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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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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.

The Better Way to Forecast the Future

by Roberta Holland

We can forecast hurricane paths with great certainty, yet many businesses can't predict a supply chain snafu just around the corner. Yael Grushka-Cockayne says crowdsourcing can help. Open for comment; Comment(s) posted.

Demand Estimation in Models of Imperfect Competition

by Alexander MacKay and Nathan H. Miller

The study shows how knowledge about firm behavior can be modeled to better predict demand. Firms tend to raise prices in response to higher demand, so observed relationships between price and quantity can be quite misleading. The authors provide an adjustment that can be used when price experiments or instrumental variables are not available.

'Always On' Isn't Always Best for Team Decision-Making

by Roberta Holland

Is it possible for teams to communicate too frequently? Research by Ethan Bernstein and colleagues suggests that groups that meet less often may be better at problem-solving. Open for comment; Comment(s) posted.

Forecasting Airport Transfer Passenger Flow Using Real-Time Data and Machine Learning

by Xiaojia Guo, Yael Grushka-Cockayne, and Bert De Reyck

Passengers arriving at international hubs often endure delays, especially at immigration and security. This study of London’s Heathrow Airport develops a system to provide real-time information about transfer passengers’ journeys through the airport to better serve passengers, airlines, and their employees. It shows how advanced machine learning could be accessible to managers.

Quantile Forecasts of Product Life Cycles Using Exponential Smoothing

by Xiaojia Guo, Kenneth C. Lichtendahl Jr., and Yael Grushka-Cockayne

Many important business decisions rely on a manager’s forecast of a product or service’s life cycle. One of the most widely used forecasting techniques is exponential smoothing models. This paper introduces a model suitable for large-scale forecasting environments where key operational decisions depend on quantile forecasts.

Say Again? Uncommon Advice for Common Business Problems

by Sean Silverthorne

Sometimes the right answer is far from obvious. Learn why an introvert may be the best choice to lead your team, taking a pay cut might make you a better manager, and why you should not trust your gut when the pressure is on. Open for comment; Comment(s) posted.

Why Ethical People Become Unethical Negotiators

by Dina Gerdeman

You may think you are an ethical person, but self-interest can cloud your judgment when you sit down at the bargaining table, says Max Bazerman. Open for comment; Comment(s) posted.

Cut Salaries or Cut People? The Best Way to Survive a Downturn

by Rachel Layne

When times are tight, companies usually respond with employee layoffs. But what if they held on to workers and cut their salaries instead? New research by Christopher Stanton and colleagues has the answer. Open for comment; Comment(s) posted.

You Probably Have a Bias for Making Bad Decisions. Here's Why.

by Sean Silverthorne

Cognitive biases cloud our decision making like a San Francisco fog in the brain. Here is recent research on psychological factors that fool us into hiring bad employees, favoring one gender or race over another, or giving more weight to the last information we've received. Open for comment; Comment(s) posted.

Can Consumers Be Saved From Their Misguided Decisions?

by Rachel Layne

Even with a world of information at our fingertips, consumers routinely make bad decisions on everything from investments to health coverage. Can science help? Research by Joshua Schwartzstein and Benjamin Handel. Open for comment; Comment(s) posted.

Nowcasting Gentrification: Using Yelp Data to Quantify Neighborhood Change

by Edward L. Glaeser, Hyunjin Kim, and Michael Luca

This study finds that data from digital platforms (in this case, Yelp) can help forecast which neighborhoods are gentrifying and provide new ways to measure business landscape changes that accompany demographic changes.

Developing Novel Drugs

by Joshua Krieger, Danielle Li, and Dimitris Papanikolaou

This paper contributes to our understanding of how financing constraints affect the direction of innovation in drug development. The authors develop a new measure of drug novelty based on molecular characteristics, and explore the tradeoffs involved in decisions to develop more novel therapies. Open for comment; Comment(s) posted.

Come Together: Firm Boundaries and Delegation

by Laura Alfaro, Nick Bloom, Paola Conconi, Harald Fadinger, Patrick Legros, Andrew F. Newman, Raffaella Sadun, and John Van Reenen

The study develops a simple model and provides new data to examine the relationship between vertical integration and delegation of decision-making, two critical aspects of a firm organizational design that are typically studied in isolation. The results show that delegation and vertical integration are positively correlated.

Will Machine Learning Make You a Better Manager?

by Michael Blanding

Big data...artificial intelligence...Internet of Things. These technologies have taken their shares of the headlines the past few years, but now machine learning is the buzz. Mike Teodorescu explains how it is changing the lives of consumers and businesses. Open for comment; Comment(s) posted.

Nowcasting the Local Economy: Using Yelp Data to Measure Economic Activity at Scale

by Edward L. Glaeser, Hyunjin Kim, and Michael Luca

Data from online platforms ranging from Yelp to Zillow offer the potential for improved measurement of the local economy. This paper finds that Yelp data can predict business growth, as measured by the Census Bureau, before official statistics are released. Predictive power increases with population density, income, and education level.