Organizations & Markets

We conduct a randomized control trial that generates exogenous variation in the access to foreign markets for rug producers in Egypt. Using this methodology and detailed survey data, we causally identify the impact of exporting on firm performance. Treatment firms report 15–25 percent higher profits and exhibit large improvements in quality alongside reductions in quantity-based productivity relative to control firms. These findings do not simply reflect firms being offered higher margins to manufacture high-quality products that take longer to produce.

We estimate a New-Keynesian macro model accommodating regime-switching behavior in monetary policy and in macro shocks. Key to our estimation strategy is the use of survey-based expectations for inflation and output. We identify accommodating monetary policy before 1980, with activist monetary policy prevailing most but not 100% of the time thereafter. Systematic monetary policy switched to the activist regime in the 2000-2005 period through an aggressive lowering of interest rates.

Shortfall aversion reflects the higher utility loss of a spending cut from a reference point than the utility gain from a similar spending increase, in the spirit of Prospect Theory's loss aversion. This paper posits a model of utility of spending scaled by a function of past peak spending, called target spending. The discontinuity of the marginal utility at the target spending corresponds to shortfall aversion.

The fields of judgment and decision making (JDM) and cultural psychology have not seen much overlap, but recent research at the intersection of culture and JDM has provided new insights for both fields. This chapter reviews recent advances, with a focus on how studying cultural variations in JDM has yielded novel perspectives on basic psychological processes. JDM perspectives can propose novel explanations for differences across national cultures beyond those suggested by the prevailing models of culture.

This article studies the causes of China’s Great Famine, during which 16.5 to 45 million individuals perished in rural areas. We document that average rural food retention during the famine was too high to generate a severe famine without rural inequality in food availability; that there was significant variance in famine mortality rates across rural regions; and that rural mortality rates were positively correlated with per capita food production, a surprising pattern that is unique to the famine years.

This article considers the social and psychological functions that norm-based thinking and behavior provide for the individual and the collectivity. We differentiate between two types of reference groups that provide norms: peer groups versus aspirational groups. We integrate functionalist accounts by distinguishing the functions served by the norms of different reference groups, different degrees of norm moralization, and different directions of responses to norm activation.

In the wake of recent revelations about US involvement in torture, and widespread and seemingly-growing support of torture in the US, we consider how people judge the value of information gained from informants under coercion. Drawing on past work on confirmation biases and moral judgments, we predicted, and found, that American torture supporters are more likely than opposers to see coerced information as relatively valuable and necessary in a scenario describing the foiling of an al-Qaeda terrorist attack.

Intergroup researchers have the opportunity to access to a wide variety of methods to help deepen theoretical insights about intergroup relations. In this paper, we focus on neuroendocrine measures, as these physiological measures offer some advantages over traditional measures used in intergroup research, are noninvasive, and are relatively easy to incorporate into existing intergroup paradigms. We begin by discussing the major neuroendocrine systems in the body and their measurable biological products, emphasizing systems that have conceptual relevance to intergroup relations.

We ask nearly 400 CFOs about the definition and drivers of earnings quality, with a special emphasis on the prevalence and detection of earnings misrepresentation. CFOs believe that the hallmarks of earnings quality are sustainability, absence of one-time items, and backing by actual cash flows. Earnings quality is determined in about equal measure by controllable factors like internal controls and corporate governance, and non-controllable factors like industry membership and macroeconomic conditions.