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.
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.
The present research explores how people's place in a power hierarchy alters their representations of valued objects. The authors hypothesized that powerlessness produces an accentuation bias by altering the physical representation of monetary objects in a manner consistent with the size-to-value relationship. In the first three experiments, powerless participants, induced through episodic priming or role manipulations, systematically overestimated the size of objects associated with monetary value (i.e., quarters, poker chips) compared to powerful and baseline participants.
Power — asymmetric control over valued resources — is a fundamental dimension of social relations. Classical conceptualizations of power emphasize its conscious nature. In this review, we reveal how power often operates nonconsciously and identify the different methods and paradigms used to activate or create a psychological sense of power outside of conscious awareness.
Based on the symbolic association between physical and moral purity, we introduce a provocative possibility: clean smells might not only regulate physical cleanliness, but may also motivate virtuous behavior. Indeed, moral transgressions can engender literal feelings of dirtiness (Zhong & Liljenquist, 2006). Just as many symbolic associations are reciprocally related (Lakoff, 1987), such as coldness and loneliness (Zhong & Leonardelli, 2008) or darkness and depravity (Frank & Gilovich, 1988), morality and cleanliness may also be reciprocally linked.
Research suggests that living in and adapting to foreign cultures facilitates creativity. The current research investigated whether one aspect of the adaptation process — multicultural learning — is a critical component of increased creativity. Experiments 1-3 found that recalling a multicultural learning experience: (a) facilitates idea flexibility (e.g., the ability to solve problems in multiple ways), (b) increases awareness of underlying connections and associations, and (c) helps overcome functional fixedness.
Research across disciplines suggests that bad is stronger than good and that individuals punish deception more than they reward honesty. However, methodological issues in previous research limit the latter conclusion. Three experiments resolved these issues and consistently found the opposite pattern: Individuals rewarded honesty more frequently and intensely than they punished deception.
We propose that people protect the belief in a controlled, nonrandom world by imbuing their social, physical, and metaphysical environments with order and structure when their sense of personal control is threatened. We demonstrate that when personal control is threatened, people can preserve a sense of order by (a) perceiving patterns in noise or adhering to superstitions and conspiracies, (b) defending the legitimacy of the sociopolitical institutions that offer control, or (c) believing in an interventionist God.
The present work examines how experiencing high versus low power creates qualitatively distinct psychological motives that produce unique consumption patterns. Based on accumulating evidence that states of power increase focus on one's own internal desires, we propose that high power will lead to a greater preference for products that are viewed as offering utility (e.g., performance, quality) to the individual.
Reflecting on the past is often a critical ingredient for successful learning. The current research investigated how counterfactual thinking, reflecting on how prior experiences might have been different, motivates effective learning from these previous experiences. Specifically, we explored how the structure of counterfactual reflection — their additive ("If only I had") versus subtractive ("If only I had not") nature — influences performance in dyadic-level strategic interactions.
Despite abundant anecdotal evidence that creativity is associated with living in foreign countries, there is currently little empirical evidence for this relationship. Five studies employing a multimethod approach systematically explored the link between living abroad and creativity. Using both individual and dyadic creativity tasks, Studies 1 and 2 provided initial demonstrations that time spent living abroad (but not time spent traveling abroad) showed a positive relationship with creativity.
For decades, goal setting has been promoted as a halcyon pill for improving employee motivation and performance in organizations. Advocates of goal setting argue that for goals to be successful, they should be specific and challenging, and countless studies find that specific, challenging goals motivate performance far better than "do your best" exhortations. The authors of this article, however, argue that it is often these same characteristics of goals that cause them to "go wild."
Three experiments demonstrated that the experience of power leads to an illusion of personal control. Regardless of whether power was experientially primed (Experiments 1 and 3) or manipulated through roles (manager vs. subordinate; Experiment 2), it led to perceived control over outcomes that were beyond the reach of the power holder.
This special issue was conceived as a way to highlight how social cognition researchers are using the paradigm of negotiations to ask and answer a range of important questions central to their core concerns: how do communication media affect social information processing; how do different roles affect preferred processing styles; how do goals and expectancies shape interactions and outcomes?
In this article, we define good scholarship, highlight our points of disagreement with Locke and Latham (2009), and call for further academic research to examine the full range of goal setting's effects. We reiterate our original claim that goal setting, like a potent medication, can produce both beneficial effects and systematic, negative outcomes, and as a result, it should be carefully prescribed and closely monitored.
Past research has established a connection between regret (negative emotions connected to cognitions about how past actions might have achieved better outcomes) and both depression and anxiety. In the present research, the relations between regret, repetitive thought, depression, and anxiety were examined in a nationally representative telephone survey. Although both regret and repetitive thought were associated with general distress, only regret was associated with anhedonic depression and anxious arousal.
We document how starting prices differentially impact outcomes in negotiations and auctions. In negotiations (where the number of actors is often predetermined), starting prices drive cognitive processes, leading individuals to selectively focus on information consistent with, and make valuations similar to, the starting value. Thus, starting high will often lead to ending high in negotiations.
In our recent article (Leung, Maddux, Galinsky, & Chiu, April 2008), we presented evidence supporting the idea that multicultural experience can facilitate creativity. In a reply to that article, Rich (2009, this issue) has argued that our review, although timely and important, was somewhat limited in scope, focusing mostly on smaller forms of creativity ("little c": e.g., paper- and-pencil measures of creativity) as well as on larger forms of multicultural experience ("Big M": e.g., living in a foreign country).
Individuals often honor sunk costs by increasing their commitment to failing courses of action. Since this escalation of commitment is fueled by self-justification processes, a widely offered prescription for preventing escalation is to have separate individuals make the initial and subsequent resource allocation decisions. In contrast to this proposed remedy, four experiments explored whether a psychological connection between two decision-makers leads the second decision-maker to invest further in the failing program orchestrated by the initial decision-maker.
We present a novel role of affect in the expression of culture. Four experiments tested whether individuals' affective states moderate the expression of culturally normative cognitions and behaviors. We consistently found that value expressions, self-construals, and behaviors were less consistent with cultural norms when individuals were experiencing positive rather than negative affect. Positive affect allowed individuals to explore novel thoughts and behaviors that departed from cultural constraints, whereas negative affect bound people to cultural norms.
Previous research suggests that narrow identification with one's own racial group impedes coalition building among minorities. Consistent with this research, the 2008 Democratic primary was marked by racial differences in voting preferences: Black voters overwhelmingly preferred Barack Obama, a Black candidate, and Latinos and Asians largely favored Hillary Clinton, a White candidate. We investigated one approach to overcoming this divide: highlighting one's negational identity.
Drawing on the motivated cognition literature, we examine how self-affirmation processes influence self-justification needs and escalation decisions. Study 1 found that individuals with a larger pool of affirmational resources (high self-esteem) reduced their escalation compared to those with fewer affirmational resources (low self-esteem). Study 2 extended these findings by demonstrating that individuals also de-escalated their commitments when they were provided an opportunity to affirm on an important value.
Three experiments examine how power affects consumers' spending propensities. By integrating literatures suggesting that (a) powerlessness is aversive, (b) status is one basis of power, and (c) products can signal status, the authors argue that low power fosters a desire to acquire products associated with status to compensate for lacking power. Supporting this compensatory hypothesis, results show that low power increased consumers' willingness to pay for auction items and consumers' reservation prices in negotiations but only when products were status related.
Individuals define themselves, at times, as who they are (e.g., a psychologist) and, at other times, as who they are not (e.g., not an economist). Drawing on social identity, optimal distinctiveness, and balance theories, four studies examined the nature of negational identity relative to affirmational identity. One study explored the conditions that increase negational identification and found that activating the need for distinctiveness increased the accessibility of negational identities.
Three experiments examine the relationship between past performance and strategies and risk attitudes in integrative negotiations. We hypothesized that past performance would affect negotiators' willingness to embrace two types of risk: strategic (i.e., information sharing in the present) versus contractual (i.e., uncertainty about the future). Consistent with the hypothesis that past success promotes strategic risk taking, dyads with a history of success were more integrative than dyads with a history of failure in Experiment 1.
Many practices aimed at cultivating multicultural competence in educational and organizational settings (e.g., exchange programs, diversity education in college, diversity management at work) assume that multicultural experience fosters creativity. In line with this assumption, the research reported in this article is the first to empirically demonstrate that exposure to multiple cultures in and of itself can enhance creativity.
Two experiments investigated the hypothesis that strategic behavioral mimicry can facilitate negotiation outcomes. Study 1 used an employment negotiation with multiple issues, and demonstrated that strategic behavioral mimicry facilitated outcomes at both the individual and dyadic levels: Negotiators who mimicked the mannerisms of their opponents both secured better individual outcomes, and their dyads as a whole also performed better when mimicking occurred compared to when it did not.
A wealth of research has found that power leads to behavioral approach and action. Four experiments demonstrate that this link between power and approach is broken when the power relationship is illegitimate. When power was primed to be legitimate or when power positions were assigned legitimately, the powerful demonstrated more approach than the powerless. However, when power was experienced as illegitimate, the powerless displayed as much approach as, or even more approach than, the powerful.
We present six experiments that tested whether lacking control increases illusory pattern perception, which we define as the identification of a coherent and meaningful interrelationship among a set of random or unrelated stimuli. Participants who lacked control were more likely to perceive a variety of illusory patterns, including seeing images in noise, forming illusory correlations in stock market information, perceiving conspiracies, and developing superstitions.
Four experiments explored whether lacking power impairs executive functioning, testing the hypothesis that the cognitive presses of powerlessness increase vulnerability to performance decrements during complex executive tasks. In the first three experiments, low power impaired performance on executive-function tasks: The powerless were less effective than the powerful at updating (Experiment 1), inhibiting (Experiment 2), and planning (Experiment 3).
Nine studies demonstrated that perspective-takers are particularly likely to adopt a target's positive and negative stereotypical traits and behaviors. Perspective-takers rated both positive and negative stereotypic traits of targets as more self-descriptive. As a result, taking the perspective of a professor led to improved performance on an analytic task, whereas taking the perspective of a cheerleader led to decreased performance, in line with the respective stereotypes of professors and cheerleaders.
Objectification has been defined historically as a process of subjugation whereby people, like objects, are treated as means to an end. The authors hypothesized that objectification is a response to social power that involves approaching useful social targets regardless of the value of their other human qualities. Six studies found that under conditions of power, approach toward a social target was driven more by the target's usefulness, defined in terms of the perceiver's goals, than in low-power and baseline conditions.
Although power is often conceptualized as the capacity to influence others, the current research explores whether power psychologically protects people from influence.
Hierarchy is such a defining and pervasive feature of organizations that its forms and basic functions are often taken for granted in organizational research. In this review, we revisit some basic psychological and sociological elements of hierarchy and argue that status and power are two important yet distinct bases of hierarchical differentiation. We first define power and status and distinguish our definitions from previous conceptualizations. We then integrate a number of different literatures to explain why status and power hierarchies tend to be self-reinforcing.
Research has yielded weak empirical support for the idea that creative solutions may be discovered through unconscious thought, despite anecdotes to this effect. To understand this gap, we examined the effect of unconscious thought on two outcomes of a remote-association test (RAT): implicit accessibility and conscious reporting of answers.
The current research explores the hypothesis that realistic threat is one psychological mechanism that can explain how individuals can hold positive stereotypical beliefs toward Asian Americans yet also express negative attitudes and emotions toward them. Study 1 demonstrates that in a realistic threat context, attitudes and emotions toward an anonymous group described by only positive, "model minority" attributes are significantly more negative than when the group was described using other positive attributes.
The current research explored whether two related yet distinct social competencies — perspective taking (the cognitive capacity to consider the world from another individual's viewpoint) and empathy (the ability to connect emotionally with another individual) — have differential effects in negotiations. Across three studies, using both individual difference measures and experimental manipulations, we found that perspective taking increased individuals' ability to discover hidden agreements and to both create and claim resources at the bargaining table.
Three experiments explored the accessibility of stereotypes and counterstereotypes following stereotype suppression. Using a lexical decision task, experiment 1 demonstrated that the counterstereotype showed greater accessibility following stereotype suppression compared to stereotype expressers and no prime control participants. Using a person perception task, experiment 2 revealed that suppression can make both the stereotype and the counterstereotype more accessible.
Alcohol impairs cognition, but it may help build rapport. Here's how to decide whether to partake during the deal-making process.
Strategic requests for advice can transform disputes into amiable problem-solving ventures.
In the present research, the authors hypothesized that additive counterfactual thinking mind-sets, activated by adding new antecedent elements to reconstruct reality, promote an expansive processing style that broadens conceptual attention and facilitates performance on creative generation tasks, whereas subtractive counter-factual thinking mind-sets, activated by removing antecedent elements to reconstruct reality, promote a relational processing style that enhances tendencies to consider relationships and associations and facilitates performance on analytical problem-solving tasks.
Five experiments investigated how the possession and experience of power affects the initiation of competitive interaction. In Experiments 1a and 1b, high-power individuals displayed a greater propensity to initiate a negotiation than did low-power individuals. Three additional experiments showed that power increased the likelihood of making the first move in a variety of competitive interactions.
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.
Four experiments and a correlational study explored the relationship between power and perspective taking. In Experiment 1, participants primed with high power were more likely than those primed with low power to draw an E on their forehead in a self-oriented direction, demonstrating less of an inclination to spontaneously adopt another person's visual perspective.
By comparing reality to what might have been, counterfactuals promote a relational processing style characterized by a tendency to consider relationships and associations among a set of stimuli. As such, counterfactual mind-sets were expected to improve performance on tasks involving the consideration of relationships and associations but to impair performance on tasks requiring novel ideas that are uninfluenced by salient associations. The authors conducted several experiments to test this hypothesis.
Counter to the "start high, end high" effect of anchors in individual judgments and dyadic negotiations, 6 studies using a diverse set of methodologies document how and why, in the social setting of auctions, lower starting prices result in higher final prices. Three processes contribute to this effect. First, lower starting prices reduce barriers to entry, which increase traffic and generate higher final prices. Second, lower starting prices entice bidders to invest time and energy (creating sunk costs) and, consequently, escalate their commitments.
The psychological research is clear: bad events affect us much more powerfully than good events. So it stands to reason that burdens weigh more heavily upon our decision processes than do benefits. Negotiations that center around burdens can pose psychological hazards for negotiators — contentiousness, clouded judgment, suspicion, and a diminished understanding of their own interests. The result? A smaller pie of resources, for one thing. Here is a guide to help you avert the dangers.
Sooner or later, every negotiator faces threats at the bargaining table. How should you respond when the other side threatens to walk away, file a lawsuit, or damage your reputation?
According to most negotiation experts, thorough preparation is the key to successful bargaining. Identifying your interests, alternatives, walkaway point, and ideal outcome — not to mention your opponent's interests, alternatives, and so on — can help you perform at your best once talks begin. The more you know about yourself and your counterpart, the more control you'll have during the negotiation process.
Vertical integration is often proposed as a way to resolve hold-up problems, ignoring the empirical fact that division managers tend to maximize divisional (not firmwide) profit when investing. This paper develops a model with asymmetric information at the bargaining stage and investment returns taking the form of cash and "empire benefits." Owners of a vertically integrated firm then will provide division managers with low-powered incentives so as to induce them to bargain "more cooperatively," resulting in higher investments and overall profit as compared with non-integration.
The article presents information on the role of power in negotiation. Power could generate competition or conflict in negotiations, however, effective channelization of power helps in bringing the win-win situation to both the parties. Social psychologists have described power as lack of dependence on others. Individuals possessing power tend to have the approach related to the behavior that includes positive mood or searching for rewards in their environment. On the other hand, powerless individuals show a great deal of self-inhibition and fear towards potential threats.