Publications
- December 2014
- Management Science
When Performance Trumps Gender Bias: Joint Versus Separate Evaluation
Abstract—We examine a new intervention to overcome gender biases in hiring, promotion, and job assignments: an "evaluation nudge," in which people are evaluated jointly rather than separately regarding their future performance. Evaluators are more likely to focus on individual performance in joint than in separate evaluation and on group stereotypes in separate than in joint evaluation, making joint evaluation the money-maximizing evaluation procedure. Our findings are compatible with a behavioral model of information processing and with the System 1/System 2 distinction in behavioral decision research where people have two distinct modes of thinking that are activated under certain conditions.
- December 2014
- IEEE Security & Privacy
Accountable? The Problems and Solutions of Online Ad Optimization
Abstract—Online advertising might seem to be the most measurable form of marketing ever invented. Comprehensive records can track who clicked what ad-and often who saw what ad-to compare those clicks with users' subsequent purchases. Ever-cheaper IT makes this tracking cost effective and routine. In addition, a web of interlocking ad networks trades inventory and offers to show the right ad to the right person at the right time. It could be a marketer's dream. However, these benefits are at most partially realized. The same institutions and practices that facilitate efficient ad placement can also facilitate fraud. The networks that should be serving advertisers have decidedly mixed incentives, such as cost savings from cutting corners, constrained in part by long-run reputation concerns, but only if advertisers ultimately figure out when they're getting a bad deal. Legal, administrative, and logistical factors make it difficult to sue even the worst offenders. And sometimes an advertiser's own staff members prefer to look the other way. The result is an advertising system in which a certain amount of waste and fraud has become the norm, despite the system's fundamental capability to offer unprecedented accountability.
Publisher's link: http://www.benedelman.org/publications/accountable-adfraud-ieeesp-nov2014.pdf
- December 2014
- Journal of Financial Economics
The Cost of Friendship
Abstract—We investigate how personal characteristics affect people's desire to collaborate and whether this attraction enhances or detracts from performance in venture capital. We find that venture capitalists who share the same ethnic, educational, or career background are more likely to syndicate with each other. This homophily reduces the probability of investment success, and the detrimental effect is most prominent for early-stage investments. A variety of tests show that the cost of affinity is most likely attributable to poor decision making by high-affinity syndicates after the investment is made. These results suggest that "birds-of-a-feather-flock-together" effects in collaboration can be costly.
- December 2014
- American Economic Review
How Elastic Are Preferences for Redistribution? Evidence from Randomized Survey Experiments
Abstract—We analyze randomized online survey experiments providing interactive, customized information on U.S. income inequality, the link between top income tax rates and economic growth, and the estate tax. The treatment has large effects on views about inequality but only slightly moves tax and transfer policy preferences. An exception is the estate tax-informing respondents of the small share of decedents who pay it doubles support for it. The small effects for all other policies can be partially explained by respondents' low trust in government and a disconnect between concerns about social issues and the public policies meant to address them.
Publisher's link: http://www.hbs.edu/faculty/Publication%20Files/kuziemko%20norton%20saez%20stantcheva_45dd17c7-a8fa-4b91-9ba2-51d5e7349750.pdf
- December 2014
- Organization Science
Team Scaffolds: How Mesolevel Structures Support Role-based Coordination in Temporary Groups
Abstract—This paper shows how mesolevel structures support effective coordination in temporary groups. Prior research on coordination in temporary groups describes how roles encode individual responsibilities so that coordination between relative strangers is possible. We extend this research by introducing key tenets from team effectiveness research to theorize when role-based coordination might be more or less effective. We develop these ideas in a multi-method study of a hospital emergency department (ED) redesign. Before the redesign, people coordinated in ad-hoc groupings, which provided flexibility because any nurse could work with any doctor, but these groupings were limited in effectiveness because people were not accountable to each other for progress, did not have shared understanding of their work, and faced interpersonal risks when reaching out to other roles. The redesign introduced new mesolevel structures that bounded a set of roles (rather than a set of specific individuals, as in a team) and gave them collective responsibility for a whole task. We conceptualized the mesolevel structures as team scaffolds and found that they embodied the logic of both role and team structures. The team scaffolds enabled small group interactions to take the form of an actual team process with team-level prioritizing, updating, and helping, based on new-found accountability, overlapping representations of work, and belonging-despite the lack of stable team composition. Quantitative data revealed changes to the coordination patterns in the ED (captured through a two-mode network) after the team scaffolds were implemented and showed a 40% improvement in patient throughput time.
Working Papers
Transition to Clean Technology
Abstract—We develop a microeconomic model of endogenous growth where clean and dirty technologies compete in production and innovation, in the sense that research can be directed to either clean or dirty technologies. If dirty technologies are more advanced to start with, the potential transition to clean technology can be difficult both because clean research must climb several rungs to catch up with dirty technology and because this gap discourages research effort directed towards clean technologies. Carbon taxes and research subsidies may nonetheless encourage production and innovation in clean technologies, though the transition will typically be slow. We characterize certain general properties of the transition path from dirty to clean technology. We then estimate the model using a combination of regression analysis on the relationship between R&D and patents, and simulated method of moments using microdata on employment, production, R&D, firm growth, entry, and exit from the U.S. energy sector. The model's quantitative implications match a range of moments not targeted in the estimation quite well. We then characterize the optimal policy path implied by the model and our estimates. Optimal policy makes heavy use of research subsidies as well as carbon taxes. We use the model to evaluate the welfare consequences of a range of alternative policies.
Download working paper: http://ssrn.com/abstract=2533977
Lobbying Behavior of Governmental Entities: Evidence from Public Pension Accounting Rules
Abstract—We examine the lobbying behavior of state governments in the development of recently issued public pension accounting standards GASB 67 and 68. Consistent with opportunistic motivations, we find that states' opposition to the liability increasing provisions embedded in these standards is increasing in the severity of pension plan underfunding, state budget deficits, and the use of high discount rates. Further we find opposing states are subject to more stringent balanced budget requirements and greater political pressure from unions. By contrast, we find evidence that the support from financial statement users for these provisions is amplified in states with poorly funded plans and large budget deficits, suggesting government lobbying is misaligned with a public interest perspective. We also find evidence that user support varies by type: internal users (public employees) overwhelmingly oppose the standards, relative to external users (credit analysts and the broader citizenry), but the difference is moderated in states with constitutionally protected benefits. This finding is consistent with the expectation that pension accounting reform will motivate cuts in pension benefits as opposed to increased levels of funding from the governments. Analyses of 2011 and 2012 state pension reforms confirm that states opposed to accounting reform are more likely to cut pension benefits.
Download working paper: http://ssrn.com/abstract=2533492
How Should We Pay for Health Care?
Abstract—Improving provider incentives and reimbursement must become a central component in health care reform. Reimbursement through bundled payments-a single payment that covers all the procedures, tests, drugs, devices, and services during inpatient, outpatient, and rehabilitative care for a patient's medical condition-is the only approach that aligns providers, payers, and suppliers in a healthy competition to increase patient value. In this article, we articulate the principles of value‐based bundled payments, how such bundles should be constructed, and why we believe this reimbursement method best aligns everyone's interests around value. We describe how recent improvements in measuring outcomes and costs have overcome past barriers to wide-scale adoption of bundled payments. We conclude by describing how bundled payments can transform competition in health care and their longer‐term implications for providers, payers, employers, and patients.
Download working paper: http://www.hbs.edu/faculty/Publication%20Files/15-041_1b93ae87-97ad-46c0-9a76-1169cdf513c2.pdf
Henry A. Kissinger as Negotiator: Background and Key Accomplishments
Abstract—Following a brief summary of Henry A. Kissinger's career, this paper describes three of his most pivotal negotiations: the historic establishment of U.S. diplomatic relations with the People's Republic of China, the easing of geopolitical tension with the Soviet Union, symbolized by the signing of the first Strategic Arms Limitation Treaty (SALT I), and the mediation of the agreement on Sinai disengagement between Egypt and Israel. An appendix lists other important negotiations in which Kissinger played key roles.
Download working paper: http://ssrn.com/abstract=2532613
Competing with Complementors: An Empirical Look at Amazon.com
Abstract—Platform owners sometimes enter complementors' product spaces to compete against them directly. Prior studies have offered two possible explanations for such entries: platform owners may target the most successful complementors so as to appropriate value from their innovations, or they may target poor performing complementors to improve the platforms' overall quality. Using data from Amazon.com, we analyze the patterns of Amazon's entries into its third-party sellers' product spaces. We find evidence consistent with the former explanation: that the likelihood of Amazon's entry is positively correlated with the popularity and customer ratings of third-party sellers' products. Amazon's entry reduces the shipping costs of affected products and hence increases their demand. Results also show that third-party sellers affected by Amazon's entry appear to be discouraged from growing their businesses on the platform subsequently.
Download working paper: http://ssrn.com/abstract=2533616
Cases & Course Materials
- Harvard Business School Case 815-002
adidas Group: IT Multi-Sourcing at Adidas
This case describes the design and implementation of an IT-multi-sourcing strategy at a large global sportswear company, the adidas Group, which is headquartered in Germany. To help increase the benefits and reduce the risks of its sourcing arrangements, adidas carefully selected two tier-2 vendors to work with its primary tier-1 vendor, a large Indian outsourcing firm that it had worked with closely for over a decade. The management of the multi-sourcing arrangement is posing a number of challenges. The chief information officer is considering a number of options to ensure the continued success of the multi-sourcing strategy, including restructuring the IT group, developing the skills of its staff, and starting a captive center.
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- Harvard Business School Case 314-056
PAREXEL International Corp.: Stages of Innovation
Through the lens of biopharmaceutical contract research organization (CRO) PAREXEL, this case traces the evolution of the firm as it reinvents itself in response to the transformation of the CRO sector from a small, secondary cluster of firms into a major player with essential capabilities for global drug development. The case begins as PAREXEL is pursuing an expensive globalization and IT strategy while many of its competitors focus on cost cutting. Over the prior 20 years, CEO Josef von Rickenbach had grown PAREXEL into a billion-dollar company by taking calculated risks and making bold investments based on anticipated industry trends and client demand. Now, despite slowing demand for CRO services, PAREXEL is betting that a global footprint and technology capabilities will become its key future competitive advantage. Near the end of the case, the timing transitions to a decade after Rickenbach made this strategic decision, describing the development of the industry and PAREXEL's place within it.
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- Harvard Business School Case 615-027
Mayo Clinic: The 2020 Initiative
Describes the challenges facing Dr. John Noseworthy, president and CEO, in implementing a long-term strategy for the growth of the Mayo Clinic-a leading academic medical center with a reputation for excellence in tertiary and quaternary health care. The case highlights the concurrent forces of regional and national competition and federal health care reform as factors complicating the plans of Mayo Clinic to grow through several channels. Students must ultimately decide whether Mayo Clinic should focus its future growth on its current areas of expertise (regional provision of integrated medical care and international provision of tertiary and quaternary care), new opportunities in a broader range of services and treatment channels (e.g., telemedicine, mobile health, enterprise learning, and training for other health care systems), or some combination of these opportunities.
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- Harvard Business School Case 915-404
HandsOn Bay Area: Scaling Up Community Service
HandsOn Bay Area, an organization devoted to the performance of (and development of leaders for) community service, is undergoing a significant (and internally controversial) shift in its business model from "retail" projects involving individual volunteers to "wholesale" projects with for-profit partners from the San Francisco Bay Area. Its CEO has to decide whether and how to respond to a request from Google to engage 5,500 Google employees in community service activities during a one-week period. It's a far larger project than the organization has ever undertaken and one requiring many added resources. Among the risks is the possible damage to the HandsOn reputation among Silicon Valley partners if the effort does not succeed.
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- Harvard Business School Case 915-406
HandsOn Bay Area: Scaling Up Community Service (B)
HandsOn Bay Area, an organization devoted to the performance of (and development of leaders for) community service, has experienced a significant turnaround from near bankruptcy to the prospect of a continued stream of surpluses. Now its CEO faces the challenge of maintaining the organization's focus in the face of an increasing number of ideas for new services that the organization could provide.
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- Harvard Business School Case 415-037
Sanford C. Bernstein Goes to Asia
Sanford C. Bernstein, a premier sell-side research firm, is expanding globally. Three years after launching Bernstein's Asian business, senior management has appointed Ghislain de Charentenay, a six-year sales veteran of the firm, as director of Asian research in Hong Kong. He is the first director of research Bernstein has put on the ground in Asia. As the firm faces the challenging realities of scaling its Asian business and meeting growing client demand for global products, de Charentenay must figure out how best to support the senior research analysts in leveraging their franchises. And with a recent wave of attrition among Bernstein's research associate ranks in Hong Kong, de Charentenay and the management team must also consider where to focus their recruiting efforts.
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- Harvard Business School Case 515-049
Customer Lifetime Value (CLV) vs. Customer Lifetime Return on Investment (CLROI)
No abstract available.
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- Harvard Business School Case 415-029
Carla Ann Harris at Morgan Stanley
No abstract available.
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- Harvard Business School Case 214-046
Lending Club: Time to Join?
No abstract available.
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- Harvard Business School Case 215-016
Evanston Capital Management
No abstract available.
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- Harvard Business School Case 715-409
Radiometer, 2003
In 2003, Radiometer was the world's leading supplier of blood gas analysis equipment and accessories for critical care patients. Based in Denmark, Radiometer sold through a combination of sales subsidiaries and distributors around the world and generated sales of over DKr 1,791 million ($272 million). Blood gas analysis formed part of the $27.7 billion in-vitro diagnostic market. Although sales were strong, Radiometer remained focused on its future. The market for blood gas analysis was growing slowly, driven mainly by new technologies that threatened to displace the high volume testing equipment that Radiometer supplied. Radiometer's recent attempts at competing in these new technologies had failed. Should it remain focused on blood gas analysis and redouble its efforts? Or should it turn to other opportunities for growth? CEO and controlling stockholder, Johan Schroder, had denied rumors of a potential sale, but an acquisition by a stronger partner could help the company expand into the United States. How should the company position itself for future success?
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- Harvard Business School Case 715-410
Radiometer, 2013
In 2013, Radiometer continued to lead the world in blood gas analysis equipment and accessories, selling direct and through distributors to hospital central laboratories, point-of-care locations, and non-hospital medical locations. Founded in 1935 and based in Denmark, Radiometer was acquired in January 2004 by U.S.-based Danaher Corporation. Under Danaher's direction, Radiometer began an intensive program of process improvements using the Danaher Business System (DBS), an iterative tool system and company culture that sought to continuously improve the company's growth and lean and leadership capabilities. However, as CEO Peter Kürstein reviewed the successes of the last 10 years, he conceded that Radiometer still faced significant challenges. Progress in the U.S., the world's largest market, remained elusive. How would Radiometer break through in the U.S.? Then there was the issue of long-term growth. Roche and Siemens were investing heavily in multiple diagnostics segments. How should Radiometer respond? Which other segments of diagnostics should Radiometer consider? Quest Diagnostics was selling HemoCue, a Swedish-based global niche leader in hemoglobin testing. Would acquiring them make sense for Radiometer?
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