Economics Insights @ CBS

In the value-based approach to business strategy, a firm’s value creation with a buyer—i.e., its value gap—is an important measure. In many formal and informal results, firm profitability depends on whether the firm can identify buyer segments in which it has the largest value gap—namely, a value-gap advantage. These results typically assume, either explicitly or implicitly, that firms have constant marginal costs.

Conventional research in organizational theory highlights the role of board interlocks in facilitating business collective action. In this article, I propose that business collective action affects the evolutionary path of interlock networks. In particular, large market players’ response after a collective action to the classic problem of the "exploitation" of the great by the small provides a mechanism for interlocks to evolve.

Researchers have debated whether a person’s behavior can be predicted from his or her face. In particular, it is unclear whether people’s trustworthiness can be predicted from their facial appearance. In the present study, we implemented conceptual and methodological advances in this area of inquiry, taking a new approach to capturing trustworthy behavior and measuring targets’ own self-expectations as a mediator between consensual appearance-based judgments and the trustworthiness of targets’ behavior.