Social Sciences Research

138 Results

 

Eyes Shut: The Consequences of Not Noticing

In his new book The Power of Noticing: What the Best Leaders See, Max Bazerman explains how and why many executives fail to notice critical information in their midst. Open for comment; 3 Comments posted.

In Venture Capital, Birds of a Feather Lose Money Together

The more affinity there is between two VCs investing in a firm, the less likely the firm will succeed, according to research by Paul Gompers, Yuhai Xuan and Vladimir Mukharlyamov. Open for comment; 7 Comments posted.

Wisdom or Madness? Comparing Crowds with Expert Evaluation in Funding the Arts

In fields as diverse as technology entrepreneurship and the arts, crowds of interested stakeholders are increasingly responsible for deciding which innovations to fund, a privilege that was previously reserved for a few experts, such as venture capitalists and grant-making bodies. Despite the growing role of crowds in making decisions once left to experts, however, we know little about how crowds and experts may differ in their ability to judge projects, or even whether crowd decision-making is based on any rational criteria at all. Drawing on a panel of national experts and data from the crowd funding platform Kickstarter, this study offers the first detailed comparison of crowd and expert judgment. There are three main findings. First, on average, there is a remarkable degree of congruence between the realized funding decisions by crowds and the evaluation of those same projects by experts. Second, there seems to be an "art" to raising money from crowds, one that may be systematically different from that of raising money from experts. Third, crowd funded projects are equally likely to have delivered on budget, result in organizations that continue to operate, and be successful in other ways. Overall, crowd funding appears to allow projects the option to receive multiple evaluations and reach out to receptive communities that may not otherwise be represented by experts. Read More

The Contaminating Effects of Building Instrumental Ties: How Networking Can Make Us Feel Dirty

Network ties are essential to advancement in organizations: they provide access to opportunities, political insight, and technical knowledge. Yet networking with the goal of advancement often leaves individuals feeling somehow bad about themselves—even dirty. The authors use field and laboratory data to examine how goal-oriented or instrumental networking influences individual emotions, attitudes, and outcomes, including consequences for an individual's morality. The authors argue that networking for professional goals can impinge on an individual's moral purity—a psychological state that results from a person's view of the self as clean from a moral standpoint and through which a person feels virtuous—and thus make him or her feel dirty. There are three main insights: First, the authors show the importance of a clear conceptual distinction between instrumental networking driven by individual agency versus spontaneous networking reflecting the constraints and opportunities of the social context. Second, the research establishes the relevance of moral psychology for network theory. Third, because people in powerful positions do not experience the morally contaminating effects of instrumental networking, power emerges from this research as yielding unequal access to networking opportunities, thus reinforcing and perpetuating inequality in performance. Read More

‘My Bad!’ How Internal Attribution and Ambiguity of Responsibility Affect Learning from Failure

As scholars and practitioners have observed, failure clearly presents a valuable opportunity for learning in organizations. All too often, however, the opportunity is lost. Indeed, prior studies on the topic suggest that, perhaps ironically, such learning often fails to occur. In this paper the authors begin to uncover when and why individuals are more likely to learn from failed experiences. Specifically, they present evidence from three studies that support a conceptual model of learning from failure as operating through individuals' internal attributions of failure, driven in part by low ambiguity of responsibility, that lead to increased learning effort and subsequent improvement. The paper thus makes theoretical advances and carries implications for managers. Theoretically, the authors focus attention on the role of attribution in learning from failure, showing that attribution style is an important moderator of the relationship between failure and learning. Next, they identify a key situational determinant of individuals' responses to failure: ambiguity of responsibility. Third, they highlight the key role of effort as a mechanism for the effects of learning from failure. For managers, these results emphasize a specific measure that organizational leaders might take before an experience to enhance learning: actively managing perceptions of ambiguity of responsibility. Read More

Venture Investors Prefer Funding Handsome Men

Studies by Alison Wood Brooks and colleagues reveal that investors prefer pitches from male entrepreneurs over those from female entrepreneurs, even when the content of the pitches is identical. And handsome men fare best of all. Open for comment; 10 Comments posted.

Poverty and Crime: Evidence from Rainfall and Trade Shocks in India

Concern about climate change has spurred a large body of scholarship examining how climate influences human behavior, particularly human conflict. While a link between climate and human conflict is well established, we still do not fully understand the mechanisms that underlie the observed relationship between rainfall and crime. In this paper the authors shed light on these mechanisms using four decades of district-level data from India. They first establish a robust effect of rainfall on different types of crime, with the strongest effects on violent crimes (including murder) and property crimes. They then go beyond previous studies, which simply document the link between weather variations and human conflict, and examine to what extent poverty is the main causal pathway between rainfall and crime. To do so they identify a source of income shocks for households in rural India that is completely independent of the amount of rainfall: trade reform that began in 1991. Findings show that violent crimes and property crimes, the types of criminal activities that are most sensitive to rainfall shocks, indeed respond to trade shocks. The larger the loss in trade protection a district experienced, the higher is the incidence of these crimes. Overall, the results provide evidence for income as a mechanism behind the observed rainfall-crime relationship, which had mostly been assumed in previous scholarship. Read More

How Grocery Bags Manipulate Your Mind

People who bring personal shopping bags to the grocery store to help the environment are more likely to buy organic items—but also to treat themselves to ice cream and cookies, according to new research by Uma R. Karmarkar and Bryan Bollinger. What's the Quinoa-Häagen-Dazs connection? Open for comment; 13 Comments posted.

Uncovering Racial Discrimination in the ‘Sharing Economy’

New research by Benjamin G. Edelman and Michael Luca shows how online marketplaces like Airbnb inadvertently fuel racial discrimination. Closed for comment; 1 Comment posted.

Racist Umpires and Monetary Ministers

Are baseball umpires racist? Are ministers motivated by money? Christopher Parsons teases important economic lessons from unlikely sources. Open for comment; 4 Comments posted.

Do Employees Work Harder for Higher Pay?

In a recent field study, Duncan Gilchrist, Michael Luca, and Deepak Malhotra set out to answer a basic question: "Do employees work harder when they are paid more?" Closed for comment; 17 Comments posted.

Unspoken Cues: Encouraging Morals Without Mandates

Harvard Business School professor Michel Anteby studied his own employer to better understand how organizations can create moral behavior using unspoken cues. Closed for comment; 1 Comment posted.

Excerpt: Manufacturing Morals

At Harvard Business School, the orderly landscape and community setting reinforces values the School wishes to introduce to both faculty and students. An excerpt from professor Michel Anteby's Manufacturing Morals: The Values of Silence in Business School Education Read More

Performance Responses to Competition Across Skill-Levels in Rank Order Tournaments: Field Evidence and Implications for Tournament Design

Tournaments and other rank-order incentive mechanisms have been used to model a wide range of settings: executive placement, elections, research and development and innovation contests, sports tournaments, and variable sales compensation: situations in which placing at the top of the performance rank-order leads to out-sized payoffs. This article analyzes how the level of competition and size of a tournament affects performance as a result of how strategic interactions affect contestants' incentives to exert high levels of effort. The authors estimate relationships between performance in these contests and competition levels across the full distribution of skill levels. They do this by studying data on software algorithm programming contests in which fine-grained data are available on contestant ability levels and performance over a large number of comparable contests. Findings show that while aggregate and average patterns of performance and effort may decline with increased competition, performance and effort may in fact increase among the highest-skilled contestants. The paper provides guidance to designers of innovation and crowdsourcing tournaments. Read More

How the Zebra Got Its Stripes: Imprinting of Individuals and Hybrid Social Ventures

Creating hybrid organizations that combine existing organizational forms is a complex process. Given the legitimacy challenges facing hybrid organizations, why are they created in the first place? The authors focus on the role of "environmental imprinting" on individuals: this means the persistent effects that individuals' environments during sensitive periods have on their subsequent behaviors. After constructing and analyzing a novel dataset of over 700 founders of social ventures, all guided by a social welfare logic, the authors suggest that individual imprinting helps to explain why an entrepreneur founding a social venture might create a hybrid by incorporating a secondary, commercial logic. Overall, the paper contributes to the understanding of hybrid organizations by providing the first large-scale, empirical examination of the antecedents of the widely-discussed type of hybrids that combine social welfare and commercial logics. Read More

To Buy Happiness, Spend Money on Other People

In a new video, Michael Norton shows that spending money on others yields more happiness than spending it on yourself. Closed for comment; 3 Comments posted.

Studying How Income Inequality Shapes Behavior

Professor David A. Moss is studying how growing income disparity affects our decision-making on everything from risk-taking to voting. Open for comment; 2 Comments posted.

Competition and Social Identity in the Workplace: Evidence from a Chinese Textile Firm

Social identity theory suggests that individuals derive part of their self-concept from their perceived membership in a social group and behave differently towards in-group versus out-group members. But despite the importance of social identity in organizational contexts, the existing empirical evidence in managerial economics has mostly come from lab experiments, and there exist few quantitative studies on the impact of social identity on worker behaviors in real workplaces. This paper provides novel evidence of the impact of social identity on workers' competitive behaviors in a Chinese textile firm that uses relative performance incentives. The firm provides an unusual empirical setting in which there is a historical and institutional division of all weavers into two distinct groups with different social identities: urban resident and rural migrant workers. Our findings show that the weavers do not compete against coworkers who share the same social identity even though there is a tournament incentive to outperform their coworkers in general. Instead, they only compete against coworkers who do not share the same social identity. Managers who design incentive schemes without understanding the dynamics of social incentives in the workplace may fail to achieve the intended effects on productivity. Read More

‘Hybrid’ Organizations a Difficult Bet for Entrepreneurs

Hybrid organizations combine the social logic of a nonprofit with the commercial logic of a for-profit business, but are very difficult to finance. So why would anyone want to form one? Julie Battilana and Matthew Lee investigate. Closed for comment; 14 Comments posted.

To Buy Happiness, Purchase an Experience

Michael Norton explains why spending money on new experiences yields more happiness than spending it on new products. Closed for comment; 16 Comments posted.

J. Richard Hackman (1940-2013)

This paper—a tribute to the lifework of the late scholar J. Richard Hackman, a professor of social and organizational psychology at Harvard—recalls his many contributions to our understanding of work design and team effectiveness. As the authors note, Hackman's research changed the face of work design in countless industries, from service and manufacturing jobs, to education, health care, and the performing arts. His theory (with Greg Oldham) of job characteristics, and his evidence about how one could redesign and enrich jobs, made it possible for workers not only to perform well but also to develop and make meaningful contributions through their work. The author or coauthor of 10 books on group effectiveness, Hackman revitalized teams research with his insights into the conditions under which effective collective work processes emerge. Read More

Religion, Politician Identity, and Development Outcomes: Evidence from India

Minority social groups may be disadvantaged by policy choices made by democratically elected leaders. It is therefore pertinent to consider whether increasing the political representation of minority groups improves their outcomes. This paper investigates whether the religious identity of state legislators in India influences development outcomes, both for citizens of their religious group and for the population as a whole. Results show that raising the share of Muslim legislators in individual districts leads to a large and statistically significant decline in infant and neonatal mortality rates. Importantly, they find no significant difference in the impact of Muslim political representation on Muslim compared with non-Muslim households. Indeed, the estimated coefficients indicate smaller beneficial impacts for Muslim children. Overall, these findings contribute to a recent literature on the relationship between religion and development, and to the literature on politician identity. Read More

Social Norms Versus Social Responsibility: Punishing Transgressions Under Conflicting Obligations

Laws and regulations provide guidelines for how to punish transgressions, but ultimately, individuals make the decisions about whether and how much to punish alleged wrongdoers. Many people feel inclined to treat wrongdoers preferentially in certain contexts. For example, people may be tempted to give people a break on "special days" such as birthdays because birthdays are part of a larger class of days with social or religious significance that produce strong norms of helping, kindness, and forgiveness. This study examines what happens when those with the authority to punish find themselves in situations that encourage leniency, specifically on offenders' birthdays. Examining over 134,000 arrest records for driving under the influence (DUI offenses) in the state of Washington during a ten-year period, the researchers find that, counter to predictions, police officers are less likely to be lenient toward marginal offenders (i.e., those just under the 0.08 BAC per se threshold) on their birthdays than on any other day. Overall, the paper argues that exploring how people respond to dual pressures provides insight into how they reconcile competing motivations, whether they can correctly compensate for biases, and additional ways in which discretion may be problematic. Individuals with the responsibility to punish behave differently in the presence of a social norm to treat someone leniently than they do in the absence of that norm. However, contrary to common intuition, the resolution of this tension results in harsher treatment of offenders rather than leniency. Read More

Is Your iPhone Turning You Into a Wimp?

The body posture inherent in operating everyday gadgets affects not only your back, but your behavior. According to a new study by Maarten Bos and Amy Cuddy, operating a relatively large device inspires more assertive behavior than working on a small one. Closed for comment; 20 Comments posted.

The Power of Rituals in Life, Death, and Business

Experimental research by Michael I. Norton, Francesca Gino, and colleagues proves multiple benefits of using rituals. Not only do they have the power to alleviate grief, but they also serve to enhance the experience of consuming food—even something as mundane as a carrot. Closed for comment; 21 Comments posted.

Faculty Symposium Showcases Breadth of Research

Faculty present their latest research on the human tendency toward dishonesty, the use of crowdsourcing to solve major scientific problems, and the impact of private equity investments. Closed for comment; 3 Comments posted.

Hidden Structure: Using Network Methods to Map System Architecture

All complex systems can be described in terms of their architecture, that is, as a nested hierarchy of subsystems. Despite a wealth of research highlighting the importance of understanding system architecture, however, there is little empirical evidence on the actual architectural patterns observed across large numbers of real world systems. In this paper, the authors developed robust and reliable methods to detect the core components in a complex system, to establish whether these systems possess a core-periphery structure, and to measure important elements of these structures. Overall, the findings represent a first step in establishing some stylized facts about the structure of real-world systems. Read More

From McRibs to Maseratis: The Power of Scarcity Marketing

In the new book Happy Money: the Science of Smarter Spending, behavioral economists Elizabeth Dunn and Michael Norton describe how money can buy happiness—but only if we spend it the right way. Closed for comment; 2 Comments posted.

How to Spot a Liar

Key linguistic cues can help reveal dishonesty during business negotiations, whether it's a flat-out lie or a deliberate omission of key information, according to research by Lyn M. Van Swol, Michael T. Braun, and Deepak Malhotra. Closed for comment; 55 Comments posted.

First Look: March 19

When daily deals misfire on merchants … Lessons of war for negotiators … The unexpected effect of electronic monitoring of criminals. Read More

Prominent Job Advertisements, Group Learning, and Wage Dispersion

What role do peers play when job seekers assess prospects? This research presents a stylized model that generates wage inequality as a result of people's reliance on peers for information about the wages that are offered in the market and the length of time one can expect to spend unemployed. The key idea of the model is that people whose peers have low wages and short unemployment spells come to expect that all jobs have relatively low wages so they accept low-wage jobs relatively quickly even when they shouldn't. People with peers that have higher wages are, instead, more choosy and wait for better jobs. Read More

Sidetracked: Why Can’t We Stick to the Plan?

In her new book, Sidetracked, behavioral scientist and professor Francesca Gino explores the unexpected forces that often keep people from following through with their plans, both professional and personal. Closed for comment; 12 Comments posted.

Developing the Guts of a GUT (Grand Unified Theory): Elite Commitment and Inclusive Growth

Why do some countries successfully initiate episodes of rapid growth while others suffer extended stagnation? Furthermore, why are some countries able to sustain growth episodes over many decades of rapid or steady growth, while other growth episodes end in reversion to stagnation or collapse? This paper represents an initial step in a research agenda aiming to build a unified theory of growth that considers the complex dynamics and varied roles of elites. The analytical model suggested here is capable of generating both transitory and sustained episodes of accelerated growth. As Pritchett and Werker argue, progress on a unified theory of growth would explain, better than current long-run growth theories, the onset of growth episodes. It would also examine how the dynamics of growth interact with existing political and institutional configurations to produce feedback effects on policy and institutions such that some growth episodes end in bust or stagnation while others are continued. Read More

Neuroeconomics: Eyes, Brain, Business

At first glance, a neuroscientist and a business school might seem an odd fit. But in fact economists have been paying increasing attention to how the brain works. Christine Looser discusses her research on how the brain detects aliveness and the possible implications for organizations and advertisers. Open for comment; 7 Comments posted.

Altruistic Capital: Harnessing Your Employees’ Intrinsic Goodwill

Everyone comes to the table with some amount of "altruistic capital," a stock of intrinsic desire to serve, says professor Nava Ashraf. Her research includes a study of what best motivates hairdressers in Zambia to provide HIV/AIDS education in their salons. Closed for comment; 20 Comments posted.

Deregulation, Misallocation, and Size: Evidence from India

India carried out wide-ranging deregulation policies in 1991. Significant sectors of the economy were opened up for private participation through de-licensing and allowing entry to industries previously reserved exclusively for the state-owned sector. This paper analyzes the efficiency impact of the removal of a specific distortion: compulsory industrial licensing that regulated firm entry and imposed output capacity constraints on Indian firms prior to 1991. Did industrial delicensing in India, which relaxed entry barriers and capacity constraints on firm size, lead to a change in firm size distributions within industries? Read More

The Novelty Paradox & Bias for Normal Science: Evidence from Randomized Medical Grant Proposal Evaluations

A key task for executives and managers involved with innovation is to evaluate new ideas and proposals. In the sciences, one longstanding hypothesis contends that research ideas outside the mainstream are susceptible to being discounted, rejected, or ignored. These days, expert peer review in academic science is the approach most relied upon for enabling research agendas and providing research funds. Are novel research projects—those deviating from existing research paradigms—treated with a negative bias in expert evaluations? In this paper, the authors investigate how nascent scientific hypotheses are evaluated, specifically looking at the process by which medical research grant proposals are assessed by "gatekeepers": in this case, elite researchers from a leading medical school. Innovation requires novelty—but novelty, as this paper shows, is not appreciated and is in fact penalized. These findings help explain concerns about incrementalism in science and also point at the challenge that most organizations face when dealing with novel topics Read More

The Value of Advice: Evidence from Mobile Phone-Based Agricultural Extension

This paper evaluates a new service that provides mobile-phone based agricultural consulting to poor farmers in India. For decades, the Government of India, like most governments in the developing world, has operated a system of agricultural extension, intended to spread information on new agricultural practices and technologies through a large work force of public extension agents. Evidence of the efficacy of these extension services, however, is limited. This paper describes a randomized field experiment examining the potential for an alternate route to improving agricultural management. Specifically, the authors evaluate Avaaj Otalo (AO), a mobile phone-based technology that allows farmers to call a hotline, ask questions, and receive responses from agricultural scientists and local extension workers. Findings show that AO had a range of important, positive effects on farmer behavior. This paper may be the first rigorous evaluation of mobile phone-based extension and, more generally, the first evaluation of a demand-driven extension service delivered by any means. Read More

Why We Blab Our Intimate Secrets on Facebook

Leslie K. John and colleagues set out to discover the reason behind a common discrepancy: While many of us purport to be concerned about Internet privacy, we seem to have no worries about sharing our most intimate details on Facebook. Closed for comment; 15 Comments posted.

Are You Paying a Tip--or a Bribe?

Both are rewards for service, so why is one considered outside the boundaries of ethical behavior? Harvard Business School professor Magnus Thor Torfason on the thin line. Closed for comment; 24 Comments posted.

Want People to Save More? Send a Text

What's the most effective way to encourage people to save their money? The answer lies in a combination of peer pressure and text messages, according to new research by Assistant Professor Dina D. Pomeranz. Open for comment; 6 Comments posted.

Self-Serving Altruism? When Unethical Actions That Benefit Others Do Not Trigger Guilt

Not a day goes by without the revelation of unethical behavior by a politician, movie star, professional athlete, or high-ranking executive. This paper asks: Is a person's willingness to cross ethical lines influenced by the presence of others who may benefit? Research by Francesca Gino, Shahar Ayal, and Dan Ariely. Findings show that cheating is motivated by potential benefits to others. The authors analyze the results of three experiments to suggest that the potential benefits which dishonesty may create for others not only help people justify their own bad behavior but also serve as a self-serving motivator for it. Focusing on the social utility of others, people more freely categorize their own actions in positive terms and avoid negative updating of their moral self-image. As a result, people feel less guilty about their dishonest behavior when others-in addition to themselves-can benefit from them. Among the implications: Team settings might be conducive to dishonest behavior among group members, and thus might not be ideal to foster learning. Read More

License to Cheat: Voluntary Regulation and Ethical Behavior

One powerful tool, at least in theory, that policymakers can rely on to stem cheating is regulation through monitoring and sanctions. But regulation does not really help when individuals and firms who are supposed to be regulated may have the ability to determine how much regulation they face, or even whether they face it at all. This paper studies what happens when individuals can avoid or circumvent regulation and monitoring intended to curb unethical conduct. Results from several experiments show significantly more misreporting under voluntary regulation (where participants have a choice of whether to be regulated) than when they are either all submitted to mandatory regulation or when no opportunity for regulation exists. These findings have several practical implications: For example, policies imposing either no regulation or total regulation may be preferable to policies that allow for regulation that is easily circumvented. Read More

Colocation and Scientific Collaboration: Evidence from a Field Experiment

In recent years there has been considerable interest in the policy arena on fostering collaborative and especially interdisciplinary collaborations. Yet there is scant evidence on how to do this in practice. To learn how team members find each other in the scientific community and decide to collaborate, the authors designed and carried out an experiment involving Harvard University and its affiliated hospitals. Results suggest that matching between scientists may be subject to considerable frictions, even among scientists in relatively close geographic proximity and in the same organizational system. However, even a brief and focused event facilitating face-to-face interactions can be useful for the formation of new scientific collaborations. Read More

The Unexpected Link Between Cadavers and Careers

Illustrating the strange socializing power of our occupational pursuits, a new study by professor Michel Anteby and colleagues finds a strong association between jobs and corpse donations. Open for comment; 2 Comments posted.

Field Evidence on Individual Behavior & Performance in Rank-Order Tournaments

Contests abound in everything from amateur and professional sports to arts, architecture, manual labor, and engineering. Just as large-scale online contest platforms that provide ongoing tournament-based work and compensation have emerged, large industrial companies increasingly use them as a complement to in-house research and development. What difference does increased competition make to individual participants? This paper analyzes data from algorithmic programming contests to shed light on the mechanisms that underlie changes in performance in reaction to increased competition. Three mechanisms may account for a performance decline: reduction in effort, increased risk taking, and deterioration in cognitive processing. The study also shows how the ability of competitors affects their reactions to increased competition. Overall, results suggest that a better understanding of behavioral responses in contests can aid both public policy and contest designers. Read More

Children Develop a Veil of Fairness

Is children's fair behavior motivated by a desire to be fair —or merely the desire to appear fair? The results of several experiments suggest that as children grow older they become increasingly concerned with appearing fair to others, which may explain some of their increased tendency to behave fairly. Since even young children can radically shift their behavior from fair to unfair based on whether authority figures are aware of their behavior, it might be naive to believe that shrewd adults will be fair without similar oversight. By understanding the limitations of fairness, policymakers can discover how to leverage fairness to increase socially desirable behavior in some circumstances, while limiting its occasional wastefulness. Read More

Legislating Stock Prices

This paper examines the importance of firms' relationships with their legal and political environment, and the actors who form this environment. Governments pass laws that affect firms' competitive landscape, products, labor force, and capital, both directly and indirectly. And yet, it remains difficult to determine which firms any given piece of legislation will affect, and how it will affect them. By observing the actions of legislators whose constituents are the affected firms, the authors gather insights into the likely impact of government legislation on firms. Specifically, the authors demonstrate that legislation has a simple yet previously undetected impact on firm prices. Read More

Charitable Giving When Altruism and Similarity are Linked

This paper presents a model to help explain several aspects of charitable giving. First, individuals do not appear to reduce their contributions to a charity significantly when they learn that the government or other individuals have increased the funds that they devote to the charity's beneficiaries. Indeed, sometimes people increase their contributions when they hear that others have contributed more. Second, there are often several distinct charities that contribute to the same beneficiaries, and these charities frequently differ by the donor population to whom they target their appeal. Lastly, the extent to which individuals contribute to charity differs greatly, even among countries that appear otherwise quite similar. Rotemberg's model shows that two assumptions grounded in evidence from psychology are helpful in explaining these regularities. Specifically, the combination of (1) letting altruism be larger towards like-minded people and (2) having self-esteem depend on the number of people that agree with oneself is consistent with small reductions in one's own giving in response to larger giving by others. Read More

Do Online Dating Platforms Help Those Who Need Them Most?

The $2 billion online dating industry promises the possibility of a priceless product: romantic love. Associate Professor Mikolaj Piskorski investigates whether these sites are helping the lonely—or just making life easier for young singles who are popular already. Open for comment; 17 Comments posted.

Discretion Within the Constraints of Opportunity: Gender Homophily and Structure in a Formal Organization

Research has demonstrated that people associate most with others who are similar to themselves, including others of the same sex. What are the implications of such patterns for organizations? This study, written by Adam M. Kleinbaum, Toby E. Stuart, and Michael L. Tushman, offers evidence of how and by whom formal lateral structures serve to link together an otherwise siloed organization. Analyzing millions of e-mail interactions among tens of thousands of employees of a single large firm, the researchers find that it is women more than men who tend to bridge formal structural boundaries in organizations. Thus women play a potentially valuable role in creating ties throughout an otherwise siloed multidivisional corporation. Despite the influence of a firm's formal organizational structure, people often have plenty of discretion to exercise choice. Same-sex interaction results from discretionary choice within the boundaries of the firm's opportunity structure. These results suggest (but do not prove) that same-sex interaction especially by woman can help to span formal organizational boundaries that are otherwise difficult to traverse. The findings raise questions for future research about whether conventional wisdoms regarding gender differences in social network structure remain accurate in current-day organizations. Read More

Behavioral Ethics: Toward a Deeper Understanding of Moral Judgment and Dishonesty

What makes even good people cross ethical boundaries? Society demands that business and professional schools address ethics, but the results have been disappointing. This paper argues that a behavioral approach to ethics is essential because it leads to understanding and explaining moral and immoral behavior in systematic ways. The authors first define business ethics and provide an admittedly biased history of the attempts of professional schools to address ethics as a subject of both teaching and research. They next briefly summarize the emergence of the field of behavioral ethics over the last two decades, and turn to recent research findings in behavioral ethics that could provide helpful directions for a social science perspective to ethics. These new findings on both intentional and unintentional unethical behavior can inform new courses on ethics as well as new research investigations. Such new directions can meet the demands of society more effectively than past attempts of professional schools. They can also produce a meaningful and significant change in the behavior of both business school students and professionals. Read More

It’s Alive! Business Scholars Turn to Experimental Research

Business researchers are turning increasingly to experiments in the lab and field to unlock the secrets of what motivates CEOs, consumers, and policymakers. Closed for comment; 5 Comments posted.

Fairness, Efficiency, and Flexibility in Organ Allocation for Kidney Transplantation

For many people who suffer end-stage renal disease, a kidney transplant is considered a potentially life-saving gift. Allocation policies for kidneys from deceased donors are thus of central importance and have to accomplish major objectives in alleviating human suffering, prolonging life, and providing nondiscriminatory, fair, and equal access to organs for all patients. In this paper, the authors focused on national allocation policies in the United States and the recent effort to revise the current policy. Their design of a national allocation policy focuses on perhaps the simplest, most common and currently used priority method, namely a point system. They also present four case studies in which they designed new policies under different scenarios. Read More

Better-reply Dynamics in Deferred Acceptance Games

There's an inherent problem in the market design theory known as mechanism design, in that the players in the market may not understand the design, and thus may make bad choices until they learn to work the system better. This paper explores the issue of learning the design. It focuses on a particular mechanism, the Deferred Acceptance algorithm for two-sided matching markets, which is used in many real-life markets. Research was conducted by Guillaume Haeringer of Universitat Autonoma de Barcelona and Hanna Halaburda of Harvard Business School. Read More

Is Web Surfing Distracting Your Workers?

If you think that banning web surfing at work will improve your employees' productivity, think again. In new research on the effects of temptation, HBS research fellow Marco Piovesan and colleagues found that the act of resisting temptation distracted subjects enough that their work performance actually suffered. Closed for comment; 10 Comments posted.

The Power of Political Voice: Women’s Political Representation and Crime in India

Protecting the rights of disadvantaged citizens remains a challenge in both developing and developed countries. These individuals often are targets of verbal abuse, discrimination, and violent crime. Using evidence from India, this paper shows that political representation of disadvantaged groups is an important means of giving them a voice in the criminal justice system. Research was conducted by Lakshmi Iyer of Harvard Business School, Anandi Mani of the University of Warwick, and Prachi Mishra and Petia Topalova of the International Monetary Fund. Read More

Individual Rationality and Participation in Large Scale, Multi-Hospital Kidney Exchanges

As kidney exchange moves from local networks to a national level, a new set of problems arises. One central issue, for example, is how individual hospitals can be motivated to participate. This paper by Itai Ashlagi (Sloan School of Management, MIT) and Alvin E. Roth (Harvard Business School) provides a theoretical framework to study and overcome the kinds of problems that can be anticipated. Read More

Marketplace Institutions Related to the Timing of Transactions

Certain markets face the problem of "unraveling," in which competition for good talent leads a firm to make job offers earlier and earlier, without sufficient knowledge about any given applicant—and in which applicants are forced to decide whether to accept a job before they really know much about working for that firm. Harvard Business School professor Alvin E. Roth discusses how this issue affects the labor markets for new lawyers and gastroenterology fellows, as well as the market for postseason college football bowls. Read More

To What Degree Does the Job Make the Person?

Summing Up: Jobs shape us as much as we shape our jobs, Jim Heskett's readers suggest. Closed for comment; 41 Comments posted.

From Social Control to Financial Economics: The Linked Ecologies of Economics and Business in Twentieth Century America

No transformation looks more consequential for the history of American higher education than the extraordinary rise of business schools and business degrees in the twentieth century. Marion Fourcade (UC Berkeley) and Rakesh Khurana (HBS) analyze the changing place of economics in American business education as reflected in the teaching of three elite business schools over the course of the twentieth century: the Wharton School (1900-1930), the Carnegie Tech Graduate School of Industrial Administration (post World War II), and the Graduate School of Business at the University of Chicago (1960s-present). Read More

How Foundations Think: The Ford Foundation as a Dominating Institution in the Field of American Business Schools

What causes institutions to change? This paper adds organizational and exogenous perspective to existing theories by looking at the idea of "dominating institutions"—a class of formal organizations purposively designed to change other institutions. HBS professor Rakesh Khurana and colleagues look at the Ford Foundation and its work reshaping America's graduate schools of management between 1952 and 1965 through funding of "centers of excellence" at a number of schools, including Harvard Business School. Read More

Conveniently Upset: Avoiding Altruism by Distorting Beliefs about Others

This paper explores the idea that people who can take advantage of a particular situation will tend to believe that others would choose to take advantage of the same situation if given the chance-thus helping to justify the decision to act selfishly. In their research, Harvard Business School professor Rafael Di Tella and Harvard PhD student Ricardo Pérez-Truglia test their hypothesis on a group of well-heeled Argentinean college students, using a modified version of the "dictator game" in which both the "dictators" and the "recipients" are given the chance to make a selfish choice. Read More

Testing Coleman’s Social-Norm Enforcement Mechanism: Evidence from Wikipedia

Harvard Business School professor Mikolaj Jan Piskorski and doctoral candidate Andreea Gorbatai look to the editing process on Wikipedia to test and validate the well-accepted (but little-verified) theory of sociologist James Coleman that social norm violations decline as network density increases. Support for Coleman's mechanism would alert us to the importance of punishments for norm violations and rewards for such punishments, and thus help us to design social systems in which norms are observed. Open for comment; 4 Comments posted.

Cognitive Barriers to Environmental Action: Problems and Solutions

Researchers have long studied the cognitive barriers that cloud our thinking and decision-making. In a recent book chapter, HBS doctoral student Lisa L. Shu and professor Max H. Bazerman look at three barriers that can prevent clear decision-making, specifically on environmental issues. They also propose ways in which these biases could be put to advantage in promoting sound environmental policy and practice. Read More

Making Right Choices: Art or Science?

Summing Up Is choice an art or science? Jim Heskett's readers wonder whether the question is the right one to ask. (Online forum has closed; next forum opens January 6.) Closed for comment; 46 Comments posted.

Prosocial Spending and Well-Being: Cross-Cultural Evidence for a Psychological Universal

Can money buy happiness? Apparently it can--if that money is spent on someone else. New research shows that people around the world gain emotional benefits from using their financial resources to benefit others. The research, which included data from 136 countries, was conducted by Lara B. Aknin, Elizabeth W. Dunn, Christopher P. Barrington-Leigh, and John Helliwell, University of British Columbia; Robert Biswas-Diener, Centre of Applied Positive Psychology; Imelda Kemeza, Mbarara University of Science & Technology; Paul Nyende, Makerere University; Claire Ashton-James, University of Groningen; and Michael I. Norton, Harvard Business School. Read More

The Consumer Appeal of Underdog Branding

Research by HBS professor Anat Keinan and colleagues explains how and why a "brand biography" about hard luck and fierce determination can boost the power of products in industries as diverse as food and beverages, technology, airlines, and automobiles. Closed for comment; 21 Comments posted.

What Top Scholars Say about Leadership

As a subject of scholarly inquiry, leadership—and who leaders are, what makes them tick, how they affect others—has been neglected for decades. The Handbook of Leadership Theory and Practice, edited by Harvard Business School's Nitin Nohria and Rakesh Khurana, brings together some of the best minds on this important subject. Q&A with Khurana, plus book excerpt. Read More

Why Do Firms Use Non-Linear Incentive Schemes? Experimental Evidence on Sorting and Overconfidence

The use of "non-linear" performance-based incentive contracts is very common in many business environments. The most well-known example is salesperson compensation, though many other types of performance-based pay, including stock options, bonus systems based on defined metrics, and pay based on subjective performance, often exhibit non-linear characteristics. Research has demonstrated that non-linear incentives are highly distortionary because employees manipulate their work in order to maximize their pay. While some scholars have recommended that companies stop using non-linear incentives, little research has been done to investigate the possible benefits of non-linear schemes. In this paper, HBS professor Ian Larkin and Ross School of Business professor Stephen Leider (HBS PhD '09) explore the role that the behavioral bias of overconfidence may play in explaining the prevalence of non-linear incentive schemes. They conclude that the linearity or non-linearity of an incentive system could play an important role in sorting employees according to their level of confidence; in addition, there may be three possible benefits to having overconfident employees. Read More

Will I Stay or Will I Go? Cooperative and Competitive Effects of Workgroup Sex and Race Composition on Turnover

Inequalities in the senior ranks by sex and race remain rampant in up-or-out knowledge organizations such as consulting firms, law firms, and universities. HBS professor Kathleen L. McGinn and Wharton School professor Katherine L. Milkman focus on patterns of voluntary and involuntary turnover over six years in one such organization to untangle the multiple ways in which social identity influences career mobility. Predicting that higher proportions of demographically similar supervisors will reduce the likelihood of subordinate turnover, while higher proportions of demographically similar peers will increase the likelihood of turnover, the researchers find evidence of the hypothesized effects. They suggest that integrating research about social cohesion and social comparison enhances understanding of racial and gender inequality within organizations and facilitates organizations' ability to reduce that inequality. Read More

The Determinants of Individual Performance and Collective Value in Private-Collective Software Innovation

Why do people expend personal time and effort toward creating a public good? Over the past decade, collaborative, community-based approaches to developing knowledge-intensive products like encyclopediae, music, and software have gained prominence in both practice and scholarly analysis. "Open source software development," for example, is distinguished by self-selection of distributed participants into tasks, free revealing of knowledge, collective creation of shared software artifacts, and participants' ability to generate new innovations by reinterpreting and repurposing knowledge and artifacts created by others. The MathWorks' Ned Gulley and HBS professor Karim R. Lakhani study the determinants of individual performance and collective value in software innovation by analyzing 11 programming competitions that mimic the working of the open source software community. Read More

What’s the Best Way to Make Careful Decisions?

Summing up reader responses, Professor Jim Heskett finds compelling arguments for a process involving intuition based on analysis and experience. Should people also make their own decision-making process more transparent to others and to themselves? (Next forum begins March 3.) Closed for comment; 87 Comments posted.

The ‘Luxury Prime’: How Luxury Changes People

What effect does luxury have on human cognition and decision making? According to new research, there seems to be a link between luxury and self interest, an insight that may help curb corporate excesses. Roy Y.J. Chua of Harvard Business School discusses findings from his work conducted with Xi Zou of London Business School. Read More

The Devil Wears Prada? Effects of Exposure to Luxury Goods on Cognition and Decision Making

Gandhi once wrote that "a certain degree of physical harmony and comfort is necessary, but above a certain level it becomes a hindrance instead of a help." This observation raises interesting questions for psychologists regarding the effects of luxury. What psychological consequences do luxury goods have on people? In this paper, the authors argue that luxury goods can activate the concept of self-interest and affect subsequent cognition. The argument involves two key premises: Luxury is intrinsically linked to self-interest, and exposure to luxury can activate related mental representations affecting cognition and decision-making. Two experiments showed that exposure to luxury led people to think more about themselves than others. Read More

“I read Playboy for the articles”: Justifying and Rationalizing Questionable Preferences

We want others to find us good, fair, responsible and logical; and we place even more importance on thinking of ourselves this way. Therefore, when people behave in ways that might appear selfish, prejudiced, or perverted, they tend to engage a host of strategies designed to justify questionable behavior with rational excuses: "I hired my son because he's more qualified." "I promoted Ashley because she does a better job than Aisha." Or, "I read Playboy for the articles." In this chapter from a forthcoming book, HBS doctoral student Zoë Chance and professor Michael I. Norton describe various means of coping with one's own questionable behavior: through preemptive actions and concurrent strategies for re-framing uncomfortable situations, forgoing decisions, and forgetting those decisions altogether. Read More

Feeling Good about Giving: The Benefits (and Costs) of Self-Interested Charitable Behavior

Helping others takes countless forms and springs from countless motivations, from deep-rooted empathy to a more calculated desire for public recognition. Social scientists have identified a host of ways in which charitable behavior can lead to benefits for the giver, whether economically via tax breaks, socially via signaling one's wealth or status, or psychologically via experiencing well-being from helping. Charitable organizations have traditionally capitalized on all of these motivations for giving, with a recently emerging focus on highlighting the mood benefits of giving—the feelings of empowerment, joy, and inspiration that giving engenders. Indeed, if giving feels good, why not advertise the benefits of "self-interested giving," allowing people to experience that good feeling while increasing contributions to charity at the same time? HBS doctoral candidate Lalin Anik, Professor Michael I. Norton, and coauthors explore whether organizations that seek to increase charitable giving by advertising the benefits of giving are making claims supported by empirical research and, most importantly, whether such claims actually increase donations. Read More

The Height Tax, and Other New Ways to Think about Taxation

The notion of levying higher taxes on tall people—an idea offered largely tongue in cheek—presents an ideal way to highlight the shortcomings of current tax policy and how to make it better. Harvard Business School professor Matthew C. Weinzierl looks at modern trends in taxation. Read More

A Decision-Making Perspective to Negotiation: A Review of the Past and a Look into the Future

The art and science of negotiation has evolved greatly over the past three decades, thanks to advances in the social sciences in collaboration with other disciplines and in tandem with the practical application of new ideas. In this paper, HBS doctoral student Chia-Jung Tsay and professor Max H. Bazerman review the recent past and highlight promising trends for the future of negotiation research. In the early 1980s, Cambridge, Massachusetts, was a hot spot on the negotiations front, as scholars from different disciplines began interacting in the exploration of exciting new concepts. The field took a big leap forward with the creation of the Program on Negotiation, an interdisciplinary, multicollege research center based at Harvard University. At the same time, Roger Fisher and William Ury's popular book Getting to Yes (1981) had a pronounced impact on how practitioners think about negotiations. On a more scholarly front, a related, yet profoundly different change began with the publication of HBS professor emeritus Howard Raiffa's book The Art and Science of Negotiation (1982), which for years to come transformed how researchers would think about and conduct empirical research. Read More

Optimal Taxation in Theory and Practice

Are developments in the theory of taxation improving tax policies around the world? The optimal design of a tax system is a topic that has long fascinated economic theorists and flummoxed economic policymakers. This paper explores the interplay between tax theory and tax policy. It identifies key lessons policymakers might take from the academic literature on how taxes ought to be designed, and it discusses the extent to which these lessons are reflected in actual tax policy. The authors find that there has been considerable change in the theory and practice of taxation over the past several decades—although the two paths have been far from parallel. Overall, tax policy has moved in the directions suggested by theory along a few dimensions, even though the recommendations of theory along these dimensions are not always definitive. Read More

The Optimal Taxation of Height: A Case Study of Utilitarian Income Redistribution

A tax on height follows inexorably from a well-established empirical regularity and the standard approach to the optimal design of tax policy. Many readers of this paper, however, will not so quickly embrace the idea of levying higher taxes on tall taxpayers. Indeed, when first hearing the proposal, most people either recoil from it or are amused by it. That reaction is precisely what makes tax policy so intriguing, according to N. Gregory Mankiw of Harvard University and Matthew Weinzierl of HBS. This paper addresses a classic problem: the optimal redistribution of income. A Utilitarian social planner would like to transfer resources from high-ability individuals to low-ability individuals, but is constrained by the fact that he cannot directly observe ability. Taxing height helps the planner achieve redistribution efficiently because height, the data show, is an indicator of income-earning ability. Although readers might take this paper in one of two ways—some seeing it as a small, quirky contribution aimed to clarify the literature on optimal income taxation, others as a broader effort to challenge the entire literature—the authors' results raise a fundamental question about the framework for optimal taxation for which William Vickrey and James Mirrlees won the 1996 Nobel Prize in Economics and which remains a centerpiece of modern public finance. Read More

In Favor of Clear Thinking: Incorporating Moral Rules into a Wise Cost-Benefit Analysis

Policy decisions may be the most important set of decisions we make as a society. In this realm, moral rules often play an active and dysfunctional role. The typical way in which we make decisions—by weighing them individually—leads us to overuse moral rules in a manner that is inconsistent with the more reflective set of preferences we would identify through joint consideration of options. In their response to a companion article in Perspectives on Psychological Science, Max Bazerman, of HBS, and Joshua D. Greene, of Harvard University, argue that cost-benefit analysis (CBA) is unfairly stereotyped. The critique of CBA in the companion article could be better framed as a set of considerations that can contribute to more careful CBAs. Read More

Policy Bundling to Overcome Loss Aversion: A Method for Improving Legislative Outcomes

Citizens hope their elected representatives will pass legislation that creates net gains that outweigh net harms—in other words, legislation that has positive expected value for society. However, economist Joseph Stiglitz has noted that legislators often fail to pass such legislation, even when its net positive expected value is highly significant. The psychology and economics literature suggests that legislators face an uphill battle when proposing legislation that has both costs and benefits due to the power of loss aversion, a cognitive bias that has been found to cause individuals to dramatically overweight losses relative to gains. Here the authors propose and test a new type of policy bundling technique in which related bills that have both costs and benefits are combined in a way that reduces the harmful effects of loss aversion. Read More

Truth in Giving: Experimental Evidence on the Welfare Effects of Informed Giving to the Poor

It is often difficult for donors to predict the value of charitable giving because they know little about the persons who receive their help. While there is substantial evidence that individuals use information about recipients to decide how generous a donation to make, we know surprisingly little about how much donors care to help their preferred types. To start closing this gap, HBS professor Felix Oberholzer-Gee and Carnegie Mellon University coauthor Christina Fong study transfers of income to real-world poor people in the context of experimental games. Their findings have implications for governments and nongovernmental organizations that seek to increase the financial and political support for wealth transfer programs. Read More

Are You Ready to Manage in an Irrational World?

It is becoming clear that human behavior is much less rational than we assumed, says HBS professor Jim Heskett. Judging from replies to this month's question, there are many nuances to managing in an irrational world. (Online forum now closed. Next forum begins August 7.) Closed for comment; 97 Comments posted.

Social Influence Given (Partially) Deliberate Matching: Career Imprints in the Creation of Academic Entrepreneurs

How do people select partners for relationships? Most relationships arise from a matching process in which individuals pair on a limited number of high-priority dimensions. Although people often match on just a few attributes, it may be that some set of additional characteristics, which was not considered when a choice was made to develop the relationship, results in the social transmission of attitudes and behaviors. For this reason, social matching is only "partially" deliberate. HBS professor Toby Stuart and coauthors observe this phenomenon in an analysis of the origins and consequences of the matching of postdoctoral biomedical scientists to their faculty advisers. This work shows the imprints of postdoctoral advisers on the subsequent choices of the scientists-in-training who travel through their laboratories. The researchers' findings contribute to a burgeoning literature on the interface between academic and commercial science. Read More

On Good Scholarship, Goal Setting, and Scholars Gone Wild

When confronted by anecdotal evidence and some causal evidence, how should scholars—and indeed businesses and society—react? In this response to a critique in the journal Academy of Management Perspectives, the authors articulate the aims of their article "Goals Gone Wild: How Goals Systematically Harm Individuals and Organizations," describe points of disagreement with the critics, offer a definition of good scholarship, and suggest a program of research for future studies of goal setting. Read More

Phenomenological Assumptions and Knowledge Dissemination within Organizational Studies

Field-wide integration of knowledge generated by subfield specialists is critical for new discoveries and for a more comprehensive and accurate understanding of complex phenomena. In spite of the value of broadly disseminating knowledge within the social and physical sciences, scholarly discourse tends to be contained within subfields of research. Further constraining innovation and understanding, knowledge dissemination between academics and practitioners or clinicians is often limited and inaccurate. In this article, UCLA professor Corinne Bendersky and HBS professor Kathleen L. McGinn introduce "phenomenological assumptions"—revealed beliefs about the fundamental qualities of the phenomenon under investigation and its relationship to the environment in which it occurs—as barriers limiting the integration of knowledge generated within a subfield into the broader intellectual discourse of its field. Read More

Beyond Gender and Negotiation to Gendered Negotiations

How does gender affect negotiations within organizations or rather how do organizations affect gender relations? Deborah Kolb, a professor at Simmons College School of Management, and HBS professor Kathleen McGinn explore how definitions of work, specified roles in organizations, status hierarchies, and the politics and practices of organizational realities affect how gender plays out in organizations. Considering gender in organizations from a "negotiated order perspective"—that is, from the perspective that cultural patterns and work practices are the result of past interaction and negotiation—not only expands the range of issues that are potentially negotiable, it also turns attention to rethinking certain dimensions of the negotiation process itself. Read More

Dishonest Deed, Clear Conscience: Self-Preservation through Moral Disengagement and Motivated Forgetting

Why do people engage in unethical behavior repeatedly over time? In Everybody Does It! (1994), Thomas Gabor documents the pervasive immorality of ordinary people. Challenging the stereotype that only criminals violate the law, Gabor describes the numerous transgressions of everyday life and suggests that the excuses people make for their dishonest behavior parallel the justifications criminals make for their crimes. This common tendency of people to justify and distance themselves from their unethical behavior has captured the attention of several psychologists, and a long stream of research has documented differences in the way people think about their own ethical behavior and that of others. Harvard Business School's Lisa Shu and Max Bazerman, with colleague Francesca Gino, show that seemingly innocuous aspects of the environment can promote the decision to act ethically or unethically. Read More

What’s Good about Quiet Rule-Breaking

If your company quietly allows employees to break some rules with the tacit approval of management, that's a moral gray zone. And your company is not alone. When rules are broken but privileges are not abused, such unspoken pacts between workers and management can allow both to achieve their respective goals of expressing professional identity and sustaining efforts in positive ways, says HBS professor Michel Anteby. Q&A Read More

Can Housing and Credit be “Nudged” Back to Health?

Did human frailty cause this crisis? Several thinkers have come forward with a suggestion for improvements to fiscal policy that are based on fostering better decisions while preserving consumer choice, says HBS professor Jim Heskett. What should be done? What do you think? (Online forum now closed. Next forum begins January 7.) Closed for comment; 38 Comments posted.

Decoding the Artful Sidestep

Do you notice when someone changes the subject after you ask them a question? If you don't always notice or even mind such conversational transformations, you're not alone. New research by Todd Rogers and Harvard Business School professor Michael I. Norton explores the common occurrence of "conversational blindness." Q&A with Rogers. Read More

The Artful Dodger: Answering the Wrong Question the Right Way

Individuals frequently attempt to avoid questions they do not want to answer, from politicians dodging reporters' requests to clarify their position on when life begins, to employees sidestepping their bosses' questions as to why they are late for the third straight day. Rogers, a recent PhD grad from HBS, and Norton, an assistant professor in the Marketing unit, suggest that when faced with unwanted queries, question-dodgers sometimes exploit conversational blindness—a phenomenon whereby listeners fail to notice when speakers respond to a different question than the one they are asked—by responding with answers that seem to address the question asked, but which in fact address an entirely different question. In the context of political debates, two studies demonstrate conversational blindness, exploring both the conditions that impact the likelihood of such dodges going unnoticed, and how speakers' successful—and failed—attempts to capitalize on conversational blindness impact listeners' opinions of them. Read More

Dirty Work, Clean Hands: The Moral Psychology of Indirect Agency

When powerful people do morally questionable things, they rarely interact directly with their putative victims. Mobsters have hit men. CEOs have vice presidents, lawyers, and accountants. More specifically, the powerful are likely to carry out their intentions through the actions of other agents, with varying degrees of explicit direction and control. This working paper describes four studies that explore the effects of such "indirect agency" on moral judgment. Read More

Nameless + Harmless = Blameless: When Seemingly Irrelevant Factors Influence Judgment of (Un)ethical Behavior

Most of us regularly make ethical judgments about others' behavior and make decisions regarding whether or not to punish others' unethical behavior. Although many of us know how we would rationally like to behave in these situations, little prior research has explored the systematic errors we commit in the process of evaluating others' unethical behavior and acting upon it. The present research by Gino, Shu, and Bazerman focuses on the effects of both the outcome of unethical acts and the identifiability of the victim of wrongdoing on ethical judgments and decisions to punish unethical behavior. Read More

How Can Decision Making Be Improved?

While scholars can describe how people make decisions, and can envision how much better decision-making could be, they still have little understanding of how to help people overcome blind spots and behave optimally. Chugh, Milkman, and Bazerman organize the scattered knowledge that judgment and decision-making scholars have amassed over several decades about how to reduce biased decision-making. Their analysis of the existing literature on improvement strategies is designed to highlight the most promising avenues for future research. Read More

The Agglomeration of U.S. Ethnic Inventors

The higher concentration of immigrants in certain cities and occupations has long been noted. There has been very little theoretical or empirical work to date, however, on the particular agglomeration of U.S. immigrant scientists and engineers. This scarcity is disappointing given the scale of these ethnic contributions and the importance of innovation to regional economic growth. William R. Kerr's study contributes to our empirical understanding of agglomeration and innovation by documenting patterns in the city-level agglomeration of ethnic inventors (e.g., Chinese, Indian) within the United States from 1975 through 2007. It is hoped that the empirical platform developed in this study provides a foothold for furthering such analyses. Read More

Spending on Happiness

Money can't buy you love but it can buy happiness—as long as it's money for someone else. New research by HBS professor Michael I. Norton and colleagues Elizabeth W. Dunn and Lara B. Aknin, described in the journal Science, looks into how and why spending money on others promotes happiness. Norton explains more in this Q&A. Read More

Connecting School Ties and Stock Recommendations

School connections are an important yet underexplored way in which private information is revealed in prices in financial markets. As HBS professor Lauren H. Cohen and colleagues discovered, school ties between equity analysts and top management of public companies led analysts to earn returns of up to 5.4 percent on their stock recommendations. Cohen explains more in our Q&A. Read More

No Harm, No Foul: The Outcome Bias in Ethical Judgments

Too often, workers are evaluated based on results rather than on the quality of the decision. Given that most consequential business decisions involve some uncertainty, the upshot is that organizations wind up rewarding luck rather than wisdom. From a rational decision-making perspective, people's decisions should be evaluated based on the information the decision maker had available to him or her at the time, and not based on the ultimate results. This paper tests predictions about this effect, known as the outcome bias, in two studies in which participants were asked to consider various ethically questionable behaviors. Participants were also given information about the outcome of such behaviors and were asked to rate the ethicality of the described actions with or without the outcome information. The findings extend prior research in psychology and ethics. Read More

Incompatible Assumptions: Barriers to Producing Multidisciplinary Knowledge in Communities of Scholarship

Just as flows of knowledge within and across communities of practice improve the quality of new products, knowledge sharing among knowledge workers within interdisciplinary communities may be critical for new discoveries and for a more comprehensive and accurate understanding of phenomena. In spite of this, biologists tend to talk to biologists, economists tend to talk to economists, and lawyers tend to talk to lawyers. This paper argues that producing and disseminating knowledge within a multidisciplinary community of practice is enhanced when knowledge workers hold compatible assumptions, even when the form and content of knowledge generation across those workers varies. Read More

Unconventional Insights for Managing Stakeholder Trust

Most organizations understand the need to manage stakeholder trust. The bad news: Most organizations don't really understand how to manage the difficult job effectively. However, for those companies wishing to reap the benefits of improved cooperation with suppliers, increased motivation and productivity among employees, enhanced loyalty among customers, and higher levels of support from investors, managing stakeholder trust is a prudent, if not critical investment. Trust management may require an appreciation for some unconventional insights regarding the appropriate investment of resources. Stakeholders differ in regard to the kinds and degrees of vulnerability they face; what they need to believe before they will trust also differs. Would-be trust managers will be wise to consider these varying needs and to anticipate the tradeoffs that exist in strengthening relationships with specific stakeholders. Read More

Psychological Influence in Negotiation: An Introduction Long Overdue

This paper attempts to encourage a better dialogue between research on social influence and on negotiation. It provides an overview of the literature on both areas, and identifies opportunities for creating more effective and useful research. First, HBS professors Deepak Malhotra and Max Bazerman identify those elements of psychological influence that do not require the influencer to change the economic or structural aspects of the bargaining situation in order to persuade the target. Second, they review prior research on behavioral decision-making in negotiation to identify those ideas that may be relevant to influence in negotiation. Third, they provide a framework for thinking about how to leverage behavioral decision research to wield influence in negotiation. Fourth, they consider how targets of influence might defend against these tactics. Fifth, because psychological influence is, by definition, aimed at achieving one's own ends through the strategic manipulation of another's judgment, they consider the ethical issues surrounding its application in negotiation. Read More

Peer Effects and Entrepreneurship

How do your coworkers affect your decision to become an entrepreneur? The vast majority of entrepreneurs launch their new ventures following a period of employment in established organizations. To date, factors such as the degree of bureaucracy that individuals have experienced have been shown to shape their likelihood to go into business for themselves. But socialization matters, too. Nanda and Sørensen show that the career experiences of coworkers shape both the information and the resources available to prospective entrepreneurs, as well as the value that individuals attach to entrepreneurial activity as a career choice. Read More

See No Evil: When We Overlook Other People’s Unethical Behavior

Even good people sometimes act unethically without their own awareness. This paper explores psychological processes as they affect the ethical perception of others' behavior, and concludes with implications for organizations. First, there is a tendency for people to overlook unethical behavior in others when recognizing such behavior would harm them. Second, people might readily ignore unethical behavior when others have an agent do their dirty work for them. Third, gradual moral decay leads people to grow comfortable with behavior to which they would otherwise object. Fourth, the tendency to value outcomes over processes can lead us to accept unethical processes for far too long. Read More

Acting Globally but Thinking Locally? The Influence of Local Communities on Organizations

It is a paradox that in a globalizing and "boundaryless" economy, factors associated with local communities—such as interpersonal networks, laws, and tax rates, among others—remain important for understanding organizational behavior. As Marquis and Battilana argue, communities influence organizational behavior not only as local markets and resource environments, but also through a number of institutional pressures. Focusing on communities as institutional environments provides fresh theoretical insights into organizational behavior, in addition to offering a more unified perspective to the diverse set of research that is emerging on local communities. Read More

The Dynamic Interplay of Inequality and Trust: An Experimental Study

Trust makes economic agents more willing to engage in interactions involving the risk of being deceived. Like a lubricant, trust may positively influence efficiency and economic growth, and at the same time affect the distribution of wealth within an economy. However, trust is difficult to measure on both the microeconomic and the macroeconomic level. Survey data frequently discover individual attitudes toward trust, but cannot easily identify to what extent such self-reported attitudes reflect economic behavior, and how trust interacts with the dynamics of efficiency and distribution. This paper complements empirical and survey literature on the relationship between inequality and trust with the help of experimental games, which systematically investigate the dynamic interplay of trust, efficiency, and distribution. Read More

Mental Accounting and Small Windfalls: Evidence from an Online Grocer

In the course of daily life, people occasionally receive small windfalls. Every so often we are handed a gift certificate for $5 off a meal, find a $10 bill on the street, or win $20 in an impromptu game of poker. According to standard economic theory, these types of small windfalls should have no noticeable effect on spending decisions because such windfalls constitute meaningless changes to lifetime wealth. However, if you have ever been the recipient of a small windfall, you may remember thinking about ways to spend this unexpected cash, buying items you might not have otherwise purchased. This kind of behavior can be interpreted as an example of "mental accounting" as theorized by economists Richard H. Thaler and Hersh M. Shefrin. This paper presents evidence supporting some of the implications of a theory of mental accounting in the domain of online grocery shopping. Read More

Harnessing Our Inner Angels and Demons: What We Have Learned About Want/Should Conflicts and How That Knowledge Can Help Us Reduce Short-Sighted Decision Making

Many of the most important problems facing the world today are exacerbated by myopic decision-making. Examples include climate change, under-saving for retirement, deficit spending, and obesity. As observed by Freud, contemporary psychologists and researchers, and entertainers, people everywhere struggle to choose between doing what they want to do and what they should do. This paper synthesizes 15 years of empirical explorations of this "want/should" conflict and discusses the most important applications of this work. The results of recent studies have the potential to help individuals and policymakers by arming them with insights about how to increase the chances that they and their constituents, respectively, will favor options that are in their best interest. Read More

The Ethnic Composition of U.S. Inventors

The contributions of immigrants to U.S. technology formation are staggering. While the foreign-born account for just over 10 percent of the U.S. working population, they represent 25 percent of the U.S. science and engineering workforce and nearly 50 percent of those with doctorates. Even looking within the Ph.D. level, ethnic researchers make an exceptional contribution to science as measured by Nobel Prizes, election to the National Academy of Sciences, patent citation counts, and so on. The magnitude of these ethnic contributions raises many research and policy questions: 4 examples are debates regarding the appropriate quota for H1-B temporary visas, the possible crowding out of native students from the science and engineering fields, the brain-drain or brain-circulation effect on sending countries, and the future prospects for U.S. technology leadership. This paper describes a new approach for quantifying the ethnic composition of U.S. inventors with previously unavailable detail. Read More

Why We Aren’t as Ethical as We Think We Are: A Temporal Explanation

People commonly predict that they will behave more ethically in the future than they actually do. When evaluating past (un)ethical behavior, they also believe they behaved more ethically than they actually did. These misperceptions, both of prediction and of recollection, have important ramifications for the distinction between how ethical we think we are and how ethical we really are, as well as understanding how such misperceptions are perpetuated over time. This paper draws on recent research in psychology and decision-making to gain insight into these forces. It also provides recommendations for reducing them. Read More

High Hills, Deep Poverty: Explaining Civil War in Nepal

Nepal, the home of Mount Everest, has been gripped in recent years by civil war. A new paper by Harvard Business School professor Lakshmi Iyer and Quy-Toan Do of the World Bank looked at the roots of Nepal's conflict from a variety of angles. For the future, investing in poverty reduction strategies is a key for peace, Iyer says. Read More

Toward a Theory of Behavioral Operations

Research in psychology over the past several decades teaches us that behavioral biases and cognitive limits are not just "noise"; they systematically affect (and often distort) people's judgment and decision making. Despite such advances, however, most scholarly research in operations management still assumes that agents—be they decision makers, problem solvers, implementers, workers, or customers—either are fully rational or can be induced to behave rationally, usually with economic incentives. This paper builds on earlier studies to explore the theoretical and practical implications of incorporating behavioral and cognitive factors into operations management models. It then points to fruitful areas for future research. Read More

The Persuasive Appeal of Stigma

Are minority groups more persuasive when their conversations with majority groups are conducted face-to-face? Interracial interactions are among the most perilous social occasions in contemporary America, full of opportunities for things to go awry. People in stigmatized groups, for instance, may worry that members of majority groups hold prejudiced attitudes that can lead to discriminatory or offensive behavior. Members of majority groups, for their part, may fear coming across as biased or racist. While psychology has traditionally explored the damaging effects of such interactions on social exchange, new findings contribute to the growing recognition that stigma may be a two-sided construct, marked with a host of costs but occasional benefits. This study demonstrates the persuasive power of stigmatized individuals and shows how self-presentational concerns may change attitudes. Read More

Film Rentals and Procrastination: A Study of Intertemporal Reversals in Preferences and Intrapersonal Conflict

Throughout our lives, we face many choices between activities we know we should do and those we want to do. Examples of such choices include whether or not to visit the gym, to smoke, to order a greasy pizza or a healthy salad for lunch, and to watch an action-packed blockbuster or a history documentary on Saturday night. Using data on consumption decisions over time from an Australian online DVD rental company, this paper investigates how and why individuals make systematically different decisions when their choices will take effect in the present versus the future. Read More

How Property Ownership Changes Your World View

When Argentine squatters were granted property title it changed the way they viewed the world. HBS professor Rafael Di Tella discusses his research into how property ownership affects our beliefs and also our attitudes toward capitalism. Read More

The Speed of New Ideas: Trust, Institutions and the Diffusion of New Products

Does trust confer competitive advantage in terms of time, money, and productivity? Previous research indicates that it does. This study shifts perspective slightly and asks whether trust can also act as a barrier to entry. In other words, are trusted suppliers protected from competition if buyers are reluctant to try new products and services offered by other suppliers? Oberholzer-Gee and Calanog explored the link between levels of trust and the decision to adopt a new product using a field experiment on the diffusion of an innovative floor drain for the plumbing market. Read More

An Empirical Approach to Understanding Privacy Valuation

What do consumers value and why? Researchers on privacy remain stumped by a "privacy paradox." Consumers declare that they value privacy highly, yet do not take steps to guard it during transactions. At the same time, consumers feel unable to enact their preferences on privacy. Clearly, scholars need a more nuanced understanding of how consumers treat information privacy in complex situations. To test the hypothesis that there is a homo economicus behind privacy concerns, not just primal fear, Wathieu and Friedman conducted an experiment based on a real-world situation about the transmission of personal information in the context of car insurance. Their experiment was based on a previous case study about marketing processes that use membership databases of trusted associations (such as alumni associations) to channel targeted deals to members through a blend of direct mail and telemarketing. Read More

I’ll Have the Ice Cream Soon and the Vegetables Later: Decreasing Impatience over Time in Online Grocery Orders

How do people's preferences differ when they make choices for the near term versus the more distant future? Providing evidence from a field study of an online grocer, this research shows that people act as if they will be increasingly virtuous the further into the future they project. Researchers examined how the length of delay between when an online grocery order is completed and when it is delivered affects what consumers order. They find that consumers purchase more "should" (healthy) groceries such as vegetables and less "want" (unhealthy) groceries such as ice cream the greater the delay between order completion and order delivery. The results have implications for public policy, supply chain managers, and models of time discounting. Read More

Behavioral Decision Research, Legislation, and Society: Three Cases

Insights about how people make decisions have enormous importance for society and public policy, yet often behavioral decision findings are overlooked or dismissed in favor of arguments based on sometimes-simplistic economic theory. This is particularly true in Washington, D.C., where Bazerman provided expert testimony in government cases on auditor bias, pharmaceutical company collusion, and big tobacco, respectively. His experiences highlight the barriers to the use of the most appropriate social science under the existing legal and legislative frameworks. In this article that is based on analysis and opinion, he tells what happened and reflects on the need for social sciences, in addition to economics, to be brought to the legal and policy-making domains. Read More

Neuro Economics: Science or Science Fiction?

The growing use of MRI (magnetic resonance imaging) devices for studying decision making means that in 2007 we may hear a number of striking conclusions based on studies involving a small number of brain scans, says Jim Heskett. What are the more general implications of this trend? Will it have strong explanatory as well as manipulative potential for us as consumers, managers, and citizens? Closed for comment; 61 Comments posted.

Future Lock-in: Or, I’ll Agree to Do the Right Thing...Next Week

Most of us believe that we should make certain choices—save more money or reduce gas consumption, for example—but we do not want to carry out these choices. In psychology this tension has been referred to as a "want/should" conflict. Rogers and Bazerman show through four experiments that people are more likely to choose what they believe they should choose when the choice will be implemented in the future rather than in the present, a tendency they call "future lock-in." They also discuss directions for future research and applications for public policy, an arena in which citizens are often asked to consider binding policies that trade short-term interests for long-term benefits. Read More

Three Perspectives on Team Learning: Outcome Improvement, Task Mastery, and Group Process

Organizations increasingly rely on teams to carry out critical strategies and operational tasks. How do teams learn, and what factors are most important to team learning? This paper reports on current perspectives and findings that address these questions, looking at empirical studies on team learning from three areas of research: outcome improvement, task mastery, and group process. Overall, Edmondson and coauthors characterize the nature of research to date and assemble what is known and unknown about the theoretically and practically important topic of team learning. Read More

Manly Men, Oil Platforms, and Breaking Stereotypes

Men who work in dangerous places often act invulnerable to prove their merit as workers and as men—objectives that can lead to decreased safety and efficiency. Professor Robin Ely and her team helicoptered to offshore oil platforms in order to understand "manly men" and how working environments can be changed to alter men's enactments of manhood. Read More

Racial Diversity Initiatives in Professional Service Firms: What Factors Differentiate Successful from Unsuccessful Initiatives?

What organizational factors are needed for racial diversity initiatives to succeed? While diversity continues to grow in importance in organizations, very little research has focused on the processes that underlie diversity management. Modupe Akinola and David A. Thomas propose a study intended to explore management initiatives that focus on racial diversity in professional service firms. Given that such firms rely on the high level of skills, expertise, and diverse perspectives offered by their professional staff, these firms may be ideal laboratories for examining diversity initiatives. Read More

Online Match-Making with Virtual Dates

Users of online dating sites often struggle to find love because the sites themselves make it more difficult than it needs to be. To the rescue: Virtual Dates, an online ice-breaker from Jeana Frost of Boston University, Michael Norton of HBS, and Dan Ariely of MIT. Read More

The Cost of Cutting in Line

Harvard Business School faculty rarely put their personal safety at risk to prove a point, but Professor Felix Oberholzer-Gee came close when he cut ahead in line—all in the name of science. Here's what companies can learn about long lines and social behavior. Read More

New Research Explores Multi-Sided Markets

Dating clubs, credit cards, and video games are all examples of multi-sided markets, where firms need to get two or more distinct groups of customers on the same platform. Professor Andrei Hagiu discusses this new field of business research—and why it matters to you. Read More

Empirical Tests of Information Aggregation

While neither buyers nor sellers may be certain of the worth of used goods, both may possess private information about the value. Do prices become more informative as the number of bidders grows? Using data from a sample of eBay auctions for computers, Yin looked at how and under what conditions auction prices converge to the common value of a given item. Read More

Effects of Task Difficulty on Use of Advice

We make most of our choices by weighing other people's advice counter to our own opinions. People generally underweight advice from others, though the practice is not universal. In two studies, it is determined that people overweight advice on difficult tasks but underweight it on the easy ones. Read More

Should the Wisdom of Crowds Influence Our Thinking About Leadership?

New research suggests that large groups of people are better than a few experts at everything from estimating the true magnitude of things to diagnosing causes of problems to predicting outcomes. If this is correct, what does it say about the true nature of effective leadership? Closed for comment; 26 Comments posted.

Psychology, Pathology, and the CEO

In difficult times, organizational pathologies can cause a death spiral. Here’s how the CEO can win back the hearts and minds of staff, according to HBS professor Rosabeth Moss Kanter. Read More

Most Accountants Aren’t Crooks—Why Good Audits Go Bad

The Sarbanes-Oxley Act sets stiff penalties for auditors and executives who commit fraud. Problem is, says Harvard Business School professor Max H. Bazerman and his collaborators, most bad audits are the result of unconscious bias, not corruption. Here's a new look at how to audit the auditors. Read More

Use the Psychology of Pricing To Keep Customers Returning

When to charge for a product or service can be more important than how much to charge, says Harvard Business School professor John Gourville. If you want to build long-term loyalty with customers, you better understand the difference. Read More

Driven: How Human Nature Shapes Organizations

Exclusive! In this first look at a new book, HBS professors Paul Lawrence and Nitin Nohria explore how human nature shapes business organizations. Does your organization reflect the four basic human drives? Plus: Q&A. Read More

The Right Connections

In attracting funding for a new venture, report HBS Professor Monica Higgins and her colleague Ranjay Gulati of Northwestern University, professional ties and company connections are even more important than a good product in inspiring the trust and loosening the wallets of potential investors. Read More