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.
This article explores the use of marketing metrics by a sample of Vietnamese firms, providing an example of the use of marketing metrics in a "transition" economy as it grows and becomes more market and marketing driven. The analysis reports usage frequency and then develops a set of "correlation chains" linking firm characteristics, metric use, and various indicators of performance. Vietnamese managers generally report that several types of metrics are used. Ownership structure and industry also impact which metrics are utilized.
The pressure to meet/beat analysts' expectations is often blamed for the recent onslaught of accounting scandals. We investigate changes in the meeting/beating phenomenon post-scandals and find that the stock market premium to meeting or just beating analyst estimates has disappeared while the premium to beating by a larger margin has diminished. In the post-scandals period, managers tend to meet or just beat analysts' forecasts less often. Further, managers rely less on income-increasing discretionary accruals and more on earnings guidance.
We model the commercial World Wide Web as a directed graph that emerges as the equilibrium of a game in which utility maximizing websites purchase (advertising) in-links from each other while also setting the price of these links. In equilibrium, higher content sites tend to purchase more advertising links (mirroring the Dorfman-Steiner rule) while selling less advertising links themselves.
Gallego et al. [Gallego, G., G. Iyengar, R. Phillips, A. Dubey. 2004. Managing flexible products on a network. CORC Technical Report TR-2004-01, Department of Industrial Engineering and Operations Research, Columbia University, New York.] recently proposed a choice-based deterministic linear programming model (CDLP) for network revenue management (RM) that parallels the widely used deterministic linear programming (DLP) model.
This special issue of Production and Operations Management offers a sample of ongoing research that focuses currently on the services industries. The articles selected cover a spectrum of application areas as well as methodologies.
A common feature of managerial and financial reporting is an iterative process wherein various parties selectively correct particular measurements by challenging them and subjecting them to increased scrutiny. We model this feature by adding an agent appeal stage to the standard moral hazard model and show that it can be optimal to allow the agent to decide which performance measures to appeal, despite the agent's incentive to cherry-pick. In the presence of measurement errors, the agent is incentivized by increased opportunities for cherry-picking that arise if he chooses the "right" vs.
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.
We consider the risk of a portfolio comprising loans, bonds, and financial instruments that are subject to possible default. In particular, we are interested in performance measures such as the probability that the portfolio incurs large losses over a fixed time horizon, and the expected excess loss given that large losses are incurred during this horizon.
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.
Volatility is the key variable in option pricing models and for risk management in general. Not surprisingly, this has led to the recognition that volatility uncertainty is an important risk factor. This realization, in turn, has given rise to derivative instruments tied to volatility, such as variance swaps, volatility swaps, and options on both variance and volatility, which are specifically designed to help manage this risk. To price these contracts, a model is needed for the volatility process.
Individuals engage in status self-enhancement when they form an overly positive perception of their status in a group. We argue that status self-enhancement incurs social costs and, therefore, most individuals perceive their status accurately. In contrast, theories of positive illusions suggest status self-enhancement is beneficial for the individual and that most individuals overestimate their status. We found supportive evidence for our hypotheses in a social relations analysis of laboratory groups, an experiment that manipulated status self-enhancement, and a study of real-world groups.
We examine racial preferences in dating. We employ a Speed Dating experiment that allows us to directly observe individual decisions and thus infer whose preferences lead to racial segregation in romantic relationships. Females exhibit stronger racial preferences than males. The richness of our data further allows us to identify many determinants of same-race preferences. Subjects' backgrounds, including the racial composition of the ZIP code where a subject grew up and the prevailing racial attitudes in a subject's state or country of origin, strongly influence same-race preferences.
Many primary care offices and other medical practices regularly experience long backlogs for appointments. These backlogs are exacerbated by a significant level of last-minute cancellations or "no-shows," which have the effect of wasting capacity. In this paper, we conceptualize such an appointment system as a single-server queueing system in which customers who are about to enter service have a state-dependent probability of not being served and may rejoin the queue.
The profitability of remanufacturing systems for different cost, technology, and logistics structures has been extensively investigated in the literature. We provide an alternative and somewhat complementary approach that considers demand-related issues, such as the existence of green segments, original equipment manufacturer competition, and product life-cycle effects. The profitability of a remanufacturing system strongly depends on these issues as well as on their interactions.
We analyze a planning model for a firm or public organization that needs to cover uncertain demand for a given item by procuring supplies from multiple sources. Each source faces a random yield factor with a general probability distribution. The model considers a single demand season. All supplies need to be ordered before the start of the season. The planning problem amounts to selecting which of the given set of suppliers to retain, and how much to order from each, so as to minimize total procurement costs while ensuring that the uncertain demand is met with a given probability.
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.
The newsvendor model captures the trade-off faced by a decision maker that needs to place a firm bet prior to the occurrence of a random event. Previous research in operations management has mostly focused on deriving the decision that minimizes the expected mismatch costs. In contrast, we present two methods that estimate the unobservable cost parameters characterizing the mismatch cost function. We present a structural estimation framework that accounts for heterogeneity in the uncertainty faced by the newsvendor as well as in the cost parameters.
Competing organizations are often defined by their niche overlap or structural equivalence in resource dependence, but the very structure that defines competitors can also identify cooperators. There is a fine line between competition and cooperation, but current theories give insufficient guidance as to which will take place and also contribute to the belief that cooperation between competitors is illegitimate. We show that the legitimacy of these practices, as well the evaluation of their welfare implications, are context bound.
Competing organizations are often defined by their niche overlap or structural equivalence in resource dependence, but the very structure that defines competitors can also identify cooperators. There is a fine line between competition and cooperation, but current theories give insufficient guidance as to which will take place and also contribute to the belief that cooperation between competitors is illegitimate. We show that the legitimacy of these practices, as well the evaluation of their welfare implications, are context bound.
Prior research shows that perceivers can judge some traits better than others in first impressions of targets. However, questions remain about which traits perceivers naturally do infer. Here, we develop an account of the "agreeableness asymmetry": although perceivers show little ability to accurately gauge target agreeableness in first impressions, we find that agreeableness is generally the most commonly-inferred disposition among the Big Five dimensions of personality (agreeableness, extraversion, conscientiousness, openness, and emotional stability).
Historical and empirical data have linked artistic creativity to depression and other affective disorders. This study examined how vulnerability to experiencing negative affect, measured with biological products, and intense negative emotions influenced artistic creativity. The authors assessed participants' baseline levels of an adrenal steroid (dehydroepiandrosterone-sulfate, or DHEAS), previously linked to depression, as a measure of affective vulnerability.
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 gap between the qualifications of New York City teachers in high-poverty schools and low-poverty schools has narrowed substantially since 2000. Most of this gap-narrowing resulted from changes in the characteristics of newly hired teachers, and largely has been driven by the virtual elimination of newly hired uncertified teachers coupled with an influx of teachers with strong academic backgrounds in the Teaching Fellows program and Teach for America.
Perhaps because of its importance, brand performance has been approached in several different ways by several different researchers employing several different measures. Lehmann, Keller, and Farley examine a broad range of these measures to explore their overlap and to uncover core underlying dimensions and the structure of brand performance metrics that balance parsimony and completeness. They also examine how different dimensions of brand performance and profiles of leading brands vary by country (i.e., the United States and China).
Product discussion boards are a rich source of information about consumer sentiment about products, which is being increasingly exploited. Most sentiment analysis has looked at single products in isolation, but users often compare different products, stating which they like better and why. We present a set of techniques for analyzing how consumers view product markets. Specifically, we extracted relative sentiment analysis and comparisons between products, to understand what attributes users compare products on, and which products they prefer on each dimension.
We use six years of panel data on students and teachers to evaluate the effectiveness of recently hired teachers in the New York City public schools. On average,the initial certification status of a teacher has small impacts on student test performance. However, among those with the same experience and certification status,there are large and persistent differences in teacher effectiveness. Such evidence suggests that classroom performance during the first two years is a more reliable indicator of a teacher's future effectiveness.
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.
he Internet is not simply a set of interconnected links and protocols---it is also a construct of the imagination, an inkblot test into which everyone projects their desires, fears, and fantasies. Some see enlightenment and education. Others see pornography and gambling. Some see sharing and collaboration. Others see spam and viruses. Yet when it comes to the impact on the democratic process, the answer seems unanimous. The Internet is good for democracy. It creates digital citizens active in the teledemocracy [1] of the Electronic Republic [2] in the e-nation [3].
We analyze data on fees paid to investment bankers and acquisition premia paid for targets in cash tender offers. Our results are broadly consistent with the predictions of a benign view of the role of investment banks in advising acquisition targets. Fees to investment banks are correlated with attributes of transactions and target firms in ways that make sense if banks are being paid for processing information. The more contingent (and, therefore, risky) the fees, the higher they tend to be, all else held constant.
We analyze data on fees paid to investment bankers and acquisition premia paid for targets in cash tender offers. Our results are broadly consistent with the predictions of a benign view of the role of investment banks in advising acquisition targets. Fees to investment banks are correlated with attributes of transactions and target firms in ways that make sense if banks are being paid for processing information. The more contingent (and, therefore, risky) the fees, the higher they tend to be, all else held constant.
Our results are broadly consistent with the predictions of a benign view of the role of investment banks in advising acquisition targets. Fees to investment banks are correlated with attributes of transactions and target firms in ways that make sense if banks are being paid for processing information. The more contingent (and, therefore, risky) the fees, the higher they tend to be, all else held constant. Variation in acquisition premia also can be explained by fundamental deal attributes.
Our results are broadly consistent with the predictions of a benign view of the role of investment banks in advising acquisition targets. Fees to investment banks are correlated with attributes of transactions and target firms in ways that make sense if banks are being paid for processing information. The more contingent (and, therefore, risky) the fees, the higher they tend to be, all else held constant. Variation in acquisition premia also can be explained by fundamental deal attributes.
In this paper, we examine the pattern of correlation among consumer price sensitivities for customer purchase incidence decisions across complementary product categories. We use a hierarchical Bayesian multivariate probit model to uncover this pattern. We estimated this model using purchase incidence data for six categories involving three pairs of complementary products.
In many services (e.g., the wireless service industry), consumers choose a service plan according to their expected consumption. In such situations, consumers experience two forms of uncertainty. First, they may be uncertain about the quality of their service provider and can learn about it after repeated use of the service. Second, they may be uncertain about their own usage of minutes and learn about it after observing their actual consumption.
We derive and analyze Monte Carlo estimators of price sensitivities ("Greeks") for contingent claims priced in a diffusion model. There have traditionally been two categories of methods for estimating sensitivities: methods that differentiate paths and methods that differentiate densities. A more recent line of work derives estimators through Malliavin calculus. The purpose of this article is to investigate connections between Malliavin estimators and the more traditional and elementary pathwise method and likelihood ratio method.
We match Big Mac prices with prices of its ingredients as a unique prism to study real exchange rates (RERs). This approach has several advantages. First, the levels of the Big Mac RER can be measured meaningfully. Second, as the exact composition of a Big Mac is known, the contributions of its tradable and non-tradable components can be estimated relatively precisely. Third, the dynamics of the RER can be studied in a setting free of several biases inherent in CPI-based RERs. Finally, a large cross-country dimension allows us to overturn the Engel result on what drives RERs.
This paper examines two related issues: (a) the implicit methodology used by the U.S. Treasury in determining whether China and America's other trading partners manipulate their exchange rates, and (b) the nature of the Chinese exchange rate regime since July 2005.
In recent years, product discussion forums have become a rich environment in which consumers and potential adopters exchange views and information. Researchers and practitioners are starting to extract user sentiment about products from user product reviews. Users often compare different products, stating which they like better and why.
Previous studies of cultural consumption have found a significant but weak relationship between expert judgment (EJ) and popular appeal (PA) and have suggested that this little taste phenomenon reflects a mediating role played by ordinary evaluation (OE) in diluting the association between EJ and PA. However, various weaknesses in this work have involved problems with sequential timing, nonindependence of measurements, and contamination by market(ing)-related influences.
While new conventional wisdom warns that developing countries should be aware of the risks of premature capital account liberalization, the costs of not removing exchange controls have received much less attention. This paper investigates the negative effects of exchange controls on trade. To minimize evasion of controls, countries often intensify inspections at the border and increase documentation requirements. Thus, the cost of conducting trade rises.
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.
This paper proposes that customers often respond to brand extension concepts by visualizing the product. We call this process spontaneous visualization and suggest that it precedes concept evaluations. In two studies, we show that spontaneous visualization is enhanced by the fit between the parent brand and the extension category and by the ease with which the product category can be imagined. The appeal of the visualized image in turn determines whether visualization enhances or decreases concept evaluations.