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 article offers the authors' views on expatriate management programs and the benefits from executives interacting with the people and institutions of the host country. The idea that international experience or interaction between foreign managers and local people will help managers become more creative, entrepreneurial, and successful is discussed. The concept of integrative complexity in bi-cultural managers which enhances job performance is mentioned.
The Kidney Case is multi-person exercise that involves the allocation of a single kidney. Students read profiles of eight candidates for the kidney and make a first allocation decision. Each candidate was designed to be high on some allocation principles but low or unknown on others (e.g., best, match, time in cue, age, personal responsibility for disease, future benefits to society, etc.). Then, students are put into groups and assigned to advocate for one of the candidates. Each group will prepare and give a 3-minute presentation on why their candidate should receive the kidney.
Emissions abatement alone cannot address the consequences of global warming for weather disasters. We model how society adapts to manage disaster risks to capital stock. Optimal adaptation — a mix of firm-level efforts and public spending — varies as society learns about the adverse consequences of global warming for disaster arrivals. Taxes on capital are needed alongside those on carbon to achieve the first best.
What are the sources of the returns to education? We study the allocation of higher education graduates from public institutions in Ohio across firms. We present three results. First, we confirm findings in the earlier literature of large pay differences across degrees. Second, we show that up to one quarter of pay premiums for higher degrees are explained by between-firm pay differences. Third, higher education degrees are associated with greater representation at the best-paying firms.
This article focuses on the role of threats in negotiations. Broadly speaking, a threat is a proposition that issues demands and warns of the costs of noncompliance. Even if neither party resorts to them, potential threats shadow most negotiations. Researchers have found that people actually evaluate their counterparts more favorably when they combine promises with threats rather than extend promises alone. Whereas promises encourage exploitation, the threat of punishment motivates cooperation.
How to view pricing, cross-selling, and customer loyalty during difficult economic times. (Reprinted from "Marketing in Difficult Times," Effective Executive, July, 2009, pp. 11-18.)
We examine the issue of executive compensation within an inter-temporal general equilibrium production context. Inter-temporal optimality places strong restrictions on the form of a representative manager's compensation contract, restrictions that appear to be incompatible with the fact that the bulk of many high-profile managers' compensation is in the form of various options and option-like rewards. We therefore measure the extent to which “options-like” convex contracts alone can induce the manager to adopt near-optimal investment and hiring decisions.
This paper addresses the issues that confront the FASB and IASB in developing a new conceptual framework document. First, we suggest characteristics that a conceptual framework ought to exhibit. Most of these suggestions are based on our critique of the existing framework and the FASB-IASB work in progress. Second, we present a model framework that exhibits these characteristics. We emphasize up front that this framework is quite explicit. It goes to the heart of what a framework document should do: it places specific restrictions on what constitutes admissible accounting standards.
I use uniquely comprehensive data on financial news events to test four predictions from an asymmetric information model of a firm's stock price. Certain investors trade on information before it becomes public; then, public news levels the playing field for other investors, increasing their willingness to accommodate a persistent liquidity shock. Empirically, I measure public information using firms' stock returns on news days in the Dow Jones archive. I find four patterns in postnews returns and trading volume that are consistent with the asymmetric information model's predictions.
We argue that a fundamental reason for the short-term perspective of corporate executives is the short-term orientation of shareholders themselves and the financial markets that drive the performance benchmarks of CEOs. Although some shareholders are prepared to take a more long-term view they are generally not rewarded for their loyalty to the company.
This is a fictitious case in which Universal Studies, a major U.S. theme parks and resorts company, has to negotiate with China's central government to build its first theme park in the country. Students are divided into groups and each student is assigned a role as one of the negotiators or as an observer. The topics covered in the negotiation include the new theme park's location, ownership structure, size, nature of theme zones, local employment and hospitality training programmes.
We examine whether securitization impacts renegotiation decisions of loan servicers, focusing on their decision to foreclose a delinquent loan. Conditional on a loan becoming seriously delinquent, we find a significantly lower foreclosure rate associated with bank-held loans when compared to similar securitized loans: across various specifications and origination vintages, the foreclosure rate of delinquent bankheld loans is 3% to 7% lower in absolute terms (13% to 32% in relative terms).
Research on choice overload has demonstrated that choosing from larger, versus smaller, sets can reduce consumers’ wellbeing. However, in real life consumers seem able to cope with ever-expanding assortments better than what this research would predict. We argue that this discrepancy depends on differences in choice timeframes: Whereas participants in choice overload studies usually make a one-off choice within a limited amount of time, real consumers often spend longer time making certain choices and/or experience repeated exposures to the same choice over time.
As the world becomes interconnected, the interest in comparisons among countries has grown. A veritable cottage industry of comparison-spewing institutions has emerged, this author not excepted. Who of the 195?plus sovereign nations on this planet is the most democratic? The happiest? The most innovative? The most electronically connected? No problem, lists exist for everything.
The evolution of industries based on systemic technologies does not always conform to the evolutionary patterns captured by dynamic models of industry evolution featuring endogenous relationship between market structure and firm investment strategies. These models purporting to explain the dynamics of intra-industry competition predominantly focus on the co- evolution of underlying technology and competing firms' idiosyncratic technological competences.
In 2007, Miley Cyrus went on her first concert tour, performing both as herself and in character as Hannah Montana. Tickets with a retail price of $20 to $60 sold out within minutes, only to be resold on secondary online markets like eBay and StubHub at prices of $500 and up. Many of Cyrus's devoted young fans were outraged, and their anger threatened to undermine Cyrus's popularity and the reputation of the ticketing agency.
In order to address the issue of the welfare costs of informed trade, a new Glosten-Milgrom type model is constructed with elastic uninformed trade. Since uninformed trade is elastic, there are some uninformed who choose not to trade because their idiosyncratic valuation lies within the spread. This lack of trade is a welfare loss and the model can be used to estimate the magnitude of the loss. Calculations show that the welfare loss tends to be single-peaked in the amount of informed trade, reaching a maximum at an internal point.
Cultural influences on individual judgment and decision making are increasingly understood in terms of dynamic constructive processing and the structures in social environments that shape distinct processing styles, directing initial attentional foci, activating particular judgment schemas and decision strategies, and ultimately reinforcing some judgment and decision making (JDM) patterns over others.
In this paper we describe the challenges of Bayesian computation in Finance. We show that empirical asset pricing leads to a nonlinear non-Gaussian state space model for the evolutions of asset returns and derivative prices. Bayesian methods extract latent state variables and estimate parameters by calculating the posterior distributions of interest. We describe the use of direct estimation methods such as Markov chain Monte Carlo (MCMC) and sequential Monte Carlo (SMC) methods based on particle filtering (PF).
In settings such as investing for retirement or choosing a drug plan, individuals typically face a large number of options. In this paper, we analyze how the size of the choice set influences which alternative is selected. We present both laboratory experiments and field data that suggest larger choice sets induce a stronger preference for simple, easy-to-understand options.
In the customer expectations arena, relatively little attention has been paid to the impact on expectations of variation in cultural variables unique to a country. Here the authors focus on one country, India, and a major cultural influence there — the extent of belief in karma. Prior research in the United States suggests that disconfirmation sensitivity lowers expectations. Here the authors examine whether belief in karma and, consequently, having a long-term orientation, counteracts the tendency to lower expectations in two studies that measure and prime respondents' belief in karma.
We present a broad-based, consumer-centric view of innovation — referred to as "perceived firm innovativeness" (PFI). PFI is conceptualized as the consumer's perception of an enduring firm capability that results in novel, creative, and impactful ideas and solutions. We develop and validate a PFI scale and show that PFI impacts consumer loyalty via two processing routes: a functional-cognitive route and an affective-experiential route.
This article studies optimal mortgage design in a continuous-time setting with volatile and privately observable income, costly foreclosure, and a stochastic market interest rate. We show that the features of the optimal mortgage are consistent with an option adjustable-rate mortgage (option ARM). Under the optimal contract, the borrower is given discretion of how much to repay until his balance reaches a certain limit. The default rates and interest rate payment on the mortgage correlate positively with the market interest rate.
On a visit to any major U.S. department store, consumers can observe vendor shops (typically for cosmetics, apparel, apparel accessories, electronics, and toys), each selling a particular brand exclusively and designed to reflect the image of that brand. For these vendor shops, also called boutiques or "stores within a store," retailers rent out retail space to the respective manufacturers and give them complete autonomy over retail-level decisions, such as pricing and in-store service.
We develop a methodology for the measurement of the parameters of cumulative prospect theory and time discounting models based on tools from the preference measurement literature. These parameters are typically elicited by presenting decision makers with a series of choices between hypothetical alternatives, gambles or delayed payments. We present a method for adaptively designing the sets of hypothetical choices presented to decision makers, and a method for estimating the preference function parameters which capture interdependence across decision makers as well as response error.
Discussion of different marketing strategies to employ during difficult times. (Reprinted from "Marketing in Difficult Times," Effective Executive, July, 2009, pp. 11-18.)
As the largest and fastest growing transition economy in the world, China's entrance onto the global stage has been swift and dramatic. As such, almost every facet of entrepreneurship, from the identification of nascent opportunities to the challenges of managing triple-digit growth to the transformation of firms from dying to emerging industries, can be studied as natural experiments. The four papers in this issue are dedicated to exploring entrepreneurial innovation in the Chinese private economy.
Suresh Sundaresan offers several insights on the development of financial markets in Asia and the Pacific. First, financial market development in the region should take account of the large number of households who are effectively unbanked, given the potential for positive feedback effects between financial markets, economic growth and stability. Second, there is a need for fundamental banking reforms of capital structures and liquidity sources to mitigate bankruptcy risks, as well as the cost to taxpayers of insolvency and bailouts.
Behavioral endocrinology research suggests that testosterone may play a role in moral decision making. Studies involving human and nonhuman animals indicate that high basal testosterone is associated with decreased aversion to risk and an increased threshold for conflict, fear, stress, and threat. We tested the role of testosterone in moral decision making. We predicted and found that individuals high in testosterone are more likely to make utilitarian decisions—specifically when doing so involves acts of aggression and social cost.
We consider a bandit problem which involves sequential sampling from two populations (arms). Each arm produces a noisy reward realization which depends on an observable random covariate. The goal is to maximize cumulative expected reward. We derive general lower bounds on the performance of any admissible policy, and develop an algorithm whose performance achieves the order of said lower bound up to logarithmic terms. This is done by decomposing the global problem into suitably "localized" bandit problems.
We develop a structural demand model that endogenously captures the effect of out-of-stocks on customer choice by simulating a time-varying set of available alternatives. Our estimation method uses store-level data on sales and partial information on product availability. Our model allows for flexible substitution patterns, which are based on utility maximization principles and can accommodate categorical and continuous product characteristics.
The authors consider how uncertainty over protest occurrence shapes the strategic interaction between companies and activists. Analyzing Wal‐Mart, the authors find support for their theory that companies respond to this uncertainty through a “test for protest” approach. In Wal‐Mart’s case, this consists of low‐cost probes in the form of new store proposals. They then withdraw if they face protests, especially when those protests signal future problems. Wal‐Mart is more likely to open stores that are particularly profitable, even if they are protested.
It's become conventional wisdom in academia, politics, and the press that America has fallen behind in electronic communications. Where once America ruled supreme, bestowing the internet on the world, it is now an also-ran. Whether in broadband internet or in mobile communications, America is barely edging out Slovenia. This may have been true for a brief period, but is it still true? And why is this story line taken up with such relish?
Communicators' tuning of a message to suit their audience's attitude about a target can bias their subsequent memory of the target. Research shows that this effect occurs to the extent that the message serves the creation of a shared reality with the audience. In two experiments we investigated the motivational processes underlying such audience-tuning memory biases. Experiment 1 found that when audience tuning was motivated by a shared-reality motive (vs.
Most studies of word-of-mouth (WOM) in marketing have concentrated either on aggregate outcomes (e.g., new product diffusion) or on the transmission process (i.e., "talking" or "sending" information). This paper instead focuses on the reception process at the individual level (i.e., "listening" to information), and addresses two questions: what makes people listen to WOM, and what are the drivers of the type and extent of WOM impact on recipients' brand attitudes and purchase intentions?
Negotiators in regulatory fit report feeling right about an upcoming negotiation more than those in non-fit, and this intensifies their responses to negotiation preparation (Appelt et al. in Soc Cogn 27(3), 365-384, 2009). High assessors emphasize critical evaluation and being right (Higgins et al. in Advances in experimental social psychology, Vol 35, pp 293-344, 2003).
A certain number of corporations, probably an increasing number, go considerably beyond what is required of them legally in minimizing their environmental impact. They meet legal limits on environmental impacts and then go beyond these. This has been called "overcompliance," a descriptive, if not elegant, phrase designating going well beyond what is required by laws and regulations in force. Why do corporations overcomply, going beyond what is legally required of them?