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Research Colloquia

 

The Research Colloquium provides a forum for interaction among faculty, students, and visitors interested in the applications of business and management. The colloquium includes presentations by faculty from UC Irvine and other universities, as well as research institutes.

Colloquia Events are open to the public unless otherwise noted; please see event description for more details. 

 

2017 Events

(Host: Assistant Professor Mireille Jacobson)

 

Wednesday, March 14, 2017


Using An Experiment To Learn About Selection, Treatment Effect Heterogeneity, And External Validity


SPEAKERS: Amanda Kowalski, Associate Professor of Economics
UNIVERSITY: Yale School of Management, Yale University
LOCATION: Social Sciences Plaza A, Room 3132
TIME:  3:30 pm - 5:00 pm

I examine treatment effect heterogeneity within an experiment to inform external validity. The local average treatment effect (LATE) gives an average treatment effect for compliers. I bound and estimate average treatment effects for always takers and never takers by extending marginal treatment effect methods. I use these methods to separate selection from treatment effect heterogeneity, generalizing the comparison of OLS to LATE. Applying these methods to the Oregon Health Insurance Experiment, I find that the treatment effect of insurance on emergency room utilization decreases from always takers to compliers to never takers. Previous utilization explains a large share of the treatment effect heterogeneity. Extrapolations show that other expansions could increase or decrease utilization.

 

 

(Host: Professor Connie Pechmann)


Friday, March 3, 2017


Stuck in the Shell: Middle-Stage Goal Pursuers Avoid (But Need) Social Reference Point


SPEAKERS: Szu-chi Huang, Assistant Professor of Marketing
UNIVERSITY: Stanford Graduate School of Business, Stanford University
LOCATION: SB1 5100, Corporate Partners Executive Boardroom
TIME: 3:30 pm - 5:00 pm

When people arrive in the middle stage of goal pursuit, they deliberately avoid social reference points that could potentially outperform them—a phenomenon we term “stuck-in-the-shell effect.” We use the frequency of head turns, eye movements, and direct choices to document this U-shaped pattern of avoidance behavior and show that this behavior is indeed driven by a fear of being outperformed: Middle-stage goal pursuers avoid social reference points that are relevant, proximal, and potentially superior. Paradoxically, however, in both individual and collective goal contexts, we found that the very social reference points that middle-stage goal pursuers attempt to avoid could ultimately restore their motivation and pull them out of the slump. Our findings connect the psychophysics of goal pursuit with information avoidance literature and shed light on why middle-stage goal pursuers get stuck in an environment that is rich with social information.

 

 

Host(s): Professor John Joseph

 

Friday, February 24, 2017


The Dominant Logic of Matching: Finding Acquisition Targets


SPEAKERS: Henrich Greve, Professor of Entrepreneurship, The John H. Loudon Chaired Professor of International Management
UNIVERSITY: INSEAD, Singapore Campus
LOCATION: SB1 5200, Lyman Porter Colloquia Room & Executive Terrace
TIME:  2:00 pm - 3:30 pm

Acquisitions are preceded by a search for targets and assessment of whether a potential target is a good fit. While prior research has emphasized resource fit and search costs, we argue that the dominant logic of the acquirer is a source of direction and constraint in the search. Based on this theory, cognitive schema and myopia by the dominant coalition can shape top management strategic analysis and conception of the firm, and are important influences in resource allocations such as acquisitions. They are likely to narrow down their search to targets that resonate with them on the mental construction of the firm environment. As a result, firms match not only on resources, but also on characteristics that are likely to be a source of cognitive schema that are influential in the dominant logic, such as nature of governance, ownership structure, and board composition. We derive new hypotheses on target selection in acquisitions from this theory, and our findings support the hypotheses by showing strong influences from this mechanism on target selection in acquisitions in China.

 

 

 

(Host: Assistant Professor Sharon Koppman)

 

Friday, February 24, 2017

 

When Two Bodies Are (Not) a Problem: Gender and Relationship Status Discrimination in Academic Hiring 

 

SPEAKER: Lauren Rivera, Associate Professor of Organization & Management

UNIVERSITY: Kellogg School of Management, Northwestern University 
TIME: 10:30 am - 12:00 pm
LOCATION: SB1 5200, Lyman Porter Colloquia Room & Executive Terrace
 
 
ABSTRACT:

Although junior faculty search committees serve as gatekeepers to the professoriate and play vital roles in shaping the demographic composition of academic departments and disciplines, how committees select new hires has received minimal scholarly attention. In this paper, I highlight one mechanism through which committees evaluate applicants and contribute to gender inequalities in academic careers: relationship status discrimination. Through a comparative, ethnographic case study of junior faculty search committees at a large R1 university, I show that committees actively considered women’s—but not men’s—relationship status when selecting hires. Drawing from gendered scripts of career and family that present men’s careers as taking precedence over women’s, committee members believed that heterosexual women whose partners held academic or high-status jobs were not “moveable” and excluded such women from offers, when there were viable male or single female alternatives. Conversely, male applicants’ relationship status was discussed infrequently, and all female partners were seen as moveable. Consequently, I show that the “two-body problem” is a gendered phenomenon embedded in cultural stereotypes and organizational practices that can disadvantage women in academic hiring. I conclude by discussing the implications of such relationship status discrimination for sociological research on labor market inequalities and faculty diversity.

 

 

(Host: Assistant Professor David Yang)

Friday, February 17, 2017

Monetary Stimulus and Bank Lending

SPEAKER: Itay Goldstein, Professor of Finance and Economics
UNIVERSITY: Wharton School, University of Pennsylvania
TIME: 10:30 am - 11:45 am
LOCATION: SB1 2321, Judy B. Rosener Classroom


ABSTRACT:

The U.S. Federal Reserve purchased both agency mortgage-backed securities (MBS) and Treasury securities to conduct Quantitative Easing (QE). Using micro-level data, we find that banks benefiting from MBS purchases increase mortgage origination, compared to other banks. At the same time, these banks reduce commercial lending and firms that borrow from these banks decrease investment. The effect of Treasury purchases is different: either positive or insignificant in most cases. Our results suggest that MBS purchases caused unintended real effects and that Treasury purchases did not cause a large positive stimulus to the economy through the bank lending channel.

 

 

(Host: Professor Radhika Lunawat)

 

Friday, February 10, 2017

 

Short-Sales Constraints and Aftermarket IPO Pricing

 

SPEAKER: Panos Patatoukas, Associate Professor

UNIVERSITY: Haas School of Business, University of California, Berkeley
TIME: 3:00 pm - 4:30 pm
LOCATION: SB1 5200, Lyman Porter Colloquia Room & Executive Terrace
 
 
ABSTRACT:

It is well established that initial public offerings (IPOs) tend to experience positive first-day returns followed by underperformance, especially around the expiration of lockup agreements. Miller's (1977) theory offers a unified explanation based on divergence of investor opinion about fundamental value combined with short-sales constraints. Our paper provides a test of Miller's explanation by analyzing detailed data from the securities lending market. While prior research is inconclusive with respect to the importance of Miller's theory in the IPO setting, our paper finds evidence that the combination of heterogenous investor opinions with short-sales constraints is the key to explaining aftermarket IPO pricing.

 

 

(Host: Assistant Professor David Yang)

Friday, February 10, 2017

Do ETFs Increase The Commonality In Liquidity Of Underlying Stocks?

SPEAKER: Vikas Agarwal, Professor of Finance
UNIVERSITY: J. Mack Robinson College of Business, Georgia State University, GA
TIME: 2:00 pm - 3:15 pm
LOCATION: SB1 2321, Judy B. Rosener Classroom


ABSTRACT:

We examine the impact of ETF ownership on the commonality in liquidity of the stocks held by ETFs, while controlling for the ownership by other institutional investors. Our results indicate that ETF ownership significantly increases the liquidity commonality on account of the arbitrage mechanism inherent in ETFs that ensures that ETF prices are in line with the prices of the underlying stocks. We show that greater arbitrage activities in both the primary and secondary markets of ETFs are associated with an increase in the effect of ETF ownership on commonality in liquidity. We exploit a quasi-natural experiment based on ETF trading halts to establish a causal relation between ETF ownership and liquidity commonality. Taken together, our results show that ETFs reduce the ability of the market participants to diversify liquidity shocks.

 

 

(Host: Assistant Professor Libby Weber)

 

Friday, February 10, 2017

 

Wish Upon a Star? How Network Proximity to Stars Influences the Attainment of Stardom

 

SPEAKER: Joel A.C. Baum, Professor of Strategic Management

UNIVERSITY: Rotman School of Management, University of Toronto 
TIME: 2:00 pm - 3:30 pm
LOCATION: SB1 5100, Corporate Partners Executive Boardroom
 
 
ABSTRACT:
Third-party awards that identify and rank “star performers” are important for ordering actors in crowded, complex markets. Because such awards are typically bestowed annually, however, stardom is more closely tied to recent performance and less stable than hierarchical orderings based on status. In such conditions, proximity to stars may inform attributions of close rivals’ quality, but the nature of these “spillovers” is debatable. When one actor receives an award, for example, a film actor wins an Oscar or a musician wins a Grammy, how does this stardom affect the fates of the winner’s closest rivals? Are close rivals elevated too, gaining spillovers of attention and recognition from the increased notoriety of the winner? Or conversely, are they lost in the shadow of the winner’s notoriety and forced to compete more intensely for attention and recognition that they would have garnered otherwise? We investigate this question in a study of US equity analysts. Using the stock co- coverage network to gauge analysts’ proximity, we examine the impact of an analyst being named to Institutional Investor’s “All-America Research Team”, the magazine’s annual ranking of sell-side equity analysis, on the subsequent likelihood of analyst’s closest rivals’ being named to a “Team” as well. We also examine the efficacy of rivals’ competitive responses to an alter’s ascension to stardom. 
 

 

 

(Host: Professor Sreya Kolay)

 

Friday, February 3, 2017

 
What are We Really Good at? Product Strategy with Uncertain Capabilities
 
SPEAKER:Dr. Matthew Selove, Associate Professor 
UNIVERSITY: The George L. Argyros School of Business & Economics, Chapman University
TIME: 3:00 pm - 4:30 pm
LOCATION: SB1 5100, Corporate Partners Executive Boardroom
 
 
ABSTRACT:
Firms often learn about their own capabilities through their products’ successes and failures. This paper explores the interaction between such learning from experience and product strategy in a formal model. We consider a firm that can launch a sequence of products, where each product’s performance depends on the fit between the firm’s capabilities and the product. A successful new product always causes the firm to become more optimistic about the capability most relevant for that product; however, it can also cause the firm to become less optimistic about some of its other capabilities, including capabilities the new product does not use. A product launch generates useful information for future decisions if it leads to learning about capabilities used by potential future products. We find that a product sharing few or even no capabilities with potential future products may generate more useful information than a product with greater overlap.
 

  

(Host: Professor Radhika Lunawat)

 

Friday, February 3, 2017

 
Effort and Information: Evidence from MBA Grade Non-Disclosure
 
SPEAKER: Eric Floyd, Associate Professor of Finance and Accounting
UNIVERSITY: Rady School of Management, University of California, San Diego
TIME: 3:00 pm - 4:30 pm
LOCATION: SB1 5200, Lyman Porter Colloquia Room & Executive Terrace
 
 
ABSTRACT:
In this paper, we study the effect of grade non-disclosure (GND) on student and employer behavior in the context of an MBA program at a highly-ranked business school. GND precludes students from revealing their GPAs to prospective employers. Our results suggest students under GND spend 55.4 hours (5.31%) less time preparing for classes during their MBA program while weighting their enrollment towards more difficult subjects. We also document diminished GPA-based matching of students with employers following GND. Overall, our study provides empirical evidence on the relationship between information and effort that underpins a broad class of principal-agent models.

 

 

 (Host: Professor Gerardo Okhuysen)

 

Friday, February 3, 2017

 
How Emotions Move Us: An Action-Readiness Account of the Effects of Emotions on Decision-Making
 
SPEAKER: Maia Young, Associate Professor of Management and Organizations
UNIVERSITY: Anderson School of Management, University of California, Los Angeles
TIME: 10:30 am - 12:00 pm
LOCATION: SB1 5200, Lyman Porter Colloquia Room & Executive Terrace
 
 
ABSTRACT: 
In this talk, I’ll present findings on anger and two common decision biases: confirmation bias and anchoring. I find that anger can improve decision making when task success requires the decision maker to be confrontational. In the case of confirmation bias, people often erroneously focus on information that confirms their opinion and ignore information that disconfirms it. However, people who are angry are more prone to seek disconfirming information, attenuating the bias. Paradoxically, people who are angry seek information about opponents’ claims to refute them, but exposure to the information moderates their position. In the case of anchoring bias, people’s numeric estimates of unknown values are overly influenced by salient values that are unlikely to be accurate. However, people who are angry are less prone to anchoring bias. For both confirmation and anchoring biases, anger reduces the bias because it motivates confrontation. Whereas the dominant model of emotions and decision-making asserts that cognitive appraisals that accompany emotions affect decision making, my research suggests that emotions can also affect decision making by changing motives.

 
 

 

(Host: Assistant Professor David Yang)

 

Friday, January 20, 2017

 

Liquidity Constraints and Budgeting Mistakes: Evidence from Social Security Recipients  

 

SPEAKER: Jialan Wang, Associate Professor of Finance

UNIVERSITY: University of Illinois at Urbana-Champaign, College of Business

TIME: 1:30 pm - 2:45 pm

LOCATION: SB1 2321, Judy B. Rosener Classroom

 

 

ABSTRACT:

In this paper, we use a unique administrative dataset to analyze the impact of income timing on the use of payday loans, a common form of short-term credit.  Exploiting quasi-random variation in the disbursement of benefits by the Social Security Administration, we document three patterns that are difficult to explain under the lifecycle / permanent income hypothesis. First, borrowing is procyclical with liquidity over the pay period. Loan volume declines by 47% over the course of a pay period, and increases discontinuously on pay days. Second, borrowing per day is 38% higher during 35-day compared with 28-day pay periods. Third, consumers borrow 3% less if they are assigned to receive income on the fourth Wednesday compared to the second Wednesday of the month, consistent with imperfect planning for recurring expenditure commitments at the beginning of the month. Our results suggest that failures to adjust to predictable variation in income timing account for at least 15% of payday loan volume and lead to $25-37 million in excess costs per year among benefits recipients.

 

 

 (Host: Assistant Professor Libby Weber & Assistant Professor John Joseph)

 

Friday, January 13, 2017
 
Competitive Rivalry and the Management of (Socially) Valuable Resources
 
SPEAKER:Christian Asmussen, Professor with Special Responsibilities in Strategic and International Management
UNIVERSITY: Copenhagen Business School, Denmark 
TIME: 2:00 pm - 3:30 pm
LOCATION: SB1 5100, Corporate Partners Executive Boardroom
 
 
ABSTRACT:
Recent research has proposed a positive interaction between competitive advantage and competitive rivalry. Accordingly, it has been suggested that firms facing more intense competition should be willing to pay more in strategic factor markets, as well as inclined to invest more aggressively in CSR-related resources. However, most empirical tests of these ideas have been built on theoretical arguments that do not take strategic interaction into account, effectively ignoring how product market rivals respond to resource acquisition strategies, as well as how such strategies may be coordinated across dispersed managers within the firm. Drawing on game-theoretic modeling, this presentation outlines findings from three papers that revolve around these issues. The first paper analyzes how competition is influenced by “scale free” resources, which can be acquired by multiple firms simultaneously and deployed against one another in product market competition. The second paper looks at the organizational challenges of managing CSR-related resources—specifically, “social brands”—in a global context. The third paper combines the rivalry aspect from the first paper with the social dimension of the second paper, showing that increased competition will lead to more CSR in some scenarios, but less CSR in others—and sometimes will lead firms to invest more in social brands while actually doing less socially responsible action. In combination, these papers shed light on resource-based strategic interaction between and within firms, and points to the importance of taking into account contextual factors when designing empirical studies of competition, strategic factor markets, and CSR.
 

 

 (Host: Professor Gerardo Okhuysen)

 

Friday, January 13, 2017

 

No Laughter Among Thieves: Informal Intellectual Property Rights and Community Dynamics in Stand-Up Comedy
 
SPEAKER: Patrick Reilly, Lecturer for Department of Sociology
UNIVERSITY: UCLA Department of Sociology, University of California, Los Angeles
TIME: 10:30 am - 12:00 pm
LOCATION: SB1 5200, Lyman Porter Colloquia Room & Executive Terrace
 
 
ABSTRACT:
This article investigates how community dynamics shape norm enforcement through a study of the informal intellectual property system that covers jokes in stand-up comedy. Through looking at the patterns of accusation and sanctioning joke theft by insiders, I find that these actions are loosely coupled to violations. Instead, insiders make accusations and punish supposed comedians as joke thieves when they exhibit high commercial success and low peer esteem. As these campaigns may be responses to actual offenses or exaggerated borderline transgressions, norm enforcement is a response to perceptions of an individual’s questionable membership within the community, violations of tangential norms, and preference for extrinsic gain over intrinsic rewards. Conversely, insiders downplay accusations against possible transgressors whom they regard as authentic community members and practitioners. The outcomes of sanctioning efforts also depend upon an accuser’s peer esteem and impression of ulterior motivation. Moral entrepreneurs that have great insider respect and supposed pro-social orientations tend to be more effective, as they can generate coalitions of support. However, I find that violators can construct satisfactory coalitions of support when they are esteemed or accusers exhibit possible self-interest. These findings emerge from fifty months of participant-observation research of stand-up comedy in Los Angeles.
 

 

(Host: Assistant Professor John Turner)

 

Friday, January 13, 2017

 

A Dynamic Stochastic Knapsack Problem With Adaptive Interaction 
 
SPEAKER: Fredrik Odegaard, Assistant Professor of Management Science
UNIVERSITY: Ivey School of Business, Western University Ontario
TIME: 12:30 pm - 2:00 pm
LOCATION: SB2 Classroom 116
 
 
ABSTRACT:
Motivated by group seating requests in entertainment venues we formulate and study extensions to the Dynamic Stochastic Knapsack Problem (DSKP). We compartmentalize the knapsack according to predefined reward-to-weight ratios, and incorporate a stochastic interaction between the offered set of open compartments and the item placement. Using a specific interaction function inspired by customer choice in the entertainment industry, we provide an algorithm to determine the optimal solution and obtain insights into structural properties. Given the computational complexity of the dynamic program we also propose and analyze via simulation a heuristic algorithm.
 
Keywords: Dynamic Stochastic Knapsack Problem, Revenue Management, Dynamic Programming, Entertainment Industry, Customer Choice, Group Seating
 
 

 

 (Host: Assistant Professor David Yang)
 
Friday, January 13, 2017
 
Finance and Workshop in Psychology in Capital Marketing (WPCM) Seminar
 
SPEAKER: David Solomon, Assistant Professor of Finance and Business Economics
UNIVERSITY: Marshall School of Business, University of Southern California
TIME: 2:00 pm - 3:30 pm
LOCATION: SB1 2321, Judy B. Rosener Classroom
 
 
ABSTRACT:
We show that investors trade as if they consider dividends and capital gains in separate mental accounts, without fully appreciating that dividends come at the expense of price decreases. Invesotrs trade differently in response to each component - trading patterns such as the disposition effect are driven by price changes, with dividends being ignored or down weighted. Investors hold dividend-paying stocks longer, and are less sensitive to price changes, consistent with dividends being valued as a separate desirable attribute of stocks. The demand for dividend-paying stocks is higher when interst rates and recent market returns are lower, consistent with investors comparing dividents to other income streams and capital gains. Investors spend the proceeds of each component differently - mutual funds and institutions rarely reinvest dividends into the stocks from which they came, but instead purchase other stocks. This leads to predictable market wide price increases on days of large aggregate dividend payouts, including stocks not paying dividends
 
 

2016 Events

(Host: Assistant Professor Chong Huang)

 

Friday, December 2, 2016

 

Vote Avoidance and Shareholder Voting in Mergers and Acquisitions

 

SPEAKER: Kai Li, Professor of Finance

UNIVERSITY: University of British Columbia, Sauder School of Business, Vancouver, BC, Canada

TIME: 2:00 pm - 3:30 pm

LOCATION: SB1 5200, Lyman Porter Colloquia Room & Executive Terrace

 

 

ABSTRACT:

Using a hand-collected sample of U.S. stock deals over the period 1995-2015, we examine whether and how the requirement of acquirer shareholder voting affects deal quality. We find that acquirer management substitutes stock with cash to bypass shareholder voting, and that deals bypassing shareholder voting have lower announcement returns than those requiring shareholder voting. Employing a regression discontinuity design in a setting without managerial discretion, we show a positive causal effect of shareholder voting on deal quality. Moreover, this positive value effect is concentrated among acquirers with higher institutional ownership and among acquirers buying targets with more severe information problems. We conclude that shareholder voting mitigates the agency problems in mergers and acquisitions.

 

 

(Host: Assistant Professor Luyi Gui)

 

Friday, December 9, 2016

 

Cost-Benefit Analysis of Resource Allocation in The United States: Models and a 1980-2011 Case Study

 

SPEAKER: Dr. Jun Zhuang, Associate Professor and Director of Undergraduate Studies, Department of Industrial and                          Systems

UNIVERSITY: University at Buffalo, The State University of New York

TIME: 2:00 pm - 3:30 pm

LOCATION: SB1 2321, Judy B. Rosener Classroom

 

 

ABSTRACT:

Fire-related hazards and incidents are an everyday phenomenon, and firefighting in the United States owe to more than one million firefighters in about 30,000 fire departments across the country. The estimated total cost of fire was $329 billion in 2011. Leveraging the National Fire Incident Response System (NFIRS) data set, we conduct a data-driven study to propose empirical and theoretical models to assess risk levels and quantitatively measure effectiveness of investments. We then study the optimal risk-reduction strategies, and optimal resource allocation strategies given a total budget constraint. We will also discuss public-private partnership, equity, and optimal routing in fire protection. This study would benefit policymakers and analysts in fire protection and safety, to save lives and other losses.

 

 

 

(Host: Assistant Professor Sharon Koppman)

 

Friday, December 2, 2016

 

Casting A Wider Net: How Increasing the Proportion of Women Applicants Affects the Hiring of Female Freelancers in an Online Labor Market

 

SPEAKER: Ming Leung, Assistant Professor of Management of Organization

UNIVERSITY: Haas School of Business, University of California, Berkeley

TIME: 10:30 am - 12:00 pm

LOCATION: SB1 5200, Lyman Porter Colloquia Room and Executive Terrace

 

 

ABSTRACT:

It is well-understood that women and men work in distinctly different jobs, contributing to substantial disparity in earnings. Less well-understood are the mechanisms generating these uneven outcomes – hampering remediation efforts. Explanations oscillate between whether employers are biased against certain applicants and whether women and men vary in their likelihood of applying to certain jobs. Conclusions are difficult to draw because researchers rarely account for how many women and men apply. This is critical because employment outcomes result from a two-sided process: applicants first decide to apply then employers decide to hire. I argue that accounting for the proportion of women applying to jobs significantly alters the conclusions we can draw. Analyses of 792,650 job postings, by 249,506 employees who received 7,699,370 job applications from 292,518 freelancers on an online market for contract labor demonstrate my contention. Regression analyses first reveal that equally qualified women are more likely to be hired for female-type jobs and less likely to be hired for male-type jobs of IT & Programming, than men. However, this differential hiring is completely mediated once the proportion of women applying to these jobs is accounted for. Most strikingly, for every 1% increase in proportion of women applying to a job, there is a commensurate 1% increase in the proportion of female freelancers hired – for all job-types. These findings advocate for a focus on the challenges women face in applying to traditionally male-type jobs. I also provide insight into the burgeoning phenomenon of online hiring and the gig-economy. 

 

 

 

(Host: Assistant Professor Radhika Lunawat)

 

Friday, November 4, 2016

 

Bank Capital & Monitoring: Evidence from Loan Quality

 

SPEAKER: Hemang Desai, Robert B. Cullum Professor of Accounting

UNIVERSITY: Edwin L. Cox School of Business, Southern Methodist University

TIME: 3:00 pm - 4:30 pm

LOCATION: SB1 5200, Lyman Porter Colloquia Room and Executive Terrace

 

 

ABSTRACT:

There are two competing theoretical perspectives on whether bank capital improves or adversely affects banks’ monitoring incentives. We show that bank capital is positively associated with loan quality, an outcome of bank’s monitoring effort, after controlling for other determinants of loan quality. Importantly, using two ex-ante measures of bank’s monitoring effort that capture quality and quantity of labor input into monitoring, we show that bank capital is positively related to monitoring efforts.  Our evidence is consistent with the prediction in Mehran and Thakor (2011) that bank capital strengthens monitoring incentives which in turn increases the value of its loan portfolio.

 

 

 

(Host: Assistant Professor Radhika Lunawat)

 

Friday, October 28, 2016

 

When Transparency Improves, Must Prices Reflect Fundamentals Better?

 

SPEAKER: Assistant Professor Snehal Banerjee

UNIVERSITY: Rady School of Management, University of California, San Diego

TIME: 3:00 pm - 4:30 pm

LOCATION: SB1 5100, Corporate Partners Executive Boardroom

 

 

ABSTRACT:

No. A common regulatory response to high market uncertainty is to increase transparency by making access to fundamental, payoff-relevant information cheaper. We study the impact of such policies on how informative prices are about fundamentals in a setting where investors can endogenously choose to learn about asset fundamentals and liquidity trading by others. When liquidity demand is price-dependent (e.g., due to forced deleveraging), we show that higher transparency, even if exclusively targeting fundamentals, can make prices less informative. As such, regulatory changes which make learning easier may exacerbate the very problems they are intended to address. 

 

 

 

(Host: Professor Tingting Nian)

 

Thursday, October 27, 2016

 

How Do Complementors Respond to the Threat of Platform Owner Entry? Evidence from the Mobile App Market

 

SPEAKER: Assistant Professor Feng Zhu

UNIVERSITY: Harvard Business School, Harvard University

TIME: 2:30 pm - 4:00 pm

LOCATION: SB1 5200, Lyman Porter Colloquia Room and Executive Terrace

 

 

ABSTRACT:

How do complementors respond to the threat of platform owner entry, and how do such responses differ from the responses to actual entry? Using the mobile platform Android as our research setting, we examine how app developers on Android adjust their rate and direction of innovation efforts and prices in response to Google’s entry threat and actual entry into to the app markets. Based on a difference-indifferences empirical framework, we find that app developers that are affected by Google’s entry reduce their innovation efforts on affected apps after entry threats increase; after Google’s actual entry, they reduce innovation efforts on affected apps further and also increase these apps’ prices. However, we find that affected app developers do not withdraw from the platform completely—once the threat occurs, they shift innovation efforts from affected apps to other unaffected apps, as indicated by an increase in updates on unaffected apps during both the entry-threat and actual-entry period.

 

 

(Host: Assistant Professor Luyi Gui)

 

 

Friday, October 21, 2016

RFQ, Sequencing, and the Most Favorable Bargaining Outcome

 

SPEAKER: Leon Y. Zhu, Associate Professor

UNIVERSITY: University of Southern California, Marshall School of Business

TIME: 12:30 pm - 2:00 pm

LOCATION: SB1 5200, Porter Colloquia Room and Executive Terrace

 

 

ABSTRACT:

When suppliers are imperfect substitutes, it is usually the best interest of a buyer to procure from various suppliers to match the needs of different customers. Motivated by prescription drug affordability practices, we study quantity-dependent pricing contracts with exclusion clauses in a dual-sourcing setting. We show that the quantity-dependent pricing contracts coordinate the supply chain, but introducing exclusion clauses may lead to various equilibriums in profit allocation. As a result, we analyze the negotiations between a buyer and two suppliers both with and without a request for quotation (RFQ) stage that precedes the negotiation. We show that the buyer can leverage the RFQ stage even under a full information setting when the negotiation sequence is endogenously determined by the final quotations of the RFQ process. Specifically, the buyer's equilibrium payoff with RFQ dominates the most favorable equilibrium under bargaining without RFQ.

 

 

(Host: Associate Professor Mireille Jacobson)

 

 

Monday, October 17, 2016

The Impact of Affordable Care Act Medicaid Expansion on Medicaid Revenue, Uncompensated Care, and Hospital Financial Position

 

SPEAKER: Tom Buchmueller, Professor of Business Economics and Public Policy

UNIVERSITY: Ross School of Business, University of Michigan

TIME: 11:00 am - 12:30 pm

LOCATION: SB1 5200, Porter Colloquia Room and Executive Terrace

 

 

ABSTRACT:

In debates over the Affordable Care Act, hospitals argued forcefully for Medicaid expansions with the hope that favorable changes in payer mix would reduce uncompensated care and consequently improve financial performance. Although uninsured discharges fell in Medicaid expansion states relative to non-expansion states, little is known about how expansions affected hospital financial performance. We estimate the impact of expansion on Medicaid payments, uncompensated care costs, net income, and operating margins using the 2011-2015 Medicare cost reports. Relative to hospitals in non-expansion states, Medicaid revenues increased and uncompensated care fell for hospitals in expansion states. Comparing all expansion states to non-expansion states suggests that net operating income and operating margins increased slightly. However, this result masks heterogeneity among expansion states. The improved financial performance was limited to states where the ACA expansion represented a major change in eligibility standards and a large increase in insurance coverage. Among hospitals in states in which childless adults above the Federal Poverty Line (FPL) were already eligible for Medicaid, changes in Medicaid revenues and uncompensated care were smaller and net income and operating margins did not improve relative to the trend in non-expansion states. We provide theoretical and empirical evidence that worsened financial position in these states could be explained by high levels of crowd-out of private hospital discharges.

 

 

(Host: Professor Radhika Lunawat)

 

 

Friday, September 30, 2016

 

Prompting the Benefit of the Doubt: The Joint Effect of Auditor-Client Social Bonds and Measurement Uncertainty in Audit Adjustments

 

SPEAKER: Professor Steven Kachelmeier

UNIVERSITY: University of Texas, Austin

TIME: 3:00 pm - 4:30 pm

LOCATION: SB1 5100, Corporate Partners Executive Boardroom

 

 

ABSTRACT:

We design an incentivized experiment to test the extent to which measurement uncertainty elevates the risk that social bonds between auditors and reporters compromise audit adjustments. Results indicate that, when audit evidence is characterized by some residual uncertainty, the adjustments our auditor-participants require is sensitive to whether they have an opportunity to form a modest but friendly social bond with reporters. In contrast, although auditors do not adjust fully even when misstatements are known with certainty, social bonding has no effect in this scenario. Accordingly, our experiment contributes beyond the main effects of social bonding and measurement uncertainty demonstrated in prior research by showing that these forces are interdependent. A practical implication is that audit firms’ expanded use of in firm specialists and concurring partners when determining audit adjustments to complex accounts can confer both technical benefits from expertise and social benefits from a more distanced assessment that is less influenced by day-to-day interactions with client personnel.

 

 

(Host: Professor Sharon Koppman)

 

 

Friday, September 30, 2016

The Self-Fulfilling Cycle of Coercive Surveillance

 

SPEAKER: Professor Michel Anteby

UNIVERSITY: Boston University

TIME: 10:30 am - 12:00 pm

LOCATION: SB1 5200, Lyman Porter Colloquia Room and Terrace

 

 

ABSTRACT:

In the past few decades, the growth of surveillance has become a fixture of organizational life. Past scholarship has largely explained this growth as the result of managerial demands for added control over workers, coupled with newly available cheap technology (such as cameras). We draw on identity work literature to complement this view, suggesting that workers can also drive the growth in surveillance. We show that workers under surveillance can feel constantly observed and seen, but they also feel largely unnoticed and uncared for as individuals by management. This paradoxical experience leads them to interpret the surveillance as coercive and to engage in invisibility practices to attempt to go unseen and remain unnoticed. Management, in turn, views these attempts as justification for even more surveillance, thus creating a self-fulfilling cycle of coercive surveillance. Our analysis therefore links in part the growth of surveillance to workers’ own identity work, while also identifying a unique form of identity work attached to such surveillance.  Overall, our study offers one of the first endogenous explanations for the growth of surveillance and carries important implications for the literature on surveillance and identity work.

  

 

(Host: Professor Tingting Nian)

 

 

Wednesday, September 21, 2016

 

A Dynamic Model of Two-Sided Markets (with Anna Ingster Adachi)

 

SPEAKER: Professor Luis Cabral

UNIVERSITY: New York University

TIME: 10:30 am - 12:00 pm

LOCATION: SB1 5200, Lyman Porter Colloquia Room and Terrace

 

ABSTRACT:

We introduce a dynamic framework to analyze two-sided markets. The (single) platform owner sets prices at the beginning of each period.  Agents (buyers, sellers, readers, consumers, merchants, etc.) make usage decisions every period and platform membership decisions occasionally. We show that optimal platform prices result from an extension of the canonical elasticity rule that also accounts for (a) the externality of two-sided markets and (b) the dynamic value of attracting new platform members. We provide analytical results relating prices to the size of each platform side. We also examine the determinants of equilibrium platform size, showing that the stationary distribution may be bi-modal, that is, with some probability the platform remains very low or takes very long to increase in size.

 

 

(Host: Professor David Hirshleifer)

 

 

Friday, August 19, 2016

 

Emotions are Contagious: Social Network and Mood-Induced Stock Returns

 

SPEAKER: Qiguang Wang

UNIVERSITY: University of California, Irvine

TIME: 1:00 pm - 2:30 pm 

LOCATION: SB2 Conference Room 306

 

ABSTRACT:

Aggregate stock market experiences mood-induced return movements. Moreover, there are also substantial cross-sectional variations in individual stocks’ reaction to these mood events. This paper tests the hypothesis that social interactions amplify the mood effects. I estimate social interactions for the local population of firms’ headquarters using Spatial Model and the U.S. census data. I show that cross-sectionally, stocks with higher local social interactions exhibit higher Friday returns and pre-holiday returns. This effect cannot be explained by stock and firm characteristics or existing return seasonalities, and is stronger for small, retail, and volatile stocks.  The evidence strongly supports the notion that emotion contagion is a key determinant for mood-induced stock returns.

 

 

 

(Host: Assistant Professor John Joseph)

 

 

Friday, June 3, 2016

 

CEO Power and Nonconforming Reference Group Selection

 

SPEAKER: Professor Pino Audia

UNIVERSITY: Dartmouth College

TIME: 2:00 pm - 3:30 pm 

LOCATION: SB1 5100, Corporate Partners Executive Boardroom

 

ABSTRACT:

By integrating insights from social psychological research on power and organizational research on legitimacy, we examine the influence of CEO power on organizations’ selections of nonconforming reference groups and the impact of these selections on analysts’ stock recommendations and coverage. Our empirical analyses rely on reference group selections manually coded from stock performance graphs of 10-K filings within the U.S. chemical industry. Consistent with previous studies, our data reveal that the majority of reference groups selected are well-known indexes favored by the SEC, analysts, and investors. At the same time, fourteen percent of the reference groups used by organizations in our sample are nonconforming custom peer groups generally regarded with suspicion by outsiders. Consistent with our predictions, we find that organizations with powerful CEOs are more likely to use custom peer groups and that the use of custom peer groups has a negative influence on analysts’ stock recommendations and coverage. We contribute to research on the choice of reference groups by calling attention to CEO power as a driver of the choices of nonconforming reference groups and by highlighting the negative effects of such choices.

 

 

 

(Host: Professor VC Choudhary)

 

Monday, May 23, 2016

What Is a Digital Cookie Worth?

 

SPEAKER: Professor Rahul Telang

UNIVERSITY: Carnegie Mellon University

TIME: 10:30 am - 12:00 pm

LOCATION: SB1 5200, Lyman Porter Colloquia Room and Terrance

 

ABSTRACT:

Tracking a user’s online browsing behavior to target them with relevant ads has become pervasive. There is an ongoing debate about the value of such tracking and the associated loss of privacy experienced by users. We inform this debate by quantifying the value of using different kinds of potentially intrusive information in targeted advertising. We collect a large proprietary dataset with over 1.3 million individual impression-bid-level observations. The data has detailed cookie information, as well as the bids placed by the firm for serving ad impressions. We also know whether a user saw the ad and whether a purchased occurred. First, we find that using more information from cookies increases the accuracy of prediction of purchases, but at a decreasing rate. We also find that firm’s bidding decision (how much to bid for an ad) can be accurately predicted by cookie information. We then estimate the effect of an ad on a user’s purchase probability. In particular, we examine whether users who have a high baseline purchase probability are also more likely to be influenced by ads. We find that on average ads do not have a statistically significant impact on purchase probabilities of consumers. However, individuals who have a high baseline purchase probability, do respond positively to ads and ads can increase their purchase probability by up to 2.7 percentage points. To overcome potential endogeneity in ad placement, we use an instrumental variable and find that these results are robust. Finally, we simulate different policy regimes by restricting different kinds of user information from being used for targeted advertising and quantify the impact such restrictions have on sales. We find that restricting more intrusive variables for targeting lowers ad effectiveness and leads to fewer potential purchases.

 

 

 

(Host: Mingdi Xin)

 

Thursday, May 12, 2016

 

Simple Pricing for Services and Information Goods

 

SPEAKER: Professor Hemant Bhargava

UNIVERSITY: University of California, Davis

TIME: 11:00 am - 12:30 pm

LOCATION: SB1 3410, Elisabeth and Paul Merage Conference Room

 

ABSTRACT:

The first part of my talk will cover results from the attached working paper "Pricing Digital Goods: Valuation vs. Appetite'' which analyzes "simple pricing''---where firms face a large market of heterogeneous consumers, but offer either a single “Pay as you Go” plan (one per-unit price), a single “All you can Eat” plan (one buffet price), or a combination of both (either a two-part tariff, or a choice between per-unit and buffet price). We show that appetite heterogeneity, caused by variation in rate of satiation, is far more consequential in plan design than the more commonly analyzed valuation heterogeneity. The profit advantage of a two-part tariff over per-unit and buffet pricing is significant only under moderate RAH (appetite heterogeneity relative to valuation heterogeneity). The 2PT also has higher profit vs. giving consumers a choice between per-unit and buffet prices, but the combination dominates on market coverage and consumer surplus. Per-unit pricing works quite well when RAH is high, while buffet pricing does well when RAH is low. But when a firm is uncertain about RAH, or has numerous products with different RAH, then the per-unit plan is less risky compared to the buffet plan, sacrificing less profit across the spectrum of scenarios, and producing higher market share. 
 
The second part of my talk (based on a paper that is in draft form) extends the analysis to three-part tariffs (F, Q, s) - fixed fee, allowance, per-unit overage fee) which is also very common in practice, and considered the most efficient way to price discriminate when users consume multiple units. Intuitively, this should be more profitable than 2PT. But we show that for all log-concave distribution of valuations (the most common assumption in modeling valuation heterogeneity), the optimal 3PT reduces to a 2PT, and a 3PT is not any more profitable. But a 3PT does produce higher profit under other conditions, e.g., the market has a bimodal distribution, or when consumers have uncertain valuations. 
 

 

 

 

(Host: Professor John Joseph)

 

 

Friday, May 6, 2016

 

Resource Interdependence and Appropriability: A Study of Product and Process Inventions

 

SPEAKER: Professor Gautam Ahuja

UNIVERSITY: University of Michigan, Stephen M. Ross School of Business

TIME: 2:00 pm - 3:30 pm

LOCATION: SB1 5100, Corporate Partners Executive Boardroom

 

ABSTRACT:

We examine how building interdependence between a firm's activities enhances a firm’s appropriation of returns to its inventions. The strategy literature has argued that higher levels of interdependence between a firm's activities can protect a firm from imitation and thereby enhance appropriability.  We evaluate this argument recognizing that firms have access to multiple different mechanisms to enhance appropriability and increasing interdependence is just one of them. Specifically we examine three routes to appropriating value from your inventions described in the literature - building enhanced levels of interdependence between your activities, investing in substantial production capacity and building access to multiple markets. Using a new measure of interdependence based on textual coding of patent claims, we demonstrate that building increased interdependence between a firm’s product and process inventions deters imitation and improves firm performance. However, this effect is most significant when the firm has more limited access to alternative scale-based mechanisms (production capacity, market access) for value appropriation. Further, firms systematically differ in their usage of these three different mechanisms in theoretically predictable ways and not all firms choose to use enhanced interdependence as a mechanism for increased appropriability. Thus, we develop a contingent model that identifies the limits to complexity and interdependence as a source of protection from imitation.

 

 

 

 

(Host: Professor Luyi Gui)

 

Thursday, April 21, 2016

 

"Making Transparency Transparent: Productivity and Behavioral Implications of Observability at Work"

 

SPEAKER: Assistant Professor Ethan Bernstein

UNIVERSITY: Harvard Business School

TIME: 1:30 pm - 3:00 pm

LOCATION: SB1 5100, Corporate Partners Executive Boardroom

 

ABSTRACT:

We are increasingly observed and observing at work. Advances in technology, from increased use of smart cameras to wearable tracking devices, are enabling “Super Vision” (Gilliom & Monahan, 2012) far beyond any level of supervision envisioned when Frederick Taylor (1911) touted the benefits of managerial oversight through scientific management. That has had profound implications for compliance, both within organizations and beyond. In this talk, I explore the conditions which, when present, might make workplaces designed with zones of privacy (rather than full observability) more productive and, ironically, more transparent—a result I term the “transparency paradox.” After reviewing several studies that investigate different aspects of the transparency paradox, I will then relate the results back to my own experiences in the regulation of consumer financial products in the United States.

  

 

(Host: Professor Libby Weber & Professor John Joseph)

 

Friday, April 8, 2016

 

Entry, Exit and the Potential for Resource Redeployment

 

SPEAKER: Professor Marvin Lieberman

UNIVERSITY: UCLA Anderson School of Management

TIME: 2:00 pm - 3:30 pm

LOCATION: SB1 5100, Corporate Partners Executive Boardroom

 

ABSTRACT:

Combining the concept of resource relatedness with the economic notion of sunk costs, we assess how the potential for resource redeployment affects market entry and exit by multi-business firms. If the performance of a new business falls below expectations, a diversified firm may have more flexibility if it is able to redeploy its resources back into related businesses. In effect, relatedness reduces the sunk costs associated with a new business, which facilitates exit. This, in turn, has implications for entry: by decreasing the cost of failure, the potential for redeployment justifies the undertaking of riskier entries and greater experimentation. These dynamic benefits of relatedness are distinct from standard notions of ‘synergy.’ To show support for this idea, we provide a mathematical model, descriptive data, and company examples.

 

 

(Host: Prof. Ben Lourie)

 

Friday, April 8, 2016

 

"The Role of Tacit Knowledge In Auditor Expertise and Human Capital Development"

 

SPEAKER: Dr. Jasmijn Bol

UNIVERSITY: Tulane University, Freeman School of Business

TIME: 3:00 pm - 4:30 pm

LOCATION: SB1 5200, Lyman Porter Colloquia Room and Terrace

 

ABSTRACT:

Prior audit research predicts and finds that tacit managerial knowledge is associated with better annual performance evaluations, but only for relatively experienced auditors (Tan and Libby [1997]). By contrast, and based on the increasing importance of social skills in today’s audit ecology, we predict and find that tacit knowledge is now also valued in relatively inexperienced auditors. In particular, audit firms reward both tacit managerial knowledge and tacit audit quality knowledge in relatively inexperienced auditors via career opportunities, better performance evaluations, and bonus compensation. Shifting to relatively experienced auditors, we predict that better supervision of subordinate auditors is one way in which tacit managerial knowledge enhances relatively experienced auditors’ performance. We find that, consistent with this prediction, supervisors with higher tacit managerial knowledge better develop this knowledge in their subordinates, value tacit knowledge more when evaluating subordinates’ annual performance, and strengthen the firm commitment of higher tacit knowledge subordinates to the firm.

 

  

 

(Host: Professor Gerardo Okhuysen)

 

Friday, April 1, 2016


“Power as an Emotional Liability: Implications for Perceived Authenticity and Trust after a Transgression”

 

SPEAKER: Professor Peter Kim

UNIVERSITY: University of Southern California

TIME: 3:00 pm - 5:00 pm

LOCATION: SB1 5100, Corporate Partners Executive Boardroom

 

ABSTRACT:

People may express a variety of emotions after committing a transgression. Through four empirical studies, we investigated how the perceived authenticity of such emotional displays and resulting levels of trust are shaped by the transgressor's power. Past findings suggest that individuals with power tend to be perceived as more authentic. Yet our findings reveal that: a) a transgressor’s display of emotion is perceived to be less authentic when that party’s power is high than low, b) this perception of emotional authenticity, in turn, directly influences (and ultimately mediates) the level of trust in that party, and c) these effects lead perceivers to exert less effort when asked to make a case for leniency toward high than low power transgressors. This tendency to discount the emotional authenticity of the powerful was, furthermore, found to arise from power increasing the transgressor’s perceived level of emotional control and strategic motivation. These results were found across different types of emotions, different expressive modalities, different operationalizations of the transgression, and different types of participants.

 

 

 

(Host: Professor Libby Weber & Professor John Joseph)

 

Thursday, March 31, 2016

 

Why Strategic Management Scholars Must Adopt a Stakeholder Perspective

 

SPEAKER: Professor Jay Barney

UNIVERSITY: Eccles School of Business, University of Utah

TIME: 11:30 am - 1:00 pm

LOCATION: SB1 5200, Lyman Porter Colloquia Room & Executive Terrace

 

ABSTRACT:

Despite calls for integrating a stakeholder perspective more completely into strategic management research and practice, most strategic management scholars continue to build on the assumption that shareholders are a firm’s only residual claimant.  This paper shows that scholarly  efforts designed to explain the existence of expected economic profits logically requires that stakeholders, besides a firm’s shareholders, are residual claimants, and thus that strategic management research must incorporate multiple stakeholders in its analysis of expected economic profits.  This conclusion has a variety of important implications for several research traditions, including stakeholder theory, strategic management, entrepreneurship, and finance.

 

 

(Host: Professor Connie Pechmann)

 

Monday, March 14, 2016

 

Lessons Learned From Hybrid [In-Person & Online] Teaching

 

SPEAKER: Lecturer Raymond Pirouz

UNIVERSITY: University of California, Irvine

TIME: 12:00 pm - 1:00 pm

LOCATION: SB1 2100, Experian Case Study Classrooms

 

ABSTRACT:

Over a six-year period, Raymond Pirouz has taken his “Marketing on the Internet” MBA elective from a standard 10-week in-person course to a hybrid offering wherein the class meets in-person for the first and final session with all other class sessions held completely online. Through trial and error, Raymond has adopted a unique mix of technologies and approaches resulting in key learnings & best practices centered around the pursuit of one central objective: To replicate a “University of” teaching & learning experience in a digital context.

 

 

(Host: Professor Shuya Yin)

 

Friday, March 4, 2016


Supply and Demand Functions in Inventory Models

 

SPEAKER: Professor Annabelle Feng

UNIVERSITY: Purdue University

TIME: 1:30 pm - 3:00 pm

LOCATION: SB1 5100

 

ABSTRACT:

The heart of an inventory model is the modeling of the supply and demand functions. To allow for analytical tractability, the existing literature focuses on almost surely linear supply and demand functions, which greatly limits the applicability of the models. The goal of this paper is to provide a unified approach to analyze general random supply and demand functions. By transforming the problem into one defined on a higher dimension, we show that many of the seemingly highly nonlinear supply and demand functions (in the almost sure sense) are linear in the stochastic sense. With this new notion of linearity, called the stochastic linearity in mid-point, our ability to analyze inventory and supply chain problems is much enhanced. We are able to prove the concavity of the profit function in the transformed inventory and pricing decisions for a general class of supply and demand functions that cover and go much beyond the ones studied in the existing literature. We further show that when the supply functions are stochastically increasing in the dispersive order, a condition satisfied by almost all the supply functions analyzed in the existing literature, the optimal ordering decision follows an almost threshold policy—When the inventory level is above a threshold, no order is placed to the supplier; otherwise, a positive order is issued to the supplier with exception over a set of inventory levels with zero Lebegue measure. If, in addition, the demand distribution is continuous, this policy reduces to a strict threshold policy and it is optimal to select the suppliers based on per unit cost of delivery. To demonstrate the applicability of these theoretical developments, we analyze several known and new examples of supply and demand functions. We also present a nonparametric approach to show how one can empirically estimate and verify the stochastic properties of the supply and demand functions.

This is a joint work with J. George Shanthikumar

 

 

(Host: Professor Sharon Koppman, Co-Sponsored by: The Department of Sociology)

 

Friday, March 4, 2016

 

The Potlatch Revisited: Distinction and Destruction among the New Global Elite

 

SPEAKER: Associate Professor Ashley Mears

UNIVERSITY: Boston University

TIME: 12:00 pm - 1:30 pm

LOCATION: SB1 5200

 

ABSTRACT:

This paper draws its conceptual lens from the sociology of expectations and from market studies to investigate the relationship between hype cycles and how future markets are formed. Through discourse analysis we interrogate a body of 462 publicly accessible texts from the period 2005 to 2015 around digital health technologies and markets across newspapers, internet sources and public policy documents, tracing: the content of the discourse, the promises made and warnings sounded, who contributes to the hype, and its effects on the shaping of the digital healthcare landscape. We find that the digital health technology hype follows an hourglass pattern, where the early market impetus around cost savings in healthcare systems finds itself replaced by a technology development frenzy in a second phase before settling down into a more mature third phase where technologies are integrated into a wider socio-economic discourse again.

 

 

 

(Host: Professor Alladi Venkatesh)

 

Friday, March 4, 2016

 

From Electronic Health Records to Mindful Cyborgs: How Expectations Shape Markets

 

SPEAKER: Professor Susi Geiger

UNIVERSITY: UCD Dublin

TIME: 12:00 pm - 1:30 pm

LOCATION: SB1 5200

 

ABSTRACT:

This paper draws its conceptual lens from the sociology of expectations and from market studies to investigate the relationship between hype cycles and how future markets are formed. Through discourse analysis we interrogate a body of 462 publicly accessible texts from the period 2005 to 2015 around digital health technologies and markets across newspapers, internet sources and public policy documents, tracing: the content of the discourse, the promises made and warnings sounded, who contributes to the hype, and its effects on the shaping of the digital healthcare landscape. We find that the digital health technology hype follows an hourglass pattern, where the early market impetus around cost savings in healthcare systems finds itself replaced by a technology development frenzy in a second phase before settling down into a more mature third phase where technologies are integrated into a wider socio-economic discourse again.

 

The paper contributes to technology marketers' understanding of how technology markets are shaped and how they can position themselves in these markets to best effect, and to marketing researchers' understanding of how complex markets form. We warn against following the 'hype', especially when it encourages companies to engage in technology development that is blinded by the promises of an untapped market and unhinged from broader systems, societal, ethical or economic concerns.

 

 

(Host: Professor Chong Huang)

 

Friday, February 26, 2016

 

Spillovers Inside Conglomerates: Incentives and Capital

 

SPEAKER: Professor Denis Sosyura

UNIVERSITY: University of Michigan

TIME: 1:30 pm - 2:45 pm

LOCATION: SB2 122

 

ABSTRACT:

Using hand-collected data on divisional managers at conglomerates, we find that a change in industry pay in one division generates spillovers on managerial pay in other divisions of the same firm. These spillovers arise only within the boundaries of a conglomerate. The intra-firm spillovers increase when conglomerates have excess cash and when managers have more influence over its distribution, but decline in the presence of strong governance. These spillovers are associated with weaker performance and lower firm value. Our evidence is consistent with simultaneous cross-subsidization via managerial payoffs and capital budgets and suggests that these practices arise in similar firms.

 

  

(Host: Professor Mingdi Xin)

 

Friday, February 19, 2016

 

Value of Multi-Dimensional Rating Systems: Evidence from a Natural Experiment

 

SPEAKER: Associate Professor Pei-Yu Chen

UNIVERSITY: Arizona State University 

TIME: 10:30 am - 12:00 pm

LOCATION: SB1 5200 5th Floor, Lyman Porter Colloquia Room & Executive Terrace 

 

ABSTRACT: 

Online product ratings offer consumers information about products. However, consensus is lacking on whether or not single-dimensional ratings can efficiently convey product quality information to consumers. Some scholars have discussed the potential of designing multi-dimensional rating systems to transfer quality information because quality is often comprised of multiple dimensions. This study directly investigates whether or not, and to what extent, multi-dimensional rating systems enhance the efficiency of information transfer. Our key identification strategy hinges on a natural experiment on www.tripadvisor.com (TripAdvisor) when the website reengineered and changed its rating system from single-dimensional to multi-dimensional in January 2009. To control the unobserved quality change over time at the restaurant level, we obtain rating data on the same set of restaurants from www.yelp.com (Yelp), which allow us to identify the causal effect using a difference-in-difference approach. Results from a set of econometric analyses show that ratings in a single-dimensional rating system have a high dispersion and downward trend, in contrast to those in a multi-dimensional rating system, which support the conjecture that multi-dimensional rating systems facilitate matching between consumer preferences and product attributes. Consumers form more accurate expectations from multi-dimensional ratings and are therefore less likely to be either “disappointed,” which results in a downward trend in ratings, or “surprised,” which leads to a higher dispersion of ratings. We also conduct two randomized experiments to understand the mechanisms of how multi-dimensional rating systems enhances information transfer. Results suggest that multi-dimensional rating systems not only help consumers find products that better fit their preference, but also increase their confidence of their choice. These results support the view that multi-dimensional rating systems enhance information transfer efficiency. This study provides important implications for a good design of online rating systems that help consumers match their preferences with product attributes.

 

  

(Host: Professor Luyi Gui)

 

Friday, February 12, 2016

 

The Local Realities of Risk, Responsibility, and Regulatory Empowerment: A Frontline Safety Approach

 

SPEAKER: Assistant Professor Garry Gray

UNIVERSITY: University of Victoria 

TIME: 10:00 am - 11:30 am

LOCATION: SB1 5200, Lyman Porter Colloquia Room & Executive Terrace 

 

ABSTRACT: 

In what ways do social interactions within work settings influence compliance with legal regulations? How do those on the frontline who perform day-to-day work, interpret and respond to regulations designed to specify and bound their work practices? A frontline safety approach takes seriously the relationships between people at the local level, between people and the systems/institutions in which they are embedded, and between people and their wider social and political contexts. It is vital for regulatory scholarship to recognize these issues, in particular, how conceptions of individuals (as rational, responsible, economic actors) are constructed and maintained at these levels. In this presentation, I will illustrate limitations in regulatory empowerment approaches that require citizens to speak up by drawing on field research among blue collar workers in factories and truck driving as well as professionals in white collar settings such as hospitals and universities. Power imbalances play a crucial role in the decision to speak up, however, not only among those doing manual labor, but also among highly trained professionals.

 

 

(Host: Professor Ben Lourie)

 

Friday, February 12, 2016

 

"Do managers tacitly collude to withhold industry-wide bad news?"

 

SPEAKER: Professor Catherine M. Schrand

UNIVERSITY: University of Pennsylvania

TIME: 3:00 pm - 4:30 pm

LOCATION: SB1 5200 5th Floor, Lyman Porter Colloquia Room & Executive Terrace

 

ABSTRACT:

We analyze when firms in an industry could collectively withhold adverse news about industry conditions. Intra-industry correlation in signals should increase capital market pressures to disclose, making it difficult for firms to collectively withhold adverse news.  Using a strategic game framework, we predict that a cooperative withholding equilibrium is possible, but whether it is achievable depends on the structure of the industry, the nature of the industry news, and the extent to which these factors are common knowledge.  Using opacity in 10-Ks as a proxy for withholding, we document a small number of cases of increased intra-industry withholding of adverse news, controlling for changes in firm fundamentals including complexity.  Strategic withholding is more likely in industries with greater negative tailrisk, greater equity incentives, and trade associations that foster interpersonal connections.  The analysis has implications for mandated disclosure of industry-wide news by providing an understanding when economic forces are sufficient to generate voluntary disclosure of industry-wide adverse conditions.

 

 

(Host: Professor Rajeev Tyagi)

 

Friday, February 12, 2016


Robust Dynamic Estimation

 

SPEAKER: Professor Prasad Naik

UNIVERSITY: University of California, Davis

TIME: 3:30 pm - 5:00 pm

LOCATION: SB1 5100, Corporate Partners Executive Boardroom

 

ABSTRACT:

Managing marketing resources over time requires dynamic model estimation, which necessitates specifying some parametric or nonparametric probability distribution. When the data generating process differs from the assumed distribution, the resulting model is misspecified. To hedge against such a misspecification risk, the extant theory recommends using White’s (1980) sandwich estimator. This approach, however, only corrects the variance of estimated parameters, but not their values. Consequently, the sandwich estimator does not affect any managerial outcomes such as marketing budgeting and allocation decisions. To overcome this drawback, we present the minimax framework that does not necessitate any distributional assumptions to estimate dynamic models. Applying minimax control theory, we derive an optimal robust filter, illustrate its application to a unique advertising data set from the Canadian Blood Services, and contribute several novel findings. We discover the compensatory effect: advertising effectiveness increases and the carryover effect decreases as robustness increases. We also find that the robust filter uniformly outperforms the Kalman filter on the out-of-sample predictions. Furthermore, we uncover the existence of a profit-volatility tradeoff, similar to the returns-risk tradeoff in finance, whereby the volatility of profit stream decreases at the expense of reduced total profit as robustness increases. Finally we prove that, unlike for-profit companies, managers of non-profit organizations should optimally allocate budgets opposite of the advertising-to-sales ratio heuristic; that is, advertise more (less) when sales are low (high).

 

 

(Host: Professor Shuya Yin)

 

Friday February 5, 2016


Improving Environmental, Health, and Safety in Supply Chains: Some Preliminary Studies

 

SPEAKER: Professor Chris Tang

UNIVERSITY: University of California, Los Angeles

TIME: 9:30 am - 11:00 am

LOCATION: SB1 5200, Lyman Porter Colloquium Room and Executive Terrace

 

ABSTRACT:

Many factories in developing countries have serious Environmental, Health and Safety (EHS) issues.  Due to inconsistent law enforcement, limited progress has been made.  What can be done?  This is an open research topic that operations management and supply chain researchers should explore.  I plan to share some of my preliminary studies in this presentation.

 

 

(Host: Professor Chris Bauman)

 

Monday, February 1, 2016

 

Using Choice Architectue to Improve Energy Decisions

 

SPEAKER: Professor Rick Larrick

UNIVERSITY: Duke University 

TIME: 3:30 pm - 5:00 pm

LOCATION: SB1 5100, Corporate Partners Executive Boardroom 

 

ABSTRACT: 

This talk will describe a set of cognitive biases that lead people to misunderstand their energy use. The talk will review four principles of “choice architecture” derived from cognitive and social psychology for helping decision makers make better energy decisions. Brief research examples will be given in support of each.  The principles will also be illustrated more broadly as tools for helping employees and consumers make better decisions. 

  

(1) Do the calculations for decision makers. “Miles per gallon” (MPG) is a familiar efficiency metric used to evaluate automobiles in the United States.  However, gas consumption is a highly curvilinear function of MPG.  As a result, MPG leads people to severely underestimate the gas savings from small MPG improvements on inefficient cars. Calculating consumption for decision makers by using a measure such as “gallons per 100 miles” corrects this bias.

 

(2) Translate energy use to important objectives such as cost and environmental impact. People often fail to map energy use to other concerns, such as cost and environmental impact, because they lack knowledge or motivation.  Translations remind people of goals they care about and guide them to options they prefer. 

 

(3) Provide a meaningful relative comparison.   Relative comparisons help consumers evaluate whether an ambiguous energy number is good or bad. For instance, OPower has demonstrated that people reduce their energy use when given specific comparisons to average (and best) neighbors.  Other comparisons, such as ambitious but realistic goals, also lead to reduced energy use. 

 

(4) Use an expanded scale, such as lifetime cost (not daily cost).  People tend to ignore small numbers. To address this issue, energy-related numbers can be scaled to large but realistic time periods.  Research shows that people are more interested in energy efficient products when given costs on a longer time scale.

 

 

(Host: Professor Shuya Yin)

 

Friday, January 29, 2016

 

The Bright Side of Managerial Overconfidence

 

SPEAKER: Professor Juan Li

UNIVERSITY: Nanjing University 

TIME: 10:00 pm - 11:30 pm

LOCATION: SB1 5200, Lyman Porter Colloquia Room & Execu

 

ABSTRACT:

A well-known behavior phenomenon is managers hold excessive faith that they know the truth. Managers may receive signals about market states, in which the states may be high or low, thus, the posterior probability of market state being high(low) with receiving a hit (bomb) signal is not smaller than the prior probability, managers may exhibit overconfidence on the accuracy of signals. The objective of this paper is to answer under which conditions overconfidence bias may lead to higher profits, the corresponding managerial insights for firms are whether to hire overconfident managers and how to estimate the value of signals in a competitive setting.

The paper shows firms’ differentiation strategies critically depend on how costly it enter market. When the fixed cost of entry is not too high, both firms would like to hire rational managers. However, for a larger fixed cost, counterintuitively, one of firms exploits to hire overconfident manager to differentiate their competition if the market states being high is relatively large, the main reason of overconfidence leading to higher profits is benefits from ordering more with receiving the hit signal are sufficiently large compared with loss from ordering less with receiving the bomb signal. The fact that hiring overconfident managers is stable in a wide range of environments may help to explain why overconfident managers remains prevalent, even if it contributes to decision bias. Furthermore, overconfidence bias leading to higher profits are robust even when market states belong to a normal distribution.

 

 

(Host: Professor John Joseph)

 

Friday, January 29, 2016

 

Vicarious Learning In Startups: Evidence From Accelerator Programs

 

SPEAKER: Professor Chris Bingham

UNIVERSITY: University of North Carolina

TIME: 2:00 pm - 3:30 pm

LOCATION: SB1 5100, Corporate Partners Executive Boardroom

 

ABSTRACT:

A fundamental challenge for new startups is overcoming liabilities of newness - especially lack of experience and business understanding. Accelerators, intense, time-compressed entrepreneurial education programs, attempt to alleviate these critical liabilities by facilitating vicarious learning for participating new ventures. Yet, the organizations literature suggests that since new ventures lack experience and thus adequate levels of absorptive capacity to assimilate and integrate new knowledge, vicarious learning may be less effective. Using a multiple case, inductive study of eight US seed accelerator programs and affiliated startups, we address this tension and explore how accelerators may contribute to (or distract from) vicarious learning in startups.  Our data suggest how accelerators do both. Collectively, our findings contribute to strategy by introducing intermediaries that may broker vicarious learning for others, to organization theory by suggesting how startups can build initial absorptive capacity, and to entrepreneurship by demystifying how accelerators can help or harm venture development.

 

 

(Host: Professor Connie Pechmann)

  

Monday, January 25, 2016

 

"Only One Left - I'll Fight you for It!": Scarcity Promotion Advertising and Aggressive Behavior

 

SPEAKER: Dr. Darren Dahl

UNIVERSITY: Sauder School of Business

TIME: 1:00 pm - 2:30 pm

LOCATION: SB1 5200, Lyman Porter Colloquia Room and Executive Terrace

 

ABSTRACT:

Marketers frequently use scarcity promotions, where a product or service is limited in either quantity or is promoted for a limited time. The present research shows that the mere exposure to scarcity promotion advertising can activate actual aggression even outside the consumption domain, when the scarce item is not even attainable. Further, exposure to scarcity promotion advertising prompts consumers to perceive other consumers (even if not physically present) as potential threats to obtaining a desired product. This threat, in turn, is shown to drive aggression towards others. Four studies using violent video game behavior to measure aggression demonstrate that firearm shooting behavior (number of shots fired), punching behavior (punches thrown), and consumer preferences for violent experiences are higher in response to such advertising. 

 

 

(Host: Professor Ben Lourie)


Thursday, January 21, 2016


Attributes of Informative Disclosures

 

SPEAKER: Professor Daren Roulstone

UNIVERSITY: Ohio State University

TIME: 2:00 pm - 3:30 pm

LOCATION: SB1 2321, Judy Rosener Flexible Classroom

 

ABSTRACT: 

Regulatory actions and academic research suggest a variety of seemingly “good” disclosure attributes: readability, amount of forward-looking information, concreteness (numerical intensity), and more disclosure in general. While all of these attributes seem intuitively desirable, there is little empirical evidence about how these disclosure attributes compare in terms of informing the readers of financial reports. We examine equity market responses to quarterly earnings announcements as a function of these disclosure attributes and find substantial variation in their effects. We find strong evidence that forward-looking disclosures represent informative disclosures, very little evidence that readability is associated with disclosure informativeness, and actually find evidence that both disclosure length and numerical intensity are negatively associated with disclosure informativeness. We provide several reasons why these measured attributes may not capture disclosure quality as expected. Overall, our results should help inform both managers and regulators making decisions about how to craft or encourage informative disclosures. Our results also suggest caution for academics using seemingly intuitive measures of disclosure quality.

 

 

(Host: Chong Huang)

 

Friday, January 15, 2016

 

Which Factors Matter to Investors? Evidence from Mutual Fund Flows.

 

SPEAKER: Professor Brad Barber

UNIVERSITY: UC Davis

TIME: 1:30 pm-2:45 pm

LOCATION: SB1 5200, Lyman Porter Colloquia Room & Executive Terrace

 

ABSTRACT:

When assessing a fund manager's skill, sophisticated investors will consider all factors (priced and unpriced) that explain cross-sectional variation in fund performance. We investigate which factors investors attend to by analyzing mutual fund flows as a function of recent returns. Investors attend most to market risk (beta), but treat returns attributable to size, value, momentum, and industry factors as alpha. Flows of direct-sold funds- whose investors are likely more sophisticated than those of broker-sold funds-are less responsive to factor-related returns, which suggests sophisticated investors are aware that factor-related returns are not indicative of managerial skill. 

 

 

(Host: Professor Luyi Gui)

 

Friday, January 15, 2016

 

Stringency, Governance, Media Coverage and Diffusion of Environmental and Social Labeling Schemes

 

SPEAKER: Professor Charles J. Corbett

UNIVERSITY: University of California, Los Angeles

TIME: 10:00 am - 11:30 am

LOCATION: SB1 5200, Lyman Porter Colloquia Room and Executive Terrace

 

ABSTRACT:

The diffusion of ecolabels has been widespread, through adoption of individual labels by firms and consumers has varied widely. Little is known about why some labeling schemes are more widely adopted than others. One might speculate that firms prefer labels with less stringent requirement, as they are less costly to adopt. Conversely, firls may prefer to associate themselves with a label that is sufficiently well-governed to minimize the risk of negative publicity emerging about other firms carrying that smae label. the notion "well-governed" itself is also not well-defined. Finally, one might speculate that labels which receive favorable coverage in the media are likely to be more widely adopted, and that labels which are more stringent and better-governed are more likely to attract such favorable coverage. We explore these linkages (between stringency, governace, and media coverage and adoption) using three sources of data. We analyze 40 enviromental and social labeling schemes, using www.ecolabelindex.org and other sources to code their governance practices. We conducted a survey of 67 experts from governments, major retailers, NGOs, consultancies. and academia, around the world, to determine stringency, quality of  governance, and breadth of adoption. Finally, we analayzed 3043 media articles on these 40 schemes, to determine the tenor of media coverage.

 

We find that only accreditation of verifiers is associated with a better overall quality of governance. We also find that labels that are better-governed are also more widely adopted, consistent with the expectation that firms are more wary of joining labels with weal governance. On the other hand, labels that are more stringent are not less widely adopted, suggesting that (within the range of stringency included in our sample) labels do not suffer by imposing stricter requirements. We find that the tenor of the media coverage of a label does not depend on its stringency, on most specific governance practices, or its overall quality of governance. Only an open and consensus-based standard-setting process is associated with more favorable media coverage. More favorable media coverage is not, however, associated with wider adoption. Overall our findings point to "reassurance" as a key part pf governance of ecolabels, whether in the form of accreditation of verifiers, or participation of many stakeholders in the standard-setting process. 

 

 

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