First Look

Abstract—The period leading up to the Great Depression witnessed the rise of the economic forecasters, pioneers who sought to use the tools of science to predict the future, with the aim of profiting from their forecasts. This book chronicles the lives and careers of the men who defined this first wave of economic fortune tellers, men such as Roger Babson, Irving Fisher, John Moody, C. J. Bullock, and Warren Persons. They competed to sell their distinctive methods of prediction to investors and businesses and thrived in the boom years that followed World War I. Yet, almost to a man, they failed to predict the devastating crash of 1929. Despite their failures, this first generation of economic forecasters helped to make the prediction of economic trends a central economic activity and shed light on the mechanics of financial markets by providing a range of statistics and information about individual firms. They also raised questions that are still relevant today. What is science and what is merely guesswork in forecasting? What motivates people to buy forecasts? Does the act of forecasting set in motion unforeseen events that can counteract the forecast made?

Publisher's link: http://press.princeton.edu/titles/10057.html

Abstract—This volume contains a selection of 42 foundational articles on the discipline of business history written between 1934 and the present day by scholars based in the United States, Europe, Asia, and Latin America. A wide-ranging editorial introduction describes the formation and evolution of the discipline from its origins at the Harvard Business School in the late 1920s. Over the following century, the editors show that the discipline and its practitioners often found themselves on the margins of academic discourses and their own institutions. There was a constant struggle to define the borders of the field and the central research questions that it sought to answer. However, the commitment to engage with the complexities of business and the disinclination to rely on models with simplistic assumptions about business behavior also enabled business history to be highly creative and, at times, to exercise a huge impact on management studies more generally, especially strategy and the study of entrepreneurship.

Publisher's link: http://www.amazon.com/Business-History-Elgar-Walter-Friedman/dp/1781955263/ref=sr_1_2?s=books&ie=UTF8&qid=1389789862&sr=1-2&keywords=Business+History+Jones+and+Friedman

Abstract—Empirical studies on information communication technologies (ICT) typically aggregate the "information" and "communication" components together. We show theoretically and empirically that this is problematic. Information and communication technologies have very different effects on the decisions taken at each level of an organization. Better information access pushes decisions down, as it allows for superior decentralized decision making without an undue cognitive burden on those lower in the hierarchy. Better communication pushes decisions up, as it allows employees to rely on those above them in the hierarchy to make decisions. Using an original dataset of firms from the U.S. and seven European countries we study the impact of ICT on worker autonomy, plant manager autonomy, and span of control. Consistent with the theory, we find that better information technologies (Enterprise Resource Planning, ERP, for plant managers and CAD/CAM for production workers) are associated with more autonomy and a wider span of control. By contrast, communication technologies (like data networks) decrease autonomy for both workers and plant managers. Treating technology as endogenous using instrumental variables (distance from the birthplace of ERP and heterogeneous telecommunication costs arising from different regulatory regimes) strengthens our results.

Publisher's link: http://www.people.hbs.edu/rsadun/Distinct_Effects_11-023.pdf

Abstract—This book is a comprehensive reference work exploring recent changes and future trends in the principles that govern institutional investors and fiduciaries. A wide range of contributors offer new perspectives on dynamics that drive the current emphasis on short-term investment returns. Moreover, they analyze the forces at work in markets around the world, which are bringing into sharper focus the systemic effects that investment practices have on the long-term stability of the economy and the interests of beneficiaries in financial, social, and environmental sustainability. This volume provides a global and multi-faceted commentary on the evolving standards governing institutional investment, offering guidance for students, researchers, and policy makers interested in finance, governance, and other aspects of the contemporary investment world. It also provides investment, business, financial media, and legal professionals with the tools they need to better understand and respond to new financial market challenges of the twenty-first century.

Publisher's link: http://www.cambridge.org/us/academic/subjects/management/governance/cambridge-handbook-institutional-investment-and-fiduciary-duty

Abstract—Psychological explanations of group genesis often require population heterogeneity in identity or other characteristics, whether deep (e.g., religion) or superficial (e.g., eye color). We use game-theoretical agent-based models to explore group genesis in homogeneous populations and find robust group formation with just two basic principles: reciprocity and transitivity. These emergent groups demonstrate in-group cooperation and out-group defection, even though agents lack common identity. Group formation increases individual payoffs, and group structure is robust to varying levels of reciprocity and transitivity. Increasing population size increases group size more than group number, and manipulating baseline trust in a population has predictable effects on group genesis. An interactive online demonstration enables first-hand exploration of the parameter space (www.mpmlab.org/groups), and available source code (supplementary materials) provides a guide to implementing psychological agent-based models.

Publisher's link: http://www.hbs.edu/faculty/Pages/download.aspx?name=gray%20rand%20et%20al.pdf

Abstract—The breadth of human generosity is unparalleled in the natural world, and much research has explored the mechanisms underlying and motivating human prosocial behavior. Recent work has focused on the spread of prosocial behavior within groups through paying-it-forward, a case of human prosociality in which a recipient of generosity pays a good deed forward to a third individual, rather than back to the original source of generosity. While research shows that human adults do indeed pay forward generosity, little is known about the origins of this behavior. Here, we show that both capuchin monkeys (Cebus apella) and 4-year-old children pay forward positive and negative outcomes in an identical testing paradigm. These results suggest that a cognitively simple mechanism present early in phylogeny and ontogeny leads to paying forward positive, as well as negative, outcomes.

Publisher's link: http://www.hbs.edu/faculty/Pages/download.aspx?name=leimgruber%20et%20al.pdf

Abstract—We review and assess research findings from 120+ papers in accounting, finance, and law to evaluate the impact of the Sarbanes-Oxley Act. We describe significant developments in how the Act was implemented and find that despite severe criticism, the Act and institutions it created have survived almost intact since enactment. We report survey findings from informed parties that suggest that the Act has produced financial reporting benefits. While the direct costs of the Act were substantial and fell disproportionately on smaller companies, costs have fallen over time and in response to changes in its implementation. Research about indirect costs such as loss of risk taking in the U.S. is inconclusive. The evidence for and social welfare implications of claimed effects such as fewer IPOs or loss of foreign listings are unclear. Financial reporting quality appears to have gone up after SOX, but research on causal attribution is weak. On balance, research on the Act's net social welfare remains inconclusive. We end by outlining challenges facing research in this area and propose an agenda for better modeling costs and benefits of financial regulation.

Publisher's link: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2343108