Learn to be good or bad? Revisited observer effects of punishment : curvilinear relationship and network contingencies

Research output: Journal Publications and ReviewsRGC 21 - Publication in refereed journalpeer-review

11 Scopus Citations
View graph of relations


Related Research Unit(s)


Original languageEnglish
Pages (from-to)754-766
Journal / PublicationJournal of Business and Industrial Marketing
Issue number4
Publication statusPublished - 2019


Purpose - Although supplier-initiated punishment is widely used to manage distributors’ opportunism, its spillover effect on unpunished distributors (i.e. observers) within the same distribution network remains under-researched. Specifically, this paper aims to investigate the curvilinear effect of punishment severity on an observer’s opportunism, and how such an effect is contingent on the observer’s network position. 
Design/methodology/approach -  This paper uses regression analysis with survey data gathered from 218 distributors in China’s automobile industry. 
Findings - Punishment severity has an inverted U-shaped effect on the observers’ opportunism, and such effect is weakened by both the observers’ network centrality and their degree of dependence on the supplier. 
Practical implications - The findings should encourage suppliers to focus more on the spillover effects of punishment on observers. To this end, the supplier must deliberately initiate the appropriate level of punishment severity against its distributors because an inappropriate level of punishment severity (e.g. too lenient) may unexpectedly raise the unpunished observers’ level of opportunism. Moreover, the supplier should be fully aware that observers’ specific network positions may produce varying spillover effects of the punishment. 
Originality/value: This study enriches the literature on channel governance by revealing the curvilinear mechanism through which punishment severity influences observers’ opportunism. By applying social learning theory to channel punishment research, this study unveils both the inhibitive learning and the imitative learning forces inherent in a single punishment event, and it delineates their joint effect on an observer’s opportunism. In addition, this study outlines the observer’s vertical and horizontal relationships within the distribution network and explores their contingent roles in determining the spillover effects of punishment.

Research Area(s)

  • Imitative learning, Inhibitive learning, Network contingencies, Observer effect, Opportunism, Punishment severity