First Look

First Look summarizes new working papers, case studies, and publications produced by Harvard Business School faculty. Readers receive early knowledge of cutting-edge ideas before they enter the mainstream of business practice. For complete details on faculty research, see our Working Papers section.

June 13, 2017

Among the highlights included in new research papers, case studies, articles, and books released this week by Harvard Business School faculty:

Focus on a few growth metrics

In an article for Stanford Social Innovation Review, Leonard A. Schlesinger makes the case that nonprofits should focus on just a few key performance metrics. Schlesinger relates his own experience at Limited Brands where “we reengineered and retrained an entire force of thousands to understand that they had control over just two things that really drove sales—the conversion of traffic into customers and the units sold per transaction—and we began to measure them on those two metrics." The article is titled Selecting the Right Growth Metrics: Fewer but Better.

Immigrants and ingenuity

In the paper Immigration and the Rise of American Ingenuity, the authors show the substantial contribution to innovation in the United States made by immigrant inventors. The paper also demonstrates that immigrant inventors were more productive than native-born inventors and that they were paid less. The paper was written by Ufuk Akcigit, John Grigsby, and Tom Nicholas.

How important is ‘detailing’ to medical sales?

Doctors are spending less and less time with pharma sales reps, so every second is important towards making a sale. The new research paper Do All Your Detailing Efforts Pay Off? Dynamic Panel Data Methods Revisited, the authors provide advice on optimal call patterns for route sales. The research was conducted by Doug J. Chung, Byungyeon Kim, and Byoung Park.

A complete list of new research and publications from Harvard Business School faculty follows.

— Sean Silverthorne
 
  • May 2017
  • American Economic Review: Papers and Proceedings

Immigration and the Rise of American Ingenuity

By: Akcigit, Ufuk, John Grigsby, and Tom Nicholas

Abstract—We build on the analysis in Akcigit, Grigsby, and Nicholas (2017) by using U.S. patent and census data to examine the relationship between immigration and innovation. We construct a measure of foreign born expertise and show that technology areas where immigrant inventors were prevalent between 1880 and 1940 experienced more patenting and citations between 1940 and 2000. The contribution of immigrant inventors to U.S. innovation was substantial. We also show that immigrant inventors were more productive than native born inventors; however, they received significantly lower levels of labor income. The immigrant inventor wage gap cannot be explained by differentials in productivity.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=52729

  • May 2017
  • Judgment and Decision Making

Is Saving Lives Your Task or God's? Religiosity, Belief in God, and Moral Judgment

By: Barak-Corren, Netta, and Max Bazerman

Abstract—Should a Catholic hospital abort a life-threatening pregnancy or let a pregnant woman die? Should a religious employer allow his employees access to contraceptives or break with healthcare legislation? People and organizations of faith often face moral decisions that have significant consequences. Research in psychology found that religion is typically associated with deontological judgment. Yet deontology consists of many principles, which might, at times, conflict. In three studies, we design a conflict around moral principles and find that the relationship between moral judgment and religiosity is more nuanced than currently assumed. Studies 1 and 2 show that, while religious U.S. Christians and Israeli Jews are more likely to form deontological judgments, they divide between the deontological principles of inaction and indirectness. Using textual analysis, we reveal that specific beliefs regarding divine responsibility and human responsibility distinguish inaction from indirectness deontologists. Study 3 exploits natural differences in religious saliency across days of the week to provide causal evidence that religion raises deontological tendencies on Sundays and selectively increases the appeal of inaction deontology for those who believe in an interventionist and responsible God.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=52731

  • 2017
  • Scientific Reports

Blunted Ambiguity Aversion During Cost-Benefit Decisions in Antisocial Individuals

By: Buckholtz, Joshua W., Uma R. Karmarkar, Shengxuan Ye, Grace M. Brennan, and Arielle Baskin-Sommers

Abstract—Antisocial behavior is often assumed to reflect aberrant risk processing. However, many of the most significant forms of antisocial behavior, including crime, reflect the outcomes of decisions made under conditions of ambiguity rather than risk. While risk and ambiguity are formally distinct and experimentally dissociable, little is known about ambiguity sensitivity in individuals who engage in chronic antisocial behavior. We used a financial decision-making task in a high-risk community-based sample to test for associations between sensitivity to ambiguity, antisocial behavior, and arrest history. Sensitivity to ambiguity was lower in individuals who met diagnostic criteria for Antisocial Personality Disorder. Lower ambiguity sensitivity was also associated with higher externalizing (but not psychopathy) scores and with higher levels of aggression (but not rule breaking). Finally, blunted sensitivity to ambiguity also predicted a greater frequency of arrests. Together, these data suggest that alterations in cost-benefit decision-making under conditions of ambiguity may promote antisocial behavior.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=52744

  • April 21, 2017
  • Stanford Social Innovation Review

Selecting the Right Growth Metrics: Fewer but Better

By: Schlesinger, Leonard A.

Abstract—No abstract available.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=52742

Minimizing Justified Envy in School Choice: The Design of New Orleans' OneApp

By: Abdulkadiroglu, Atila, Yeon-Koo Che, Parag A. Pathak, Alvin E. Roth, and Oliver Tercieux

Abstract—In 2012, New Orleans Recovery School District (RSD) became the first U.S. district to unify charter and traditional public school admissions in a single-offer assignment mechanism known as OneApp. The RSD also became the first district to use a mechanism based on Top Trading Cycles (TTC) in a real-life allocation problem. Since TTC was originally devised for settings in which agents have endowments, there is no formal rationale for TTC in school choice. In particular, TTC is a Pareto efficient and strategy-proof mechanism, but so are other mechanisms. We show that TTC is constrained-optimal in the following sense: TTC minimizes justified envy among all Pareto efficient and strategy-proof mechanisms when each school has one seat. When schools have more than one seat, there are multiple possible implementations of TTC. Data from New Orleans and Boston indicate that there is little difference across these versions of TTC but significantly less justified envy compared to a serial dictatorship.

Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=52730

Do All Your Detailing Efforts Pay Off? Dynamic Panel Data Methods Revisited

By: Chung, Doug J., Byungyeon Kim, and Byoung Park

Abstract—We estimate a sales response model to evaluate the short- and long-term value of pharmaceutical sales representatives' detailing visits to physicians of different types. By understanding the dynamic effect of sales calls across heterogeneous doctors, we provide guidance on the design of optimal call patterns for route sales. Our analyses reveal that the long-term persistence effect of detailing is more pronounced for specialist physicians; the contemporaneous marginal effect is higher for generalists. Free samples have little effect on any type of physician. We also introduce a key methodological innovation to the marketing and economics literature. We show that moment conditions—typically used in traditional dynamic panel data methods—are vulnerable to serial correlation in the error structure. However, traditional tests to detect serial correlation have weak power and can be misleading, resulting in misuse of moment conditions and incorrect inference. We present an appropriate set of moment conditions to properly address serially correlated errors in analyzing dynamic panel data.

Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=52743

Abstract—In French parliamentary and local elections, candidates ranked first and second in the first round automatically qualify for the second round, while a third candidate qualifies only when selected by more than 12.5% of registered citizens. Using a fuzzy RDD around this threshold, we find that the third candidate attracts both “switchers,” who would have voted for one of the top two candidates if she were not present, and “loyal” voters, who would have abstained. Switchers vote for the third candidate even when she is very unlikely to win. This disproportionately harms the candidate ideologically closest to her and causes his defeat in one fifth of the races. These results suggest that a large fraction of voters value voting expressively over behaving strategically to ensure the victory of their second best. We rationalize our findings by a model in which different types of voters trade off expressive and strategic motives.

Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=52728

  • Harvard Business School Case 913-404

Monsanto

Monsanto CEO Hugh Grant must guide his global agribusiness technology company into an uncertain future where food security, food safety, sustainability, and climate change will all impact the global food system.

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/913404-PDF-ENG

  • Harvard Business School Case 817-088

Hygeia Group: Delivering Quality Care in Nigeria

Fola Laoye is the Group Managing Director of Hygeia Group, a Nigerian healthcare insurer and provider, and she is deciding on the optimal strategy to grow the provider arm of her business. Hygeia Group was founded in the 1980s by her physician parents, and although operating a healthcare company in Nigeria offered challenges particularly in human resources and infrastructure, by 2011, it had expanded to include three hospital and clinic sites and a large insurance company. The company has just received a large equity investment from an international private equity company, and it has decided to focus on expanding tertiary care capabilities in its hospitals. A consulting team has identified cardiology, oncology, and advanced surgery (orthopedic and minimally invasive) as areas with strategic potential. However, Laoye must decide which of these options offers the greatest growth opportunities. In addition, as her company grows, she must decide how best to structure the payer and provider aspects of her business in a way that maximizes synergies for both.

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/817088-PDF-ENG

  • Harvard Business School Case 316-112

Health Systems in the Developing World

This note offers an approach to the evaluation of health care markets globally. It prepares students with a set of questions about the organization of core elements of the health care system. The organization of these elements can vary across markets and can vary in terms of the different roles of the public and private sector in financing and delivery of health care services. Overall, the framework provides an opportunity for a structured analysis of any market in health care and provides students with a comprehensive approach to assessing the current health care market. Students can build from this framework with their own assessments of potential opportunities for business or policy innovation within the market.

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/316112-PDF-ENG

This note describes the practice of employee furloughs (also known as work sharing or short-time work) including their regulatory frameworks in different countries and the business and ethical implications of their use.

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/314097-PDF-ENG

  • Harvard Business School Case 717-506

CarMax, Inc.: Disrupting the Used-Car Market

No abstract available.

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/717506-PDF-ENG