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.
In a fresh Covid-19 wave, Sally Beauty may beg for cash with nothing left for collateral.
We decompose the returns of five well-known anomalies into cash flow and discount rate news. Common patterns emerge across the five factor portfolios and their mean variance efficient (MVE) combination. Whereas discount rate news predominates in market returns, systematic cash flow news drives the returns of anomaly portfolios and their MVE combination with the market portfolio. Anomaly cash flow and discount rate shocks are largely uncorrelated with market cash flow and discount rate shocks and with business cycle fluctuations.
An information system is a primitive structure that defines which agents can initially get information and how such information is then distributed to others. From political and organizational economics to privacy, information systems arise in various contexts and, unlike information itself, can be easily observed empirically. We introduce a methodology to characterize how information systems affect strategic behavior. This involves proving a revelation principle result for a novel class of constrained information design problems.
We study how small and medium enterprise (SME) lenders react to information about their competitors' contracting decisions. To isolate this learning from lenders' common reactions to unobserved shocks to fundamentals, we exploit the staggered entry of lenders into an information-sharing platform. Upon entering, lenders adjust their contract terms toward what others offer. This reaction is mediated by the distribution of market shares: lenders with higher shares or that operate in concentrated markets react less.
We study how monetary policy and risk shocks affect major asset prices (interest rates, stocks, long-term bonds) in three large economies: the US, the euro area, and Japan. Using a high-frequency framework, we fail to find evidence in favor of monetary policy affecting foreign asset prices through a risk channel. There is however a strong global common component in risk shocks affecting asset prices in all three economies.
A key distinction between over-the-counter markets and centralized exchanges is the non-anonymity of the transactions. In this paper, we develop a model of non-anonymous trading and compare its prices, liquidity, and efficiency of asset allocations against a baseline with anonymous transactions. The non-anonymity improves the market liquidity by reducing the concerns for adverse selection. More specifically, it allows the market participants to learn valuable information about their counterparties through repeated interactions and consequently enables them to form trading relationships.
Matt Frisch, VP of Corporate Development for Canadian pharmaceutical wholesaler Kohl & Frisch, had successfully led the charge to buy out US-based rival AmerisourceBergen Canada (ABC). ABC's aggressive price cuts had disrupted the industry -- before squeezing its own revenues to the point where leaders at its Pennsylvania headquarters decided to divest the Canadian unit rather than subsidize an unprofitable operation.
The equity variance risk premium is the expected compensation earned for selling variance risk in equity markets. The variance risk premium is positive and shows moderate persistence. High variance risk premiums coincide with the left tail of the consumption growth distribution shifting down. These facts, together with a positive, yet moderate, difference between the risk-neutral entropy and variance of the aggregate market return, refute the bulk of the extant consumption-based asset pricing models. We introduce a tractable habit model that does fit the data.
Salary history bans forbid employers from asking job candidates to disclose their salaries. However, applicants can still volunteer this information. Our theoretical model predicts the effect of these laws varies by how workers comply. Our survey of Americans in the labor force finds candidates fall into three compliance types: 25% always disclose their salary whether asked or not, 17% never disclose, and 58% comply with the ban (disclosing only when asked). Importantly, compliance type varies by demographics (e.g.
Objectives:
To examine whether and how step-down unit admission after ICU discharge affects patient outcomes.
Design:
Retrospective study using an instrumental variable approach to remove potential biases from unobserved differences in illness severity for patients admitted to the step-down unit after ICU discharge.
Setting:
Ten hospitals in an integrated healthcare delivery system in Northern California.
Patients:
How do ethical arguments affect AI adoption in business? We randomly expose business decision-makers to arguments used in AI fairness activism. Arguments emphasizing the inescapability of algorithmic bias lead managers to abandon AI for manual review by humans and report greater expectations about lawsuits and negative PR. These effects persist even when AI lowers gender and racial disparities, and when engineering investments to address AI fairness are feasible. Emphasis on status quo comparisons yields opposite effects.
This paper offers the first study of how changes in corporate R&D investment affect labor mobility. We document that increases in firm R&D have no measurable effect on employee mobility to other incumbent firms or on exit from employment, but do spur employee departures to join the founding teams of startups. These startups are more likely to be outside the R&D-investing employer's industry, suggesting that the ideas moving via employees to startups would impose diversification costs on the parent.
For one, if you’re worried about a Covid-19 cash crunch, consider slicing your salary.
We derive a measure of firm-level regulatory exposure from the text of corporate earnings calls. We use this measure to study the effect of regulation on companies’ growth, leverage, profitability, and equity returns. Higher regulatory exposure results in slower sales and asset growth, lower leverage, reduced profitability, but higher post-call equity returns. These effects are mitigated for larger firms. Our findings suggest that both compliance risk and physical operational cost are consequences of increased regulation, but the magnitude of the effects of compliance risk are larger.
In an effort to better understand occupational segregation by gender, scholars have begun to examine gender differences in preferences for job characteristics. We contend that a critical job characteristic has been overlooked to date: meaning at work; and in particular, meaning at work induced by job mission. We provide empirical evidence of the importance of gender differences in preferences for meaning at work using mixed methods.
We propose a model of asset management in which benchmarking arises endogenously, and analyze its unintended welfare consequences. Fund managers' portfolios are unobservable and they incur private costs in running them. Conditioning managers' compensation on a benchmark portfolio's performance partially protects them from risk, and thus boosts their incentives to invest in risky assets. In general equilibrium, these compensation contracts create an externality through their effect on asset prices.
This article presents new conceptual and managerial insights about consumer experiences of positive emotions in the marketplace and how to engineer these emotional experiences for business purposes. Specifically, we provide an in-depth conceptual analysis of three positive emotions that are of high relevance for marketers: (1) consumer pride, (2) consumer excitement, and (3) consumer relaxation.
In this paper, I estimate the magnitude of an informational friction limiting credit reallocation to firms during the 2007-2009 financial crisis. Because lenders rely on private information when deciding which relationship to end, borrowers looking for a new lender are adversely selected. I show how to separately identify private information from information common to all lenders but unobservable to the econometrician by using bank shocks within a discrete choice model of relationships.
Well-educated and prosperous, Asians are called the “model minority” in the United States. However, they appear disproportionately underrepresented in leadership positions, a problem known as the “bamboo ceiling.” It remains unclear why this problem exists and whether it applies to all Asians or only particular Asian subgroups. To investigate the mechanisms and scope of the problem, we compared the leadership attainment of the two largest Asian subgroups in the United States: East Asians (e.g., Chinese) and South Asians (e.g., Indians).
Women participate in cultural activities such as art, music, and literature at higher rates than men, yet as creative professionals, their career achievements tend to lag behind men’s. Scholars interested in this puzzle have largely focused on gender bias in the evaluations of audiences and other gatekeepers. In this paper, we identify differences in the relative novelty of creative products, which we argue are shaped by the conditions under which male and female artists produce their work.
China and the United States are the two largest emitters of greenhouse gases, making them pivotal players in global climate negotiations. Within the coming decade, however, India is set to become the most important counterpart to the United States, as it overtakes China as the country with the most at stake depending on the type of global burden-sharing agreements reached, thus becoming a member of the ‘Climate G2’.
The Business Roundtable’s Statement on the Purpose of a Corporation, delivered in August 2019, reflected a pronouncement of a new paradigm for business.
This paper uses simulations to explore the properties of the HP filter of Hodrick and Prescott (1997), the BK filter of Baxter and King (1999), and the H filter of Hamilton (2018) that are designed to decompose a univariate time series into trend and cyclical components. Each simulated time series approximates the natural logarithms of U.S. Real GDP, and they are a random walk, an ARIMA model, two unobserved components models, and models with slowly changing nonstationary stochastic trends and definitive cyclical components.
We estimate the benefit of life-extending medical treatments to life insurance companies. Our main insight is that life insurance companies have a direct benefit from such treatments as they lower the insurer's liabilities by pushing the death benefit further into the future and raise future premium income. We apply this insight to immunotherapy, treatments associated with durable gains in survival rates for a growing number of cancer patients. We estimate that the life insurance sector's aggregate benefit from FDA approved immunotherapies is $9.8 billion a year.
The dominant cultural valuation of stress is that it is “bad for me.” This valuation leads to regulatory goals of reducing or avoiding stress. In this article, we propose an alternative approach—stress optimization—which integrates theory and research on stress mindset (e.g., Crum, Salovey, & Achor, 2013) and stress reappraisal (e.g., Jamieson, Mendes, Blackstock, & Schmader, 2010) interventions. We further integrate these theories with the extended process model of emotion regulation (Gross, 2015).
Using a price-theoretic framework, we derive and empirically test a fundamental demand force shaping firms’ public disclosure decisions. Our framework suggests that the number of firms’ transacting stakeholders, not just their shareholders, is a major determinant of disclosure demand and, hence, firms’ decision to disclose publicly.
Under standard assumptions, both individuals and the government are indifferent between traditional tax-deferred retirement accounts and "front-loaded" (Roth) accounts. When we add investment fees to this benchmark, individuals are still indifferent but the government is not. We estimate that tax deferral increases demand for asset management services by $3 trillion, causing the government to pay $20.7 billion in corresponding annual fees.
We study and model the process by which humans summarize creative documents (e.g., from a movie script to a synopsis). We develop a customized topic model based on Poisson Factorization and inspired by the creativity literature, which links the text in a summary to the text in the original document. Traditional Poisson Factorization approximates documents as positive combinations of topics, i.e., as points in the cone defined by a set of topics (in the Euclidean space defined by the words in the vocabulary).
We examine the microeconomics of using algorithms to nudge decision-makers towards particular social outcomes. We refer to this as "algorithmic social engineering." In this article, we apply classic strategic communication models to this strategy. Manipulating predictions to express policy preferences strips the predictions of informational content and can lead decision-makers to ignore them. When social problems stem from decision-makers’ objectives (rather than their information sets), algorithmic social engineering exhibits clear limitations.
Technologies are becoming increasingly autonomous, able to make decisions and complete tasks on behalf of consumers. Virtual assistants already take care of grocery shopping by replenishing used up ingredients while cooking machines prepare these ingredients and implement recipes. In the future, consumers will be able to delegate substantial parts of the shopping process to autonomous shopping systems.
Bank balance sheet lending is commonly viewed as the predominant form of lending. We document and study two margins of adjustment that are usually absent from this view using microdata in the $10 trillion U.S. residential mortgage market. We first document the limits of the shadow bank substitution margin: shadow banks substitute for traditional “deposit-taking” banks in loans which are easily sold, but are limited from activities requiring on-balance-sheet financing.
Technological advances have resulted in a hyperconnected world, requiring a reassessment of branding research from the perspectives of firms, consumers, and society. Brands are shifting away from single ownership to shared ownership, as heightened access to information and people is allowing more stakeholders to cocreate brand meanings and experiences alongside traditional brand owners and managers.
This research examines how drip pricing--a strategy whereby a firm advertises only part of a product's price upfront and then reveals additional mandatory or optional fees/surcharges as the consumer proceeds through the buying process--affects consumer choice and satisfaction. Across six studies, we find that when optional surcharges are dripped (vs. revealed upfront) consumers are more likely to initially select a lower base priced option which, after surcharges are included, is often more expensive than the alternative.
Consumer research often fails to have broad impact on members of our own discipline, on adjacent disciplines studying related phenomena, and on relevant stakeholders who stand to benefit from the knowledge created by our rigorous research. We propose that impact is limited because consumer researchers have adhered to a set of implicit boundaries or defaults regarding what we study, why we study it, and how we do so. We identify these boundaries and describe how they can be challenged.
The multi-armed bandit problem has been the subject of decades of intense study in statistics, operations research, electrical engineering, computer science, and economics. A “one-armed bandit” is a somewhat antiquated term for a slot machine, which tends to “rob” players of their money. The colorful name for our problem comes from a motivating story in which a gambler enters a casino and sits down at a slot machine with multiple levers, or arms, that can be pulled. When pulled, an arm produces a random payout drawn independently of the past.