Organizations & Markets

In this letter, we summarize our recent work on the welfare impact of recommendation algorithms and propose questions for further study. We model recommendation algorithms as an information structure, which shapes how a third party takes actions that affect the welfare of different individuals in a population. Each recommendation algorithm thus induces a welfare profile, describing the expected payoffs of different individuals when the third party takes actions following the algorithm.

Social movements are catalysts for crucial institutional changes. To succeed, they must coordinate members’ views (consensus building) and actions (mobilization). We study union leaders within Myanmar’s burgeoning labor movement. Union leaders are positively selected on both ability and personality traits that enable them to influence others, yet they earn lower wages. In group discussions about workers’ views on an upcoming national minimum wage negotiation, randomly embedded leaders build consensus around the union’s preferred policy.

We leverage Lachmann’s insight on elite conflict to explain the politics surrounding industry regulation in contemporary America and argue that conflicts between political elites create both constraints on industry players and opportunities for them to shape regulation. The widening urban-rural polarization of American society, in particular, has made urban political elites more liberal than those in state politics. The greater the political polarization of a state,  the more local restrictions the nascent U.S.

Firms with political connections to a regime with an authoritarian history face a dilemma when the regime undergoes a democratic transition. Such connections provide an essential competitive advantage when the regime is in power but become a liability when an institutional transition brings democratic change. This study theorizes that when mass protests expose a regime’s distorted policies favoring elites over others and signal a high probability of regime turnover, firms may hedge against the risks associated with their political connections by engaging in philanthropy.

Acquisitions can shift the market structure of a digital platform in ways that affect subsequent entries and hence the platform’s base of complementors. Synergies that complementor acquirers accrue can be entry-deterring. We develop a two-by-two typology of acquisition synergies in a multisided platform based on the two sides of a platform market (user side or complementary-technology side) and two sources of synergies (scale or scope economies).

Organizational secrecy is central to national security, politics, business, technology, healthcare, and law, but its effects are largely unknown. Keeping organizational secrets creates social divides between those who are required to keep the secret and those who are not allowed to know it. We demonstrate that keeping organizational secrets simultaneously evokes feelings of social isolation and status, which have opposing effects on employee well-being.

In this feature with Education Technology Insights APAC, Dave Moretti, Senior Director of Digital Marketing and Technology at Columbia Business School, discusses how AI and technology need to be explored and implemented to better streamline communication between administrators, students, potential candidates and visitors.