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New research on decision making from Harvard Business School faculty on issues including policymaking, approaches to common work problems, and predicting behavior.
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Predictions, Prophets, and Restarting Your Business

by Frank V. Cespedes

Businesses are starting to plan their re-entry into the market, but how do they know what that market will look like? Frank V. Cespedes warns against putting too much trust in forecasters. Open for comment; Comment(s) posted.

The Bulletproof Glass Effect: When Privacy Notices Backfire

by Aaron R. Brough, David A. Norton, and Leslie John

Consumers regularly encounter privacy notices explaining if and how their personal information will be collected, stored, used, and shared. Evidence in this study demonstrates that privacy notices, though designed to promote a sense of confidence that personal data will not be misused, can undermine consumer trust and decrease purchase intent.

How to Turn Down the Boil on Group Conflict

by Michael Blanding

Intergroup conflict can grind office productivity to a halt. Jeffrey Lees discusses how understanding psychological stereotypes can help divided parties compromise. Open for comment; Comment(s) posted.

When to Apply?

by Katherine Coffman, Manuela Collis, and Leena Kulkarni

Using a series of experiments, the authors studied gender differences in how job-seekers perceive their own qualifications for different opportunities and how this affects their decision to apply. Results suggest that soft touch employer interventions can improve the diversity of applicant pools even if candidate beliefs about their own ability are unchanged.

Creating the Experimentation Organization

by Michael Blanding

New tools allow companies to innovate on an unprecedented scale, in every aspect of business. But the organization must also change. Stefan Thomke previews his forthcoming book, Experimentation Works. Open for comment; Comment(s) posted.

Don't Turn Your Marketing Function Over to AI Just Yet

by Kristen Senz

Lacking human insight, artificial intelligence will be limited when it comes to helping marketers open the black box of market prediction, says Tomomichi Amano. Open for comment; Comment(s) posted.

Use Artificial Intelligence to Set Sales Targets That Motivate

by Michael Blanding

Setting sales targets has always been an inexact science, with serious consequences if done poorly. Using AI-based advanced analytics might be the answer, argues Doug Chung. Open for comment; Comment(s) posted.

Persuasion by Populist Propaganda: Evidence from the 2015 Argentine Ballotage

by Rafael Di Tella, Sebastian Galiani, and Ernesto Schargrodsky

This paper studies data generated prior to the 2015 Argentine presidential ballotage, when a government propaganda campaign was used to attack the opposition candidate and influence voter preferences. Results show the propaganda was persuasive.

Vote Choice Formation and the Minimal Effects of TV Debates: Evidence from 61 Elections in 9 OECD Countries

by Caroline Le Pennec-Caldichoury and Vincent Pons

This study of 61 elections around the world finds that vote choices aggregate a lot of information obtained during the electoral season, but the contribution of TV debates to this process is negligible.

Using Models to Persuade

by Joshua Schwartzstein and Adi Sunderam

“Model persuasion” happens when would-be persuaders offer receivers a streamlined way of understanding data they already know, especially when the data is open to interpretation. Using examples from finance, politics, and law, the authors find that truthtellers do not eliminate the impact of misleading persuasion because wrong models may better fit the past than correct models.

Can These Business Students Motivate Londoners to Do the Right Thing?

by Dina Gerdeman

In the Harvard Business School course Behavioral Insights, students work in the UK with psychology experts to understand what motivates consumers and workers. What they learn can help businesses of all types, says Michael Luca. Open for comment; Comment(s) posted.

Reflexivity in Credit Markets

by Robin Greenwood, Samuel G. Hanson, and Lawrence J. Jin

Investors’ biases and market outcomes affect each other in a two-way feedback loop. This study develops a model of a credit market feedback loop, finding that when investors become more bullish this can predict positive returns in the short run, even if expected returns become more negative at longer horizons.

Memory and Representativeness

by Pedro Bordalo, Katherine Baldiga Coffman, Nicola Gennaioli, Frederik Schwerter, and Andrei Shleifer

We explore the foundations of individuals’ probabilistic judgments, looking to better understand the sources of systematic errors. We conduct a laboratory experiment where participants view abstract images and are then asked to recall what they saw. We find evidence that interference in episodic memory contributes to biased probabilistic judgments.

Consumer Inertia and Market Power

by Alexander MacKay and Marc Remer

Consumers are often more likely to buy a product if they have purchased it previously. This paper provides a means to estimate the magnitude of this phenomenon (i.e., consumer inertia) and shows how it affects the prices of firms in competitive settings. Perhaps surprisingly, greater consumer inertia can result in smaller price increases after a merger.

How To Ask Better Questions

by Kristen Senz

To make the best decisions, managers must ask the right questions. This collection of past studies by Harvard Business School researchers will help you gather the critical information needed to prepare for action. Open for comment; Comment(s) posted.

The Revision Bias

by Ximena Garcia-Rada, Leslie John, Ed O’Brien, and Michael I. Norton

Companies often release revised editions of books, director’s cuts of movies, and technological updates, on the assumption that revising products and services leads to better outcomes. Nine studies, however, document the revision bias: the tendency to prefer things that were revised, regardless of whether the revised versions are objectively better than their predecessors.

The Hidden Cost of a Product Recall

by Danielle Kost

Product failures create managerial challenges for companies but market opportunities for competitors, says Ariel Dora Stern. The stakes have only grown higher. Open for comment; Comment(s) posted.

Judgment Aggregation in Creative Production: Evidence from the Movie Industry

by Hong Luo, Jeffrey T. Macher, and Michael Wahlen

Selecting early-stage ideas in creative industries is challenging because consumer taste is hard to predict and the quantity to sift through is large. Using The Black List that ranks scripts annually based on nominations from film executives, this study shows that aggregating expert opinions helps reduce quality uncertainty and can influence high-budget production.

Gender Stereotypes in Deliberation and Team Decisions

by Katherine B. Coffman, Clio Bryant Flikkema, and Olga Shurchkov

Professional success requires the ability to contribute ideas, and receive credit for them. This paper explores gender differences in how men and women communicate and reward each other in team decision-making problems. We find that women are recognized less often for their contributions in male-typed domains.

Stereotypes and Belief Updating

by Katherine B. Coffman, Manuela Collis, and Leena Kulkarni

Increasing evidence demonstrates that stereotyped beliefs drive key economic decisions. This paper shows the significant role of self-stereotyping in predicting beliefs about one’s own ability. Stereotypes do not just affect beliefs about ability when information is scarce. In fact, stereotypes color the way information is incorporated into beliefs, perpetuating initial biases.