Columbia Business School Research

We develop theory on how a contentious moral market can develop, and we test it with data from a study of the commercialization of Buddhist temples in China from 2006 to 2016, as local government officials try to boost the local economy by transforming temples into tourist enterprises that charge admission fees. The practice is resisted by monks and the public such that the central government, which values public appearances of social justice, is pressured to support their resistance to local officials’ economic demands.

Maintenance service plans (MSPs) are contracts for the provision of maintenance by a service provider to an equipment operator. These plans can have different payment structures and risk allocations, which induce various types of incentives for agents in the service chain. How do such structures affect service performance and service chain value? We provide an empirical answer to this question by using a unique panel data covering the sales and service records of more than 700 diagnostic body scanners.

Firms exhibit heterogeneity in size, productivity, and internal structure, and this is true even within the same industry. It has been thought since the time of Adam Smith that a firm's internal structure affects its productivity through the channel of gains from specialization. Our paper provides evidence of a link between an organization's culture — specifically the trust environment — and its internal structure. We show experimentally that exogenously imposed culture endogenously leads to variation in organizational form.

We study the dynamic mechanism design problem of a seller that repeatedly auctions independent items over a discrete time horizon to buyers that face a cumulative budget constraint. A driving motivation behind our model is the emergence of real-time bidding markets for online display advertising in which such budgets are prevalent. We assume the seller has a strong form of limited commitment: she commits to the rules of the current auction but cannot commit to those of future auctions.

The authors propose a quantitative approach for describing entertainment products, in a way that allows for improving the predictive performance of consumer choice models for these products. Their approach is based on the media psychology literature, which suggests that people’s consumption of entertainment products is influenced by the psychological themes featured in these products. They classify psychological themes on the basis of the “character strengths” taxonomy from the positive psychology literature (Peterson and Seligman 2004).

Novel measures of technology popularity and usage were constructed and tested to assess the returns available from patenting within mainstream versus more-exotic technology-classification codes (or pairs of codes). <em>Popularity</em> suggested the frequency density with which technological codes (pairs) were most frequently found among competitors' patents. <em>Usage</em> measured whether firms dominated particular technology codes (or pairs of codes) relative to competitors.

We use five years of bidding data to examine the reaction of advertisers to widely disseminated press on the lack of effectiveness of brand search advertising (queries that contain the firm's name) found in a large experiment run by eBay (Blake, Nosko and Tadelis, 2015). We estimate that 11% of firms that did not face competing ads on their brand keywords, matching the case of eBay, discontinued the practice of brand search advertising.

As a result of the digital revolution, new topics and themes have entered consumer research, and, as the digital revolution enters a new phase, additional new concepts and research questions will emerge. To illustrate the variety of themes on digital technology that consumer researchers have studied, I am presenting a collection of five articles that represent this active new research area. Moreover, I will look into the future and propose a research agenda to address key consumer behavior issues occurring during the next phase of the digital transformation.

Using data on the entire population of businesses registered in the states of California and Massachusetts between 1995 and 2011, we decompose the well-established gender gap in entrepreneurship. We show that female-led ventures are 63 percentage points less likely than male-led ventures to obtain external funding (i.e., venture capital). However, investors' gendered preferences can, at most, explain about 35 percent of this differential (or 22 percentage points).

In this article, we provide a descriptive account of how people from different generations vary in their use of financial management technology, their access credit markets, and how they finance consumption and incur financial costs and penalties. We use a detailed panel of transaction-level data from Iceland on individual spending, incomes, balances, and credit limits from a personal financial management software. We find that technology adoption is faster for millennials, but use of consumer credit and financial penalties are higher for older generations.

In the modern fast-paced workplace, employees are required to be creative under various levels of stress. In understanding the relationship between stress and creativity, organizational scholars and practitioners have largely focused on how stress affects cognition, while overlooking the role that physiological responses to stress might play in creative performance.

This article studies contracts between a principal and an agent that are robust to information asymmetries about measurement quality. Our main result is that an information asymmetry about measurement quality not only reduces the usefulness of a given performance measure for stewardship purposes, it also qualitatively changes the way the performance measure is used if the information asymmetry is sufficiently large.

The aim of this paper is to examine how an acquirer’s diversification strategy shapes the multiple dimensions of inventive activity. Differing from prior research, we use a set of indicators to investigate this phenomenon. In particular, we consider three different but complementary dimensions of inventive quality: technological impact, originality of the synthesized knowledge streams, and generality of applicability across different technological domains.

Advances in information technology have enabled consumers to connect and communicate as they never have before. This chapter conceptualizes information and the digital machines that enable contemporary connection and communication as being part of a “Moveable Feast.” A brief historical review tracing the impact and evolution of information technology on consumers’ lives and the marketplace is first provided.

We introduce a novel approach to measure the founding strategic differentiation of startups and its relationship to follow-on performance. We use natural language processing and historical websites to estimate the similarity between the founding website of an individual startup, the historical website of public firms at the startup's founding year, and the founding website of other startups founded in the same year. We propose that distance in the value proposition stated in these websites represents differentiation in the market.

The current research explores the role of power in moral decision-making. Some work suggests that power increases utilitarianism; other work suggests power increases deontological judgments. Conversely, we propose that power can both increase and decrease both deontological and utilitarian decisions by building on two recent insights in moral psychology. First, we utilize the moral orientation scale to assess four thinking styles that jointly predict moral dilemma decisions.

Mass customization interfaces typically guide consumers through the configuration process in a sequential manner, focusing on one product attribute after the other. What if this standardized customization experience were personalized for consumers on the basis of how they process information? A series of large-scale field and experimental studies, conducted with Western and Eastern consumers, shows that matching the interface to consumers’ culture-specific processing style enhances the effectiveness of mass customization.

The second Global Business Anthropology Summit was held May 28-29, 2019 at Fordham University in New York City. The 2019 Summit brought together 160 industry practitioners and academic scholars to build upon the work of the 2018 Summit. The 2019 Summit was explicitly and emphatically forward thinking and action oriented to advance anthropological ideas in business.

We (1) propose that evidence linking grit and performance is mixed because the measure used to assess grit—the Short Grit (Grit-S) scale (2)—captures only perseverance, not passion, whereas the definition of grit encompasses both perseverance and passion (3). Our studies find that the combination of perseverance (measured through the whole Grit-S scale) and passion (measured through the passion attainment scale) predicted higher performance.

Over the past four decades, government debt as a fraction of GDP has been on an upward trajectory in advanced economies, approaching levels not reached since World War II. While normative macroeconomic theories can explain the increase in the level of debt in certain periods as a response to macroeconomic shocks, they cannot explain the broad-based long-run trend in debt accumulation. In contrast, political economy theories can explain the long-run trend as resulting from an aging population, rising political polarization, and rising electoral uncertainty across advanced economies.

We consider the compensation design problem of a firm that hires a salesperson to exert effort to increase demand. We assume both demand and supply to be uncertain with sales being the smaller of demand and supply and assume that, if demand exceeds supply, then unmet demand is unobservable (demand censoring).

Dietary variety increases food intake, but it is unclear if sensory differences elicit increases in eating-related behaviors. Using a 4×3 between-subject pilot experiment, we examined if increasing sensory variety (control, color, shape, both color and shape) and priming individuals to notice differences or similarities in the foods (positive, neutral, negative) influenced ad libitum proximal intake, liking, and willingness to purchase pears and peppers among 164 Greater Boston adults >18y/o.

When carefully planned, language can be a strategic tool for managing a brand’s communication to target customers and for building brand equity. This paper explains how and why managers should conduct a brand language audit -- a comprehensive inventory of the many and varied linguistic devices used by brands in the category -- and then use the findings from the audit to develop a brand language brief. The brand language brief is a blueprint for crafting a distinctive language for a brand.

The tendency to see life as zero-sum exacerbates political conflicts. Six studies (N = 3223) examine the relationship between political ideology and zero-sum thinking: the belief that one party's gains can only be obtained at the expense of another party's losses. We find that both liberals and conservatives view life as zero-sum when it benefits them to do so. Whereas conservatives exhibit zero-sum thinking when the status quo is challenged, liberals do so when the status quo is being upheld.

People's tendency to rate themselves as above average is often taken as evidence of undue self-regard. Yet, everyday experience is occasioned with feelings of inadequacy and insecurity. How can these 2 experiences be reconciled? Across 12 studies (N = 2,474; including 4 preregistered studies) we argue that although people do indeed believe that they are above average they also hold themselves to standards of comparison that are well above average.

Failing to refinance a mortgage can cost a borrower thousands of dollars. Based on administrative data from a large financial institution, we show that around 50% of borrowers leave thousands of dollars on the table by not refinancing. Survey data indicate that, among all the behavioral factors examined, only suspicion of banks motives is consistently related to the probability of accepting a refinancing offer. Finally, we report the results of three field experiments showing that enticing offers made by banks fail to increase participation and may even deepen suspicion.

The authors present empirical evidence that borrowers, consciously or not, leave traces of their intentions, circumstances, and personality traits in the text they write when applying for a loan. This textual information has a substantial and significant ability to predict whether borrowers will pay back the loan above and beyond the financial and demographic variables commonly used in models predicting default.

Consumers often have multiple goals that are active simultaneously and make choices to satisfy those goals. However, no work to date has studied how people choose when all available options serve a goal (e.g., a choice-set goal) that conflicts with another goal they hold (e.g., an incidental goal). We demonstrate that in such contexts, consumers are more likely to choose the option that is most instrumental for attaining the choice-set goal, even when that option poses the greatest violation of the incidental goal.

Organizations often empower employees at all levels to propose innovation ideas that rely on their first-hand knowledge of their standard task (i.e. employee-initiated innovation). Many, however, struggle with motivating employees to develop innovative ideas that may benefit the firm, especially when the standard tasks for which employees are hired, measured and incentivized do not explicitly include innovation.

When deciding whether to buy an item, consumers sometimes think about other ways they could spend their money. Past research has explored how increasing the salience of outside options (i.e., alternatives not immediately available in the choice set) influences purchase decisions, but whether the type of alternative considered systematically affects buying behavior remains an open question. Ten studies find that relative to considering alternatives that are similar to the target, considering dissimilar alternatives leads to a greater decrease in purchase intent for the target.

Shadow bank market share in residential mortgage origination nearly doubled from 2007 to 2015, with particularly dramatic growth among online "fintech" lenders. We study how two forces, regulatory differences and technological advantages, contributed to this growth.

Internet recommender systems are popular in contexts that include heterogeneous consumers and numerous products. In such contexts, product features that adequately describe all the products are often not readily available. Content-based systems therefore rely on user-generated content such as product reviews or textual product tags to make recommendations.

Many modern business cycle models use uncertainty shocks to generate aggregate fluctuations. However, uncertainty is measured in a variety of ways. Our analysis shows that the measures are not the same, either statistically or conceptually, raising the question of whether fluctuations in them are actually generated by the same phenomenon. We propose a mechanism that generates realistic micro dispersion (cross-sectional variance of firm-level outcomes), higher-order uncertainty (disagreement) and macro uncertainty (uncertainty about macro outcomes) from changes in macro volatility.

Following the efficiency logic that argues process quality management provides an important basis for firms’ internal controls over their innovation activities, this study which is set within emerging markets extends the literature by shedding light upon an interesting phenomenon: employing process quality management reduces purchasing risk for potential customers by conveying valuable information regarding the firms who employ it (a symbolic logic argument).

We study the intertemporal properties of accounting conservatism with a focus on managerial incentives. In our main model, conservatism results in smaller expected payouts to the manager (agent) in early periods and larger expected payouts in later periods. Conservatism shifts (ambiguous) evidence that might be used to recognize good performance in early periods to later periods. In later periods, good performance is less informative, since good news might mean good current period performance and might also mean good prior period performance whose recognition was delayed.

This paper studies how hedge fund activism impacts corporate innovation. Firms targeted by activists improve their innovation efficiency over the five-year period following hedge fund intervention. Despite a tightening in research and development (R&D) expenditures, target firms increase innovation output, as measured by both patent counts and citations, with stronger effects among firms with more diversified innovation portfolios. Reallocation of innovative resources, redeployment of human capital, and change to board-level expertise all contribute to improve target firms' innovation.

We use a very accurate panel of all individual spending, income, balances, and credit limits from a financial aggregation app and document significant payday responses of spending to the arrival of both regular and irregular income. These payday responses are clean, robust, and homogeneous for all income and spending categories throughout the income distribution. Spending responses to income are typically explained by households' capital structures: households that hold little or no liquid wealth have to consume hand-to-mouth.

Although the rates of economic inequality in the United States are at their highest since the onset of The Great Depression, many Americans do not seem as concerned as may be expected. This apparent lack of concern has been attributed to people's deeply-entrenched belief in economic mobility -- the belief that through hard work, determination, and skill people are able to rise up the economic ladder. Little is known, however, about why Americans so strongly believe in economic mobility.

Firms often finance their inventory through debt and subsequently sell it to generate profits and service the debt. Pricing of products is consequently driven by both inventory and debt servicing considerations. In the present paper, we analyze how debt distorts dynamic pricing decisions and reduces generated sales revenues. We show that debt induces sellers to always price higher than the revenue-maximizing price.

Selecting more productive employees among a pool of job applicants can be a cost-effective means of improving organizational performance and may be particularly important in the public sector. We study the relationship among applicant characteristics, hiring outcomes, and job performance for teachers in the Washington DC Public Schools. Applicants' academic background (e.g., undergraduate GPA) is essentially uncorrelated with hiring.