Theory
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- 15 May 2019
- Research Event
The Unconventional Capitalism That Shapes Business History
Geoffrey G. Jones reports on a business history conference studying the many shades of capitalism around the world and through time. Open for comment; 0 Comments.
- 30 Oct 2018
- Working Paper Summaries
Design Rules, Volume 2: How Technology Shapes Organizations: Chapter 5 Complementarity
Even as economics has theories about what assets and activities should be grouped together under common ownership and unified governance, in practice it sometimes makes sense to distribute complementary assets, skills, and activities across separate organizations. This paper investigates when and how this happens.
- 08 Oct 2018
- Working Paper Summaries
Developing Theory Using Machine Learning Methods
This paper provides a step-by-step roadmap for using machine learning (ML) techniques to explore novel and robust patterns in data. It introduces management researchers to a new use case for ML tools: building new theory from quantitative observational data. Open for comment; 0 Comments.
- 19 Mar 2018
- Working Paper Summaries
Lone Wolves in Competitive Equilibria
The Lone Wolf Theorem states that any agent who is unmatched in one stable partnership assignment is unmatched in every stable assignment. This new study in matching theory broadens the Lone Wolf Theorem to exchange economies, with implications for the strategy-proof negotiation of job contracts.
- 05 Aug 2015
- Research & Ideas
How Hormones Foretell Whether People Will Cheat
There's a key link between our hormone levels and unethical behavior, according to new research by Francesca Gino, and colleagues. The good news: businesses can do something about it. Open for comment; 0 Comments.
- 13 Jul 2015
- Research & Ideas
‘Humblebragging’ is a Bad Strategy, Especially in a Job Interview
While humblebragging runs rampant on Twitter, it's a lousy self-promotion tactic that usually backfires according to recent research by Ovul Sezer, Francesca Gino, and Michael Norton. Open for comment; 0 Comments.
- 26 May 2015
- Research & Ideas
Corporate Field Researchers Share Tricks of the Trade
In a panel discussion, several professors shared practical findings and tricks-of-the-trade from recent field research. Among the discoveries: how to prompt employees to get a flu shot. Closed for comment; 0 Comments.
- 11 Mar 2015
- Working Paper Summaries
Curbing Adult Student Attrition: Evidence from a Field Experiment
This paper by Michael Luca and colleagues demonstrates how insights from behavioral economics can improve attendance habits among adults in literacy and numeracy programs. In a field experiment consisting of 1,179 adult learners in England, the authors sent behaviorally-informed text messages and organizational reminders to students. The messages led to large increases in attendance rates, and the effects persisted over the three weeks of the campaign. This simple intervention provides a low cost approach for organizations looking to improve attendance and engagement. Closed for comment; 0 Comments.
- 25 Feb 2015
- Working Paper Summaries
Thick as Thieves? Dishonest Behavior and Egocentric Social Networks
In a series of laboratory and online experiments, the authors examined the relational and psychological consequences of dishonest behavior. Findings suggest that individuals' perceived social relationships are key to regulating human morality. While earlier research has shown that a cohesive social network can temper one's moral behavior through shared norms, this new work demonstrates a flip-side: People often construct their own social network as a way to defend themselves from threatening information. Closed for comment; 0 Comments.
- 23 Feb 2015
- Research & Ideas
How to Break the Expert’s Curse
Experts could be our most powerful teachers—but often they've lost the ability to connect with novices. Research by Ting Zhang reveals how experts can rediscover the experience of inexperience. Open for comment; 0 Comments.
- 09 Feb 2015
- Research & Ideas
Professional Networking Makes People Feel Dirty
Francesca Gino and colleagues find that people avoid professional networking—even though it's good for their careers—because it makes them feel physically dirty. Open for comment; 0 Comments.
- 19 Jan 2015
- Research & Ideas
Is Wikipedia More Biased Than Encyclopædia Britannica?
By identifying politically biased language in Encyclopædia Britannica and Wikipedia, Feng Zhu hopes to learn whether professional editors or open-sourced experts provide the most objective entries. Open for comment; 0 Comments.
- 19 Nov 2014
- Working Paper Summaries
The Search for Benchmarks: When Do Crowds Provide Wisdom?
Finding appropriate economic benchmarks for individual firms is a fundamental issue. Firms, managers, investors, and researchers all need to identify fundamentally similar benchmarks for such tasks as performance evaluation, executive compensation, equity valuation, statistical arbitrage, and portfolio construction. While traditional benchmarking methods rely primarily on industry classification schemes, more recent approaches introduce new dimensions by utilizing novel data sources or fresh data analytic techniques. Some of these approaches suggest we may need to rethink the reliance on traditional industry classification for benchmarking purposes. In this paper, the authors conduct a comprehensive analysis of the state-of-the-art representatives of four broad categories of peer identification schemes nominated by either financial practitioners or recent academic studies as potential solutions to economic benchmarking. The study's results suggest that the class of bench-marking solutions that harnesses the collective wisdom of investors is a promising path for the future. This approach's effectiveness, however, depends on the sophistication of the individuals in the population (the inherent level of collective wisdom attainable through sampling) and the quality of the information environment surrounding the firm, as well as the size of the sample itself. Key concepts include: Traditional industry classifications are unlikely to capture nuanced or changing economics in firms in an increasingly service- and knowledge-based economy. Aggregated revealed-choice-based approaches have great potential in resolving long-standing benchmarking problems in accounting and finance. These approaches aggregate individual agents' choices to reveal the collective wisdom of investors with respect to the set of economically-related firms. Closed for comment; 0 Comments.
- 07 Nov 2014
- Working Paper Summaries
Do Experts or Collective Intelligence Write with More Bias? Evidence from Encyclopædia Britannica and Wikipedia
Britannica and Wikipedia are sources that aspire to provide comprehensive information. They both face similar challenges over the length, tone, and factual basis of controversial, unverifiable, and subjective content. Such challenges are pervasive in the production of encyclopedic knowledge about current events and political debates surrounding topics like taxation, health care policies, biographical details of presidential candidates, and the funding of stem-cell research, for example. In this paper the authors begin with a simple observation: Each source resolves these challenges differently in distinct production processes. Britannica, for example, produces its final content after consultation between editors and experts. Wikipedia, on the other hand, relies on the "crowd" for its content, receiving contributions from tens of millions of individual users. Examining 3,918 pairs of articles about US politics that appeared in both outlets, the authors compare bias and slant from the two production models. Results suggest that the allocation of editorial time and user contributions is central to the minimization of differences in bias and slant between the two outlets. Among the managerial implications, community managers can work towards a balanced view if intervention alleviates disputes and generates the right kind of participation. Key concepts include: The costs of producing, storing, and distributing knowledge shape different biases and slants in the collective intelligence (Wikipedia) and the expert-based model (Britannica). Many of the differences between Wikipedia and Britannica arise because Wikipedia faces insignificant storage, production, and distribution costs. This leads to longer articles with greater coverage of more points of view. The number of revisions of Wikipedia articles results in more neutral point of view. In the best cases, it reduces slant and bias to a negligible difference with an expert-based model. As the world moves from reliance on expert-based production of knowledge to collectively-produced intelligence, it is unwise to blindly trust the properties of knowledge produced by the crowd. Their slants and biases are not widely appreciated, nor are the properties of the production model as yet fully understood. Closed for comment; 0 Comments.
- 24 Oct 2014
- Working Paper Summaries
Individual Experience of Positive and Negative Growth Is Asymmetric: Global Evidence from Subjective Well-being Data
Are individuals more sensitive to losses than gains in macroeconomic growth? The authors analyze subjective well-being data drawn from three large data sets to investigate whether economic downturns are associated with decreases in individual well-being that are significantly larger than increases in well-being from equivalent upswings. The authors argue that public policy discussions focusing on the benefits of economic growth often overlook and should consider the psychological toll that recessions may create. Key concepts include: Individuals experience losses more acutely than gains in a macroeconomic setting. Recession years are significantly associated with losses in well-being. The question whether people are more sensitive to losses than equivalent gains in economic growth relates to the famous behavioral finding on individual loss aversion that underpins prospect theory (Kahneman and Tversky, 1979). Closed for comment; 0 Comments.
- 01 Oct 2014
- Working Paper Summaries
Who Runs the International System? Power and the Staffing of the United Nations Secretariat
National governments frequently pull strings to get their citizens appointed to senior positions in international institutions. For the United Nations' executive arm, the Secretariat—which plays a plays a key role in agenda-setting for the various deliberative UN organs, as well as managing global peace-keeping operations—there is keen competition among nations over the staffing of approximately 80 senior positions. Which nations therefore have been successful in controlling this institution? What factors have allowed them to do so? In this paper the authors examine the nationality of the most senior officials in the United Nations Secretariat over the last sixty years. Findings show that democracies, countries that invest in bilateral diplomacy, and economically/militarily powerful countries are the most effective at placing staff in the Secretariat. Furthermore, Western Europe and its offshoots have retained control over a disproportionate share of positions in the Secretariat even while their share of global GDP and population has fallen. Key concepts include: The power to control international institutions is of significant concern to governments around the world. The United Nations is arguably the world's most representative international organization. Even so, it was set up by a particular set of nations, the victors of the second world war, with the goal of sustaining a certain kind of world order. In spite of significant changes in the balance of global economic power over the past decades, the post-World War II balance of control at the United Nations has been largely sustained. Nordic countries are in a far more influential international position than the size of their population or economy would suggest. Top positions are dominated by rich democracies: the five most overrepresented countries in the Secretariat are Sweden, Norway, Finland, New Zealand, and Ireland. The United States is overrepresented, and China is significantly underrepresented. In spite of the decline in US influence, the Secretariat remains pro-American relative to the world at large. Closed for comment; 0 Comments.
- 26 Sep 2014
- Working Paper Summaries
Dangerous Expectations: Breaking Rules to Resolve Cognitive Dissonance
Before completing a task, we form expectations about its difficulty and of how well we will perform on it. It is psychologically uncomfortable to perform worse than we expected. This paper proposes that individuals are more likely to break rules if they have been led to expect that achieving high levels of performance will be easy rather than difficult. The authors argue that this phenomenon occurs because of the heightened cognitive dissonance people experience when their performance expectations go unmet. Consistent with these arguments, across three studies people were more likely to break rules when have been led to believe that performing well will be easy rather than hard. The authors also show that differences in rule breaking are not due to differences in legitimate performance as a function of how easy people expect the task to be or whether their expectations are set explicitly (by referring to others' performance, Study 1) or implicitly (as implied by their own prior performance, Study 2). In Study 3, the authors also show that cognitive dissonance triggered by unmet expectations drives these effects. These results have important implications for the ways in which colleges are setting students' expectations, as well as broader implications for how we set expectations in professional environments. Key concepts include: Academic and professional environments need to realistically manage how well their students and employees, respectively, should expect to perform. When people experience a disconnect between their expectations and reality, they are more likely to engage in dysfunctional behaviors in the form of rule breaking, even when breaking rules means crossing ethical boundaries. Closed for comment; 0 Comments.
- 10 Sep 2014
- Working Paper Summaries
Don’t Take ‘No’ for an Answer: An Experiment with Actual Organ Donor Registrations
More than 10,000 people in the United States die each year while waiting for an organ transplant. Policymakers and some economists who have tried to increase the rates of organ transplantation have focused on changing the registration question—usually asked when people renew their driver's license—from a simple opt-in to one in which potential donors have the opportunity to make an active "yes" or "no " choice. The authors provide the first concrete evidence of whether active choice affects registration decisions about organ donation. Somewhat surprisingly, the results suggest that not only does active choice not increase registration, it may decrease the transplantation rate by suggesting to next-of-kin that unregistered donors actively chose not to donate. At the same time, however, experimental results suggest other ways to increase the rates of organ donor registration. For example, people are 22 times more likely to add themselves to the registry than remove themselves from the registry, even though they had been asked previously about organ donor registration. This suggests the effectiveness of making a repeated appeal for organ donor registration. In addition, giving people more information about organ donation increases registration rates. Key concepts include: Giving people the opportunity to make an active choice about donation rather than a simple opt-in does not increase, and may decrease, organ donor registration rates. Asking more than once for organ donation increases the number of donors. We shouldn't assume that "no" is a final answer (i.e., don't take no for an answer). People who are registered donors are unlikely to remove themselves from the registry when given the opportunity to do so Giving people information about the benefits of donation, namely providing a list of organs that might be donated, increases the likelihood of registration. Increasing the number of individuals who register as deceased donors is just one way of addressing the need for transplantable organs. Kidney exchange, in which incompatible patient-donor pairs are matched, has facilitated transplantation of kidneys from living donors. Closed for comment; 0 Comments.
- 25 Aug 2014
- Working Paper Summaries
Agglomeration and Innovation
It is well known that population and economic activity are spatially concentrated or clustered. But why does innovative activity tend to occur in clusters? What is the best way to measure this concentration? And what is the economic impact of this concentration? The authors take up these and related questions in this paper, a chapter of the forthcoming Handbook of Regional and Urban Economics. They summarize recent literature on agglomeration and innovation and explore how it relates to economic performance and growth. They also discuss the difference between invention vs. innovation and how these forces are measured; review patterns of innovation and agglomeration; and describe formal theories linking agglomeration and innovation. The authors also discuss research on other factors that work to sustain agglomeration clusters, link global clusters together, promote large vs. small company innovation, and similar phenomena. Throughout, they highlight important areas for future research. Key concepts include: Empirical measurement in urban economic studies has made substantial strides forward in the last two decades, but much remains to be learned. We need better insight into the long-term lifecycles of innovative places. This is true within countries-innovation cores have shifted between Detroit, Boston, Silicon Valley, etc. and will continue to do so-but also true across countries. Many policymakers want to foster "the next Silicon Valley" type initiatives but they need better guidance. This is so in advanced economies, in nations currently looking to transition from resource dependence to a knowledge-based economy, in developing countries looking to leapfrog growth stages, and everywhere in between. Innovation comes in many shapes and sizes-except in economic studies. Ideally, future research will develop a richer accounting of the variations of innovation and how they related to the traits of clusters. Closed for comment; 0 Comments.
Transaction Cost Economics in the Digital Economy: A Research Agenda
The increasing dominance of the digital economy has brought new questions about the interplay of organizations and the market-based ecosystem. Transaction Cost Economics theory is a useful lens to understand firm organization and possibly guide policy and regulation.