John Maxwell

In addition to his principle appointment at Kelley, Professor Maxwell is a Research Professor at the Richard Ivey School of

Areas of Expertise

Corporate Environmentalism and Public Policy, Non-market Strategy, Risk Management, Environmental Economics

Academic Degrees

• BScS (Mathematics), Acadia University, 1986
• MA (Economics), Queen''s University, 1987
• PhD (Economics), Queen''s University, 1993

Professional Experience

• Assistant, Associate and Full Professor, Department of Business Economics and Public Policy, Kelley School of Business, Indiana University, 1993-present
• Research Professor, Richard Ivey School of Business, the University of Western Ontario, 2009 - present
• Board Member, Alliance for Research in Corporate Sustainability (ARCS), 2009 - present
• Academic Director, Lawrence National Center for Policy and Management, Richard Ivey School of Business, University of Western Ontario, 2008-2009
• Professor of Business Economics and Public Policy, Richard Ivey School of Business, University of Western Ontario, 2008-2009
• Chairperson, Department of Business Economics and Public Policy, Kelley School of Business, Indiana University, 2006-2008, 2010 - present
• Chairperson of the International Scholars Advisory Committee to the Department of Environmental Resource and Development Economics, School of Economics, Peking University (Beijing University), 2003-present

Awards, Honors & Certificates

• FRSA. Fellow of the Royal Society for the Encouragement of the Arts, Manufactures and Commerce.
• Research Fellow CCISSR (The China Center for Insurance and Social Security Research) Peking University (Beijing University)
• Senior Fellow, ZEI, University of Bonn, Germany.

Selected Publications

• Maxwell, John W., and Thomas P. Lyon (2016), "Self-regulation and Regulatory Discretion: Why Firms may be Reluctant to Signal Green," Advances in Strategic Management, 34: 301-329.
• Harbaugh, Rick, John W. Maxwell, and Beatrice Roussillon (2011), "Label Confusion: The Groucho Effect of Uncertain Standards," Management Science, Vol. 57, No. 9, September, pp. 1512-1527.

Abstract Labels certify that a product meets some standard for quality, but often consumers are unsure of the exact standard that the label represents. Focusing on the case of eco-labels for environmental quality, we show how even small amounts of uncertainty can create consumer confusion that reduces or eliminates the value to firms of adopting voluntary labels. First, consumers are most suspicious of a label when a product with a bad reputation has it, so labels are often unpersuasive at showing that a seemingly bad product is actually good. Second, label proliferation aggravates the effect of uncertainty, causing the informativeness of labels to decrease rather than increase. Third, uncertainty makes labeling and non-labeling equilibria more likely to coexist as the number of labels increases, so consumers face greater strategic uncertainty over how to interpret the presence or absence of a label. Finally, a label can be legitimitized or spoiled for other products when a product with a good or bad reputation displays it, so firms may adopt labels strategically to manipulate such information spillovers, which further exacerbates label confusion. Managers can reduce label confusion by supporting mandatory labeling or by undertaking investments to make certain labels “focal”.

• Reuveny, Rafael, John W. Maxwell, and Jefferson Davis (2011), “On Conflict over Natural Resources,” Ecological Economics, Vol. 70, Issue 4, February, pp. 698-712.

Abstract This paper considers a game theoretic framework of repeated conflict over natural resource extraction, in which the victory in each engagement is probabilistic and the winner takes all the extracted resource. Every period, each contesting group allocates its capabilities, or power, between resource extraction and fighting over the extracted amount. The probability of victory rises with fighting effort, but a weaker group can still win an encounter. The victorious group wins all of the extracted resources and converts them to power, and the game repeats. In one model, groups openly access the resource. In a variant of the model, the stronger group can access a larger part of the resource than its rival, while in a second variant of the model the advantage of the dominant group is made more decisive than in the first two models. Our models generate outcomes that mimic several aspects of real-world conflict, including full military mobilization, defeats in one or repeated battles, victories following defeats, changes in relative dominance, and surrender. We examine comparative dynamics with respect to changes in the resource attributes, resource extraction, initial power allocation, fighting capabilities, and power accumulation. The policy implications are evaluated, and future research avenues are discussed.

• Lyon, Thomas P. and John W. Maxwell (2011), "Greenwash: Environmental Disclosure Under Threat of Audit," Journal of Economics and Management Strategy, Vol. 20, Issue 1, pp. 3-41.

Abstract Abstract We develop an economic model of “greenwash,” in which a firm strategically discloses environmental information and an activist may audit and penalize the firm for disclosing positive but not negative aspects of its environmental profile. We fully characterize the model''s equilibria, and derive a variety of predictions about disclosure behavior. We rationalize conflicting results in the empirical literature, finding a non-monotonic relationship between a firm''s expected environmental performance and its environmental disclosures. Greater activist pressure deters greenwash, but induces some firms to disclose less about their environmental performance. Environmental management systems discourage firms with poor expected environmental performance from greenwashing, which may justify public policies encouraging firms to adopt them.