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.
We study a dynamic learning model in which heterogeneously connected Bayesian players choose between two activities: learning from one's own experience (work) or learning from the experience of others (search). Players who work produce an inflow of information which is local and dispersed around the society. Players who search, instead, aggregate the information produced by others and facilitate its diffusion, thereby transforming what inherently is a private good into information that everyone can access more easily.
Columbia Business School’s position in the heart of New York City places it at the most important nexus of the global financial industry. It’s no coincidence that finance and economics are at the very core of Columbia Business School’s research and scholarship.
We develop a tractable general equilibrium framework of housing and mortgage markets with aggregate and idiosyncratic risks, costly liquidity and strategic defaults, empirically relevant informational asymmetries, and endogenous mortgage design. We show that adverse selection plays an important role in shaping the form of an equilibrium contract. If borrowers' homeownership values are known, aggregate wages and house prices determine the optimal state-contingent mortgage payments, which efficiently reduces the costs of liquidity default.
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.
We would like to share some of our general observations on activism, economics and the macro environment.
We present a novel theory of the employment relationship. A manager can invest in attention technology to recognize good worker performance. The technology may break and is costly to replace. We show that as time passes without recognition, the worker's belief about the manager's technology worsens and his effort declines. The manager responds by investing, but this investment is insufficient to stop the decline in effort and eventually becomes decreasing. The relationship, therefore, continues deteriorating, and a return to high performance becomes increasingly unlikely.
We study the efficient resolution of global banks by national regulators. Single-point-of-entry (SPOE) resolution, where loss-absorbing capacity is shared across jurisdictions, is efficient in principle, but may not be implementable. First, when expected transfers across jurisdictions are too asymmetric, national regulators fail to set up an efficient SPOE resolution regime ex ante. Second, when required ex-post transfers across jurisdictions are too large, national regulators ring-fence local banking assets instead of cooperating in a planned SPOE resolution.
A monopolist offers a product to a market of consumers with heterogeneous quality preferences. Although initially uninformed about the product quality, they learn by observing past purchase decisions and reviews of other consumers. Our goal is to analyze the social learning mechanism and its effect on the seller's pricing decision. This analysis borrows from the literature on social learning and on pricing and revenue management.
In a single commodity setting with changing tastes, an individual's consumption plan can be obtained using naive or sophisticated choice. We provide two sufficient conditions for when (i) the solutions are unique and agree and (ii) the common plan is representable by a non-changing tastes utility. Because the solution is not revised over time, the plan and associated preferences are referred to as being effectively consistent. Afriat-style revealed preference tests are derived.
This paper studies technology adoption in a cluster of soccer-ball producers in Sialkot, Pakistan. We invented a new cutting technology that reduces waste of the primary raw material and gave the technology to a random subset of producers. Despite the clear net benefits for nearly all firms, after 15 months take-up remained puzzlingly low.
We examine short-horizon return predictability using a novel proprietary dataset of institutional traders with known identities. We estimate investor-specific short-term trading skill and find that there is pronounced heterogeneity in predicting short-term returns among institutional investors. Incorporating short-term predictive ability, our model explains much higher fraction of variation in asset returns. Ignoring the heterogeneity in short-term trading skill has major implications in modeling price impact.
I present a model of consumption and savings for multi-person households in which members are imperfectly altruistic and share wealth. I show that, despite having standard exponential time preferences, the household is time-inconsistent: members save too little and overspend on private consumption goods. Access to private illiquid durable goods can exacerbate overconsumption by providing a way for members to lock-up wealth from each other.
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.
Assessments of how governments and international organizations have dealt with global challenges often feature a familiar refrain: when it comes to funding, there was too little, too late. The costs of economic, social, and environmental problems compound over time, whether it's an Ebola outbreak that escalates to an epidemic, a flood of refugees that tests the strength of the EU, or the rise of social inequalities that reinforce poverty.
People are more generous toward single than toward multiple beneficiaries, and encouraging greater giving to multiple targets is challenging. We identify one factor, perceived efficacy, which enhances generosity toward multiple beneficiaries. We investigate relationships between perceived self-efficacy (believing one can take steps to make an impact), response efficacy (believing those steps will be effective), and charitable giving.
Contemporary consumer behavior research largely conceptualizes post-decision evaluation processes in terms of decision confidence, anticipated regret and satisfaction, and decision and consumption satisfaction. The current research broadens this view, arguing that people additionally experience varying degrees of decision comfort that are distinct from other post-decision evaluations.
Investigations of the basic risk-return trade-off for the market return typically use maximum likelihood estimation (MLE) with a monthly or quarterly horizon and data sampled to match the horizon even though daily data are available. We develop an overlapping data inference methodology for such models that uses all of the data while maintaining the monthly or quarterly forecasting period. Our approach recognizes that the first order conditions of MLE can be used as orthogonality conditions of the generalized method of moments (GMM).
We introduce a new measure of emerging market sovereign credit risk: the local currency credit spread, defined as the spread of local currency bonds over the synthetic local currency risk-free rate constructed using cross-currency swaps. We find that local currency credit spreads are positive and sizable. Compared with credit spreads on foreign-currency-denominated debt, local currency credit spreads have lower means, lower cross-country correlations, and lower sensitivity to global risk factors.
This paper studies optimal communication flows in organizations. A production process can be coordinated ex ante, by letting agents stick to a prespecified plan of action. Alternatively, agents may adapt to task-specific shocks, in which case tasks must be coordinated ex post, using communication. When attention is scarce, an optimal organization coordinates only a few tasks ex post. Those tasks are higher performing, more adaptive to the environment, and influential. Hence, scarce attention requires setting priorities, not just local optimization.
Building on intuition from the dynamic asset pricing literature, we uncover unobserved risk aversion and fundamental uncertainty from the observed time series of the variance premium and the credit spread while controlling for the conditional variance, expectations about the macroeconomic outlook, and interest rates. We apply this methodology to monthly data from both Germany and the US. We find that the variance premium contains a substantial amount of information about risk aversion whereas the credit spread has a lot to say about uncertainty.
Mainstream queueing models are frequently employed in modeling healthcare delivery in a number of settings, and further are used in making operational decisions for the same. The vast majority of these queueing models ignore the effects of delay experienced by a patient awaiting care. However, long delays may have adverse effects on patient outcomes and can potentially lead to longer lengths of stay (LOS) when the patient ultimately does receive care. This work sets out to understand these delay issues from an operational perspective.
Revolutions are said to devour their children, as well as their parents. The Internet is no exception. Its success and impact have been overwhelming. But in the process it is also undermining its own technological, organizational, and economic foundations. If its origin was cutting-edge science and engineering, then its present is that of commerce and its future is that of entertainment. Yet that descent from lofty aspirations to popular diversions should not be seen as negative.
Netting risk anywhere is a threat to returns everywhere.
I have taken the liberty to repurpose one of the great quotes of the 20th century, and adulterate it, to elucidate a far more pedestrian financial concept: That of netting risk.
We propose a model where investors can choose to acquire costly information that allows them to identify good assets and purchase them in opaque over the counter (OTC) markets. Uninformed investors trade on an organized exchange and only have access to an asset pool that has been (partially) cream-skimmed by informed dealers. We show that when the quality composition of assets for sale is fixed there is always too much information acquisition and cream skimming by dealers in equilibrium.
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.
We consider a system of parallel queues where arriving service tasks are buffered, according to type. Available service resources are dynamically configured and allocated to the queues to process the tasks. At each point in time, a scheduler chooses a service configuration across the queues, in response to queue backlogs. Switching from one service configuration to another incurs a setup time, during which idling occurs and service bandwidth is lost. Such setup times are inherent in manufacturing and computer systems.
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.
The literature assessing whether mutual fund managers have skill typically regards market timing or stock picking skills as immutable attributes of a manager or fund. Yet, measures of these skills appear to vary over the business cycle. This paper offers a rational explanation, arguing that timing and picking are tasks. A skilled manager can choose how much of each task to attend to. Using tools from the rational inattention literature, we show that in booms, a manger should pick stocks and in recessions, he should pay more attention to his market timing.
This paper investigates citations of influential papers in the marketing and management area. These papers are successful in terms of the direct citations they receive (i.e., primary citations). To be truly influential, however, the papers citing them must in turn be used and cited by subsequent papers (i.e., have secondary citations) to demonstrate their long-run relevance. We propose a measure of enduring impact that takes into account (1) both primary and secondary citations and (2) the number of citations in the bibliography.
Individuals that consume different baskets of goods are differentially affected by relative price changes caused by international trade. We develop a methodology to measure the unequal gains from trade across consumers within countries. The approach requires data on aggregate expenditures and parameters estimated from a non-homothetic gravity equation. We find that trade typically favors the poor, who concentrate spending in more traded sectors.
This paper examines how prices, markups and marginal costs respond to trade liberalization. We develop a framework to estimate markups from production data with multi-product firms. This approach does not require assumptions on the market structure or demand curves faced by firms, nor assumptions on how firms allocate their inputs across products. We exploit quantity and price information to disentangle markups from quantity-based productivity, and then compute marginal costs by dividing observed prices by the estimated markups.
The role of assortment planning and pricing in shaping sales and profits of retailers is well documented and studied in monopolistic settings. However, such a role remains relatively unexplored in competitive environments. In this paper, we study equilibrium behavior of competing retailers in two settings: i.) when prices are exogenously fixed, and retailers compete in assortments only; and ii.) when retailers compete jointly in assortment and prices.
