Leadership & Organizational Behavior

Profession- and job-related social events such as mixers are viewed by organizations and individuals as incubators of interpersonal ties, as arenas in which individuals can initiate new and different contacts. Theory and evidence on network dynamics, however, suggests that such outcomes may be unlikely, because past ties constrain future contacts, and because homophily inhibits contact between different types of people. We investigate whether guests at a social mixer "mix" despite these influences.

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Given the cross-sectional and temporal variation in their liquidity, emerging equity markets provide an ideal setting to examine the impact of liquidity on expected returns. Our main liquidity measure is a transformation of the proportion of zero daily firm returns, averaged over the month. We find that it significantly predicts future returns, whereas alternative measures such as turnover do not.

This paper examines the preferences of advice seekers for human information sources. We focus on the case in which advice providers can be people with high or low technical expertise (high in technical knowledge) and/or socially connected (connected to many others). Somewhat contrary to intuition, information sources who are high on social connectivity are shown to be relatively more attractive for more innovative products. Consistent with this, a meta-analysis indicates that the correlation between knowledge and opinion leadership is indeed lower for more innovative products.

Ernst & Young hosted this 2007 roundtable with the goal of providing a better understanding of the challenges and best practices of using valuation analysis to support executive decisions. Panelists included Richard Ruback of the Harvard Business School, Trevor Harris of Morgan Stanley, Aileen Stockburger of Johnson & Johnson, Dino Mauricio of General Electric, Christian Roch of BNP Paribas, Ken Meyers of Siemens Corporation, and Charles Kantor of Lehman Brothers. Jeff Green of Ernst & Young moderated.

Investment decisions frequently require coordination across multiple divisions of a firm. This paper explores a class of capital budgeting mechanisms in which the divisions issue reports regarding the anticipated profitability of proposed projects. To hold the divisions accountable for their reports, the central office ties the project acceptance decision to a system of cost allocations comprised of depreciation and capital charges.

I develop a model of group decision-making, in which a committee generates proposals and holds open discussions, but the ultimate decision is either taken by a leader (decision by authority) or by majority vote. Optimal communication processes are studied that combine both cheap talk statements (proposals) and costly state verification (discussions). I show that by favouring one particular agent—the leader—authoritative decisionmaking reduces rent-seeking discussions and often results in a higher decision-quality relative to majority decision-making.

Theoretical work on the pricing of information reveals that competition between independent information sellers can result in prices that are negatively related to the quality or reliability of the information. The theory argues that when information products are unreliable (low quality), independent products become complements, and competition can increase prices. The goal of this study is to test empirically the theory's counterintuitive predictions with the help of an experimental market based on a business simulation.

The article explores the history of the U.S. Institutional Review Board (IRB) system and its penetration into local institutions. The author found that the Code of Federal Regulations Governing the Protection of Human Subjects in Research develops categories of risk for which various types of medical research are required. In this regard, research or reviews identified with the highest level of assessed risk can only be considered by a convened panel of IRB members.