The Past, Present, and Future of Brand Research
Aggregate Demand and Aggregate Supply Effects of Covid-19: A Real-time Analysis
We extract aggregate demand and supply shocks for the US economy from real-time survey data on inflation and real GDP growth using a novel identification scheme. Our approach exploits non-Gaussian features of macroeconomic forecast revisions and imposes minimal theoretical assumptions. After verifying that our results for US post-war business cycle fluctuations are largely in line with the prevailing consensus, we proceed to study output and price fluctuations during COVID-19. We attribute two thirds of the decline in 2020:Q1 GDP to a negative shock to aggregate demand.
Biased Programmers? Or Biased Data? A Field Experiment in Operationalizing AI Ethics
Good Carry, Bad Carry
We distinguish between "good" and "bad" carry trades constructed from G-10 currencies. The good trades exhibit higher Sharpe ratios and sometimes positive return skewness, in contrast to the bad trades that have both substantially lower Sharpe ratios and highly negative return skewness. Surprisingly, good trades do not involve the most typical carry currencies like the Australian dollar and Japanese yen.
Power leads to action because it releases the psychological brakes on action
Why does power lead to action? Theories of power suggest it leads to action because it presses the psychological gas pedal. A review of two decades of research finds, instead, that power releases the psychological brakes on action. Power releases the psychological brakes on action by making failure seem less probable and feel less painful, thereby decreasing the downside risks of action. Power releases the psychological brakes on action by shrouding the feelings and thoughts of others, thereby diminishing the perceived social costs of action.
Repo Priority Right and the Bankruptcy Code
This paper shows that when the bankruptcy code protects the creditors' rights with no impairments to secured creditors, issuance of debt such as repo with exemption from automatic stay adds no value. When the bankruptcy process admits violations of absolute priority rules or results in collateral impairments to secured creditors, the liability structure includes short-term debt, with safe harbor protection when the pledged collateral satisfies a minimum liquidity threshold.
Should Hospitals Keep Their Patients Longer? The Role of Inpatient Care in Reducing Post-Discharge Mortality
The Centers for Medicare & Medicaid Services (CMS) and the National Quality Forum have endorsed the 30-day mortality rate as an important indicator of hospital quality. Concerns have been raised, however, as to whether post-discharge mortality rates are reasonable measures of hospital quality as they consider the frequency of an event that occurs after a patient is discharged and no longer under the watch and care of hospital staff. Estimating the causal effect of length-of-stay (LOS) on post-discharge mortality from retrospective data introduces a number of econometric challenges.
What Drives Anomaly Returns?
We decompose the returns of five well-known anomalies into cash flow and discount rate news. Common patterns emerge across the five factor portfolios and their mean variance efficient (MVE) combination. Whereas discount rate news predominates in market returns, systematic cash flow news drives the returns of anomaly portfolios and their MVE combination with the market portfolio. Anomaly cash flow and discount rate shocks are largely uncorrelated with market cash flow and discount rate shocks and with business cycle fluctuations.
The confidence gap predicts the gender pay gap among STEM graduates
Women make less than men in some science, technology, engineering, and math (STEM) fields. While explanations for this gender pay gap vary, they have tended to focus on differences that arise for women and men after they have worked for a period of time. In this study we argue that the gender pay gap begins when women and men with earned degrees enter the workforce. Further, we contend the gender pay gap may arise due to cultural beliefs about the appropriateness of women and men for STEM professions that shape individuals’ self-beliefs in the form of self-efficacy.
Do Workers Comply with Salary History Bans? A Survey on Voluntary Disclosure, Adverse Selection, and Unraveling
Salary history bans forbid employers from asking job candidates to disclose their salaries. However, applicants can still volunteer this information. Our theoretical model predicts the effect of these laws varies by how workers comply. Our survey of Americans in the labor force finds candidates fall into three compliance types: 25% always disclose their salary whether asked or not, 17% never disclose, and 58% comply with the ban (disclosing only when asked). Importantly, compliance type varies by demographics (e.g.
New Methods in the Cross-Section of Stock Returns
The Impact of Step-Down Unit Care on Patient Outcomes After Intensive Care Unit Discharge
Objectives:
To examine whether and how step-down unit admission after ICU discharge affects patient outcomes.
Design:
Retrospective study using an instrumental variable approach to remove potential biases from unobserved differences in illness severity for patients admitted to the step-down unit after ICU discharge.
Setting:
Ten hospitals in an integrated healthcare delivery system in Northern California.
Patients:
The Managerial Effects of Algorithmic Fairness Activism
How do ethical arguments affect AI adoption in business? We randomly expose business decision-makers to arguments used in AI fairness activism. Arguments emphasizing the inescapability of algorithmic bias lead managers to abandon AI for manual review by humans and report greater expectations about lawsuits and negative PR. These effects persist even when AI lowers gender and racial disparities, and when engineering investments to address AI fairness are feasible. Emphasis on status quo comparisons yields opposite effects.
International Currencies and Capital Allocation
A Review of the Fads and Fashion Literature for the Digital Age
Using Blockchain in Decision-Making that Benefits the Public Good
On the Experience and Engineering of Consumer Pride, Consumer Excitement, and Consumer Relaxation in the Marketplace
This article presents new conceptual and managerial insights about consumer experiences of positive emotions in the marketplace and how to engineer these emotional experiences for business purposes. Specifically, we provide an in-depth conceptual analysis of three positive emotions that are of high relevance for marketers: (1) consumer pride, (2) consumer excitement, and (3) consumer relaxation.
The Evolving World of Research in Marketing and the Blending of Theory and Data
Why East Asians but not South Asians are underrepresented in leadership positions in the United States
Well-educated and prosperous, Asians are called the “model minority” in the United States. However, they appear disproportionately underrepresented in leadership positions, a problem known as the “bamboo ceiling.” It remains unclear why this problem exists and whether it applies to all Asians or only particular Asian subgroups. To investigate the mechanisms and scope of the problem, we compared the leadership attainment of the two largest Asian subgroups in the United States: East Asians (e.g., Chinese) and South Asians (e.g., Indians).
Are Women More Creative Than Men? The Gendered Effects of Networks and Genres on Musical Creativity
Women participate in cultural activities such as art, music, and literature at higher rates than men, yet as creative professionals, their career achievements tend to lag behind men’s. Scholars interested in this puzzle have largely focused on gender bias in the evaluations of audiences and other gatekeepers. In this paper, we identify differences in the relative novelty of creative products, which we argue are shaped by the conditions under which male and female artists produce their work.
India in the coming ‘climate G2’?
China and the United States are the two largest emitters of greenhouse gases, making them pivotal players in global climate negotiations. Within the coming decade, however, India is set to become the most important counterpart to the United States, as it overtakes China as the country with the most at stake depending on the type of global burden-sharing agreements reached, thus becoming a member of the ‘Climate G2’.
A Theoretical Analysis Connecting Conservative Accounting to the Cost of Capital
Flights to Safety
We identify flight-to-safety (FTS) days for 23 countries using only stock and bond returns and a model averaging approach. FTS days comprise less than 2% of the sample, and are associated with a 2.7% average bond-equity return differential and significant flows out of equity funds and into government bond and money market funds. FTS represents flights to both quality and liquidity in international equity markets, but mainly a flight-to-quality in the US corporate bond market.
Optimizing stress: An integrated intervention for regulating stress responses
The dominant cultural valuation of stress is that it is “bad for me.” This valuation leads to regulatory goals of reducing or avoiding stress. In this article, we propose an alternative approach—stress optimization—which integrates theory and research on stress mindset (e.g., Crum, Salovey, & Achor, 2013) and stress reappraisal (e.g., Jamieson, Mendes, Blackstock, & Schmader, 2010) interventions. We further integrate these theories with the extended process model of emotion regulation (Gross, 2015).
The Evolving World of Research in Marketing and the Blending of Theory and Data
A Consensus-Based Transparency Checklist
Autonomous Shopping Systems: Identifying and Overcoming Barriers to Consumer Adoption
Technologies are becoming increasingly autonomous, able to make decisions and complete tasks on behalf of consumers. Virtual assistants already take care of grocery shopping by replenishing used up ingredients while cooking machines prepare these ingredients and implement recipes. In the future, consumers will be able to delegate substantial parts of the shopping process to autonomous shopping systems.
Branding in a Hyperconnected World: Refocusing Theories and Rethinking Boundaries
Technological advances have resulted in a hyperconnected world, requiring a reassessment of branding research from the perspectives of firms, consumers, and society. Brands are shifting away from single ownership to shared ownership, as heightened access to information and people is allowing more stakeholders to cocreate brand meanings and experiences alongside traditional brand owners and managers.
Consumer Reactions to Drip Pricing
This research examines how drip pricing--a strategy whereby a firm advertises only part of a product's price upfront and then reveals additional mandatory or optional fees/surcharges as the consumer proceeds through the buying process--affects consumer choice and satisfaction. Across six studies, we find that when optional surcharges are dripped (vs. revealed upfront) consumers are more likely to initially select a lower base priced option which, after surcharges are included, is often more expensive than the alternative.
Consumers’ Reactions to Drip Pricing
Creating Boundary-Breaking Marketing-Relevant Consumer Research
Consumer research often fails to have broad impact on members of our own discipline, on adjacent disciplines studying related phenomena, and on relevant stakeholders who stand to benefit from the knowledge created by our rigorous research. We propose that impact is limited because consumer researchers have adhered to a set of implicit boundaries or defaults regarding what we study, why we study it, and how we do so. We identify these boundaries and describe how they can be challenged.
Incomplete Market Demand Tests for Kreps-Porteus-Selden Preferences
What does utility maximization subject to a budget constraint imply for intertemporal choice under uncertainty? Assuming consumers face a two period consumption-portfolio problem where asset markets are incomplete, we address this question following both the standard local infinitesimal and finite data approaches. To focus on the separate roles of time and risk preferences, individuals maximize KPS (Kreps-Porteus-Selden) preferences. The consumption-portfolio problem is decomposed into a one period portfolio problem and a two period certainty consumption-saving problem.
Inspiring Brand Positionings with Mixed Qualitative Methods: A Case of Pet Food
Qualitative research is often used by marketers to develop new brand positionings. This case illustrates how two sequentially applied qualitative approaches were used to generate positionings for a pet food brand. The methods included psychologically oriented focus groups and anthropologically informed ethnographies. When implemented independently by a single market research company, the two approaches inspired highly distinctive brand positionings.
Modeling Dynamic Heterogeneity Using Gaussian Processes
Marketing research relies on individual-level estimates to understand the rich heterogeneity of consumers, firms, and products. While much of the literature focuses on capturing static cross-sectional heterogeneity, little research has been done on modeling dynamic heterogeneity, or the heterogeneous evolution of individual-level model parameters. In this work, the authors propose a novel framework for capturing the dynamics of heterogeneity, using individual-level, latent, Bayesian nonparametric Gaussian processes.
Moving the Conceptual Framework Forward: Accounting for Uncertainty
To meet the objectives of financial reporting in the IASB's Conceptual Framework, the "balance-sheet approach" embraced by the Framework is necessary but not sufficient. Critical, but largely overlooked, is the role of uncertainty, which we argue defines the role of accrual accounting as a distinctive source of information for investors when investment outcomes are uncertain. This role is in some sense paradoxical: on the one hand, uncertainty undermines both the balance sheet (because uncertain assets are unrecognized) and the income statement (because mismatching is unavoidable).
Multiperiod Contracting and Salesperson Effort Profiles: The Optimality of "Hockey Stick," "Giving Up" and "Resting on Laurels"
We study multi-period sales-force incentive contracting where salespeople can engage in effort gaming, a phenomenon that has extensive empirical support. Focusing on a repeated moral hazard scenario with two independent periods and a risk-neutral agent with limited liability, we conduct a theoretical investigation to understand which effort profiles the firm can expect under the optimal contract.
Ordering sequential competitions to reduce order relevance: Soccer penalty shootouts
Penalizing the Underdogs? Employment Protection and the Competitive Dynamics of Firm Innovation
Properties of Reciprocity Formulas for the Rogers-Ramanujan Continued Fractions
Search Query Formation by Strategic Consumers
Submitting queries to search engines has become a major way for consumers to search for information and products. The massive amount of search query data available today has the potential to provide valuable information on consumer preferences. In order to unlock this potential, it is necessary to understand how consumers translate their preferences into search queries. Strategic consumers should attempt to maximize the information content of the search results, conditional on a set of beliefs on how the search engine operates.
Speciesism: An Obstacle to AI and Robot Adoption
Once artificial intelligence (AI) is indistinguishable from human intelligence, and robots are highly similar in appearance and behavior to humans, there should be no reason to treat AI and robots differently from humans. However, even perfect AI and robots may still be subject to a bias (referred to as speciesism in this article), which will disadvantage them and be a barrier to their commercial adoption as chatbots, decision and recommendation systems, and staff in retail and service settings.
Stochastic Market Microstructure Models of Limit Order Books (abstract + video)
Many financial markets are operated as electronic limit order books (LOBs). Over short time scales, seconds to minutes, LOBs can be best understood and modeled as stochastic dynamical systems, and, specifically, ones that exhibit interesting and relevant queueing phenomena. I will offer a brief overview of algorithmic trading in a limit order book, and highlight how queueing phenomena play an important role in trade execution, and as a consequence in market behavior.
Team Incentives and Bonus Floors in Relational Contracts
Teamwork and team incentives are increasingly prevalent in modern organizations. Performance measures used to evaluate individuals' contributions to teamwork are often non-verifiable. We study a principal-multi-agent model of relational (self-enforcing) contracts in which the optimal contract resembles a bonus pool. It specifies a minimum joint bonus floor the principal is required to pay out to the agents, and gives the principal discretion to use non-verifiable performance measures to both increase the size of the pool and to allocate the pool to the agents.
The Financial Benefits of Persistently High Forward Citations
We explored the balance between societal benefits that negatively affect firms' financial performance by eroding their competitive advantage and positive effects that enhanced their reputations as technological leaders to study the effects of forward citations upon firms' financial performance.
The Impact of State-Level R&D Tax Credits on the Quantity and Quality of Entrepreneurship
The acceleration of start-up activity is often cited as a rationale for the R&D tax credit, a key innovation policy instrument adopted increasingly by US states over the past quarter century. While there is a strong empirical base linking the R&D tax credit to increased R&D expenditures and innovation, prior work has not provided causal evidence that this policy effects the rate of formation and growth potential of new businesses.
The Polarity of Online Reviews: Prevalence, Drivers and Implications
In this research, we investigate the prevalence, robustness and possible reasons underlying the polarity of online review distributions with the majority of the reviews at the positive end of the rating scale, a few reviews in the mid-range and some reviews at the negative end of the scale.
The Role of Intuition in CEO Acquisition Decisions
The Role of Numbers in the Customer Journey
At each stage in customers' journeys, they encounter different types of numeric information that they process using different judgment strategies. Relevant numbers might include budgets, price, product attributes, product counts, product ratings, numbers in brand names, health and nutrition information, financial information, time-related information, and others. This manuscript provides a review of the vast array of numerical information presented to consumers at different stages of the customer journey.
Trickle-Round Signals: When Low Status Is Mixed with High
Trickle-down theories suggest that status symbols and fashion trends originate from the elites and move downward, but some high-end restaurants serve lowbrow food (e.g., potato chips, macaroni and cheese), and some high-status individuals wear downscale clothing (e.g., ripped jeans, duct-taped shoes). Why would high-status actors adopt items traditionally associated with low-status groups?
Uniting the Tribes: Using Text for Marketing Insights
Words are part of almost every marketplace interaction. Online reviews, customer service calls, press releases, marketing communications, and other interactions create a wealth of textual data. But how can marketers best use such data? This article provides an overview of automated textual analysis and details how it can be used to generate marketing insights. The authors discuss how text reflects qualities of the text producer (and the context in which the text was produced) and impacts the audience or text recipient.
The Latest Research
Breaking the Cycle: How the News and Markets Created a Negative Feedback Loop in COVID-19
New research from CBS Professor Harry Mamaysky reveals how negativity in the news and markets can escalate a financial crisis.
Mind the Trade Gap: How a Relational Perspective Can Enhance Understanding
Adapted from “Global Value Chains in Developing Countries: A Relational Perspective from Coffee and Garments,” by Laura Boudreau of Columbia Business School, Julia Cajal Grossi of the Geneva Graduate Institute, and Rocco Macchiavello of the London School of Economics.
Online Shopping: What Companies Can Conclude Based on How Consumers Search
Adapted from “Online Advertising as Passive Search,” by Raluca M. Ursu of New York University Stern School of Business, Andrey Simonov of Columbia Business School, and Eunkyung An of New York University Stern School of Business.
Meaning in the Age of Autonomy: Marketing Autonomous Products to Consumers Who Value Manual Labor
This paper from Columbia Business School, “Meaning of Manual Labor Impedes Consumer Adoption of Autonomous Products,” explores marketing solutions to some consumers’ resistance towards autonomous products. The study was co-authored by Emanuel de Bellis of the University of St. Gallen, Gita Johar of Columbia Business School, and Nicola Poletti of Cada.
My Work Is My Bond? A Financial-Asset Approach to Wage Contracts Could Lessen Inequality
Co-authored by John B. Donaldson of Columbia Business School, “The Macroeconomics of Stakeholder Equilibria,” proposes a model for a purely private, mutually beneficial financial agreement between worker and firm that keeps decision-making in the hands of stockholders while improving the employment contract for employees.