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.
We analyze forms of synergy between emic and etic approaches to research on culture and cognition. Drawing on the justice judgment literature, we describe dynamics through which the two approaches stimulate each other's progress. Moreover, we delineate ways in which integrative emic/etic frameworks overcome limitations of narrower frameworks in modeling culture and cognition. Finally, we identify advantages of integrative frameworks in guiding responses to the diverse justice sensitivities in international organizations.
We analyze forms of synergy between emic and etic approaches to research on culture and cognition. Drawing on the justice judgment literature, we describe dynamics through which the two approaches stimulate each other's progress. Moreover, we delineate ways in which integrative emic/etic frameworks overcome limitations of narrower frameworks in modeling culture and cognition. Finally, we identify advantages of integrative frameworks in guiding responses to the diverse justice sensitivities in international organizations.
This paper lays out alternative equity valuation models that involve forecasting for finite periods and shows how they are related to each other. It contrasts dividend discounting models, discounted cash flow models, and "residual income" models based on accrual accounting. It shows that some models that are apparently different yield the same valuation. It gives the general form of the terminal value calculation in these models and shows how this calculation serves to correct errors in the model.
This paper concerns the modeling of low inventory lines. Currently, most models assume that processing times are independent. We consider the differences in behavior of workers in low- and high-inventory production lines. Using a laboratory experiment we show that workers speed up whent hey are the cause of idle time on the line. This means that processing time distributions are not independent of the size of the buffer, of the processing speed of co-workers, or of the amount of inventory in the system.
In this paper we develop policies for scheduling dynamically arriving jobs to a broad class of parallel-processing queueing systems. We show that in heavy traffic the policies asymptotically minimize a measure of the expected system backlog, which we call system work. Our results yield succinct, closed-form expressions for optimal system work in heavy traffic.
We study the Mt/G/∞ queue where customers arrive according to a sinusoidal function λt = λ + A sin(2 π t/T) and the service rate is μ. We show that the expected number of customers in the system during peak congestion can be closely approximated by (λ + A)/ μ for service distributions with coefficient of variation between 0 and 1.
We study the Mt/G/∞ queue where customers arrive according to a sinusoidal function λt = λ + A sin(2 π t/T) and the service rate is μ. We show that the expected number of customers in the system during peak congestion can be closely approximated by (λ + A)/ μ for service distributions with coefficient of variation between 0 and 1.
Generalized knowledge comes from cumulating results across studies, a process known as meta-analysis. Efficiently increasing generalized knowledge in a defined area-estimates of price or advertising, for example-is one important goal for research. Because (1) most meta-analyses are based on highly inefficient and unbalanced natural experiments or designs and (2) additional studies are costly, carefully selecting the next study is important.
Recent research on business investment decisions suggests that real investment in plant and equipment is quite sensitive to changes in the user cost of capital, pointing to the possibility that long-run changes in tax policy may have a significant impact on an economy's capital stock. Indeed, many countries have at times adopted investment tax incentives to stimulate investment. The prevalence of investment incentives suggests that local policy-makers believe these are effective in increasing investment at a reasonable cost in terms of lost revenue.
This paper describes novel market-based technologies for systematic, quantifiable and predictable protection of information systems against attacks. MarketNet establishes a financial market to regulate and protect access resource access and to account for their use. A domain offers access to its resources to cIients who can pay with its currency. It controls its exposure to attacks by pricing critical resources high and by limiting the currency available to potential attackers.
The fact that people frequently cooperate in the single-trial Prisoner's Dilemma (PD) game indicates that their decision making in conflicts is not always guided by game-theoretic analyses of expected outcomes. Whereas most theorists have accounted for cooperation in terms of an ethically rooted concern for matching another's “good faith” cooperation (Hofstadter, 1985), others have argued that cooperation reflects several distinct social norms or heuristics (Elster, 1989).
We show how a simple normal approximation to Erlang's delay formula can be used to analyze capacity and staffing problems in service systems that can be modeled as M/M/s queues.
We show how a simple normal approximation to Erlang's delay formula can be used to analyze capacity and staffing problems in service systems that can be modeled as M/M/s queues.
The increased complexity of modern manufacturing has led to uncertainties in production processes. Factors such as unplanned machine maintenance, tool unavailability, and complex process adjustments make it difficult to maintain a predictable level of output. To be effective, an appropriate production model must incorporate these uncertainties into the representation of the production process. This paper considers a one-time production of an application-specific product which must follow a fixed routing through the manufacturing system.
It has been suggested that evaluations may be based on a "How-do-I-feel-about-it?" heuristic, which involves holding a representation of the target in mind and inspect feelings that this representation may elicit. Previous studies have shown that reliance on such feelings depends on whether they are believed to be representative of the target. This paper argues that it also depends on whether feelings toward the target are regarded as relevant.
This study investigates factors influencing causal attributions in managerial decision making. Three categories of factors are identified: (i) prior beliefs (ii) background frequencies, and (iii) covariation cues. The impact of factors in each of the above categories on causal attribution are studied in a marketing decision making context. Subjects demonstrated a bias toward assigning causality to variables that occurred infrequently or were controllable. Also, subjects were particularly influenced by the joint-occurrences of cause and effect variables.
The authors discuss the long-run future of decision support systems in marketing. They argue that a growing proportion of marketing decisions can not only be supported but may also be automated. From a standpoint of both efficiency (e.g., management productivity) and effectiveness (e.g., resource allocation decisions), such automation is highly desirable. The authors describe how model-based automated decision-making is likely to penetrate various marketing decision-making environments and how such models can incorporate competitive dynamics.
Why has the service factory model failed to live up to its original promise? To answer this question, we start with a basic concept: service is doing the work of your customer. As a result, it requires a high level of contact, communication and coordination with your customers. To deliver truly excellent service, therefore, requires a level of customer intimacy. That is, a service provider needs to know individual customers being served in order to deliver service that, in addition to being efficient, is also personal and effective in fulfilling their total service requirements.
Why has the service factory model failed to live up to its original promise? To answer this question, we start with a basic concept: service is doing the work of your customer. As a result, it requires a high level of contact, communication and coordination with your customers. To deliver truly excellent service, therefore, requires a level of customer intimacy. That is, a service provider needs to know individual customers being served in order to deliver service that, in addition to being efficient, is also personal and effective in fulfilling their total service requirements.
We examine the effects of intergenerational transfers on saving behavior by analyzing transfers targeted to first-time home purchases. Transfer recipients have a shorter time to save for a down payment of 9-20%. For each dollar of transfer received, total savings falls by 29-40 cents and the down payment rises by 61-71 cents. Transfer recipients increase the value of the home purchased, but by an amount that is much lower than possible if the transfer were fully leveraged.
We examine some mathematical aspects of learning unknown mappings with the mixture of experts model (MEM). Specifically, we observe that the MEM is at least as powerful as a class of neural networks, in a sense that will be made precise. Upper bounds on the approximation error are established for a wide class of target functions. The general theorem states that ||f-fn||p⩽c/nr d/ for f∈Wpr(L) (a Sobolev class over [-1,1]d), and fn belongs to an n-dimensional manifold of normalized ridge functions.
Two and three-dimensional variants of Hotelling's (1929) model of differentiated products are analyzed. In the setup, consumers can place different importances on each product attribute; these are measured by weights on the disutility of distance in each dimension. Two firms play a two-stage game; they choose locations in stage 1 and prices in stage 2. Subgame-perfect equilibria are sought. It is found that all such equilibria have maximal differentiation in one dimension only; in all other dimensions they have minimum differentiation.
To improve the efficiency of product distribution for a centralized bakery, I first performed each person's tasks and discovered that constructing optimal minimum-distance routes would not significantly reduce costs but replacing the physical validation of new routes with a manual mathematical computation or simulation would. The trick was getting management to trust the simulation enough to use it.
This note gives a simple proof that in a (r, q) system the average outstanding backorders andthe average stockouts per unit time are jointly convex in the two control variables q and r.
This note gives a simple proof that in a (r, q) system the average outstanding backorders andthe average stockouts per unit time are jointly convex in the two control variables q and r.
Examines the correlation between investments and proxies for changes in net worth or internal funds and the importance of this correlation for firms likely to face information related capital-market imperfections. Developments and challenges in empirical research; Analytical underpinnings of models of capital market imperfections; Model's application to investment activities.
A major problem in forecasting is estimating the time of some future event. Traditionally, forecasts are designed to minimize an error cost function that is evaluated once, possibly when the event occurs and forecast accuracy can be determined. However, in many applications forecast error costs accumulate over time, and the forecasts themselves may be updated with information that is collected as the expected time of the event approaches. This paper examines one such application, in which flow control managers in the U.S.
The paper develops a simple model of corporate ownership structure in which costs and benefits of ownership concentration are analyzed. The model compares the liquidity benefits obtained through dispersed corporate ownership with the benefits from efficient management control achieved by sonic degree of ownership concentration. The paper reexamines the free-rider problem in corporate control in the presence of liquidity trading, derives predictions for the trade and pricing of blocks, and provides criteria for the optimal choice of ownership structure.
It is common to apply multipliers to both earnings and book value to calculate approximate equity values. However, applying a price-earnings multiplier or a price-to-book multiplier typically produces two valuations and the analyst is left with the question of how to combine them into one valuation. This paper calculates weights that combine the valuations and shows that these weights vary over the difference between earnings and book value, doing so systematically over time.
Bid-prices are becoming an increasingly popular method for controlling the sale of inventory in revenue management applications. In this form of control, threshold—or "bid"—prices are set for the resources or units of inventory (seats on flight legs, hotel rooms on specific dates, etc.) and a product (a seat in a fare class on an itinerary or room for a sequence of dates) is sold only if the offered fare exceeds the sum of the threshold prices of all the resources needed to supply the product.
This article investigates the performance of real estate auctions relative to negotiated sales. It uses a repeat-sales methodology to control for unobserved differences in the quality of auction properties. Properties auctioned in Los Angeles during the 1980s boom sold at an estimated discount of 0%-9%, while sales in Dallas following the oil bust obtained discounts of 9%-21%.
The accelerated pace of technological change has led to rapid obsolescence of productive capacity in electronics and other industries. Managers must consider the impact of future technologies while making acquisition and replacement decisions in such environments. We consider a problem where a sequence of technological breakthroughs are anticipated but their magnitude and timing are uncertain. A firm, operating in such an environment, must decide how much capacity of the current technology to acquire to meet future demand growth.
It is common to apply multipliers to both earnings and book value to calculate approximate equity values. However, applying a price-earnings multiplier or a price-to-book multiplier typically produces two valuations and the analyst is left with the question of how to combine them into one valuation. This paper calculates weights that combine the valuations and shows that these weights vary over the difference between earnings and book value, doing so systematically over time.
In this article, we argue that the time has come to begin to integrate the Coasian view of the firm--which is concerned with the interactions between ownermanagers--and the Bede and Means perspective--which emphasizes the separation of ownership and control in most corporations.
A commentary on Barbara E. Kahn's article, Dynamic Relationships with Customers: High-Variety Strategies, published in the winter 1998 issue of Journal of the Academy of Marketing Sciences is provided. The purpose is to question Kahn's assumptions and hence to suggest some implications for research.
In this paper we address periodic base-stock policies for stochastic economic lot scheduling problems. These represent manufacturing settings in which multiple items compete for the availability of a common capacity source, in the presence of setup times and/or costs, incurred when switching between items, and in the presence of uncertainty regarding demand patterns, production, and setup times. Under periodic base-stock policies, items are produced according to a given periodic item-sequence.
Arya, Glover, and Sunder (AGS) contribute to the earnings management literature along two dimenstion. First, they classify existing explanations for earnings manipulation, based on the assumption of the revelation principle that is violated. Second, they introduce a model where allowing a manager to manipulate earnings serves as a commitment device. They show that both the owners and the manager can benefit from earnings management (a Pareto improvement). My discussion first deals with the general phenomenon of earnings management and then with the specifics of the AGS model.
The effects of tax reform on corporate financial decisions help determine whether reform will increase capital formation and simplify the tax system. This paper describes the effects of fundamental tax reform on corporate tax planning and summarizes economists' knowledge of the magnitude of these effects. We analyze both income tax reform, consisting of integrating the corporate and personal income taxes, and moving to a broad-based consumption tax. As prototypes of reform, we use the U.S.
This paper studies the trade-off between inventory levels and the delivery leadtime offered to customers in achieving a target level of service. It addresses the question of how much a delivery leadtime can be reduced, per unit increase of inventory, at a fixed fill rate. We show that for a class of assemble-to-order models with stochastic demands and production intervals there is a simple linear trade-off between inventory and delivery leadtime, in a limiting sense, at high fill rates.
We determine the minimum cost of super-replicating a nonnegative contingent claim when there are convex constraints on portfolio weights. We show that the optimal cost with constraints is equal to the price of a related claim without constraints. The related claim is a dominating claim, that is, a claim whose payoffs are increased in an appropriate way relative to the original claim. The results hold for a variety of options, including some path-dependent options.
We consider a distribution system consisting of a single warehouse and many geographically dispersed retailers. Each retailer faces demands for a single item which arise a deterministic, retailer specific rate. The retailers' stock is replenished by a fleet of vehicles of limited capacity, departing and returning to the warehouse and combining deliveries into efficient routes. The cost of any given route consists of a fixed component and a component which is proportional with the total distance driven. Inventory costs are proportional with the stock levels.