New research from CBS Professor Harry Mamaysky reveals how negativity in the news and markets can escalate a financial crisis.
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.
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.
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.
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.
At Columbia Business School, our faculty members are at the forefront of research in their respective fields, offering innovative ideas that directly impact the practice of business today. A quick glance at our publication on faculty research, CBS Insights, will give you a sense of the breadth and immediacy of the insight our professors provide.
As a student at the School, this will greatly enrich your education. In Columbia classrooms, you are at the cutting-edge of industry, studying the practices that others will later adopt and teach. As any business leader will tell you, in a competitive environment, being first puts you at a distinct advantage over your peers. Learn economic development from Ray Fisman, the Lambert Family Professor of Social Enterprise and a rising star in the field, or real estate from Chris Mayer, the Paul Milstein Professor of Real Estate, a renowned expert and frequent commentator on complex housing issues. This way, when you complete your degree, you'll be set up to succeed.
Columbia Business School in conjunction with the Office of the Dean provides its faculty, PhD students, and other research staff with resources and cutting edge tools and technology to help push the boundaries of business research.
Specifically, our goal is to seamlessly help faculty set up and execute their research programs. This includes, but is not limited to:
All these activities help to facilitate and streamline faculty research, and that of the doctoral students working with them.
Industry groups engage in venue shifting when they seek to overturn or alter restrictive regulations imposed by one political venue through another. A critical step in this process is resolving uncertainties surrounding the preference of the targeted venue and the nature of the relevant policy proposal. While existing studies emphasize a long-term trial-and-error process of policy learning, we focus on nascent industries and argue that ventures seek other information sources to resolve these uncertainties quickly.
This is the first study to consider the relationship between open source software (OSS) and entrepreneurship around the globe. This study measures whether country-level participation on the GitHub OSS platform affects the founding of innovative ventures, and where it does so, for what types of ventures. We estimate these effects using cross-country variation in new venture founding and OSS participation. We propose an approach using instrumental variables, and cannot reject a causal interpretation.
Can accelerators pick the most promising startup ideas no matter their provenance? Using unique data from a global accelerator where judges are randomly assigned to evaluate startups headquartered across the globe, we show that judges are less likely to recommend startups headquartered outside their home region by 4 percentage points. Back-of-the-envelope calculations suggest this discount leads judges to pass over 1 in 20 promising startups.
The US entrepreneurial finance market has changed dramatically over the last two decades. Entrepreneurs who raise their first round of venture capital retain 30% more equity in their firm and are more likely to control their board of directors. Late-stage start-ups are raising larger amounts of capital in the private markets from a growing pool of traditional and new investors. These private market changes have coincided with a sharp decline in the number of firms going public—and when firms do go public, they are older and have raised more private capital.
We propose a new valuation method for private equity investments. First, we construct a cash-flow replicating portfolio for the private investment, using cash-flows on various listed equity and fixed income instruments. The second step values the replicating portfolio using a flexible asset pricing model that accurately prices the systematic risk in listed equity and fixed income instruments of different horizons.
We investigate underlying sources of the US entrepreneurial ecosystem's advantage compared to other innovative economies by assessing the benefits Israeli startups derive from migrating to the US. Addressing positive sorting into migration, we show that migrants raise larger funding amounts and are more likely to have a US trademark and be acquired than non-migrants. Migrants also achieve a higher acquisition value. However, their patent output is not larger.
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.
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.
Entrepreneurial motivation is important to the process of economic growth. However, evidence on the motivations of innovative entrepreneurs, and how those motivations differ across fundamental characteristics, remains scant. We conduct three interrelated field experiments with the MIT Inclusive Innovation Challenge to study how innovative entrepreneurs respond to messages of money and social impact, and how this varies across gender and culture.
Cryptocurrencies provide an important dimension of innovation to the evolution of the exchange medium we call money. There are now over 2,000 such currencies, and their potential and volume is growing. How- ever, they will, collectively and in volume, create real problems for the monetary system of a country. Central banks, which are institutions tasked with providing monetary stability, are more essential than ever.
The main objectives of this commentary are to discuss the replication study of Adam and Galinsky (2012, Experiment 1) by Burns, Fox, Greenstein, Olbright, and Montgomery, clarify the main idea behind enclothed cognition, supplement the literature review presented by Burns et al., discuss why our original study failed to replicate, and offer potential avenues for future research. Overall, we believe the replication study was conducted competently, and thus the results cast doubt on our finding that wearing a lab coat decreases errors on the Stroop test. At the same time, Burns et al.
Prior research attributes the positive effects of passion on professional success to intrapersonal characteristics. We propose that interpersonal processes are also critical because observers confer status on and support those who express passion. These interpersonal benefits of expressing passion are, however, contingent on several factors related to the expresser, perceiver, and context. Six studies, including entrepreneurial pitches from Dragons' Den and two pre-registered experiments, establish three key findings.
Do men and women generate the same benefits from using their social ties? This study addresses this question by examining how resources are allocated within social networks. Prior research has commonly attributed observed gender differences in network benefits to the tendency for women to be embedded in networks that are poorer in social and economic resources. Implicit in this explanation is that if women had access to more valuable networks they would receive similar benefits as do men.
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).
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.
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.
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.
The current research explores the relationship between living abroad and self-concept clarity. We conducted six studies (N = 1,874) using different populations (online panels and MBA students), mixed methods (correlational and experimental), and complementary measures of self-concept clarity (self-report and self-other congruence through 360-degree ratings). Our results indicate that living abroad leads to a clearer sense of self because it prompts self-discerning reflections on whether parts of their identity truly define who they are or merely reflect their cultural upbringing.
People quickly form impressions about moral character; for example, if people learn that someone cheated, they form a negative impression about that person's character and expect that person to cheat in the future. Four studies show that the formation of such moral character impressions depends on the degree of valence homogeneity in the target's context. We argue that this is the case because the degree of homogeneity in the context (the evaluative ecology) informs perceivers about the reliability of signals.
Moral Utility Theory provides an integrative framework for understanding the motivational basis of ethical decision making by modeling it as a process of subjective expected utility (SEU) maximization. The SEUs of ethical and unethical behavioral options are proposed to be assessed intuitively during goal pursuit, with unethical conduct emerging when the expected benefits of moral transgressions outweigh the expected costs.
Past studies have found that multicultural approaches to diversity can reduce prejudice and stimulate positive intergroup relations. The current research explored a possible negative side effect of multiculturalism: whether organizational diversity structures geared toward multiculturalism can conceal racial discrimination and delegitimize racial discrimination claims.
Air pollution is a serious problem that affects billions of people globally. Although the environmental and health costs of air pollution are well known, the present research investigates its ethical costs. We propose that air pollution can increase criminal and unethical behavior by increasing anxiety. Analyses of a 9-year panel of 9,360 U.S.
This integrative review presents the Agentic-Communal Model of Advantage and Disadvantage to offer insight into the psychology of inequality. This model examines the relation between individuals' position of advantage or disadvantage in a social hierarchy and their propensity toward agency and communion. We begin by identifying and reviewing four inequalities — Resources, Opportunities, Appraisals, and Deference, or the ROAD of inequality — that are fundamental to social advantage and disadvantage.
Research has established that competing head to head against a rival boosts motivation and performance. The present research investigated whether rivalry can affect performance over time and in contests without rivals. We examined the long-term effects of rivalry through archival analyses of postseason performance in multiple high-stakes sports contexts: National Collegiate Athletic Association (NCAA) Division I Men's Basketball and the major U.S.
Prior studies linking grit — defined as perseverance and passion for long-term goals — to performance are beset by contradictory evidence. As a result, commentators have increasingly declared that grit has limited effects. We propose that this inconsistent evidence has occurred because prior research has emphasized perseverance and ignored, both theoretically and empirically, the critical role of passion, which we define as a strong feeling toward a personally important value/preference that motivates intentions and behaviors to express that value/preference.
This article offers a primer on social power and social class with respect to their theoretical importance, conceptual distinction, and empirical relationship. We introduce and define the constructs of social power, social class, and one's psychological sense of power. We next explore the complex relationship between social power and social class. Because social class can produce a sense of power within an individual, studies on social power can inform theory and research on social class.
Many organizations employ diversity initiatives, such as diversity mission statements, in order to effectively recruit and manage a diverse workforce. One approach emphasizes multiculturalism, which focuses on the acknowledgement and celebration of racial diversity. Multiculturalism has been found to produce greater inclusion by racial majorities and increased psychological engagement of racial minorities, but has also been linked to negative outcomes among Whites, from feelings of exclusion to greater stereotyping to perceiving racial discrimination claims as less valid.
A crucial element of navigating group conflict is how group members manage stigma imposed on them by other groups. Across three experiments, we propose that group identification is a cause and consequence of self-labeling with stigmatizing group labels, a practice known to reduce stigma. Experiment 1 found that group identification increased self-labeling with a stigmatizing group label.
Rivalry is prevalent across many competitive environments and differs in important ways from non-rival competition. Here, we draw upon research on relational schemas and automatic goals to explore whether mere exposure to or recall of a rival can be sufficient to increase individuals' Machiavellianism and unethical behavior, even in contexts where their rivals are not present.
The present research investigates whether close intercultural relationships promote creativity, workplace innovation, and entrepreneurship — outcomes vital to individual and organizational success. We triangulate on these questions with multiple methods (longitudinal, experimental, and field studies), diverse population samples (MBA students, employees, and professional repatriates), and both laboratory and real-world measures.
A stigma — originally a branding-iron mark on a prisoner or slave — serves as a mark of disgrace. To carry the stigma of a bankruptcy, an HIV infection, an addiction, a reviled religion, or another negatively stereotyped social group is to be dishonored, disapproved, or even dehumanized by others.
Past investigations show that asking participants to recall a personal episode of power affects behavior in a variety of ways. Recently, some researchers have questioned the replicability of such priming effects. This article adds to this conversation by investigating a moderator of power recall effects: ease of retrieval. Four experiments find that the effects of the power recall manipulation are reduced or even reversed when the power episode is difficult to recall.
Human personality traits differ across geographical regions. However, it remains unclear what generates these geographical personality differences. Because humans constantly experience and react to ambient temperature, we propose that temperature is a crucial environmental factor that is associated with individuals' habitual behavioural patterns and, therefore, with fundamental dimensions of personality.
Consumer goods and services have psychological value that can equal or exceed their functional value. A burgeoning literature demonstrates that one source of value emerges from the capacity for products to serve as a psychological salve that reduces various forms of distress across numerous domains. This review systematically organizes and integrates the literature on the use of consumer behavior as a means to regulate self-discrepancies, or the incongruities between how one currently perceives oneself and how one desires to view oneself (Higgins, 1987).
Because of the unprecedented pace of globalization, foreign experiences are increasingly common and valued. Past research has focused on the benefits of foreign experiences, including enhanced creativity and reduced intergroup bias. In contrast, the present work uncovers a potential dark side of foreign experiences: increased immoral behavior. We propose that broad foreign experiences (i.e., experiences in multiple foreign countries) foster not only cognitive flexibility but also moral flexibility.
This paper aims to identify and discuss four major sources of power in negotiations: alternatives, information, status and social capital. Each of these sources of power can enhance a negotiator's likelihood of obtaining their ideal outcome because power allows negotiators to be more confident and proactive, and it shields them from the bargaining tactics of their opponents.
Contracts are commonly used to regulate a wide range of interactions and relationships. Yet relying on contracts as a mechanism of control often comes at a cost to motivation. Integrating theoretical perspectives from psychology, economics, and organizational theory, we explore this control-motivation dilemma inherent in contracts and present the Contract-Autonomy-Motivation-Performance-Structure (CAMPS) model, which highlights the synergistic benefits of combining structure and autonomy.
We introduce a tractable dynamic monitoring technology into a continuous-time moral hazard problem and study the optimal long-term contract between principal and agent. Monitoring adds value by allowing the principal to reduce the intensity of performance-based incentives, reducing the likelihood of costly termination. We present a novel characterization of optimal dynamic incentive provision when performance-based incentives may decline continuously to zero. Termination happens in equilibrium only if its costs are relatively low.
This paper presents an Agentic-Communal Model of Power as a means to understand how power shapes and guides consumer behavior. We present theoretical arguments and review empirical data that reveal how the possession of power can produce a more agentic orientation within consumers, whereas the lack of power can produce a more communal orientation within consumers. As a consequence of either an increased agentic or communal orientation, psychological states of power and powerlessness affect a wide variety of consumer behaviors ranging from gift giving to persuasion to consumer misconduct.
The past decade has seen a rise in both economic insecurity and frequency of physical pain. The current research reveals a causal connection between these two growing and consequential social trends. In five studies, we found that economic insecurity produced physical pain and reduced pain tolerance. In a sixth study, with data from 33,720 geographically diverse households across the United States, economic insecurity predicted consumption of over-the-counter painkillers.
Although it is known that certain names gain popularity within a culture because of historical events, it is unknown how names become associated with different social categories in the first place. We propose that vocal cord vibration during the pronunciation of an initial phoneme plays a critical role in explaining which names are assigned to males versus females.
The current research explores why people desire power and how that desire can be satisfied. We propose that a position of power can be subjectively experienced as conferring influence over others or as offering autonomy from the influence of others. Conversely, a low-power position can be experienced as lacking influence or lacking autonomy. Nine studies show that subjectively experiencing one’s power as autonomy predicts the desire for power, whereas the experience of influence over others does not.
In the experiments reported here, we integrated work on hierarchy, culture, and the enforcement of group cooperation by examining patterns of punishment. Studies in Western contexts have shown that having high status can temper acts of dominance, suggesting that high status may decrease punishment by the powerful. We predicted that high status would have the opposite effect in Asian cultures because vertical collectivism permits the use of dominance to reinforce the existing hierarchical order.
In this commentary, we reflect on several important issues and questions provoked by Murphy and Dweck's target article. First, we define a mindset as a frame of mind that affects the selection, encoding, and retrieval of information as well as the types of evaluations and responses an individual gives. As such, we suggest that while studying fixed versus growth mindsets is important, it is critical to explore and understand how a variety of mindsets affect consumer behavior, including regulatory focus, construal level, implementation versus deliberation, and power.
The present research examined whether possessing multiple social identities (i.e., groups relevant to one’s sense of self) is associated with creativity. In Study 1, the more identities individuals reported having, the more names they generated for a new commercial product (i.e., greater idea fluency). In Study 2, multiple identities were associated with greater fluency and originality (mediated by cognitive flexibility, but not by persistence). Study 3 validated these findings using a highly powered sample.
Norm violations engender both negative reactions and perceptions of power from observers. We addressed this paradox by examining whether observers' tendency to grant power to norm followers versus norm violators is moderated by the observer's position in the hierarchy. Because norm violations threaten the status quo, we hypothesized that individuals higher in a hierarchy (high verticality) would be less likely to grant power to norm violators compared to individuals lower in the hierarchy (low verticality).
Three high-power studies (N = 3,000 total) demonstrated that asking participants to recall an experience as a manipulation can have unintended consequences. Participants who recalled preoccupying secrets made more extreme judgments of an external environment, supporting the notion that secrecy is burdensome. This influence was found, however, only among a subset of participants (i.e., participants who successfully recalled secrets that corresponded to their condition). We introduce the concept of manipulation correspondence to understand these patterns of results.
We show that venture capitalists' (VCs) on-site involvement with their portfolio companies leads to an increase in (1) innovation and (2) the likelihood of a successful exit. We rule out selection effects by exploiting an exogenous source of variation in VC involvement: the introduction of new airline routes that reduce VCs' travel times to their existing portfolio companies.
Perspective taking is a crucial leadership skill, yet Galinsky and Schweitzer contend that it becomes more difficult the higher you rise in an organization. Gaining perspective helps to motivate others, communicate more clearly, and navigate difficult or tense situations. Their article includes research they conducted with psychologists at the University of Iowa, the University of California-Los Angeles, and New York University, as well as an anecdote about President John F. Kennedy and the 1962 Cuban missile crisis.