application of empirical methods to labour law issues. Furthermore, courses in which students learn to understand and critically analyse empirical legal research findings are offered within interdisciplinary master's programmes, such as the Master International Law & Global Governance. Education offered at the doctoral level includes the course Qualitative Research Methods and the course Building Your Methodology - What Is Out There?, in which empirical research methods are taught.

4. Reflection

4.1 Methodological caveats

Based on the data we collected, a general impression of ELS education in the Netherlands has been formed. However, one can never be sure that an inquiry like the one reported herein is complete. Various steps have been taken to eliminate false-positive and false-negative results. Nevertheless, the validity and reliability of our study warrant a critical note. An overview of ELS education in current law school curricula is a complex task for a number of reasons. First, the curricula of each of the nine law schools include many courses. This implies the need to collect and carefully study a considerable amount of data. Second, one may assume that not all course descriptions are always available on faculty websites. Therefore, our overview may mistakenly omit some relevant courses. There is also a risk that not all people involved in ELS education were approached, although we did snowballing during interviews held at the universities. Furthermore, our findings provide a snapshot of ELS education and should therefore be interpreted in light of the period in which the study was conducted. All the course descriptions, even after updating the information at the time of finalising the research, correspond to the study year 2019/2020. It is, therefore, possible that universities have meanwhile taken further steps in developing or offering ELS education. Finally, some courses remain in the grey areas because the concept of ELS can be defined in different ways. It has been decided to rely on a workable definition of ELS, but even after the delimitation of the concept, its interpretation affects the conclusion as to whether a particular course is to be characterised as ELS education. Therefore, the overview is, to some extent, subjective, especially with respect to the decision whether a course falls under the definition of ELS. However, we still believe that we have sketched an evidence-based picture of the current offer of ELS education in the Netherlands, providing a basis for further inquiries. For instance, it can assist in assessing the desirability of further development of the current law school curricula and in determining the specific steps to be taken to incorporate empirical research methods in the law school curricula.

4.2 The current state of affairs

It remains difficult to describe the ELS skills of an "average Dutch law student" due to the differences between law schools in terms of their portfolios of ELS education. Further research to increase our understanding of why some law schools or some levels of education incorporate more ELS education than others might inform future discussions on the law school curricula. Although not the focus of our study, we believe that one possible explanation for differences between universities may be the presence of established empirical legal research groups or relative lack thereof. Although individual experts in the field of ELS can be found at each law school, some law schools have coherent ELS research groups or even expertise centres, such as the Groningen Centre for Empirical Legal Research. The activities of such research groups have a spillover effect within the faculty: staff members become familiar with the possibilities offered by empirical legal research and can reach out to a colleague who can advise on qualitative and quantitative methods. The effect may also spill over to education. While ELS is still largely absent from the Dutch law school curricula, the rise of empirical legal research will likely go hand in hand with teaching staff experienced in empirical research methods, which should ultimately allow for more research-based education. ELS can enrich the teaching of law when teachers bring in their own research experience and empirical knowledge, thereby creating a stimulating learning environment. However, the question of whether such a spillover effect occurs should be the subject of further research.

So what have we learned? Taking a helicopter view of the current situation, we can conclude that mandatory curricula of the regular bachelor's programmes do not incorporate much education in empirical legal research methods. At the bachelor's level, ELS education is more present within specialisations, minor trajectories, honours programmes, and elective courses. Empirical components are clearly identifiable in interdisciplinary bachelor's programmes, which have a specific focus on the interplay between law and other disciplines. For example, the Bachelor Politics, Psychology, Law and Economics (PPLE) (University of Amsterdam) has a multidisciplinary curriculum, including the teaching of qualitative and quantitative research methods over three years. Furthermore, new bachelor's programmes dedicated to empirical research on law have been established, such as the Bachelor Law in Society (Free University Amsterdam).

At the master's level, the picture is mostly comparable. New master's programmes with a focus on ELS are the masters Law and Society (Leiden University) and Legal Theory & Socio-Legal Studies (Erasmus University Rotterdam). In the regular master's programmes, education in ELS methodology is offered primarily outside the mandatory curricula, in elective courses. The programmes of the research masters and extracurricular (honours) programmes for master's students devote more attention to passive and active ELS skills. Research master's programmes incorporate specific method-oriented courses, which cover empirical methods. Sometimes the content of the latter overlaps with that of doctoral education.

At almost all nine law faculties, doctoral education includes training in empirical legal research methods. This training is often shaped as a specific course or as a series of courses building on each other. However, even if no such course is offered, appropriate education is organised on demand, so that the PhD candidates may benefit from the expertise of staff members and experts from outside. All in all, it follows that as students advance in their studies and as they come closer to the stage at which they are expected to conduct legal research themselves, the more extensive is the ELS education on offer. Notably, at a couple of law schools, a first ELS seed is already planted within the regular bachelor's programmes.

5. Looking to the future

5.1 Recommendations

The growing attention to ELS and discussions on the value of empirical skills in legal education touch upon the more general plea for broadly educated law school graduates.³¹ In the literature, it has been suggested that along with academic skills, broader interdisciplinary skills should be instigated at an early stage.³² This can be achieved by enhancing students' affinity with research methods from other disciplines. As empirical research methods draw on other disciplines, especially social sciences, the development of students' empirical profile goes hand in hand with the development of their interdisciplinary profile.

This is not to say that an interdisciplinary focus should replace disciplinary education, that is, the study of positive law. On the contrary, disciplinary education is the core of the law school curriculum; it is a necessary foundation for interdisciplinarity. In our view, if ELS is to be introduced into the regular curriculum, it needs to be better embedded in legal education, with a focus on adding to the regular legal curriculum and integrating relevant aspects from other disciplines. The most obvious opportunity to do so can be found in interdisciplinary courses. We believe that interdisciplinary courses currently taught at law schools, including various "law and ... " courses, can be relatively easily transformed into ELS education by focusing on empirical methods or shifting the current focus to legally relevant topics. Most interdisciplinary courses can accommodate a critical discussion of the empirical methods applied in the required (interdisciplinary) readings. Some interdisciplinary courses already include a critical discussion of empirical methods but do not focus on law. These courses can be transformed into ELS education by adding a discussion of legal questions (or by replacing some non-legal questions with legal ones). This would also contribute to better embedding such courses in the law curriculum. Therefore, cooperation should be encouraged between on the one hand teaching staff involved in interdisciplinary courses and on the other hand legal scholars with a traditional background.

In the long term, universities could consider adding empirical skills to the set of competencies a graduate should have at bachelor's, master's, and doctoral levels. Various sources of inspiration can be used for a focused legal research skills framework, such as the skills in criminology programmes. Empirical skills also play a role in several consecutive courses within the bachelor programmes PPLE (University of Amsterdam), Law in Society (Free University Amsterdam), and Legal Governance (University of Groningen). Inspiration may also be drawn from the way empirical research skills are developed at the faculties of social sciences.

Centring skills training and committing to the development of ELS skills as part of a (research) skills framework would help prevent situations in which students are introduced to ELS but there is no follow-up in the remainder of the study programme. Instead, ELS skills should be developed consistently throughout the years of study, so that the student's knowledge is progressive and matches the increasing difficulty of ELS-related tasks they will encounter. One could think of a preliminary encounter with empirical findings when studying law, followed by teaching passive ELS skills, where students would learn to critically analyse the results of existing empirical research and identify which methods are used therein. Thereafter, students may deepen their understanding of ELS methodology by gaining active knowledge and skills. This entails at least learning to design an empirical legal research project, but students can also be taught to conduct independent or supervised empirical legal research using quantitative and/or qualitative methods in a scientifically sound manner.

Incorporating ELS into law school curricula would require both staff that can teach the relevant (parts of the) courses and appropriate teaching materials. With regard to staff, the focus on ELS in the context of the Dutch Sector Plan for Law is prompted by, amongst other things, the small numbers of empirical legal researchers at law schools. ELS education requires academics with specific expertise. When this type of expertise is limitedly available at law schools, law students are not trained in empirical legal skills and will be unlikely to take up the challenge of empirical non-doctrinal research if they become academics, nor will they be equipped to teach it to the next generation of law students. Also in other countries this cycle of self-perpetuation has been recognised.³³ We believe it is important to be aware of this need for "critical mass", also among teaching staff, in the development of ELS education in the Netherlands. ELS courses would also benefit from a textbook that, in terms of writing style, (legal) topics, and level of difficulty, appeal to the average Dutch law student and match the reader's level of education. These conditions are probably met by the books recently published by Van den Bos and Bijleveld,³⁴ which contain materials for setting up and carrying out empirical legal research and can therefore be used in teaching ELS skills to law students and young researchers in the field of ELS.

5.2 The wishes of law students, the requirements of practice, and the content of curricula

While we have noted earlier that incorporating ELS into the regular law school curriculum might be merited, whether this should be done undoubtedly requires further consideration. Our study has only addressed the supply side of ELS education, that is, what is currently offered at law schools in the Netherlands. However, the demand for ELS education should also be assessed. What are the preferences of law students? Do law students and doctoral candidates want to see empirical research methods and techniques of empirical analysis (including statistics) in their study programme? Would they prefer gaining passive or active ELS skills, and what would they prefer at which stage?³⁵ These questions warrant examination to ensure that the development of ELS education does not overlook the interests and needs of law students.

The demand for ELS education has yet another aspect: the skills that law graduates should have according to their (future) employers. Some practitioners of law have explicated which practical skills they think a recent law graduate should have.³⁶ The role of universities in preparing students for legal practice is an important point in discussions about the value of empirical research and education. Empirical research can provide enriching insights for law and enhance understanding of the law, for instance, by critically addressing the assumptions underlying legal norms or by examining the societal impact of rules and regulations. If they can deal with empirical facts in a knowledgeable way, practitioners of law can professionalise legal practice and make it more evidence based.³⁷ Dutch legal scholars have argued that the same holds true for interdisciplinarily trained practitioners of law; legal decisions and advice increasingly require interdisciplinary competences,³⁸ and insights from sociology, psychology and economics are increasingly used to evaluate effectiveness (of laws and policies).³⁹ All in all, it seems that the areas of law- and policymaking would benefit from practitioners of law who are broadly educated.

This brings us to the so-called T-shaped lawyer. This ideal stands for a deep knowledge of positive law and broad knowledge of methods, empirics, and other disciplines.⁴⁰ Broad legal education, including a focus on ELS skills, corresponds to the model of the T-shaped lawyer and would allow practitioners of law to translate empirical findings into implications for the law and legal practice, which is one of the objectives of the second stimulation action (referred to in the introduction of this paper).

Having said this, one may question to what extent the law school curricula should be determined by the demand side. Prior research outside the Netherlands has identified that the wishes of students "do not necessarily chime with what the law school sees as its mission"⁴¹ and should therefore not be decisive in determining whether the law school curricula should include ELS education and whether the aim should be passive or active ELS skills.⁴² Nor should the wishes of employers be a deciding factor, although this is important from the perspective of employability of law school graduates.

In our view, what should be at the core of this discussion is what it is that will enable students to better understand law. Arguing for the need to introduce ELS components into the curriculum might subscribe mostly to the ideas of legal realism.⁴³ Legal realists suggest that not only positive law and its norms and values (law in the books) but also how the law is actually applied in society and the impact it has (law in action) belong to the discipline of law. If the primary objective of law schools is to teach students to understand law, then ELS education would help them to achieve depth in knowledge about law in action. In Dutch literature, this has been referred to as the contextual approach to law,⁴⁴ according to which the philosophical ideas of both legal positivists and legal realists as well ideas on natural law all form essential components of understanding (and teaching) law.

5.3 Points for discussion and further research

Both the development of a coherent legal skills framework with ELS skills and the choice of study material imply several choices, which are closely related to debates that have not been addressed in this paper. These debates include the discussion about " civiel effect",⁴⁵ the use of the English language in higher education in the Netherlands, international collaborations between universities, and the Dutch "ELS signature" in the world. Herein, we leave these debates aside, but we formulate some questions that could be relevant to future discussions and choices.

5.4 Joining forces

Following an impetus to ELS, which was recently given by the Sector Plan for Dutch law schools, Dutch universities are encouraged to join forces and share their ELS knowledge and experience in order to institutionalise an exchange between law schools for the benefit of legal scholarship in the Netherlands. A good match between the demand and supply sides of ELS education would enable bachelor's and master's students as well as doctoral candidates to follow - in-house or as exchange student - courses that provide them with passive or active knowledge in the field of ELS. In the long term, this can develop into a country-wide network of courses on empirical legal studies. We hope that our research will provide a helping hand to universities in their further endeavours.

Disclosure statement

No potential conflict of interest was reported by the authors.

Additional information

Funding

This work was supported by the Nederlandse Organisatie voor Wetenschappelijk Onderzoek [2018/SGW00546100].

1 The concept of empirical legal studies (ELS) has US origins. See inter alia T Eisenberg, "The Origins, Nature, and Promise of Empirical Legal Studies and a Response to Concerns" [2011] UILR 1713; M Heise, "The Past, Present, and Future of Empirical Legal Scholarship: Judicial Decision Making and the New Empiricism" [2002] UILR 819; M Adler and J Simon, "Stepwise Progression: The Past, Present, and Possible Future of Empirical Research on Law in the United States and the United Kingdom" (2014) 41 JL & Soc'y 173.

2 See inter alia MV Antokolskaia, "Opkomst van Empirical Legal Studies: een vloek, een zegen, of allebei?" [2016] TPR 423; D Blocq and M Van der Woude, "Empirisch-juridisch onderzoek" [2017] 3 RdW 32; G van Dijck, "Naar een succesformule voor empirisch-juridisch onderzoek" [2016] 6 JV 29; NA Elbers, "Empirisch-juridisch onderzoek - toekomstmuziek of werkelijkheid?" [2016] 6 JV 43.

3 CCJH Bijleveld and others, Nederlandse encyclopedie Empirical Legal Studies (Boom Juridisch 2020) 12. ELS denotes a field of study within legal scholarship that is characterised by empirical legal research. When we discuss ELS in an educational context, we refer to it as ELS education. More on the concept of ELS in section 2.

4 ibid; CCJH Bijleveld, Research Methods for Empirical Legal Studies (Boom Juridisch 2020).

5 M Bovens, "Samen sterker: Beeld van het SSH-domein" (NWO 2018). See also < www.sectorplanrechtsgeleerdheid.nl> accessed 1 November 2021.

6 NA Elbers and others, "Rapport Nationale stimuleringsactie Empirical Legal Studies" (NSCR 2018).

7 For the sake of clarity, in this paper we use the general term "practitioner of law" to refer to legal professionals like attorney, notary, judge, and public prosecutor. The term "legal scholar" is used here to refer to academic lawyers - teachers and researchers - working at the universities, thus in legal academia.

8 See < www.ehea.info> accessed 1 November 2021.

9 ES Pannebakker and others, "Onderweg naar morgen - een inventarisatie van empirische onderzoeksmethoden in juridisch onderwijs" (Platform Empirical Legal Studies 2020). For a detailed description of the selected ELS courses, see ibid, Appendix A in ch 6 (in Dutch).

10 Adler and Simon (n 1) 177-84.

11 P Cane and HM Kritzer, The Oxford Handbook of Empirical Legal Research (Oxford University Press 2010) 2.

12 ibid; A Bradney, "The Place of Empirical Legal Research in the Law School Curriculum" in P Cane and HM Kritzer (eds), The Oxford Handbook of Empirical Legal Research (Oxford University Press 2010).

13 Blocq and Van der Woude (n 2) 32-37.

14 Bijleveld and others (n 3).

15 Bijleveld and others (n 3) 11-13.

16 Cane and Kritzer (n 11); Elbers and others (n 6) 24. See also WH van Boom, P Desmet and P Mascini (eds), Empirical Legal Research in Action: Reflections on Methods and Their Applications (Edward Elgar 2018); P Cserne and M Malecka (eds), Law and Economics as Interdisciplinary Exchange: Philosophical, Methodological and Historical Perspectives (Routledge 2019); D Watkins and M Burton (eds), Research Methods in Law (Routledge 2018); various contributions in [2016] 6 JV; FL Leeuw and H Schmeet, Empirical Legal Research: A Guidance Book for Lawyers, Legislators and Regulators (Edward Elgar 2016); Antokolskaia (n 2); J Lindgren, "Predicting the Future of Empirical Legal Studies" (2006) 86 BULR 1447.

17 Nevertheless, it could be useful to conduct further research in order to clarify the extent to which the Dutch definition of the concept of ELS corresponds to various definitions given in other countries. See on this section 5.

18 Also referred to as the training problem, see Adler and Simon (n 1) 196.

19 For instance, trademark lawyers distributing surveys to identify whether consumers have been confused by a product allegedly infringing intellectual property rights; see the example given by Van Boom in P Jonkers, "Empirische kennis als instrument" [2019] 3 Advocatenblad 26. Elsewhere, judges have been encouraged to do experiments and evaluation research for evidence-based justice: P van der Laan, M Smit and BC Welsch, "Rechters, ga experimenteren! Over het belang van evalueren en experimenteren voor een effectieve (straf)rechtspleging" (2013) 4 Rechtstreeks 15.

20 To stick with the example of trademark lawyers (n 19), they often have to rely on survey or experimental data provided by others in legal proceedings; K Weatherall, "The Consumer as the Empirical Measure of Trade Mark Law" (2017) 80 MLR 57.

21 See K Twisk, Een jurisprudentieonderzoek naar de kwaliteit van de waardering van DNA-bewijs (Uitgeverij Paris 2019); for other examples on the use of empirical findings in legal practice, including those related to DNA evidence, see M Malsch, Law Is Too Important to Leave to Lawyers (Eleven International Publishing 2021). Also the UK Royal Statistical Society identified difficulties for judges related to empirical evidence, see RSS - Statistics Law Guides (RSS) < www.rss.org.uk/news-publication/publications/law-guides/> accessed 1 November 2021. The risk is a miscarriage of justice, of which Lucia de B is an illustrative criminal law case example in the Netherlands.Hoge Raad, 07 October 2008, ECLI:NL:HR:2008:BD4153. See on this case RD Gill, P Groeneboom and P de Jong, "Elementary Statistics on Trial-The Case of Lucia de Berk" (2018) 31, 4 Chance 9.

22 This applies to criminology and forensic science courses (fields of study which cover non-legal questions): Pannebakker and others (n 9) ch 4.

23 For the content of the mandatory education of the Dutch Bar, see < https://beroepsopleidingadvocaten.nl/vanaf-2021/de-opleiding/schematisch-overzicht> accessed 1 November 2021.

24 See the website of the Centre for Education of the Dutch Judiciary < https://ssr.nl/> accessed 1 November 2021.

25 In the Netherlands, PhD candidates are usually staff members with an employment contract and salary.

26 The overview does not include the Open University ( Open Universiteit) because no empirical legal education was offered at this university's Faculty of Law at the time of study. Since the focus is on university courses offered in-house, courses offered by research schools such as Ius Commune fall outside the scope.

27 Pannebakker and others (n 9) chs 3 and 6.

28 For examples, see ibid section 4.4. on mandatory readings in ELS education.

29 H Pluut and others, "Statistiek in het rechtencurriculum: nut en noodzaak" [2021] AA 87; Elbers and others (n 6); E Mak, The T-Shaped Lawyer and Beyond: Rethinking Legal Professionalism and Legal Education for Contemporary Societies (inaugural lecture Utrecht University) (Eleven International Publishing 2017).

30 R van Gestel, I Giesen and WH van Boom, "Een landelijk Centrum voor Methodologie en Empirische Rechtsbeoefening" [2012] NJB 2032.

31 See M Snoep and others, "Opleiding jurist moet breder" [2014] NRC Handelsblad 17; Mak (n 29). This plea has led to a debate that covers also the requirement of " civiel effect"; see MJAM Ahsmann, "Civiel effect: nut en noodzaak" in MJAM Ahsmann (ed), Herijking van de juridische opleidingen (Wolters Kluwer 2018); M Ahsmann, De juridische opleiding en de T-shaped lawyer: hoe leiden universiteiten goede juristen op?" in Stichting LNSC (ed), De kwaliteit binnen het notariaat (Wolters Kluwer 2016) 7-25.

32 HK Elzinga, "Interdisciplinariteit in de initiële juridische opleiding" in MJAM Ahsmann (ed), Herijking van de juridische opleidingen (Wolters Kluwer 2018) 65-92.

33 H Genn, M Partington and S Wheeler, Law in the Real World: Improving Our Understanding of How Law Works (The Nuffield Foundation 2006) 29; M Adler, "Recognising the Problem: Socio-Legal Research Training in the UK" (University of Edinburgh 2007) 2; TC Hutchinson and K Burns, "The Impact of 'Empirical Facts' on Legal Scholarship and Legal Research Training" [2009] TLT 28-29.

34 K van den Bos, Empirical Legal Research (Edward Elgar Publishing 2020); K van den Bos, Inleiding Empirische Rechtswetenschap (Boom Juridisch 2020); C Bijleveld, Research Methods for Empirical Legal Studies: An Introduction (Eleven International Publishing 2021).

35 See van Gestel, Giesen and Van Boom (n 30).

36 See Snoep and others (n 31).

37 See on evidence-based law making, N Doornbos and others, "Laat wetgever empirische kennis beter benutten" [2020] NJB 3298.

38 See also Mak (n 29); B van Klink, "Juridische vaardigheden in het onderwijs: tijd voor een upgrade?" [2020] AA 1080.

39 JB Spath, "Iedereen T-vormig?" [2017] NTBR 41; Antokolskaia (n 2).

40 The first call was made by Snoep and others (n 31). See also B van Klink, B de Vries and T Bleeker, "Recht in context: Naar een bredere academische vorming van juristen" [2017] NJB 916; Mak (n 29). But see also, for another perspective, Ahsmann, "Civiel effect: nut en noodzaak" (n 31) and Ahsmann, De juridische opleiding en de T-shaped lawyer (n 31).

41 Bradney (n 12) 1039.

42 Bradney (n 12) 1039, with further references.

43 This philosophical movement is rooted in the writings of the American legal scholar Roscoe Pound (1870-1964).

44 Van Klink and others (n 40) 916.

45 The qualification required to be admitted to the Dutch Bar, the judiciary and the office of public prosecution in the Netherlands. On the importance of the Dutch civiel effect, see Ahsmann (n 31).

46 See inter alia recent plans to create an overview of German ELS education; T Herklotz, "Law and Society Studies in Context: Suggestions for a Cross-Country Comparison of Socio-Legal Research and Teaching" (2020) 21 GLJ 1332. For a less recent but extensive UK overview, see Genn, Partington and Wheeler (n 33).

47 It has been identified in the literature that practitioners of law are not sufficiently trained and face problems when they are required to deal with empirical facts; see RSS (n 21); Twisk (n 21); J de Poorter, "De rol van empirische assumpties in de rechtsvorming door de hoogste (bestuurs)rechters" (2021) 38 NJB 2906.

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Empirical legal studies in the law school curriculum in the Netherlands: what is the state of the art and where do we go from here?

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ABSTRACT ABSTRACT This paper describes and discusses the portfolio of courses in which empirical legal research skills are currently taught to law students in the Netherlands. It results from an in-depth country-wide study we undertook as part of a project supported by the Dutch Research Council (NWO) in view of the growing attention to empirical legal studies (ELS).

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Start of Niek's HC Law course Psychology for Lawyers

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Start of Niek's HC Law course Psychology for Lawyers

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8 februari 2022

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Pre-PhD day - organised by VSR, ELS Academy (Kimia) & KU Leuven (March 9 2022)

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Pre-PhD day - organised by VSR, ELS Academy (Kimia) & KU Leuven (March 9 2022)

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https://www.universiteitleiden.nl/nieuws/2022/03/inspirerende-phd-dag-voorafgaand-aan-het-vsr-jaarcongres-georganiseerd-door-vsr-els-academy--ku-leuven

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Inspirerende PhD dag voorafgaand aan het VSR jaarcongres georganiseerd door VSR, ELS Academy & KU Leuven

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Op 9 maart vond de allereerste editie van de PhD day plaats aan de KU Leuven, een initiatief van de VSR en ELS Academy. De PhD day ging vooraf aan het VSR jaarcongres van 10 en 11 maart.

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14 februari 2022

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29 maart, on writing empirical legal articles

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PhD students in the Institutions for Conflict Resolution (COI) research group attended a PhD Skills Lab to develop empirical legal publication expertise.

On Tuesday, 29 March 2022, the Institutions for Conflict Resolution (COI) research group at Leiden University, which is part of the Dutch National Sector Plan for Law, organised a skills lab for its PhD candidates. During this lab, we discussed and practiced the skill of writing empirical legal research papers, as many of the COI PhD projects have an empirical component. The session was led by Jessie Pool and Niek Strohmaier from the Empirical Legal Studies (ELS) research group in Leiden, the other Sector Plan theme on which the Law Faculty at Leiden University focuses, thus fostering collaboration between the two research groups.

During the first part of the session, we discussed a classic piece by Bem (2004) on writing empirical journal articles, as well as types of outlets for empirical legal research projects. For example, can you combine both the empirical aspects and the legal aspects of a study in one paper or might it sometimes be better to split these? What are the dos and don'ts when targeting social science journals or law journals, respectively? The discussion then moved on to paper structure, addressing differences between the structure of social science papers versus legal doctrinal papers. Subsequently, we focused on each part of the paper separately: what goes into an Introduction, Methods, Results, and Discussion or Conclusion section, and how do you write a good abstract? The entire session was highly interactive, allowing ample time for questions and discussions, which continued afterwards over drinks and bites.

This skills lab is one of the two special editions of the COI PhD labs, which take place monthly. During regular labs, PhD candidates within COI at Leiden University present their research and provide each other with feedback. In addition to these regular lab sessions, we organise yearly skills labs (like the session on 29 March) and overarching labs. During the overarching lab, which will take place on 22 June this year, all COI PhDs present their research to each other as well as senior researchers connected to COI in Leiden. The aim of this overarching lab is both to provide each other with feedback and to reflect on the overarching COI research questions that connect the different PhD projects.

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Institutions for Conflict Resolution Skills Lab on 29 March 2022

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PhD students in the Institutions for Conflict Resolution (COI) research group attended a PhD Skills Lab to develop empirical legal publication expertise. On Tuesday, 29 March 2022, the Institutions for Conflict Resolution (COI) research group at Leiden University, which is part of the Dutch National Sector Plan for Law, organised a skills lab for its PhD candidates.

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5 april 2022

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Jessie Pool on LinkedIn: Gisteren mocht ik tijdens de INSOLAD workshop in Pathé Ede vertellen

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Gisteren mocht ik tijdens de INSOLAD workshop in Pathé Ede vertellen over de resultaten van mijn promotieonderzoek naar de rol van de curator bij de aanpak...

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7 april 2022

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Launch of the Leiden Law Methods Portal - Jessie Pool in panel + organisation

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Launch of the Leiden Law Methods Portal - Jessie Pool in panel + organisation

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https://leiden2022.nl/activiteiten/launching-leiden-law-methods-portal

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Lancering van het Leiden Law Methods Portal. Tijdens de lancering laten we je zien hoe u het portaal kunt gebruiken en geven experts een introductie op verschillende empirische onderzoeksmethoden.

Het principe 'meten is weten' is misschien niet het eerste wat in je opkomt als je aan juridisch onderzoek denkt. Toch zullen tijdens de lancering van het Leiden Law Methods Portal verschillende rechtsgeleerden bespreken hoe zij het gebruik van empirische onderzoeksmethoden en een sociaal-juridische benadering in hun juridisch onderzoek hebben geïntegreerd - en hoe men dat kan doen - om tot een dieper begrip te komen van de werkelijke werking van het recht in actie. Tijdens deze 2 uur durende sessie nodigen wij iedereen uit om een kijkje te komen nemen in de wereld van empirisch en sociaal-juridisch onderzoek!

Op 12 april wordt het Leiden Law Methods Portal gelanceerd tijdens een feestelijke lunchselaunching-the-leiden-law-methods-portalssie tussen 12 en 14 uur in C.020 (Steenschuur 25). Het Methodenportaal is een handig hulpmiddel dat rechtswetenschappers een breed overzicht biedt van empirische methoden en de (empirische) onderzoeksfasen. Tijdens de lancering laten we u zien hoe u de portal kunt gebruiken en geven experts een introductie op verschillende empirische onderzoeksmethoden. Het programma van de lancering is als volgt:

12.00 - 12.15 Inloop, broodje pakken en installeren

12.15 - 12.30 Welkom en opening door Prof. dr. Maartje van der Woude

12.30 - 12.45: Wij presenteren -- Het Leidse Rechtsmethodiek Portaal

12.45 - 13.30: Paneldiscussie over het gebruik van Het Leidse Methoden Portaal

13.30 - 13.55: Tijd voor Q & A

13.55 -14.00: Afsluiting

Locatie: Kamerlingh Onnes Gebouw, Steenschuur 25 (2311 ES), zaal C 0.20 én online

Tijd: 12.00 - 14.00 uur

Entree: Gratis. Aanmelden kan via deze link.

Meer informatie op de website

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Launching the Leiden Law Methods Portal!

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Lancering van het Leiden Law Methods Portal. Tijdens de lancering laten we je zien hoe u het portaal kunt gebruiken en geven experts een introductie op verschillende empirische onderzoeksmethoden. Het principe 'meten is weten' is misschien niet het eerste wat in je opkomt als je aan juridisch onderzoek denkt.

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https://www.universiteitleiden.nl/en/news/2022/04/blog-on-how-research-on-valuation-biases-was-used-in-a-us-courtroom-co-authored-by-niek-strohmaier

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In a Leiden Law Blog, lab member Niek Strohmaier and Marc Broekema describe how their research on valuation biases was used by the Delaware Court of Chancery in a recent valuation dispute involving telecom giant AT&T.

The blog discusses what valuation disputes are and why these are problematic, the main findings of their recent paper on biases in valuation disputes, and a recent Memorandum Opinion issued by Court of Chancery of Delaware in which the paper was used.

The blog can be accessed here.

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From Leiden tot Delaware: How empirical legal research on valuation biases was used in a US courtroom

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In a Leiden Law Blog, lab member Niek Strohmaier and Marc Broekema describe how their research on valuation biases was used by the Delaware Court of Chancery in a recent valuation dispute involving telecom giant AT&T.

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https://www.universiteitleiden.nl/en/law/els

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The Empirical Legal Studies Lab @Leiden provides a platform that brings together legal scholars and social scientists to collaboratively explore legally relevant questions related to market regulation. Our purpose is to shape and strengthen expertise on law and behavior in a market context. Using bo…

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https://www.universiteitleiden.nl/en/news/2022/04/new-topic-group-els-lab--at-leiden-on-goed-werkgeverschap-good-employment-practices

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New topic group ELS lab @Leiden on Goed Werkgeverschap ('good employment practices')

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The ELS lab @Leiden is looking for colleagues to join the newly introduced topic group on Goed Werkgeverschap ('good employment practices').

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Spring 2022 cycle ELS lab meetings concluded

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Spring 2022 cycle ELS lab meetings concluded

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The different sessions:
- JC: https://www.universiteitleiden.nl/en/events/2022/04/els-lab-meeting---journal-club-survey-of-eu-member-states-by-eva-grosfeld
- L&L: https://www.universiteitleiden.nl/en/events/2022/04/els-lab-meeting---lunch--learn-faqs-about-els
- WIP: https://www.universiteitleiden.nl/en/events/2022/04/els-lab-meeting---work-in-progress-survey-of-eu-member-states-by-eva-grosfeld

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https://issuu.com/universiteit-leiden/docs/leidraad_mei_2022

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Save the publication to a stack

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Alumnimagazine van de Universiteit Leiden Leidraad verschijnt 3 maal per jaar en wordt kosteloos verspreid onder oud-studenten en relaties van Universiteit Leiden. Voor andere belangstellenden is een abbonnement op aanvraag beschikbaar. http://alumni.leidenuniv.nl/blijf-betrokken/leidraad.html

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Publication JP, Kimia & Alan Sears (eLaw) in Journal of Hospitality and Tourism Insights

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Publication JP, Kimia & Alan Sears (eLaw) in Journal of Hospitality and Tourism Insights

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mei 2022

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Strohmaier, N. The Biasing Effect of Bad Character Evidence on Mental State Ascription and Legal Judgments. UK-IVR 2022 Annual Conference Law, Rationality and Practical Reason: Ancient and Contemporary Perspectives, 10-6-2022.

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Strohmaier, N. The Biasing Effect of Bad Character Evidence on Mental State Ascription and Legal Judgments. UK-IVR 2022 Annual Conference Law, Rationality and Practical Reason: Ancient and Contemporary Perspectives, 10-6-2022.

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Sarah paper presentation at the Wageningen annual conference on Business, Human Rights, and the living environment, organised by the NNHR

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Sarah paper presentation at the Wageningen annual conference on Business, Human Rights, and the living environment, organised by the NNHR

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16 June 2022

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Niek en Jessie presenteren over het thema 'wat drijft de curator' op het lustrumfeest van de vereniging voor jonge insolventieadvocaten in Utrecht. 30 juni 2022

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Strohmaier, N. The Biasing Effect of Bad Character Evidence on Mental State Ascription and Legal Judgments. IVR WORLD CONGRESS: Justice, Community and Freedom, Bucharest, 3-8 July 2022.

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Strohmaier, N. The Biasing Effect of Bad Character Evidence on Mental State Ascription and Legal Judgments. IVR WORLD CONGRESS: Justice, Community and Freedom, Bucharest, 3-8 July 2022.

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Strohmaier, N. Yes, your Honour! Do judicial reasoning styles influence the degree of acceptance of court rulings by the general public? IVR WORLD CONGRESS: Justice, Community and Freedom, Bucharest, 3-8 July 2022.

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Strohmaier, N. Yes, your Honour! Do judicial reasoning styles influence the degree of acceptance of court rulings by the general public? IVR WORLD CONGRESS: Justice, Community and Freedom, Bucharest, 3-8 July 2022.

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29 juli 2022

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Online platform Wish was caught red-handed by the Dutch ACM, on account of engaging in personalised pricing. What does this mean for the future of the practice?

This just in: following actions of the ACM (the Dutch Authority for Consumers and Markets), the online e-commerce platform Wish has blocked the use of personalised pricing in the EU. This is the first case of personalised pricing to be brought out into the open by a European consumer authority. In this blogpost, I will discuss the case and what this news might mean for the future of personalised pricing.

In an earlier post, I discussed that big data has allowed companies to engage in more personalised online marketing practices. Personalised advertising, newsletters and recommendations - all strategies employed by companies to court their (prospective) clients. Personalised pricing fits right into this list, with companies using consumer data to set prices tailored to specific consumers or consumer segments.

Though a lot can be said for the benefits of personalisation in general, the practice does pose certain risks with regards to the future of e-commerce and the interaction between companies and consumers. Companies are increasingly able to base their pricing on large amounts of data, often without our knowledge - think of your social media activity, purchase history, device type, among many other new kinds of data. Personalised pricing has been a widely debated topic among various disciplines, due to its potentially adverse effects on (trust in) markets, certain consumer groups and the relationship between companies and consumers. For example, the use of algorithms to analyse consumer data and set prices accordingly, can result in (unintentional) systematic disadvantage or exploitation of certain consumer groups.

In light of these concerns, Directive (EU) 2019/2161 on the better enforcement and modernisation of Union consumer protection rules (also known as the Omnibus Directive) - which became applicable at Member States' level on May 28 - put forward the first initiative towards specific EU regulation of personalised pricing. Companies that engage in such a practice are required to disclose to consumers that the price is personalised on the basis of automated decision-making. The ACM issued a press release, stating that they will enforce compliance with these stricter rules.

And that they did. The ACM found that Wish was engaging in exactly this practice: personalising prices, without disclosing it to consumers. The prices on Wish were personalised based on - among other factors - consumers' location and purchase behaviour. Under the Omnibus Directive, companies must clearly indicate the use of personalised pricing prior to the purchase, and consumers must also understand in what ways their personal data affect prices. Wish had failed to do so, not disclosing the personalisation of prices at all.

As mentioned above, this is the first case of personalised pricing to be brought out into the open by a European consumer authority. Up until now, empirical research failed to find systematic evidence that personalised pricing was prevalent: though price fluctuations were observed, it remained difficult to determine whether these fluctuations were the result of actual price personalisation. Furthermore, most of the anecdotal evidence stemmed from the US market, adding to the question how much of it is actually happening in the EU.

Interestingly, Wish has decided to end its price personalisation in the EU as of 25 May 2022, instead of being transparent about its engagement in the practice, as demanded by the ACM. Given that previous instances of (alleged) price personalisation, albeit in the US, were met with great consumer backlash and research has shown that consumers find the practice unfair and unlawful, Wish's decision is still understandable. Being the first company to openly admit to price personalisation and continue the practice, might evoke major consumer backlash that even a multi-billion company like Wish might not recover from.

In my recent article, in press at the Computer Law and Security Review, I report on the interviews that I conducted with several Dutch companies on this very topic. I asked them their opinions on the practice, as well as factors that influence their decision to (not) engage in personalised pricing. What we confirmed is that one of the main factors to not engage in the practice is that of consumer backlash. If there was a sure-fire way for companies to ensure that consumers would not find out about the personalised prices, most of them would do it first thing tomorrow - if they had access to the necessary (financial) means, that is.

All things considered, the fact that the ACM has managed to bring personalised pricing to light is a great milestone. The question remains what this will mean for other companies. Will this case inspire companies to bring their own engagement in the practice to a halt, or will this only provide incentive for companies to find ways to conceal their personalised pricing strategies even more? The fear for consumer backlash still holds many companies back and will continue to do so for now, but at the same time the norms of what we deem (un)fair change constantly. By conducting empirical research on this topic, it will hopefully become clearer whether we can expect more of these cases in the future and what - if anything - we can do to regulate this practice.

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Personalised pricing is happening: Here's what you need to know

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Online platform Wish was caught red-handed by the Dutch ACM, on account of engaging in personalised pricing. What does this mean for the future of the practice? This just in: following actions of the ACM (the Dutch Authority for Consumers and Markets), the online e-commerce platform Wish has blocked the use of personalised pricing in the EU.

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Publication Kimia, Bart, Helen & JP in Computer Law and Security Review

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Publication Kimia, Bart, Helen & JP in Computer Law and Security Review

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22 augustus 2022

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Publication Jessie TvI over maatschappelijk verantwoord vereffenen

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Publication Jessie TvI over maatschappelijk verantwoord vereffenen

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Presentation Jessie at International Insolvency Institute Conference (Toronto) on the topic: 'Looking ahead: how ESG may affect restructuring and insolvency'

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Presentation Jessie at International Insolvency Institute Conference (Toronto) on the topic: 'Looking ahead: how ESG may affect restructuring and insolvency'

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Interview Helen over hybride werken - 28 augustus

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Interview Helen over hybride werken - 28 augustus

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Ervaringsverhaal: hybride echt laten werken

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“Medewerkers mogen wel flexibel werken, als ze maar 40 uur op kantoor zijn”, zei Elon Musk in juni 2022. Zijn we na de coronacrisis weer terug bij af? Wat is er nodig om de flexibiliteit tot bloei te laten komen? Helen Pluut is onderzoeker Organisatiegedrag bij Universiteit Leiden en doet al lange t…

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Sarah: Guest Lecture introduction to incoming students of master programmes 

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Sarah: Guest Lecture introduction to incoming students of master programmes 

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30 August 2022
With perspectives on interdisciplinarity and ELS

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ELS Conference Amsterdam, 1-2 September 2022

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ELS Conference Amsterdam, 1-2 September 2022

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https://www.universiteitleiden.nl/nieuws/2022/09/leiden-law-school-colleagues-participate-in-firts-international-els-conference

Strohmaier, N  & De Jong, S. Character Evidence Revisited: A Source of Bias or of Procedural Justice? International Empirical Legal Studies Conference, Amsterdam, 1-2 September 2022.

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On 1 and 2 September, colleagues of Leiden Law School participated in the very first International ELS Conference, organized by the ELS Academy in Amsterdam.

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New logo ELS lab meetings by Merel Cornax

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New logo ELS lab meetings by Merel Cornax

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ELS Lab meetings logo v1_Tekengebied 1 (1)

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Start Honours Course 'Onderzoek naar recht in de samenleving', coordinated by Niek Strohmaier

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Start Honours Course 'Onderzoek naar recht in de samenleving', coordinated by Niek Strohmaier

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Guest lectures by:
- Jessie Pool & Kimia Heidary
- ...

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Toegangseisen

Toegelaten tot HC Law

Beschrijving

Dit vak schenkt gericht aandacht aan empirische onderzoeksvaardigheden.
Tijdens de seminars spreekt een reeks gastdocenten met de studenten over hun onderzoek naar recht en samenleving. Via hun bijdragen over hun onderzoek komen studenten in aanraking met het recht in actie.
Daaromheen leren de studenten de begrippen, principes en methoden van empirisch onderzoek kennen. Zoals de fasen van de empirische cyclus: ontwerpen, verzamelen, analyseren en evalueren, en het nut van verschillende methoden afwegen. Heel belangrijk is ook het wetenschappelijk bewijs kritisch leren te beoordelen.
Via de gastdocenten kunnen studenten tevens met senior onderzoekers van gedachten wisselen over die onderzoeksmethoden.

In praktische zin zal dit vak studenten tevens voorbereiden op onderdelen/vakken zoals een onderzoeksassistent(schap) en student-Stage en een Law Clinic.
Dit vak valt dan ook zowel binnen de HC Law Pijlers van 'Vaardigheden en competenties' ;as die van 'Onderzoekvaardigheden en wetenschapsfilosofie'.
Belangstellende ba Criminologie studenten moeten er rekening mee houden dat zij diverse onderdelen en facetten van dit vak al hebben gehad of nog krijgen in en bij verschillende vakken van hun ba Criminologie - dit natuurlijk mede afhankelijk of zij 2e dan wel 3e jaars student zijn.

Leerdoelen

Dit vak heeft als doel gericht aandacht te schenken aan empirische onderzoeksvaardigheden en hetgeen daarbij (allemaal) komt kijken.
Na de zeven weken zijn studenten in staat kritisch andermans onderzoek te evalueren, en een eigen onderzoeksvoorstel te schrijven.

Dit vak heeft als doel gericht aandacht te schenken aan empirische onderzoeksvaardigheden en hetgeen daarbij (allemaal) komt kijken.
Na de zeven weken zijn studenten in staat kritisch andermans onderzoek te evalueren, en een eigen onderzoeksvoorstel te schrijven.

Na afronding van het vak hebben studenten de volgende kwalificaties verworven. De student:

Is bekend met de (basis-)begrippen, principes en methoden van empirisch onderzoek.

Heeft inzicht in de empirische cyclus (van onderzoek doen), en kan afwegingen van iedere stap uitleggen met voorbeelden.

Kan met (senior) onderzoekers van gedachten wisselen over onderzoeksmethoden.

Kan de onderzoeksmethoden en resultaten van wetenschappelijke publicaties evalueren.

Kan, mede gebaseerd op een academische discussie, een onderzoeksvraag ontwerpen.

Kan een basaal voorstel ontwerpen voor empirisch onderzoek naar recht in actie.

Onderwijsvormen

Wij zullen 7 interactieve seminars hebben.
In de meeste weken komt dan tevens een onderzoeker werkzaam binnen de faculteit rechtsgeleerdheid aan het woord over zijn of haar onderzoek naar het recht in actie.
Per seminar bestuderen wij een bijpassend deel theorie en methodologie.
Studiemateriaal en opdrachten zullen via Brightspace gedeeld worden.

Aanwezigheid bij en participatie aan dit vak is natuurlijk verplicht. Zoals bij alle vakken van HC Law. Dit, mede i.v.m. het karakter en de opzet van HC Law en de vakken daarvan, die daardoor mede de status van praktische oefening hebben.

Periode

Het vak is in 22-23 in blok 1. De seminars vinden waarschijnlijk plaats op de dinsdagen.

Dinsdag 6 september
Dinsdag 13 september
Dinsdag 20 september
Dinsdag 27 september
Dinsdag 4 oktober
Dinsdag 11 oktober
Dinsdag 18 oktober.

De tijd is van 17:00-20:00 uur.

Toetsing (Onder voorbehoud van wijziging)

Deelopdrachten (45 procent): (kwaliteit van de) participatie in seminars en in Brightspace-discussies (15 procent);
kort essay (15 procent); eerste opzet onderzoeksvoorstel (15 procent).

Eindopdracht (55 procent):
een onderzoeksvoorstel (deadline midden januari)
Inleverprocedure via Brightspace, waarmee automatisch voor plagiaat wordt gecontroleerd.

Brightspace

Bij dit vak wordt gebruik gemaakt van Brightspace.

Literatuur

Wordt nader bekend gemaakt en deels ook verstrekt via Brightspace.

Aanmelden

Via de administratie van Honours College Law: honours@law.leidenuniv.nl.

Minimum en maximum aantal deelnemers

14-24 studenten

Contact

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Onderzoek naar Recht in de Samenleving. Sociaal-wetenschappelijk onderzoek naar het recht

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Toegelaten tot HC Law Dit vak schenkt gericht aandacht aan empirische onderzoeksvaardigheden. Tijdens de seminars spreekt een reeks gastdocenten met de studenten over hun onderzoek naar recht en samenleving. Via hun bijdragen over hun onderzoek komen studenten in aanraking met het recht in actie.

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ILS courses LLM Civiel Recht (Gitta Veldt) & Ondernemingsrecht (Jessie Pool)

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ILS courses LLM Civiel Recht (Gitta Veldt) & Ondernemingsrecht (Jessie Pool)

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https://studiegids.universiteitleiden.nl/courses/113979/ils-regulering-gedrag-en-privaatrecht
https://studiegids.universiteitleiden.nl/courses/114026/ils-ondernemings-en-insolventierecht

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Toegangseisen

Bachelor rechtsgeleerdheid (zie OER)

Beschrijving

Veel rechtsregels hebben als doel bepaald gedrag van burgers te bevorderen of juist te ontmoedigen. Op dit fundament is veel publiekrechtelijke regulering van bepaald marktgedrag gebouwd. En ook in het vermogensrecht zien we dat het vaak om gedrag van burgers draait. Hoe verhoudt vermogensrecht zich tot die vormen van regulering? Is sprake van convergentie, divergentie, of iets anders? En hoe gaan bedrijven om met dit soort gedragsregels? En wat zou het beste voor de maatschappij zijn? Dit vak beoogt zowel de normatieve als de empirische implicaties van de gedragsregels uit vermogensrecht en regulering te doorgronden. Het vak beoogt te laten zien dat en hoe het vermogensrecht interactie vertoont met andere reguleringsvormen en daar soms ook mee concurreert of botst. Begrip van deze materie is van belang voor zowel theorie als praktijk van het privaatrecht en het vak beoogt voor te bereiden op zowel academische verdieping als op het verwerven van praktische onderzoeksvaardigheden.

In dit vak wordt aandacht besteed aan de ontwikkeling van onderzoeksvaardigheden op masterniveau. Deelnemers aan het vak worden begeleid in het opstellen van een goed afgebakende onderzoeksvraag en het opzetten en uitvoeren van een uitvoerbaar onderzoeksplan.

Leerdoelen

Doel van het vak:
Het onderwijs is opgezet om antwoord te geven op de volgende onderzoeksvragen (van algemeen naar bijzonder):

Wat verstaan we onder regulering?

Welke theorieën zijn er over de rechtsstatelijke randvoorwaarden voor regulering?

Hoe verhoudt regulerend overheidsingrijpen zich tot economische wetmatigheden?

Wat is er bekend over hoe individuen, groepen en ondernemingen (kortweg: burgers) reageren op regulerend overheidsingrijpen?

Wat is er bekend over determinanten van effectiviteit en over de feitelijke effecten van regulerende maatregelen?

Welke kernleerstukken van het vermogensrecht hebben relevantie in verband met regulerend overheidsingrijpen?

Wat is er bekend over de invloed van het vermogensrecht op het gedrag van burgers?

Wat is er bekend over de effectiviteit van het gebruik van vermogensrecht als middel van regulerend overheidsingrijpen?

Wat is er bekend over de effectiviteit van het gebruik van bestuursrecht als middel van regulerend overheidsingrijpen?

Wat is er bekend over interactie tussen vermogensrecht en bestuursrecht als instrument van regulerend overheidsingrijpen en de competitieve voordelen van beide rechtsgebieden?

Daarnaast beoogt het vak studenten vertrouwd te maken met het verrichten van wetenschappelijk juridisch onderzoek. Studenten verkrijgen de vaardigheid een goed afgebakende onderzoeksvraag op te stellen en een uitvoerbaar onderzoeksplan op te zetten. In het vervolg van de masteropleiding wordt op deze vaardigheden voortgebouwd.

Na afronding van het vak hebben studenten de volgende kwalificaties verworven:

De student is in staat om een antwoord te formuleren op de bovenstaande onderzoeksvragen.

De student heeft bovendien inzicht in:
-de genese van normen in het privaatrecht in vergelijking met andere rechtsgebieden;
-overzicht van verschillende juridische remedies in vermogensrecht en andere rechtsgebieden (m.n. bestuursrecht) en de interactie daartussen;
-gangbare beleidstheorieën en wetgevingsleer;
-de functie van privaatrecht in verhouding tot andere reguleringsinstrumenten;
-basale inzichten uit economie en andere sociaalwetenschappelijke inzichten voor zover. relevant voor de juridische analyse van regulering.

De student kan een goed afgebakende onderzoeksvraag opstellen en een onderzoeksplan opzetten om deze vraag te beantwoorden.

De student is in staat om beknopt, in foutloos Nederlands en met deugdelijke argumentatie en bronverwijzing een beknopt literatuuronderzoek te rapporteren in een onderzoekspaper.

De student kan zelfstandig reflecteren op haar/zijn leerproces door feedback van docenten op opdrachten.

Rooster

Zie MyTimetable.

Onderwijsvorm
Hoorcolleges Instructiebijeenkomsten

Vaardighedencolleges. Aantal à 2 uur: 2

Namen docenten: mr. dr. G.M. Veldt en anderen

Vereiste voorbereiding door studenten: het bekijken van kennisclips op brightspace en het volgen van een verplicht traject voor de schriftelijke opdracht.
Studenten leveren drie stukken in: een opzet, een concept-paper en het definitieve paper. Zij ontvangen feedback van de paper-begeleider op de opzet en het concept-paper. De begeleider heeft bovendien tweemaal een (telefonisch) spreekuur. Het definitieve paper wordt becijferd als schriftelijke opdracht

Andere onderwijsvorm(en)

Omschrijving: gastcolleges

Aantal à 2 uur: maximaal 2

Namen docenten: nader bekend te maken.

Vereiste voorbereiding door studenten: nader bekend te maken.

Toetsing
Toetsvorm(en)

Praktische oefening: het maken van drie opdrachten (opzet, concept-paper en definitief paper). Het inleveren van alle drie de opdrachten is verplicht voor deelname aan de schriftelijke opdracht.

Schriftelijke opdracht (definitief paper): 50% van het eindcijfer

Schriftelijk tentamen: 50% van het eindcijfer

Het eindcijfer bestaat uit de gemiddelde score van de schriftelijke opdracht en het schriftelijke tentamen. Het vak is behaald als het eindcijfer voldoende is. Het vak kan worden herkanst als het eindcijfer onvoldoende is. De herkansing, bestaande uit een schriftelijke opdracht en een schriftelijk tentamen, bepaalt voor 100% het eindcijfer. De cijfers voor de schriftelijke opdracht en het schriftelijke tentamen kunnen dus niet worden meegenomen naar een eventuele volgende poging. Indien het vak niet met een voldoende is afgerond, verliezen de resultaten voor de schriftelijke opdracht en het schriftelijke tentamen dus hun geldigheid en moet het vak geheel worden herkanst.

Inleverprocedures
Via de Brightspace-omgeving van het vak wordt informatie gegeven over de geldende inleverprocedures.

Examenstof
Tot de examenstof behoort de verplichte literatuur, het werkboek en hetgeen behandeld is tijdens hoorcollege, werkgroep en tijdens eventuele andere onderwijsvormen.

Regeling herkansen voldoendes
Op dit vak is de regeling herkansen voldoendes van toepassing (artikel 4.1.8 e.v. OER). Studenten die bij de eerste kans een voldoende eindcijfer hebben behaald, kunnen onder bepaalde voorwaarden het schriftelijke tentamen opnieuw afleggen op het reguliere herkansingsmoment. Praktische opdrachten - waaronder ook de schriftelijke opdracht valt - zijn uitgesloten van de regeling. Om een voldoende te kunnen herkansen, dienen studenten eerst om toestemming te vragen bij het OIC. Kijk voor meer informatie op de studentensite onder 'Inschrijven voor vakken en tentamens' > 'Toestemming voldoende herkansen'.
Let op: studenten die voor dit vak gebruik willen maken van de regeling kunnen alleen het schriftelijk tentamenonderdeel herkansen (artikel 4.1.9 e.v. OER).

Literatuur
Verplicht studiemateriaal
Vereiste voorbereiding door studenten: De voorgeschreven literatuur wordt bekend gemaakt via Brightspace. In elk geval moet het studieboek worden aangeschaft: W.H. van Boom, Privaatrecht en markt, Den Haag: Boom juridisch 2020. In verband met een mogelijk openboektentamen wordt aangeraden een hard copy exemplaar van dit studieboek aan te schaffen en niet het ebook.

Aanmelden

Zie voor informatie over aanmelding de website onder het kopje "aanmelding onderwijs en tentamens".

Contact

Vakcoördinator: via secretariaat

Werkadres: Kamerlingh Onnes Gebouw, Steenschuur 25, kamer B2.43

Bereikbaarheid: via secretariaat

Telefoon: 071-527 7400 (secretariaat)

E-mail: mastercivielrecht@law.leidenuniv.nl

Instituut/afdeling

Instituut: Instituut voor Privaatrecht

Afdeling: Civiel recht, sectie Burgerlijk recht

Kamernummer secretariaat: KOG B2.43

Openingstijden balie: maandag tot en met vrijdag 09.00 - 17.00 uur

Telefoon secretariaat: 071-527 7400

E-mail: mastercivielrecht@law.leidenuniv.nl

Opmerkingen

Indien er van overheidswege (corona-)beperkingen worden opgelegd, is deze vakbeschrijving onderhevig aan wijzigingen.

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ILS - Regulering, gedrag en privaatrecht

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Bachelor rechtsgeleerdheid (zie OER) Veel rechtsregels hebben als doel bepaald gedrag van burgers te bevorderen of juist te ontmoedigen. Op dit fundament is veel publiekrechtelijke regulering van bepaald marktgedrag gebouwd. En ook in het vermogensrecht zien we dat het vaak om gedrag van burgers draait. Hoe verhoudt vermogensrecht zich tot die vormen van regulering?

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September-October cycle ELS lab meetings

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September-October cycle ELS lab meetings

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Leidse wetenschappers en SEO Economisch Onderzoek onderzoeken financiering faillissementscurator o.a. Jessie Pool

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Leidse wetenschappers en SEO Economisch Onderzoek onderzoeken financiering faillissementscurator o.a. Jessie Pool

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Foto: moerschy | Pixabay

Leidse onderzoekers van de afdelingen ondernemingsrecht en bedrijfswetenschappen gaan in samenwerking met SEO Economisch Onderzoek in opdracht van het WODC van start met een onderzoek naar de financiering van de faillissementscurator.

Een faillissement betekent per definitie een gebrek aan financiële middelen. Per faillissement blijft er gemiddeld 582.000 euro aan onbetaalde schuld achter, waarvan 109.000 euro aan belasting- en sociale premieschulden. De gemiddelde recovery rate - het percentage van de schulden van de gezamenlijke schuldeisers dat uiteindelijk wordt voldaan - bedraagt per faillissement slechts 4,8 procent. De gemiddelde recovery rate laat al jaren een dalende trend zien. Recent empirisch onderzoek laat zien dat volgens curatoren in ruim 70 procent van de faillissementen geen uitkering kan worden gedaan aan de boedelschuldeisers en in ruim 37 procent geen uitkering kan worden gedaan aan de boedelschuldeisers.

Een logisch gevolg van deze legeboedelproblematiek in combinatie met de wijze waarop de financiering van curatoren in Nederland is geregeld, is dat curatoren geen (volledig) salaris ontvangen als er onvoldoende geld in de boedel beschikbaar is. Volgens curatoren moeten zij een derde van uren die zij maken in faillissementen afschrijven omdat onvoldoende boedel beschikbaar is om deze uren te voldoen. Door een gebrek aan middelen in de boedel kunnen curatoren bepaalde werkzaamheden niet uitvoeren.

Hoewel duidelijk lijkt dat de financiering van curatoren in het geding komt door de legeboedelproblematiek, is onduidelijk hoe groot het probleem precies is en welke gevolgen een gebrek aan financiering bij de afwikkeling van faillissementen heeft. Zo is onduidelijk welke werkzaamheden achterwege (moeten) blijven bij welke omvang van de boedel en in hoeveel faillissementen de financiering van de curator onvoldoende is om zijn werkzaamheden uit te kunnen voeren. Onderzoek naar de omvang van het probleem is een voorwaarde om voorstellen te kunnen uitwerken voor alternatieve financieringsvormen om het probleem van de financiering van curatoren op te kunnen lossen.

In opdracht van het WODC gaan onderzoekers van de afdelingen ondernemingsrecht en bedrijfswetenschappen van de Universiteit Leiden in samenwerking met SEO Economisch Onderzoek uit Amsterdam, onderzoek doen naar de omvang van de problematiek bij de financiering van de curator in faillissementen, om vervolgens voorstellen te doen voor alternatieve financieringsvormen. Namens de Universiteit Leiden zijn Reinout Vriesendorp, Harold Koster, Peter van der Zwan en Jessie Pool betrokken bij het onderzoek. Contact via j.m.w.pool@law.leidenuniv.nl .

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Leidse wetenschappers en SEO Economisch Onderzoek onderzoeken financiering faillissementscurator

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Leidse onderzoekers van de afdelingen ondernemingsrecht en bedrijfswetenschappen gaan in samenwerking met SEO Economisch Onderzoek in opdracht van het WODC van start met een onderzoek naar de financiering van de faillissementscurator. Een faillissement betekent per definitie een gebrek aan financiële middelen.

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Gastcolleges bij Tax & Behaviour (onderdeel van de minor Tax & Society), 16 en 21 september 2022 door Helen en Niek

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Gastcolleges bij Tax & Behaviour (onderdeel van de minor Tax & Society), 16 en 21 september 2022 door Helen en Niek

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Verdediging Jessie Pool - 27 September 2022

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Verdediging Jessie Pool - 27 September 2022

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De curator is volgens de wetgever de eerst aangewezene om in een faillissement onregelmatigheden te signaleren en aan te pakken. Maar als de aanpak van fraude meer kost dan het oplevert, wat betekent dat dan voor de handelwijze van de curator? En welke factoren belemmeren curatoren nog meer bij de aanpak van onregelmatigheden? Promotie op 27 september 2022.

Jessie Pool

De verdediging van het proefschrift van Jessie Pool vindt plaats op dinsdag 27 september 2022 om 16.15 uur in het Academiegebouw in Leiden. De promotie is ook via een livestream te volgen vanaf deze pagina.

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'Aanpak faillissementsfraude kan baat hebben bij richtlijnen voor curatoren'

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De curator is volgens de wetgever de eerst aangewezene om in een faillissement onregelmatigheden te signaleren en aan te pakken. Maar als de aanpak van fraude meer kost dan het oplevert, wat betekent dat dan voor de handelwijze van de curator?

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Student conference 30 September 2022 ILS- ondernemingrecht and ILS-regulering, gedrag en privaatrecht - Gitta Veldt and Alette Jansen

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Student conference 30 September 2022 ILS- ondernemingrecht and ILS-regulering, gedrag en privaatrecht - Gitta Veldt and Alette Jansen

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Doctoral Research Forum Presentation 14.10.2022

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Doctoral Research Forum Presentation 14.10.2022

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Sarah presented her next paper in the Doctoral Research Forum organised by the Netherlands Network for Human Rights Research. The 2 days PhD conference took place in Groningen this year, and gathered all PhDs from the Netherlands conducting research related to the Human Rights field.

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20221014_132508 NNHRR Doctoral Research Forum Groningen, Sarah Vandenbroucke en Lottie Lane

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14 October - Health law conference - workshop on AI and liability Gitta Veldt and Jan van Staalduinen

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14 October - Health law conference - workshop on AI and liability Gitta Veldt and Jan van Staalduinen

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New cycle of ELS lab meetings, compliance theme

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New cycle of ELS lab meetings, compliance theme

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Carrousel made by Merel & Sarah: https://www.linkedin.com/feed/update/urn:li:activity:7000479948264120320

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Afronding cyclus ELS Atelier (feb - dec 2022)

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Afronding cyclus ELS Atelier (feb - dec 2022)

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Sarah Guest Lecture in the Advanced Master International Human Rights Law: Business and Human Rights: What corporate accountability for labor rights violations in global supply chains? 

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Sarah Guest Lecture in the Advanced Master International Human Rights Law: Business and Human Rights: What corporate accountability for labor rights violations in global supply chains? 

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9 November 2022
Including ELS perspectives

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Helen's Leidsch Dagblad and Intermediar interviews on social safety in organizations

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Helen's Leidsch Dagblad and Intermediar interviews on social safety in organizations

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Helen Pluut is geïnterviewd voor zowel het Leidsch Dagblad als Intermediair over het onderwerp sociale veiligheid en grensoverschrijdend gedrag.

Helen Pluut is geïnterviewd voor zowel het Leidsch Dagblad als Intermediair over het onderwerp sociale veiligheid en grensoverschrijdend gedrag. Aanleiding zijn de recent in opspraak geraakte hoogleraar sterrenkunde aan de Universiteit Leiden en Matthijs van Nieuwkerk bij De Wereld Draait Door. 'Het is een situatie die voor veel mensen herkenbaar is', zegt Helen Pluut, universitair hoofddocent bij de afdeling Bedrijfswetenschappen.

Zij gaat in de interviews in op de informele leerprocessen die als onderdeel van de organisatiecultuur plaatsvinden. Men kan gaan denken dat bepaald ongewenst gedrag - zoals intimideren en pesten - erbij hoort. Maar wat doe je als er bij jou op het werk zo'n negatieve sfeer hangt? Of als juist je leidinggevende het probleem is?

In de artikelen waarschuwt Helen Pluut voor de metafoor van competitieve topsport die veel gebruikt wordt, ook in de wetenschap. Met haar collega's van de Young Academy Leiden schreef ze hier eerder al een blog over.

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Helen Pluut in het nieuws over sociale veiligheid'

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Helen Pluut is geïnterviewd voor zowel het Leidsch Dagblad als Intermediair over het onderwerp sociale veiligheid en grensoverschrijdend gedrag. Helen Pluut is geïnterviewd voor zowel het Leidsch Dagblad als Intermediair over het onderwerp sociale veiligheid en grensoverschrijdend gedrag. Aanleiding zijn de recent in opspraak geraakte hoogleraar sterrenkunde aan de Universiteit Leiden en Matthijs van Nieuwkerk bij De Wereld Draait Door.

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Workshop All hands on Stata, organised by ELS Academy, hosted by ELS @Leiden

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Workshop All hands on Stata, organised by ELS Academy, hosted by ELS @Leiden

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https://www.universiteitleiden.nl/agenda/2022/12/statistics-workshop-all-hands-on-stata

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13 december 2022

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From 1 January 2023, the Dutch Authority for Consumers & Markets will enforce stricter rules on discounting by Dutch companies. What can we expect?

Sandwiched between Black Friday and Christmas shopping, now is a good time to reflect on the prices we are paying. Chances are that many of us who contribute to consumerism as we indulge in (online) shopping sprees, have unknowingly encountered a price that was the result of a 'fake discount'. In the past, some companies would raise the price of a product right before they were planning on marking down the product price. For example, a company would raise the price of product A from 30 to 50 euros, two weeks before Black Friday. On Black Friday, it would present consumers with a special deal, offering 45 percent off. Consumers end up paying 27.50 euros for a product that was originally 30 euros, before the company raised it temporarily to 50 euros. Consumers are then under the impression they got a remarkable deal, while in fact the difference is minimal. Alternatively, and quite ethically questionable, companies can also fabricate a fictitious 'before' price.

From 1 January 2023, however, the use of fake discounts is no longer allowed in the Netherlands. Earlier this year, the Ministry of Economic Affairs and Climate announced that a prohibition on said fake discounts was on its way. This set of new rules flows from a broader revision of Dutch consumer protection law, as a result of the Omnibus Directive ( EU 2019/2161). The advent of these rules was announced almost a year before the actual implementation, which gave companies some time to grow accustomed to them and change their practices accordingly. The Dutch Authority for Consumers & Markets (ACM) has stated that they will carry out strict enforcement in 2023 straight away.

Dutch companies looking to discount a product, must use the lowest price that was charged over a 30-day period prior to the discount. Therefore, they cannot raise the price right before a promotional period, to create the impression of a large discount. There are exceptions: discounts on perishable products and products that have been on the market for less than 30 days (then the lowest price during the period that the product has been on the market counts) as well as progressive discounts (a product that is marked down 30 percent and then 50 percent, no longer than three months) are still allowed.

The main aim of the prohibition of fake discounts is to prevent traders from fluctuating prices, misleading consumers and presenting them with fake discounts. Ideally, combined with stricter enforcement by the ACM, this will lead to greater transparency and better consumer protection. The prohibition of fake discounts is part of the overarching aim of higher transparency and increased consumer protection, especially in online environments, that flows from the Omnibus Directive. It remains to be seen whether detecting fake discounts in practice is as effective as we hope, or that the announcement of the upcoming prohibition back in May has given companies plenty of time to start exploring more covert methods to advertise discounts.

As we are approaching Christmas, about two weeks before the ACM will start actively protecting us against fake discounts, keep in mind the responsibility that you have as a consumer to be alert and to educate yourself on marketing tactics used by companies. The numbers don't lie: a market study in the UK found that a striking 99.5 percent of Black Friday deals could be bought at cheaper or similar prices at other times of the year. Before parting with your hard-earned money, compare prices and check the pricing history of products that you are looking to purchase. Be wary of advertising that tries to trigger a sense of scarcity or urgency, as such tactics play on our often limited consumer rationality.

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'Was/now' prices: Fake discounts are no longer allowed

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From 1 January 2023, the Dutch Authority for Consumers & Markets will enforce stricter rules on discounting by Dutch companies. What can we expect? Sandwiched between Black Friday and Christmas shopping, now is a good time to reflect on the prices we are paying.

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Publication Merel, Yvonne & Helen in Tijdschrift Recht & Arbeid

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Publication Merel, Yvonne & Helen in Tijdschrift Recht & Arbeid

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TRA 2023-3_M.M. Cornax_M.Y.H.G. Erkens_H. Pluut

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Article Graaf T.J. de & Veldt G.M. (2022), The AI Act and Its Impact on Product Safety, Contracts and Liability, European Review of Private Law 30(5): 803-833. 

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Article Graaf T.J. de & Veldt G.M. (2022), The AI Act and Its Impact on Product Safety, Contracts and Liability, European Review of Private Law 30(5): 803-833. 

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Sarah presentation at the Political Economy Group (Den Haag): methods & results on the Database of Business Ethics

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Sarah presentation at the Political Economy Group (Den Haag): methods & results on the Database of Business Ethics

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26 January 2023

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Article Veldt G.M. (2023), The New Product Liability Proposal – Fit for the Digital Age or in Need of Shaping Up?: An Analysis of the Draft Product Liability Directive, Journal of European Consumer and Market Law 12(1): 24-31. 

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Article Veldt G.M. (2023), The New Product Liability Proposal – Fit for the Digital Age or in Need of Shaping Up?: An Analysis of the Draft Product Liability Directive, Journal of European Consumer and Market Law 12(1): 24-31. 

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Vandenbroucke S.E.M. (2023), The portrayal of effectiveness of supplier codes of conduct in improving labor conditions in global supply chains: A systematic review of the literature, Regulation & Governance.

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Vandenbroucke S.E.M. (2023), The portrayal of effectiveness of supplier codes of conduct in improving labor conditions in global supply chains: A systematic review of the literature, Regulation & Governance.

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6 February 2023

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17 feb - Letter experiment (Sarwesh Ishwardat)
10 mrt - L&L on interviews (Sarah & Kimia)
31 mrt - Bluetick: Legal research & AI (Thijs Kranenburg & colleague)

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ELS expert group meeting and FB on education 13 Feb. 2023

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ELS expert group meeting and FB on education 13 Feb. 2023

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Blogpost Sarah: Are supplier codes of conduct effective? Database of Business Ethics

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Blogpost Sarah: Are supplier codes of conduct effective? Database of Business Ethics

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24 February 2023

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By Sarah Vandenbroucke

Multinational impact on human rights in global supply chains is gaining momentum, and is increasingly discussed by legislators and academics. To do business responsibly, companies often adopt supplier codes of conduct through which social and human rights are protected. These codes are also the documents to be found in our database.Since supplier codes of conduct (hereinafter: SCs) form self-regulatory tools, companies are free to use wording and compliance methods of their own choice. Does this make supplier codes solely window dressing policy documents?

A recently published paper by Sarah Vandenbroucke, one of the contributors to the Database of Business Ethics, uncovers some interesting findings on how the use of SCs can improve labour conditions in global supply chains. She identifies which conditions influence the effectiveness of SCs, on the basis of 33 scientific papers. Her paper highlights the needed conditions to ensure the SCs' impact on labour conditions. What should companies, suppliers, and institutional actors do to ensure SCs' effectiveness?

At the institutional level, it is shown that pressure to adopt a comprehensive SC may help align the goals with the practice, by making sure that SC content includes the goal of improving labour standards. Within companies themselves, appointing new committed professionals, such as sustainability or compliance officers, may lead in time to the creation of new policies. To reach actual improvement of the practices, these individuals should be motivated both intrinsically and ideologically. Moreover, committed compliance officers should be given sufficient power to carry out the policy in everyday practice, both in terms of organisational and financial capacities. They should be enabled to create strong ties with suppliers, put in place intensive and long-term surveillance with several audits, and ensure that the buyer company financially participates in implementation costs that may arise.

Finally, it is necessary for corporations to transform global supply chain management systems and leave the traditional compliance model to tackle root causes of workers' rights violations. This new type of governance proposed by scholars is called the 'peer-to-peer governance' or the 'commitment approach'. This requires creating long-term, trusting buyer-supplier relationships where stakeholders get engaged in the implementation process, by granting workers' representatives a seat at the table.

Vandenbroucke concludes that SCs' effectiveness highly depends on the efforts made in code implementation by both buyers and suppliers, and on their intrinsic ethical commitments to prevail decent labour conditions. Despite some factors contributing to the implementation of SCs in global supply chains, this self-regulatory policy has undeniable limits to improve labour conditions worldwide, thus needs to be supplemented by public regulation. The development of a legal framework on corporate mandatory due diligence currently discussed at the EU level, would certainly contribute to enhancing corporate responsibility and actions in limiting human, social, and environmental risks in global supply chains, and hopefully support and complement effective self-regulatory policies.

The full paper was published in the Journal Regulation & Governance in February 2023. Reach out to Sarah Vandenbroucke for more information, at the following email address: This email address is being protected from spambots. You need JavaScript enabled to view it.. Additionally, if you are interested in conducting your own research into (supplier) codes of conduct, you can find over 200 companies' codes in our database. To assist you in using our database for this research, we have also published a user guide.

Partner

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Are Supplier Codes of Conduct Effective?

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Multinational impact on human rights in global supply chains is gaining momentum, and is increasingly discussed by legislators and academics. To do business responsibly, companies often adopt supplier codes of conduct through which social and human rights are protected.