A new C.E.O. is appointed.  What are the opinions of the employees and how are they going to react?

In England, where I grew up, the cliche is that people are looking for excuses to denigrate successful people and pull them down.  Envy is the pertinent sin from the seven deadlies.  My intuition for American norms is poor but my impression is that employees will rally around the C.E.O.  Contradictory data is ignored and a big fan club develops spontaneously.

If employees diss or extol the boss whatever her true qualities, a rational observer cannot infer anything about the C.E.O. in cultural equilibrium.  But if observers herd, there is an idolatry bubble.   In an American bubble, the C.E.O. is a superstar.  When the facts come out, the bubble bursts and the C.E.O.’s collapse is huge.  In an English bubble, once the C.E.O. departs, employees will look back fondly on her tenure while complaining about the new C.E.O.  (Tony Hayward straddles both cultures so it hard to classify him!)

Careful investors should short American firms and go long on English firms.