Leadership & Organizational Behavior

Recommendations often play a positive role in the decision process by reducing the difficulty associated with choosing between options. However, in certain circumstances recommendations play a less positive and more undesirable role from the perspectives of both the recommending agent or agency and the person receiving the recommendation. Across a series of four studies, we explore consumer response when recommendations by experts and intelligent agents contradict the consumer's initial impressions of choice options.

The purpose of this panel is to make significant headway in assessing and developing multilateral strategies to promote democracy. Throughout, we will focus on constructive avenues for change rather than on critique and lamentation. We begin with two diagnostic questions: What is the state of democratization in the world today? How have strategies for the promotion of democracy changed since September 11, led by the transformed U.S. agenda of war on terror? Here we will discuss recent interventions in Afghanistan and Iraq, as well as new developments in other parts ofthe world.

I propose an intertemporal precautionary saving model in which the agent's labor income is subject to (possibly correlated) shocks with different degrees of persistence and volatility. However, he only observes his total income, not individual components. I show that partial observability of individual components of income gives rise to additional precautionary saving due to estimation risk, the error associated with estimating individual components of income. This additional precautionary saving is higher, when estimation risk is greater.

We study linguistic access in a mixed language context by integrating the Bilingual Interactive Activation model and the Language Differential Processing model. We show that highly proficient bilinguals, compared to less proficient bilinguals, activate phonological and semantic representations of the dominant as well as the non-dominant language, and engage in differential processing for different types of scripts (phonetic vs. logographic). For highly proficient bilinguals, language emphasis (Chinese vs.

We propose an exogenous measure of a country's growth opportunities by interacting the country's local industry mix with global price to earnings (PE) ratios. First, we find that these exogenous growth opportunities strongly predict future changes in real GDP and investment in a large panel of countries. This relation is strongest in countries that have liberalized their capital accounts, equity markets, and banking systems. Second, we re-examine the link between financial development, external finance dependence, investor protection, capital allocation, and growth.

We examine the effects of both equity market liberalization and capital account openness on real consumption growth variability. We show that financial liberalization is mostly associated with lower consumption growth volatility. Our results are robust, surviving controls for business-cycle effects, economic and financial development, the quality of institutions, and other variables. Countries that have more open capital accounts experience a greater reduction in consumption growth volatility after equity market openings.

Everyone who has studied international equity returns has noticed the episodes of high volatility and unusually high correlations coinciding with a bear market. We develop quantitative models of asset returns that match these patterns in the data and use them in two quantitative asset allocation analyses. First, we show that the presence of regimes with different correlations and expected returns is difficult to exploit with within a global asset allocation framework focussed on equities. The benefits of international diversification dominate the costs of ignoring the regimes.

Gallant, Hansen, and Tauchen (1990)Go show how to use conditioning information optimally to construct a sharper unconditional variance bound (the GHT bound) on pricing kernels. The literature predominantly resorts to a simple but suboptimal procedure that scales returns with predictive instruments and computes standard bounds using the original and scaled returns. This article provides a formal bridge between the two approaches. We propose an optimally scaled bound that coincides with the GHT bound when the first and second conditional moments are known.

Many Strategic Account Programs are disconnected from the firm's strategic objectives and market place realities. If the Strategic Account Program is not central to your company's strategy formulation and implementation processes, it will have difficulty securing active senior management sponsorship and support. The Strategic Account Program then degenerates into a sales program and salespeople have difficulty getting alignment and commitment from other company functions.