Benjamin Ho

John A. List

Ian Muir

Basil Halperin

We use a theory of apologies to design a nationwide field experiment involving 1.5 million Uber ridesharing consumers who experienced late rides. Several insights emerge from our field experiment. First, apologies are not a panacea: the efficacy of an apology and whether it may backfire depend on how the apology is made. Second, across treatments, money speaks louder than words -- the best form of apology is to include a coupon for a future trip. Third, in some cases sending an apology is worse than sending nothing at all, particularly for repeated apologies. For firms, caveat venditor should be the rule when considering apologies.

Evidence from a Large-scale Natural Field Experiment

Toward an Understanding of the Economics of Apologies

Many companies have been criticised for weak business ethics, including in some cases breaking the law. Numerous scandals have rocked industries as diverse as banking, insurance, oil, supermarkets, consumer goods, pharmaceuticals and the media. But ethical lapses are not confined to business; few sectors of society can claim the moral high ground. This year, like every other year, new scandals and ethical breaches have hit the news. The Tone from the Top: How Behaviour Trumps Strategy will convince readers that leaders’ behaviour and the signals they send are more important than strategy. In an increasingly transparent world, employee engagement is founded on trust - of their boss, their department, of their whole enterprise. Ian sets the scene via ’something’s not right’ then provides first hand evidence from interviews with the chairmen of a quarter of a trillion pounds of market capitalisation (FTSE200 companies). In offering a model for a much more systematic approach, Ian shows that behaviour and signalling have a much greater influence on business performance and ethics than simply communicating a strategy. This book helps readers understand how boards provide ethical leadership; how boards monitor the tone they are setting; and how non-executive directors can check that their company has a good ethical compass.

Ian Muir

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