Columbia Business School Research

The article discusses research that shows managers who are perceived as being tough and wielding power are more likely to be promoted than others. The author cites the example of drug maker Pfizer, where in 2001 the no-nonsense Hank McKinnell was hired as chief executive instead of the more collegial Karen Katen. In 2006 Pfizer got rid of McKinnel for poor performance.

This experimental study investigates how behavior changes after receiving punishment. The focus is on how proposers in a power-to-take game adjust their behavior depending on their fairness perceptions, their experienced emotions, and their interaction with responders. We find that fairness plays an important role: proposers who take what they consider to be an unfair amount experience higher intensities of prosocial emotions (shame and guilt), particularly if they are punished. This emotional experience induces proposers to lower their claims.

Many companies do not know their marketing ROI because their organizations are not set up to evaluate marketing ROI.

This article examines the population dynamics and viability of network weavers, which are organizations that provide network relations for others. An analysis of the population dynamics of the intergovernmental organizations (IGOs) that are the basis of the interstate networks that influenced global economic relations, peace, and democracy in the 1815–2000 period show that IGO founding and failure depends on the ease and value of specific interstate relations.

This research investigates the effects of regulatory focus on alternative search and consideration set formation in consumer decision making. Results from three experiments yield two primary findings. First, promotion‐focused consumers tend to search for alternatives at a more global level, whereas prevention‐focused consumers tend to search for alternatives at a more local level. Second, promotion‐focused consumers tend to have larger consideration sets than do prevention‐focused consumers.

<p>We present a tractable, linear model for the simultaneous pricing of stock and bond returns that incorporates stochastic risk aversion. In this model, analytic solutions for endogenous stock and bond prices and returns are readily calculated. After estimating the parameters of the model by the general method of moments, we investigate a series of classic puzzles of the empirical asset pricing literature.

We examine the implications of separating students of different grade levels across schools for the purposes of educational production. Specifically, we find that moving students from elementary to middle school in 6th or 7th grade causes significant drops in academic achievement. These effects are large (about 0.15 standard deviations), present for both math and English, and persist through grade 8, the last year for which we have achievement data. The effects are similar for boys and girls, but stronger for students with low levels of initial achievement.

Bicultural individuals differ in the degree to which their cultural identities are integrated versus conflicting—Bicultural Identity Integration (BII). Studies of judgment find that biculturals with less integrated identities (low BIIs) tend to defy salient cultural norms, whereas those with highly integrated identities (high BIIs) conform. This study examined biculturals' judgment in a group decision-making context, focusing on individuals' reactions to consensus in cultural ingroups. Results showed that low (vs.

Bicultural individuals vary in the degree to which their two cultural identities are integrated. Among Asian-Americans, for instance, some experience their Asian and American sides as compatible whereas others experience them as conflicting. Past research on judgments finds this individual difference affects the way bicultural individuals respond to situations that cue their cultures.

This Editors' Forum –‘Creativity East and West’– presents five papers on the question of cultural differences in creativity from the perspective of different research literatures, followed by two integrative commentaries. The literatures represented include historiometric, laboratory, and organizational studies. Investigation of cultural influences through country comparisons and priming manipulations, focusing on how people perform creatively and how they assess creativity.

This paper proposes a simple model to study how domestic institutions affect patterns of international capital flows. Inefficient financial system, and poor corporate governance, may be bypassed by two-way capital flows in which domestic savings leave the country in the form of financial capital outflows but domestic investment takes place via inward FDI. While financial globalization always improves the welfare of a developed country with a good financial system, its effect is ambiguous for a developing country with an inefficient financial sector or poor corporate governance.

Non-linear external habit persistence models, which feature prominently in the recent "equity premium" asset pricing and macroeconomics literature, generate counterfactual predictions in the cross section of stock returns. In particular, we show that in the absence of cross sectional heterogeneity in firms' cash flow risk these models produce a "growth premium," that is, stocks with high price-to-fundamental ratios command a higher premium than stocks with low price-to-fundamental ratios.

As Cassius said to Brutus (in Julius Caesar) Men at some time are masters of their fates: The fault, dear Brutus, is not in our stars, But in ourselves, that we are underlings. Might you become master of your fate through choice—no matter what the stars say?

Negotiators may use vigilant, loss-minimizing strategies or eager, gain-maximizing strategies. The present study provides evidence that preferences for these different strategies depend on negotiator role and personal orientation. In a price negotiation, buyers and prevention-focused individuals prefer vigilant strategies, whereas sellers and promotion-focused individuals prefer eager strategies.

Whether one is in one’s native culture or abroad, one’s personality can differ markedly from the personalities of the majority, thus failing to match the “cultural norm.” Our studies examined how the interaction of individual- and cultural-level personality affects people’s self-esteem and well-being.We propose a person-culture match hypothesis that predicts that when a person’s personality matches the prevalent personalities of other people in a culture, culture functions as an important amplifier of the positive effect of personality on self-esteem and subjective well-being at the individ

Large companies are usually organized into business units, yet some activities are almost always centralized in a company-wide functional unit. We first show that organizations endogenously create an incentive conflict between functional managers (who desire excessive standardization) and business-unit managers (who desire excessive local adaptation). We then study how the allocation of authority and tasks to functional and business-unit managers interacts with this endogenous incentive conflict.

This special issue features articles from the 9th Annual INFORMS Revenue Management and Pricing Section Conference at the Kellogg School of Management, Northwestern University during 22–23 June 2009. The conference featured 42 half hour talks by practitioners and researchers, as well as keynote addresses by Professor Anton Kleywegt of Georgia Tech and by Dr Matthew Schrag, the Director of Operations Research and Industrial Engineering at Delta Airlines. The conference was organized by Martin Lariviere and Baris Ata.

This goal of this chapter is to build a bridge between psychophysiology and organizational behavior in an effort to extend organizational theories and enhance the precision of organizational research. The first section describes psychophysiological systems and theories that can inform organizational scholars' understanding of the biological bases of behavior in organizations. The second section discusses the advantages and challenges associated with incorporating psychophysiological measures into organizational research.

Belief in one's ability to exert control over the environment and to produce desired results is essential for an individual's well being. It has been repeatedly argued that the perception of control is not only desirable, but it is likely a psychological and biological necessity. In this article, we review the literature supporting this claim and present evidence for a biological basis for the need for control and for choice—that is, the means by which we exercise control over the environment.

Applies economic, marketing, and finance concepts to develop a metric, Customer Value Added, that explains how marketing activities drive the financial performance of an organization.  Includes empirical results for a consumer packaged goods company where Customer Value Added predicted revenue and contribution with R-squared values greater than 0.90.

This article starts by discussing the concept of "inflation hedging" and provides estimates of "inflation betas" for standard bond and well-diversified equity indices for over 45 countries. We show that such standard securities are poor inflation hedges. Expanding the menu of assets to Treasury bills, foreign bonds, real estate and gold improves matters but inflation risk remains difficult to hedge. We then describe how state-of-the-art term structure research has tried to uncover estimates of the inflation risk premium, the compensation for bearing inflation risk.

The notion of accessibility of mental representations has been invaluable in explaining and predicting human thought and action. Focusing on social cognition, we review the large corpus of data that has accumulated since the first models of mental activation dynamics were outlined. We then outline a framework that we call Relevance of a Representation (or ROAR for short), the main tenant of which is that not all stimulated representations are in fact activated (i.e., influence thought and action processes).

Six studies show that subtle contextual cues that increase customers' self-awareness can be used to influence their satisfaction with service providers holding the objective service delivery constant. Self-awareness cues tend to increase customers' satisfaction when the outcome of a service interaction is unfavorable, but tend to decrease customers' satisfaction when the outcome of the interaction is favorable. This is because higher self-awareness increases customers' tendency to attribute outcomes to themselves as opposed to the provider.

How to view pricing, cross-selling, and customer loyalty during difficult economic times.  (Reprinted from "Marketing in Difficult Times," Effective Executive, July, 2009, pp. 11-18.)

This paper addresses the issues that confront the FASB and IASB in developing a new conceptual framework document. First, we suggest characteristics that a conceptual framework ought to exhibit. Most of these suggestions are based on our critique of the existing framework and the FASB-IASB work in progress. Second, we present a model framework that exhibits these characteristics. We emphasize up front that this framework is quite explicit. It goes to the heart of what a framework document should do: it places specific restrictions on what constitutes admissible accounting standards.

Bilateral investment treaties (BITs) are agreements between two countries for the reciprocal encouragement, promotion and protection of investments in each other's territories by companies based in either country. Germany and Pakistan signed the first BIT in 1959 and since then, BITs are one of the most popular and widespread form of international agreement. In this work we study the proliferation of BITs using a social networks approach. We propose a network growth model that dynamically replicates the empirical topological characteristics of the BIT network.

I use uniquely comprehensive data on financial news events to test four predictions from an asymmetric information model of a firm's stock price. Certain investors trade on information before it becomes public; then, public news levels the playing field for other investors, increasing their willingness to accommodate a persistent liquidity shock. Empirically, I measure public information using firms' stock returns on news days in the Dow Jones archive. I find four patterns in postnews returns and trading volume that are consistent with the asymmetric information model's predictions.

We examine whether securitization impacts renegotiation decisions of loan servicers, focusing on their decision to foreclose a delinquent loan. Conditional on a loan becoming seriously delinquent, we find a significantly lower foreclosure rate associated with bank-held loans when compared to similar securitized loans: across various specifications and origination vintages, the foreclosure rate of delinquent bankheld loans is 3% to 7% lower in absolute terms (13% to 32% in relative terms).

Cultural influences on individual judgment and decision making are increasingly understood in terms of dynamic constructive processing and the structures in social environments that shape distinct processing styles, directing initial attentional foci, activating particular judgment schemas and decision strategies, and ultimately reinforcing some judgment and decision making (JDM) patterns over others.

In settings such as investing for retirement or choosing a drug plan, individuals typically face a large number of options. In this paper, we analyze how the size of the choice set influences which alternative is selected. We present both laboratory experiments and field data that suggest larger choice sets induce a stronger preference for simple, easy-to-understand options.

In the customer expectations arena, relatively little attention has been paid to the impact on expectations of variation in cultural variables unique to a country. Here the authors focus on one country, India, and a major cultural influence there — the extent of belief in karma. Prior research in the United States suggests that disconfirmation sensitivity lowers expectations. Here the authors examine whether belief in karma and, consequently, having a long-term orientation, counteracts the tendency to lower expectations in two studies that measure and prime respondents' belief in karma.

We present a broad-based, consumer-centric view of innovation — referred to as "perceived firm innovativeness" (PFI). PFI is conceptualized as the consumer's perception of an enduring firm capability that results in novel, creative, and impactful ideas and solutions. We develop and validate a PFI scale and show that PFI impacts consumer loyalty via two processing routes: a functional-cognitive route and an affective-experiential route.

This article studies optimal mortgage design in a continuous-time setting with volatile and privately observable income, costly foreclosure, and a stochastic market interest rate. We show that the features of the optimal mortgage are consistent with an option adjustable-rate mortgage (option ARM). Under the optimal contract, the borrower is given discretion of how much to repay until his balance reaches a certain limit. The default rates and interest rate payment on the mortgage correlate positively with the market interest rate.

On a visit to any major U.S. department store, consumers can observe vendor shops (typically for cosmetics, apparel, apparel accessories, electronics, and toys), each selling a particular brand exclusively and designed to reflect the image of that brand. For these vendor shops, also called boutiques or "stores within a store," retailers rent out retail space to the respective manufacturers and give them complete autonomy over retail-level decisions, such as pricing and in-store service.