�� Desautels Faculty of Management - Desautels 22

Faculty Achievements: Daphne Demetry Associate Professor in Strategy and Organization appointed Senior Editor Organization Science

�� — Wed, 30 Oct 2024 13:05:42 +0000

Congratulations to Daphne Demetry, Associate Professor in Strategy and Organization, for the appointment as Senior Editor of the Organization Science.

Faculty Achievements: Patrick Augustin Associate Professor in Finance appointed Associate Editor Management Science

�� — Wed, 10 Jul 2024 19:13:34 +0000

Congratulations to Patrick Augustin, Associate Professor of Finance, for his appointment as Associate Editor of the Management Science.

Dual Pathways of Value Creation from Digital Strategic Posture: Contingent Effects of Competitive Actions and Environmental Uncertainty

�� — Wed, 24 Apr 2024 13:45:27 +0000

Authors: Choi Inmyung, David E. Cantor, Kunsoo Han and Joey F. George

Publication: MIS Quarterly
Volume 18, Issue 1, March 1, 2024, Pages 409-426

Abstract::

Do Early Words from New Ventures Predict Fundraising? A Comparative View of Social Media Narratives

�� — Fri, 12 Jan 2024 13:24:27 +0000

Authors: Taha Havakhor, Alireza Golmohammadi, Rajiv Sabherwal and Dinesh K. Gauri

Publication: MIS Quarterly
Volume 47, Issue 2, June 2023, Pages 611-638

Managing Channel Profits with Positive Demand Externalities

�� — Tue, 09 Jan 2024 18:34:10 +0000

Authors: Long Gao, Dawei Jian, Mehmet Gumus and Barry Mishra

Publication: Management Science, Forthcoming 2024.

Reject and Resubmit: A Formal Analysis of Gender Differences in Reapplication and Their Contribution to Women’s Presence in Talent Pipelines

�� — Wed, 15 Feb 2023 21:55:06 +0000

Authors: Isabel Fernandez-Mateo, Brian Rubineau and Venkat Kuppuswamy

Publication: Organization Science, Forthcoming
Articles in Advance – published online: December 2022

Abstract:

Managing Airfares Under Competition: Insights from a Field Experiment

�� — Fri, 06 Jan 2023 16:52:46 +0000

Authors: Maxime C. Cohen, Alexandre Jacquillat, Juan Camilo Serpa and Michael Benborhoum

Publication: Management Science, Forthcoming

Bots with Feelings: Should AI Agents Express Positive Emotion in Customer Service?

�� — Wed, 21 Dec 2022 14:43:04 +0000

Authors: Elizabeth Han, Dezhi Yin and Han Zhang

Publication: Information Systems Research, Forthcoming
Published online Articles in Advance: December 2, 2022

Abstract:

Constrained optimization of objective functions determined from random forests

�� — Mon, 14 Nov 2022 20:26:10 +0000

Authors: Max Biggs, Rim Hariss and Georgia Perakis

Publication: Production and Operations Management, Forthcoming
First published online: September 2022

Abstract:

Retail power in distribution channels: A double-edged sword for upstream suppliers

�� — Mon, 26 Sep 2022 20:23:24 +0000

Authors: Yuhong He, Saibal Ray and Shuya Yin

Publication: Production and Operations Management
Volume 31, Issue 6, June 2022, Pages 2681 – 2694

Abstract:

Can Cross-Border Funding Frictions Explain Financial Integration Reversals?

�� — Wed, 23 Mar 2022 18:34:12 +0000

Authors: A. Akbari, Francesca Carrieri and A. Malkhozov

Publication: The Review of Financial Studies, Volume 35, Issue 1, January 2022, Pages 394–437

Abstract:

Competition and coopetition for two-sided platforms

�� — Thu, 17 Mar 2022 15:02:30 +0000

Authors: Maxime C. Cohen and Renyu Zhang

Publication: Production and Operations Management, Forthcoming

Abstract:

The Impact of Advertising Creative Strategy on Advertising Elasticity

�� — Wed, 16 Mar 2022 19:23:43 +0000

Authors: Filippo Dall'Olio and Demetrios Vakratsas

Publication: Journal of Marketing, Forthcoming, first published online as EXPRESS: January 7, 2022

Abstract:

Augmenting Password Strength Meter Design using the Elaboration Likelihood Model: Evidence from Randomized Experiments

�� — Thu, 24 Feb 2022 14:28:15 +0000

Authors: Warut Khern-am-nuai, M.J. Hashim, Alain Pinsonneault, W. Yang and N. Li

Publication: Information Systems Research, Forthcoming

Abstract:

What warrants our claims? A methodological evaluation of argument structure

�� — Tue, 15 Feb 2022 16:41:37 +0000

Authors: Mikko Ketokivi and Saku Mantere

Publication: Journal of Operations Management, Volume 67, Issue 6, September 2021, Pages 755 – 776.

Abstract:

How is Liquidity Priced in Global Markets?

�� — Thu, 27 Jan 2022 23:31:32 +0000

Investors pay a premium for liquidity, but exactly how much do they pay and how does that vary? Desautels Professor Vihang Errunza investigates that question with a new international asset pricing model.

Trajectory Dynamics in Innovation: Developing and Transforming a Mobile Money Service Across Time and Place

�� — Wed, 06 Oct 2021 18:46:14 +0000

Authors: E. Oborn, M. Barrett, W. Orlikowski, and Anna Kim

Publication: Organization Science, Volume 30, Issue 5, September-October 2019, Pages 896-1123

Abstract:

Identifying Perverse Incentives in Buyer Profiling on Online Trading Platforms

�� — Wed, 06 Oct 2021 18:39:02 +0000

Authors: K.N. Kannan, R.L. Saha and Warut Khern-am-nuai

Publication: Information Systems Research, Forthcoming

Abstract:

Going viral or growing like an oak tree? Towards sustainable local development through entrepreneurship

�� — Thu, 30 Sep 2021 13:42:52 +0000

Authors: Suntae Kim and Anna Kim

Publication: Academy of Management Journal, Forthcoming

Abstract:

More than the Quantity: The Value of Editorial Reviews for a UGC Platform

�� — Wed, 08 Sep 2021 15:49:54 +0000

Authors: Y. Deng, J. Zheng, Warut Khern-am-nuai, and K.N. Kannan

Publication: Management Science, Forthcoming

Abstract:

The Dual Impact of Product Line Length on Consumer Choice

�� — Wed, 16 Jun 2021 19:25:49 +0000

Jalapeño cheddar or zesty lime. Crinkle cut or wavy. Potato chips are as varied as people’s appetites – and the chances are pretty good that everyone’s local corner store features dozens of choices to suit every taste. But do the countless variations of this humble snack food satisfy consumer demand for variety, or intimidate the indecisive by making it too difficult to choose?

Institutional Trading around Corporate News: Evidence from Textual Analysis

�� — Tue, 15 Jun 2021 13:47:54 +0000

Authors: A.G. Huang, Hongping Tan, and R. Wermers

Publication: The Review of Financial Studies, Volume 33, Issue 10, October 2020, Pages 4627-4675.

Abstract:

The Effects of Analyst-Country Institutions on Biased Research: Evidence from Target Prices

�� — Tue, 15 Jun 2021 13:31:27 +0000

Authors: M.T. Bradshaw, A.G. Huang, and Hongping Tan

Publication: Journal of Accounting Research, Volume 57, Issue 1, March 2019, Pages 85-120.

Does Private Country-by-Country Reporting Deter Tax Avoidance and Income Shifting? Evidence from BEPS Action Item 13

�� — Tue, 15 Jun 2021 13:17:27 +0000

Author: Preetika Joshi

Publication: Journal of Accounting Research, Volume 58, Issue 2, May 2020, Pages 333-381.

Abstract:

Promotion Optimization for Multiple Items in Supermarkets

�� — Tue, 08 Jun 2021 14:16:47 +0000

Authors: Maxime C. Cohen, J.J. Kalas, and G. Perakis

Publication: Management Science, Volume 67, Issue 4, April 2021, Pages 2340-2364.

Abstract:

Under the Umbrella: Goal-Derived Category Construction and Product Category Nesting

�� — Tue, 08 Jun 2021 14:04:19 +0000

Authors: Johnny Boghossian and Robert J. David

Publication: Administrative Science Quarterly, Forthcoming; First published online May 17, 2021

Abstract:

Constant Job-Allowance Policies for Appointment Scheduling: Performance Bounds and Numerical Analysis

�� — Wed, 24 Mar 2021 18:21:37 +0000

Authors: S. Zhou, Yichuan Ding, W.T. Huh, and G. Wan

Publication: Production and Operations Management, Forthcoming

Abstract:

A Simple Rule for Pricing with Limited Knowledge of Demand

�� — Wed, 24 Mar 2021 18:11:39 +0000

Authors: Maxime C. Cohen, G. Perakis, R.S. Pindyck

Publication: Management Science, Volume 67, Issue 3, March 2021, Pages 1608-1621.

Abstract:

Trust, Collaboration, and Economic Growth

�� — Wed, 24 Mar 2021 18:01:50 +0000

Authors: Jiro Kondo, D. Li, and D. Papanikolaou

Publication: Management Science, Volume 67, Issue 3, March 2021, Pages 1825-1850.

Abstract:

A Fluid Model for One-Sided Bipartite Matching Queues with Match-Dependent Rewards

�� — Wed, 24 Mar 2021 17:48:19 +0000

Authors: Yichuan Ding, S.T. McCormick and M. Nagarajan

Publication: Operations Research, Forthcoming

Abstract:

The New Food Truck in Town: Geographic Communities and Authenticity-Based Entrepreneurship

�� — Wed, 24 Mar 2021 17:09:19 +0000

Authors: T. Schifeling and Daphne Demetry

Publication: Organization Science, Volume 32, Issue 1, January 2021, Pages 133-155.

Abstract:

Make Way for the Algorithms: Symbolic Actions and Change in a Regime of Knowing

�� — Wed, 24 Mar 2021 16:37:39 +0000

Authors: S. Pachidi, H. Berends, Samer Faraj, and M. Huysman

Publication: Organization Science, Volume 32, Issue 1, January 2021, Pages 18-41.

Prof. Lisa Cohen co-edits special virtual issue of Administrative Science Quarterly

�� — Tue, 16 Mar 2021 20:28:21 +0000

Congratulations to Lisa Cohen, Associate Professor of Organizational Behavior, for co-editing the special virtual issue of Administrative Science Quarterly in honor of Women’s History Month!

Prof. Ganju's paper selected as finalist for NIHCM Research Award

�� — Mon, 15 Mar 2021 16:28:13 +0000

Congratulations to Kartik K. Ganju, Assistant Professor in Information Systems, whose paper has been selected as a finalist for NIHCM Foundation’s 27th Annual Research Award.

Professor Ganju’s Management Science paper “The Role of Decision Support Systems in Attenuating Racial Biases in Healthcare Delivery” with co-authors Hilal Atasoy Jeffery McCullough, and Brad Greenwood was selected by the National Institute for Health Care Management Foundation (NIHCM) as one of five finalists for NIHCM Foundation’s 27th Annual Research Award from a competitive pool of nearly 100 entries.

“The National Institute for Health Care Management (NIHCM) Foundation is a nonprofit, nonpartisan organization dedicated to transforming health care through evidence and collaboration (www.nihcm.org).”

“Management Science is a scholarly journal that publishes scientific research on the practice of management. Within our scope are all aspects of management related to strategy, entrepreneurship, innovation, information technology, and organizations as well as all functional areas of business, such as accounting, finance, marketing, and operations.”

Manufacturer’s 1-Up from Used Games: Insights from the Secondhand Market for Video Games

�� — Wed, 03 Mar 2021 20:12:17 +0000

Authors: A. Kim, R.L. Saha, and Warut Khern-am-nuai

Publication: Information Systems Research, Forthcoming

Abstract:

When Paying for Reviews Pays Off: The Case of Performance-Contingent Monetary Rewards

�� — Tue, 09 Feb 2021 20:21:41 +0000

Authors: Y. Yu, Warut Khern-am-nuai and Alain Pinsonneault

Publication: MIS Quarterly, Forthcoming

Abstract:

In Sickness and in Debt: The COVID-19 Impact on Sovereign Credit Risk?

�� — Tue, 09 Feb 2021 20:01:22 +0000

Authors: Patrick Augustin, V. Sokolovski, M.G. Subrahmanyam, and D. Tomio

Publication: Journal of Financial Economics, Forthcoming

Abstract:

Learning Through Crowdfunding

�� — Tue, 09 Feb 2021 19:40:05 +0000

Authors: G. Chemla and Katrin Tinn

Publication: Management Science, Volume 66, Issue 5, May 2020, Pages 1783-1801.

Abstract:

The impact of an augmented reality game on local businesses: a study of Pokémon go on restaurants

�� — Tue, 09 Feb 2021 18:25:01 +0000

Authors: V. Pamuru, Warut Khern-am-nuai, K. N. Kannan

Publication: Information Systems Research, Forthcoming

Abstract:

Inventory in Times of War

�� — Fri, 13 Nov 2020 17:02:37 +0000

Authors: Andres F. Jola-Sanchez and Juan Camilo Serpa

Publication: Management Science, 67(10):6457-6479

Abstract:

We study how armed conflicts affect inventory across firms’ production facilities. We track 38,916 production facilities—including plantations, livestock farms, and factories—in war-torn Colombian regions; we also collect the data of 5,138 attacks performed by the two rebel groups involved in Colombia’s civil war. To obtain exogenous variation in the conflict intensity, we use a difference-in-differences model that hinges on the peace process between the government and one of the guerrilla groups. We find that when the conflict intensity increases by one order of magnitude, inventory decreases by up to 10.38%. Firms, however, barely reduce finished inventory during war; they mainly reduce raw and work-in-process inventory. To offset this inventory reduction, firms increase their cash holdings—that is, they shift their working capital from physical inventory to liquid assets. The location of the facility moderates the effect of war: when a facility is close to a distribution center—hence, inventory travels short distances—the firm responds to violence by aggressively reducing inventory; when a facility is far from a distribution center, the firm reacts less aggressively to war.

Theorizing Process Dynamics with Directed Graphs: A Diachronic Analysis of Digital Trace Data

�� — Fri, 13 Nov 2020 16:54:05 +0000

Authors: B. Pentland, Emmanuelle Vaast and J. Ryan Wolf

Publication: MIS Quarterly, Forthcoming

Abstract:

The growing availability of digital trace data has generated unprecedented opportunities for analyzing, explaining, and predicting the dynamics of process change. While research on process organization studies theorizes about process and change, and research on process mining rigorously measures and models business processes, there has so far been limited research that measures and theorizes about process dynamics. This gap represents an opportunity for new Information Systems (IS) research. This research note lays the foundation for such an endeavor by demonstrating the use of process mining for diachronic analysis of process dynamics. We detail the definitions, assumptions, and mechanics of an approach that is based on representing processes as weighted, directed graphs. Using this representation, we offer a precise definition of process dynamics that focuses attention on describing and measuring changes in process structure over time. We analyze process structure over two years at four dermatology clinics. Our analysis reveals process changes that were invisible to the medical staff in the clinics. This approach offers empirical insights that are relevant to many theoretical perspectives on process dynamics.

Losing Touch: An Embodiment Perspective on Coordination in Robotic Surgery

�� — Fri, 13 Nov 2020 16:32:09 +0000

Authors: A.V. Sergeeva, Samer Faraj, and M. Huysman

Publication: Organization Science, Volume 31, Issue 5, October 2020, Pages 1248-1271.

Abstract:

Because new technologies allow new performances, mediations, representations, and information flows, they are often associated with changes in how coordination is achieved. Current coordination research emphasizes its situated and emergent nature, but seldom accounts for the role of embodied action. Building on a 25-month field study of the da Vinci robot, an endoscopic system for minimally invasive surgery, we bring to the fore the role of the body in how coordination was reconfigured in response to a change in technological mediation. Using the robot, surgeons experienced both an augmentation and a reduction of what they can do with their bodies in terms of haptic, visual, and auditory perception and manipulative dexterity. These bodily augmentations and reductions affected joint task performance and led to coordinative adaptations (e.g., spatial relocating, redistributing tasks, accommodating novel perceptual dependencies, and mounting novel responses) that, over time, resulted in reconfiguration of roles, including expanded occupational knowledge, emergence of new specializations, and shifts in status and boundaries. By emphasizing the importance of the body in coordination, this paper suggests that an embodiment perspective is important for explaining how and why coordination evolves following the introduction of a new technology.

When Digital Technologies Enable and Threaten Occupational Identity: The Delicate Balancing Act of Data Scientists

�� — Fri, 13 Nov 2020 16:16:27 +0000

Authors: Emmanuelle Vaast and Alain Pinsonneault

Publication: MIS Quarterly, Forthcoming

Abstract:

Occupations are increasingly embedded with and affected by digital technologies. These technologies both enable and threaten occupational identity and create two important tensions: they make the persistence of an occupation possible while also potentially rendering it obsolete and they bring about both similarity and distinctiveness of an occupation with regard to other occupations. Based on the critical case study of an online community dedicated to data science, we investigate longitudinally how data scientists address the two tensions of occupational identity associated with digital technologies and reach transient syntheses in terms of “optimal distinctiveness” and “persistent extinction.” We propose that identity work associated with digital technologies follows a composite life-cycle and dialectical process. We explain that people constantly need to adjust and redefine their occupational identity (i.e., how they define who they are and what they do). We contribute to scholarship on digital technologies and identity work by illuminating how people deal in an ongoing manner with digital technologies that simultaneously enable and threaten their occupational identity.

Financial Returns to Firms’ Communication Actions on Firm-Initiated Social Media: Evidence from Facebook Business Pages

�� — Tue, 10 Nov 2020 15:57:22 +0000

Authors: S. Chung, Animesh Animesh, Kunsoo Han and Alain Pinsonneault

Publication: Information Systems Research, Volume 31, Issue 1, March 2020, Pages 258-285.

Abstract:

The primary goal of this study is to investigate the financial returns to firms’ communication actions on a firm-initiated social media platform by focusing on Facebook Business pages. To this end, we conceptualize and quantify two types of firms’ communication actions on social media: posts and responses to customer messages. Furthermore, we classify a firm’s responses to customer messages based on the valence of customer messages—positive versus negative—and examine the effects of volume as well as timeliness of the two types of a firm’s responses to customer messages on firm performance. Using a sample of 63 South Korean firms across industries over a three-year period (5,566 firm-week observations), we find that the volume and timeliness of a firm’s responses to negative customer messages, which are associated with an increase in customer satisfaction, have a significant positive impact on the firm’s market performance measured by abnormal returns and Tobin’s q. Interestingly, the results suggest that a firm’s posts and its responses to positive customer messages are not significantly associated with firm performance. Furthermore, we find that a firm’s posts and its responses to negative customer messages exhibit complementarities in contributing to firm performance. Our results are robust to various alternative specifications, econometric concerns, and Facebook’s policy changes, such as EdgeRank and Promoted Post. Our findings underscore the business value of firms’ actions on social media and provide unique and important implications for theory and practice regarding the appropriate ways to use social media for building and managing customer relationships.

Software Patents and Firm Value: A Real Options Perspective on the Role of Innovation Orientation and Environmental Uncertainty

�� — Tue, 10 Nov 2020 15:57:24 +0000

Authors: S. Chung, Animesh Animesh, Kunsoo Han and Alain Pinsonneault

Publication: Information Systems Research, Volume 30, Issue 3, September 2019, Pages 1073-1097.

Abstract:

Although software patents have been growing steadily since 1996, when the restrictions on the patentability of software were eliminated, their value and impacts on the firm’s profits remain unclear and ambiguous. Drawing on the real options theory and the literature on exploration and exploitation, we develop a novel theoretical framework to assess the value of software patents. Moreover, we examine the impact of contextual factors related to the nature of innovation underlying firms’ patent portfolios (exploitative versus explorative) and the environmental uncertainty (competitiveness and dynamism) on the value of software patents. Specifically, we examine the interaction effect of a firm’s software patent stock and its innovation orientation on firm value in markets exhibiting different levels of environmental uncertainty. Based on a large-panel data set consisting of 602 U.S. firms, our results indicate that a software patent portfolio having higher levels of explorative orientation is associated with a higher firm value (as measured by Tobin’s q) in environments exhibiting low dynamism and high competitiveness. By contrast, a software patent portfolio with higher levels of exploitative orientation is associated with a higher firm value in environments with high dynamism and low competitiveness. We discuss the implications for research and practice.

Maxime Cohen appointed Associate Editor of Management Science

�� — Fri, 30 Oct 2020 20:23:42 +0000

Maxime Cohen, Associate Professor of Retail Management and Operations Management, was recently appointed Associate Editor of Management Science

The Role of Decision Support Systems in Attenuating Racial Biases in Healthcare Delivery

�� — Tue, 03 Mar 2020 14:28:03 +0000

Authors: Kartik K. Ganju, Hilal Atasoy, Brad Greenwood and Jeff McCullough

Publication: Management Science, Volume 66, Issue 11, November 2020, Pages 5171-5181.

Abstract:

Although significant research has examined how technology can intensify racial and other outgroup biases, limited work has investigated the role information systems can play in abating them. Racial biases are particularly worrisome in healthcare, where underrepresented minorities suffer disparities in access to care, quality of care, and clinical outcomes. In this paper, we examine the role clinical decision support systems (CDSS) play in attenuating systematic biases among black patients, relative to white patients, in rates of amputation and revascularization stemming from diabetes mellitus. Using a panel of inpatient data and a difference-in-difference approach, results suggest that CDSS adoption significantly shrinks disparities in amputation rates across white and black patients—with no evidence that this change is simply delaying eventual amputations. Results suggest that this effect is driven by changes in treatment care protocols that match patients to appropriate specialists, rather than altering within physician decision making. These findings highlight the role information systems and digitized patient care can play in promoting unbiased decision making by structuring and standardizing care procedures.

Cross-Listings and the Dynamics between Credit and Equity Returns

�� — Wed, 15 Jan 2020 21:09:06 +0000

Authors: Patrick Augustin, Feng Jiao, Sergei Sarkissian, Michael J Schill

Publication: The Review of Financial Studies, Vol. 33, Issue 1, January 2020

Abstract:

We study how listing in multiple markets affects the dynamics between firms’ credit default swap (CDS) and stock returns. We find that cross-listing increases (1) the sensitivity of CDS to stock returns, (2) the integration of CDS with world equity and bond markets, and (3) the statistical synchronicity of CDS and stock prices. Our results are stronger for firms with greater media attention, analyst and CDS coverage, and Google search intensity and for listings in familiar markets. We suggest that a firm’s presence in global equity markets comes with an improvement in the credit-equity integration through a reduction of informational frictions.

Sovereign credit risk and exchange rates: Evidence from CDS quanto spreads

�� — Thu, 12 Sep 2019 18:58:50 +0000

Authors: Patrick Augustin, Mikhail Chernov and Dongho Song

Publication: Journal of Financial Economics, Forthcoming

Abstract:

Sovereign CDS quanto spreads tell us how financial markets view the interaction between a country’s likelihood of default and associated currency devaluations (the Twin Ds). A no-arbitrage model applied to the term structure of Eurozone quanto spreads can isolate the Twin Ds and gauge the associated risk premiums. Conditional on the occurrence of default, the true and risk-adjusted 1-week probabilities of devaluation are 42% (2%) and 90% (55%) for the core (periphery) countries. The weekly risk premium for Euro devaluation in case of default for the core (periphery) exceeds the regular currency premium by up to 18 (13) basis points.

Measuring sovereign bond market integration

�� — Thu, 12 Sep 2019 18:17:40 +0000

Authors: Ines Chaieb, Vihang Errunza, and Rajna Gibson Brandon

Publication: The Review of Financial Studies, Forthcoming

Abstract:

There is significant heterogeneity in the degree and dynamics of sovereign bond market integration across 21 developed and 18 emerging countries. We show that better spanning can significantly enhance market integration through local risk premia dissipation. Integration of the sovereign bond markets increases on average by about 10%, when a country moves from the 25th percentile to the 75th percentile as a result of higher political stability and credit quality, lower inflation and inflation risk, and lower illiquidity. The 10% increase in integration leads to, on average, a decrease in the sovereign cost of funding of about 1% per annum.

Sharing is caring: Social support provision and companionship activities in healthcare virtual support communities

�� — Wed, 24 Jul 2019 15:18:19 +0000

Authors: K.-Y. Huang, I. Chengalur-Smith, and Alain Pinsonneault

Publication: MIS Quarterly: Management Information Systems, Volume 43, Issue 2, June 2019, Pages 395-423

Abstract:

Individuals increasingly rely on healthcare virtual support communities (HVSCs) for social support and companionship. While research provides interesting insights into the drivers of informational support in knowledge-sharing virtual communities, there is limited research on the antecedents of emotional support provision and companionship activities in HVSCs. The unique characteristics of HVSCs also justify the need to reexamine members’ voluntary provisions of help in such communities. This paper develops a model that examines the relationships between the structural, relational, and cognitive dimensions of social capital and the provision of informational and emotional support, and engagement in companionship activities in HVSCs. The model is tested based on data generated through an automated method that classifies and analyzes user-generated text in three healthcare virtual support communities (breast, prostate, and colorectal cancer). The results show that all three dimensions of social capital impact the provision of emotional support; both structural and relational capital facilitate engagement in companionship activities; and only cognitive capital enables the provision of informational support. Research and practical implications on the need to facilitate informational and emotional support provision and companionship activities in healthcare virtual support communities are discussed.

What users do besides problem-focused coping when facing IT security threats: An emotion-focused coping perspective

�� — Wed, 24 Jul 2019 15:15:29 +0000

Authors: H. Liang, Y. Xue, Alain Pinsonneault and Y. Wu

Publication: MIS Quarterly: Management Information Systems, Volume 43, Issue 2, June 2019, Pages 373-394

Abstract:

This paper investigates how individuals cope with IT security threats by taking into account both problem-focused and emotion-focused coping. While problem-focused coping (PFC) has been extensively studied in the IT security literature, little is known about emotion-focused coping (EFC). We propose that individuals employ both PFC and EFC to volitionally cope with IT security threats, and conceptually classify EFC into two categories: inward and outward. Our research model is tested by two studies: an experiment with 140 individuals and a survey of 934 respondents. Our results indicate that both inward EFC and outward EFC are stimulated by perceived threat, but that only inward EFC is reduced by perceived avoidability. Interestingly, inward EFC and outward EFC are found to have opposite effects on PFC. While inward EFC impedes PFC, outward EFC facilitates PFC. By integrating both EFC and PFC in a single model, we provide a more complete understanding of individual behavior under IT security threats. Moreover, by theorizing two categories of EFC and showing their opposing effects on users’ security behaviors, we further examine the paradoxical relationship between EFC and PFC, thus making an important contribution to IT security research and practice.

How does the implementation of enterprise information systems affect a professional's mobility? An empirical study

�� — Wed, 24 Jul 2019 15:08:21 +0000

Authors: Brad N. Greenwood, Kartik K. Ganju and Corey M. Angst

Publication: Information Systems Research, Vol. 30, No. 2, June 2019, Pages 563-594

Abstract:

Although significant research has examined the effect of enterprise information systems on the behavior and careers of employees, the majority of this work has been devoted to the study of blue- and gray-collar workers, with little attention paid to the transformative effect information technology may have on high-status professionals. In this paper, we begin to bridge this gap by examining how highly skilled professionals react to the increasing presence of enterprise systems within their organizations. Specifically, we investigate how the implementation of enterprise systems-in the form of electronic health records-affects the decision of physicians to continue practicing at their current hospital. Results suggest that when enterprise systems create complementarities for professionals, their duration of practice at the organization increases significantly. However, when technologies are disruptive and force professionals to alter their routines, there is a pronounced exodus from the organization. Interestingly, these effects are strongly moderated by individual and organizational characteristics, such as the degree of firm-specific human capital, local competition, and the prevalence of past disruptions, but are not associated with accelerated retirement or the strategic poaching of talent by competing organizations.

Yu Ma article selected as a finalist 2019 Paul E. Green Award

�� — Wed, 24 Apr 2019 15:58:56 +0000

Congratulations to Yu Ma, Associate Professor of Marketing and Bensadoun Scholar, whose article “The Club Store Effect: Impact of Shopping in Warehouse Club Stores on Consumers' Packaged Food Purchases” has been selected as one of four finalists for the Journal of Marketing Research’s 2019 Paul E. Green Award

The Paul E. Green Award recognizes the best article in the Journal of Marketing Research within the last calendar year that demonstrates the most potential to contribute significantly to the practice of marketing research.

Publication: Journal of Marketing Research, Vol. 55, No. 2, April 2018

Authors: Kusum L. Ailawadi, Yu Ma and Dhruv Grewal

This article studies the impact of shopping at the warehouse club format on households' packaged food-for-home purchases. In addition to low prices, this format has several unique characteristics that can influence packaged food purchases. The empirical analysis uses a combination of households' longitudinal grocery purchase information, rich survey data, and detailed item-level nutrition information. After accounting for selection on observables and unobservables, the authors find a substantial increase in the total quantity (servings per capita) of purchases attributable to shopping at this format. Because there is no effect on quality of purchases, this translates into a substantial increase in calories, sugar, and saturated fat per capita. The increase comes primarily from storable and impulse foods and it is drawn equally from foods that have positive and negative health halos. The results have important implications for how marketers can create win–win opportunities for themselves and for consumers.

Collective Information System Use: A Typological Theory

�� — Tue, 23 Apr 2019 15:16:00 +0000

Authors: Bogdan Negoita, Liette Lapointe and Suzanne Rivard

Publication: MIS Quarterly, Vol. 42 Issue 4, 1281-1301, 2018

Abstract:

As the nature of information systems (IS) has evolved from primarily standalone, to enterprise, and distributed applications, the need for a better understanding of collective IS use has become a research and practical necessity. In view of contributing to this understanding, we conceptually define collective IS use as a unit level construct, rooted in instances of individual-level IS use within the context of a common work process. Its emergence from the individual to the unit level is shaped by different configurations of task, user, and system interdependence between instances of individual-level IS use. On the basis of this definition, we propose a typology of collective IS use that comprises four ideal types, namely siloed use, processual use, coalesced use, and networked use. For each ideal type, we theorize on the emergence process from the individual to the unit level and we consider the measurement implications for each.

A Primal-Dual Lifting Scheme for Two-Stage Robust Optimization

�� — Thu, 28 Mar 2019 14:22:03 +0000

Authors: Angelos Georghiou, Angelos Tsoukalas, Wolfram Wiesemann

Publication: Operations Research, Forthcoming

Abstract:

Two-stage robust optimization problems, in which decisions are taken both in anticipation of and in response to the observation of an unknown parameter vector from within an uncertainty set, are notoriously challenging. In this paper, we develop convergent hierarchies of primal (conservative) and dual (progressive) bounds for these problems that trade off the competing goals of tractability and optimality: While the coarsest bounds recover a tractable but suboptimal affine decision rule approximation of the two-stage robust optimization problem, the refined bounds lift extreme points of the uncertainty set until an exact but intractable extreme point reformulation of the problem is obtained. Based on these bounds, we propose a primal-dual lifting scheme for the solution of two-stage robust optimization problems that accommodates for generic polyhedral uncertainty sets, infeasible problem instances as well as the absence of a relatively complete recourse. The incumbent solutions in each step of our algorithm afford rigorous error bounds, and they can be interpreted as piecewise affine decision rules. We illustrate the performance of our algorithm on illustrative examples and on an inventory management problem.

Professor Ramaprasad appointed Associate Editor of Management Science

�� — Fri, 22 Feb 2019 17:50:39 +0000

Jui Ramaprasad, Associate Professor in Information Systems, was recently appointed as Associate Editor to Management Science.

Extrinsic versus Intrinsic Rewards for Contributing Reviews in an Online Platform

�� — Tue, 20 Nov 2018 15:04:03 +0000

Authors: Warut Khern-am-nuai, Karthik Kannan, Hossein Ghasemkhani

Publication: Information Systems Research, Forthcoming

Abstract:

Firms have considered various forms of incentives for writing reviews, including the use of extrinsic rewards to attract reviewers. Building on this literature, we study the implications of monetary incentives on online reviews in the context of a natural experiment, where one review platform suddenly began offering monetary incentives for writing reviews. We refer to this as the treated platform. Along with data from Amazon.com and using the difference-in-differences approach, we compare the quantity and quality of reviews before and after rewards were introduced in the treated platform. We find that reviews are significantly more positive but that the quality decreases. Taking advantage of the panel data, we also evaluate the effect of rewards on existing reviewers. We find that their level of participation after monetary incentives decreases but not their quality of participation. Last, even though the platform enjoys an increase in the number of new reviewers, disproportionately more reviews appear to be written for highly rated products.

Read abstract: Information Systems Research

Robust Dual Dynamic Programming

�� — Thu, 15 Nov 2018 15:52:25 +0000

Authors: Angelos Georghiou, Angelos Tsoukalas, Wolfram Wiesemann

Publication: Operations Research, Forthcoming

Abstract:

Multi-stage robust optimization problems, where the decision maker can dynamically react to consecutively observed realizations of the uncertain problem parameters, pose formidable theoretical and computational challenges. As a result, the existing solution approaches for this problem class typically determine suboptimal solutions under restrictive assumptions. In this paper, we propose a robust dual dynamic programming (RDDP) scheme for multi-stage robust optimization problems. The RDDP scheme takes advantage of the decomposable nature of these problems by bounding the costs arising in the future stages through lower and upper cost to-go functions. For problems with uncertain technology matrices and/or constraint right-hand sides, our RDDP scheme determines an optimal solution in finite time. If also the objective function and/or the recourse matrices are uncertain, our method converges asymptotically (but deterministically) to an optimal solution. Our RDDP scheme does not require a relatively complete recourse, and it offers deterministic upper and lower bounds throughout the execution of the algorithm. We demonstrate the promising performance of our algorithm in a stylized inventory management problem.

The Effects of Analyst‐Country Institutions on Biased Research: Evidence from Target Prices

�� — Thu, 15 Nov 2018 15:43:28 +0000

Authors: Mark T. Bradshaw, Alan G. Huang, Hongping Tan

Publication: Journal of Accounting Research, Forthcoming

Abstract:

Prior research demonstrates that a strong institutional infrastructure in a country moderates self‐serving behavior of market participants. Cross‐country economic activities have increased significantly, presenting a research opportunity to examine the relative influence of local versus foreign institutional infrastructure on individual market participants. We utilize variation in analyst‐country location relative to covered firm location to examine institutional determinants of optimism in analyst research. Focusing on target prices, where persistent optimism is well documented, we find that analysts domiciled in countries with stronger institutional infrastructures exhibit significantly attenuated target price optimism and more value‐relevant target prices. Our results demonstrate the importance of domestic country‐level institutional factors in moderating self‐serving behavior of market participants engaged in cross‐country activities.

Optimizing Foreclosed Housing Acquisitions in Societal Response to Foreclosures

�� — Mon, 15 Oct 2018 14:59:47 +0000

Authors: Senay Solak, Armagan Bayram, Mehmet Gumus, Yueran Zhuo

Publication: Operations Research, Forthcoming

Abstract:

A dramatic increase in U.S. mortgage foreclosures during and after the great economic recession of 2007-2009 had devastating impacts on the society and the economy. In response to such negative impacts, non-profit community development corporations (CDCs) throughout the U.S. utilize various resources, such as grants and lines of credit, in acquiring and redeveloping foreclosed housing units to support neighborhood stabilization and revitalization. Given that the cost of all such acquisitions far exceeds the resources accessible by these non-profit organizations, we identify socially optimal policies for CDCs in dynamically selecting foreclosed properties to target for potential acquisition as they become available over time. We evaluate our analytical results in a numerical study involving a CDC serving a major city in the U.S, and specify social return based thresholds defining selection decisions at different funding levels. We also find that for most foreclosed properties CDCs should not offer more than the asking price, and should typically consider overbidding only when the total available budget is low. Overall, comparisons of optimal policies with historical acquisition data suggest a potential improvement of around 20% in expected total impacts of the acquisitions on nearby property values. Considering a CDC with annual fund availability of $4 million for investment, this corresponds to an estimated additional value of around $280,000 for the society.

A Smart-City Scope of Operations Management

�� — Mon, 10 Sep 2018 19:59:05 +0000

Authors: Wei Qi and Zuo-Jun Max Shen

Publication: Production and Operations Management, Forthcoming

Abstract:

We are entering an era of great expectations towards our cities. The vision of “smart city” has been pursued worldwide to transform urban habitats into superior efficiency, quality and sustainability. This phenomenon prompts us to ponder what role the scholars in operations management (OM) can assume. In this essay, we express our initial thoughts on expanding OM to the smart-city scope. We review smart-city initiatives of governments, industry, national laboratories and academia. We argue that the smart-city movement will transition from the tech-oriented stage to the decision-oriented stage. Hence, a smart city can be perceived as a system scope within which planning and operational decisions are orchestrated at the urban scale, reflective of multidimensional needs, and adaptive to massive data and innovation. The benefits of studying smart-city OM are manifold and significant: contributing to deeper understanding of smart cities by providing advanced analytical frameworks, pushing OM knowledge boundaries (such as data-driven decision making), and empowering the OM community to deliver much broader impacts than before. We discuss several research opportunities to embody these thoughts, in the interconnected contexts of smart buildings, smart grid, smart mobility and new retail. These opportunities arise from the increasing integration of systems and business models at the urban scale.

Designing Risk‐Adjusted Therapy for Patients with Hypertension

�� — Wed, 08 Aug 2018 13:17:35 +0000

Authors: Manaf Zargoush, Mehmet Gumus, Vedat Verter, Stella S. Daskalopoulou

Publication: Production and Operations Management, Forthcoming

Abstract:

Limited guidance is available for providing patient‐specific care to hypertensive patients, although this chronic condition is the leading risk factor for cardiovascular diseases. To address this issue, we develop an analytical model that takes into account the most relevant risk factors including age, sex, blood pressure, diabetes status, smoking habits, and blood cholesterol. Using the Markov Decision Process framework, we develop a model to maximize expected quality‐adjusted life years, as well as characterize the optimal sequence and combination of antihypertensive medications. Assuming the physician uses the standard medication dose for each drug, and the patient fully adheres to the prescribed treatment regimen, we prove that optimal treatment policies exhibit a threshold structure. Our findings indicate that our recommended thresholds vary by age and other patient characteristics, for example (1) the optimal thresholds for all medication prescription are nonincreasing in age, and (2) the medications need to be prescribed at lower thresholds for males who smoke than for males who have diabetes. The improvements in quality‐adjusted life years associated with our model compare favorably with those obtained by following the British Hypertension Society's guideline, and the gains increase with the severity of risk factors. For instance, in both genders (although at different rates), diabetic patients gain more than non‐diabetic patients. Our sensitivity analysis results indicate that the optimal thresholds decrease if the medications have lower side‐effects and vice versa.

Supply Diagnostic Incentives under Endogenous Information Asymmetry

�� — Mon, 23 Jul 2018 14:21:05 +0000

Authors: Mohammad E. Nikoofal, Mehmet Gumus

Publication: Production and Operations Management, Forthcoming

Abstract:

This paper develops a dyadic supply chain model with one buyer who contracts the manufacturing of a new product to a supplier. Due to the lack of experience in manufacturing, the extent of supply risk is unknown to both the buyer and supplier before the time of contract. However, after the contract is accepted, the supplier may invest in a diagnostic test to acquire information about his true reliability, and use this information when deciding on a process improvement effort. Using this setting, we identify both operational and strategic benefits and costs of diagnostic test. Operationally, it helps the supplier to take the first-best level of improvement effort, which would increase efficiency of the total supply chain. Strategically, it enables the buyer to reduce the agency costs associated with implementing process improvement on the supplier. Besides these benefits, diagnostic test increases the degree of information asymmetry along the supply chain. This in turn provides the supplier with proprietary information, whose rent would be demanded from the buyer in equilibrium. Benefit-cost analysis reveals two key factors in determining the value of diagnostic test: (i) degree of endogenous information asymmetry between supply chain firms, and (ii) the relative cost of diagnostic test with respect to process improvement cost. Our results indicate that when both are high, the mere presence of diagnostic test can result in less reliable supply chain. This implies that when incentives are not properly aligned, information asymmetry amplified due to diagnostic test neutralizes all its benefits.

A Model of Two-Sided Costly Communication for Building New Product Category Demand

�� — Mon, 23 Jul 2018 13:28:39 +0000

Authors: Michelle Y. Lu , Jiwoong Shin

Publication: Marketing Science, Vol. 37, No. 3, May-June 2018

Abstract:

When a firm introduces a radical innovation, consumers are unaware of the product’s uses and benefits. Moreover, consumers are unsure of whether they even need the product. In this situation, we consider the role of marketing communication as generating consumers’ need recognition and thus market demand for a novel product. In particular, we model marketing communication as a two-sided process that involves both firms’ and consumers’ costly efforts to transmit and assimilate a novel product concept. When the marketing communication takes on a two-sided process, we study a firm’s different information disclosure strategies for its radical innovation. We find that sharing innovation, instead of extracting a higher rent by keeping the idea secret, can be optimal. A firm may benefit from the presence of a competitor and its communication effort. The innovator can share its innovation so that competitors can also benefit, which encourages rivals to enter the market. The presence of such competition guarantees a higher surplus for consumers, which can induce greater consumer effort in a two-sided communication process. Moreover, the increased consumer effort, in turn, prompts complementarity in the communication process and lessens the potential free-riding effect in communication between firms. Additionally, it encourages the rival firm to exert more effort, especially when the role of consumers becomes more important. Sharing innovation with a rival serves as a mechanism to induce more efforts in a two-sided communication process.

Oversight and Efficiency in Public Projects: A Regression Discontinuity Analysis

�� — Tue, 10 Jul 2018 20:47:31 +0000

Authors: Eduard Calvo, Ruomeng Cui and Juan Camilo Serpa

Publication: Management Science, Volume 65, Issue 12, December 2019, Pages 5651-5675.

Abstract:

In the U.S., four in ten public infrastructure projects report delays or cost overruns. To tackle this problem, regulators often scrutinize the project contractor’s operations. We investigate the causal effect of government oversight on project efficiency by gleaning 262,857 projects that span seventy-one U.S. federal agencies and 54,739 contractors. Our identification strategy exploits a regulatory bylaw: if a project’s anticipated budget exceeds a threshold value, the contractor’s operations are subject to surveillance from independent procurement officers; otherwise, these operational checks are waived. Using a regression discontinuity design, we find that oversight is obstructive to the project’s operations, especially when the contractor (i) has no prior experience in public projects, (ii) is paid with a fixed-price contract that includes performance-based incentives, and (iii) performs a labor-intensive task. In contrast, oversight is least obstructive — or beneficial — when the contractor (i) is experienced, (ii) is paid with a time-and-materials contract, and (iii) performs a machine-intensive task.

Supply Chain Proximity and Product Quality

�� — Mon, 11 Jun 2018 17:45:43 +0000

Authors: Robert Bray, Juan Camilo Serpa and Ahmet Colak

Publication: Management Science, Volume 65, Issue 9, September 2019, Pages 4079-4099.

Abstract:

We explore the effect of supply chain proximity on product quality by merging four independent data sources from the automotive industry, collecting: (i) auto component defect rates, (ii) upstream component factory locations, (iii) downstream assembly plant locations, and (iv) product-level links connecting the upstream and downstream factories. Combining these four datasets allows us to trace the flow of 27,807 products through 529 supplier factories and 275 assembly plants. We estimate that increasing the distance between an upstream component factory and a downstream plant by an order of magnitude increases the component’s expected defect rate by 3.9%. We also find that shorter inter-factory spans are associated with more rapid product quality improvements, and that supply chain distance is more detrimental to quality when automakers: (i) produce early generation models or (ii) high-end products, (iii) when they buy components with more complex configurations, or (iv) when they source from suppliers who invest relatively little in research and development

Cutting the Cord: Mutual Respect, Organizational Autonomy, and Independence in Organizational Separation Processes

�� — Mon, 04 Jun 2018 19:11:33 +0000

Authors: Rene Wiedner and Saku Mantere

Publication: Administrative Science Quarterly, Forthcoming

Abstract:

Based on a longitudinal, qualitative analysis of developments in the English National Health Service, we develop a process model of how organizations divest or spin off units with the aim of establishing two or more autonomous organizational entities while simultaneously managing their continued interdependencies. We find that effective organizational separation depends on generating two types of respect—appraisal and recognition respect—between the divesting and divested units. Appraisal respect involves showing appreciation for competence or the effort to achieve it, while recognition respect requires considering what someone cares about—such as values or concerns—and acknowledging that they matter. The process model we develop shows that open communication is crucial to the development of both. We also find that certain attempts to gain organizational independence and respect may unintentionally undermine the development of autonomy. Counterintuitively, we find that increasing or maintaining interorganizational links via communication may facilitate organizational separation, while attempts by units to distance themselves from one another may unintentionally inhibit it. By linking organizational separation, autonomy, independence, and respect, this paper develops theory on organizational separation processes and more generally enhances our understanding of organizational autonomy and its relations with mutual respect.

Informed Options Trading Prior to Takeover Announcements: Insider Trading?

�� — Thu, 24 May 2018 20:24:27 +0000

Authors: Patrick Augustin, Menachem Brenner, Marti G. Subrahmanyam

Publication: Management Science, May 21, 2019

Abstract:

We quantify the pervasiveness of informed trading activity in target companies' equity options before the announcements of 1,859 U.S. takeovers between 1996 and 2012. About 25% of all takeovers have positive abnormal volumes, which are greater for short-dated out-of-the-money calls, consistent with bullish directional trading before the announcement. Over half of this abnormal activity is unlikely due to speculation, news and rumors, trading by corporate insiders, leakage in the stock market, deal predictability, or beneficial ownership filings by activist investors. We also examine the characteristics of option trades litigated by the SEC for alleged illegal insider trading. While the characteristics of such trades closely resemble the patterns of abnormal option volume in the U.S. takeover sample, we find that the SEC litigates only about 8% of all deals in it.

Inspiration from the 'Biggest Loser': Social Interactions in a Weight Loss Program

�� — Fri, 04 May 2018 17:32:16 +0000

Authors: Kosuke Uetake, Nathan Yang

Publication: Marketing Science, Forthcoming

Abstract:

We investigate the role of heterogeneous peer effects in encouraging healthy lifestyles. Our analysis revolves around one of the largest and most extensive databases about weight loss that track individual participants' meeting attendance and progress in a large national weight loss program. The main finding is that while weight loss among average performing peers has a negative effect on an individual's weight loss, the corresponding effect for the top performer among peers is positive. Furthermore, we demonstrate that our results are robust to potential issues related to selection into meetings, endogenous peer outcomes, individual unobserved heterogeneity, lagged dependent variables, and contextual effects. Ultimately, these results provide guidance about how the weight loss program should identify role models.

A Large-Scale Approach for Evaluating Asset Pricing Models

�� — Tue, 01 May 2018 14:49:57 +0000

Author: Laurent Barras

Publication: Journal of Financial Economics, Forthcoming

Abstract:

Recent studies show that the standard test portfolios do not contain sufficient information to discriminate between asset pricing models. To address this issue, we develop a large-scale approach that expands the cross-section to several thousand portfolios. Our novel approach is simple, widely applicable, and allows for formal evaluation/comparison tests. Its benefits are confirmed in empirical tests of CAPM- and characteristic-based models. While these models are all misspecified, we uncover striking performance differences between them. In particular, the human capital and conditional CAPMs largely outperform the CAPM which suggests that labor income and time-varying recession risks are primary concerns for investors.

Ruslan Goyenko paper "Illiquidity Premia in Equity Option Markets" selected Editor's Choice in Review of Financial Studies

�� — Thu, 29 Mar 2018 18:22:34 +0000

Professor Ruslan Goyenko's paper "Illiquidity Premia in Equity Option Markets" with Peter Christoffersen, Kris Jacobs and Mehdi Karoui was selected as Editor's Choice article in the March 2018 issue of Review of Financial Studies.

Asset Pricing with Countercyclical Household Consumption Risk

�� — Thu, 29 Mar 2018 17:39:11 +0000

Authors: George M. Constantinides and Anisha Ghosh

Publication: Journal of Finance, Vol. 72, No. 1, February 2017

Abstract:

We show that shocks to household consumption growth are negatively skewed, persistent, countercyclical, and drive asset prices. We construct a parsimonious model where heterogeneous households have recursive preferences. A single state variable drives the conditional cross-sectional moments of household consumption growth. The estimated model ﬁts well the unconditional cross-sectional moments of household consumption growth and the moments of the risk-free rate, equity premium, price-dividend ratio, and aggregate dividend and consumption growth. The model-implied risk-free rate and price-dividend ratio are procyclical, while the market return has countercyclical mean and variance. Finally, household consumption risk explains the cross section of excess returns.

Read article: Journal of Finance

What Is the Consumption-CAPM Missing? An Information-Theoretic Framework for the Analysis of Asset Pricing Models

�� — Thu, 29 Mar 2018 17:02:10 +0000

Authors: Anisha Ghosh, Christian Julliard, Alex P. Taylor

Publication: The Review of Financial Studies, Volume 30, No. 2, February 2017

Abstract:

We consider asset pricing models in which the SDF can be factorized into an observable component and a potentially unobservable one. Using a relative entropy minimization approach, we nonparametrically estimate the SDF and its components. Empirically, we find the SDF has a business-cycle pattern and significant correlations with market crashes and the Fama-French factors. Moreover, we derive novel bounds for the SDF that are tighter and have higher information content than existing ones. We show that commonly used consumption-based SDFs correlate poorly with the estimated one, require high risk aversion to satisfy the bounds and understate market crash risk.

Read article: The Review of Financial Studies

The Effects of Asymmetric Social Ties, Structural Embeddedness and Tie Strength on Online Content Contribution Behavior

�� — Mon, 26 Mar 2018 19:40:53 +0000

Authors: Rishika Rishika and Jui Ramaprasad

Publication: Management Science, Forthcoming

Abstract:

For a social media community to thrive and grow, it is critical that users of the site interact with each other and contribute content to the site. We study the role of social ties in motivating user preference expression, a form of user content contribution, in an online social media community. We examine the role of three types of ties, reciprocated, follower and followee ties, and assess whether the structural and relational properties of a user’s social network moderate the social influence effect in user contribution. A unique disaggregate level panel dataset of users’ contributions and social tie formation activities from an online music platform is employed to study the impact of social ties. To address identification issues, we adopt a quasi-experimental approach based on dynamic propensity score matching. The results provide strong evidence of the influence of online network ties in online contribution behavior. We find that the influence of reciprocated ties is the greatest, followed by influence from followee ties and then follower ties. Additional analysis reveals that reciprocated and followee ties have even greater influence when they contribute new information for a focal user. Structural embeddedness and tie strength among network ties are found to amplify the effect of social contagion in online contribution. We conduct several sensitivity and robustness checks that lend credible support to our findings. The results add to the greater understanding of social influence in online contribution and provide valuable managerial insights into designs of online communities to enable greater user participation.

Love Unshackled: Identifying the Effect of Mobile App Adoption in Online Dating

�� — Mon, 26 Mar 2018 19:23:38 +0000

Authors: JaeHwuen Jung, Ravi Bapna, Jui Ramaprasad and Akhmed Umyarov

Publication: MIS Quarterly, Forthcoming

Abstract:

The proliferation of smartphones and other mobile devices has led to numerous companies investing significant resources in developing mobile applications, in every imaginable domain. As apps proliferate, understanding the impact of app adoption on key outcomes of interest and linking this understanding to the the underlying mechanisms that drive these results is imperative. In this paper, we explore the changes in user behavior induced by adoption of a mobile application, in terms of engagement and matching outcomes in the online dating context. We also identify three mechanisms that are somewhat unique to the mobile environment, but are hitherto unestablished in the literature, that drive this shift in behavior – ubiquity, impulsivity and disinhibition. Our main identification strategy uses propensity score matching combined with difference-in-differences, coupled with a rigorous falsification test to confirm the validity of our identification strategy. Our results demonstrate that mobile app adoption induces users to become more socially engaged as measured by key engagement metrics such as visiting significantly more profiles, sending significantly more messages, and importantly, achieving more matches. We also discover various mechanisms facilitating this increased engagement: ubiquity of mobile use – users login more, and login across wider range of hours in the day. We find that men act more impulsively, in that they are less likely to check the profile of a user who messaged them before replying to them. This effect is not visible for women who continue to be deliberate in their checking before replying even after adoption of the mobile app. Finally, we find that both men and women exhibit disinhibition, in that users initiate actions to a more diverse set of potential partners than they did before on dimensions of race, education and height.

Designing Risk-Adjusted Therapy for Patients with Hypertension

�� — Tue, 20 Mar 2018 19:14:57 +0000

Authors: Manaf Zargoush, Mehmet Gumus, Vedat Verter, Stella Daskalopoulou

Journal Name: Production and Operations Management, Forthcoming

Abstract:

Hypertension has not been well studied by operations researchers from a clinical decision support perspective. Moreover, little personalized (i.e. patient-centric) guidance is available regarding the number and combination of antihypertensive medications. To fill this gap, we develop a Markov Decision Process (MDP) to characterize the optimal sequence (and combination) of antihypertensive medications under the standard medication dose. Our model is patient-centric as it takes into account a set of relevant patient characteristics such as age, gender, blood pressure level, smoking habits, diabetes status, and cholesterol level. Based on a set of intuitive assumptions, we prove that our model yields a series of structured optimal policies. Having calibrated our model based on real data and medical literature, we analyze these optimal policies and discuss their insights to the real practice. We also compare the benefits, in terms of quality adjusted life expectancy, QALE, obtained from our results with those obtained from British Hypertension Society (BHS) guideline.

Did Europe Move in the Right Direction on E-Waste Legislation?

�� — Mon, 19 Mar 2018 17:46:24 +0000

Authors: Shumail Mazahir, Vedat Verter, Tamer Boyaci and Luk van Wassenhove

Publication: Production and Operations Management, Forthcoming

Abstract:

This paper presents an analytical framework of the product take back legislation in the context of product reuse. We characterize existing and proposed forms of E-waste legislation and compare their environmental and economic performance. Using stylized models, we analyze an OEM’s decision about new and remanufactured product quantity in response to the legislative mechanism. We focus on the 2012 waste electrical and electronic equipment directive in Europe, where the policy-makers intended to create additional incentives for the product reuse. Through a comparison to the original 2002 version of the directive, we find that these incentives translate into improved environmental outcomes only for a limited set of products. We also study a proposed policy that advocates a separate target for the product reuse. Our analysis reveals that from an environmental standpoint, the recast version is always dominated either by the original policy or by the one that advocates a separate target for the product reuse. We show that the benefits of a separate reuse target scheme can be fully replicated with the aid of fiscal levers. Our main message is that there cannot be a single best environmental policy that is suitable for all products. Therefore, the consideration of product attributes is essential in identification of the most appropriate policy tool. This can be done either by the implementation of different policies on each product category or by implementation of product based target levels.

Juan Serpa's article featured in Management Science

�� — Thu, 22 Feb 2018 19:38:13 +0000

Professor Juan Serpa's paper "The Impact of Supply Chains on Firm-Level Productivity," together with Harish Krishnan was selected by the Editor-in-Chief of Management Science one of the three Featured Articles for the February 2018 issue.

Management Science is a scholarly journal that publishes scientific research on the practice of management. Within our scope are all aspects of management related to strategy, entrepreneurship, innovation, information technology, and organizations as well as all functional areas of business, such as accounting, finance, marketing, and operations. We include studies on organizational, managerial, and individual decision making, from both normative and descriptive perspectives.

Influential Chief Marketing Officers and Management Revenue Forecasts

�� — Thu, 08 Feb 2018 18:22:14 +0000

Authors: David S. Koo and Dongyoung Lee

Publication: The Accounting Review, Forthcoming

Abstract:

We examine the role of the chief marketing officer (CMO) in corporate voluntary disclosure of future revenues. Using a sample of S&P 1500 firms for the period from 2003 to 2011, we find that the presence of an influential CMO in top management is positively associated with the likelihood of a firm's issuing a management revenue forecast. We also find that firms with an influential CMO provide more accurate revenue forecasts than other firms. These findings extend to long-window change analyses and are robust to the use of a propensity-score matched-pair approach. Overall, the results are consistent with the notion that CMO influence in top management appears to play an important role in voluntary revenue disclosures.

Read abstract: The Accounting Review

Strategy processes and practices: Dialogues and intersections

�� — Mon, 05 Feb 2018 19:26:28 +0000

Authors: Robert Burgelman, Steven Floyd, Tomi Laamanen, Saku Mantere, Eero Vaara and Richard Whittington

Publication: Strategic Management Journal, Vol. 39, No. 3 (SI), 2018, pp. 531-558.

Abstract:

Building on our review of the strategy process and practice research, we identify three ways to see the relationships between the two research traditions: complementary, critical, and combinatory views. We adopt in this special issue the combinatory view, in which activities and processes are seen as closely intertwined aspects of the same phenomena. It is this view that we argue offers both strategy practice and strategy process scholars some of the greatest opportunities for joint research going forward. We develop a combinatory framework for understanding strategy processes and practices (SAPP) and based on that call for more research on (a) temporality, (b) actors and agency, (c) cognition and emotionality, (d) materiality and tools, (e) structures and systems, and (f) language and meaning.

Read article: Strategic Management Journal

The Club Store Effect: Impact of Shopping in Warehouse Club Stores on Consumers' Packaged Food Purchases

�� — Tue, 09 Jan 2018 21:30:26 +0000

Authors: Kusum L. Ailawadi, Yu Ma and Dhruv Grewal

Publication: Journal of Marketing Research, Vol. 55, No. 2, 2018, pp. 193-207.

Abstract:

Read abstract: Journal of Marketing Research

Bridging Practice and Process Research to Study Transient Manifestations of Strategy

�� — Mon, 23 Oct 2017 16:25:42 +0000

Authors: Laurent Mirabeau, Steve Maguire and Cynthia Hardy

Publication: Strategic Management Journal, Vol. 39, No. 3 (SI), March 2018

Abstract:

At the intersection of Strategy Process (SP) and Strategy-as-Practice (SAP) research lies the focal phenomenon they share – strategy, which manifests itself in a variety of ways: intended, realized, deliberate, emergent, unrealized, and ephemeral strategy.

We present a methodology comprised of three stages that, when integrated in the manner we suggest, permit a rich operationalization and tracking of strategy content for all manifestations. We illustrate the utility of our methodology for bridging SP and SAP research by theorizing practices that are more likely to give rise to unrealized and ephemeral strategy, identifying their likely consequences, and presenting a research agenda for studying these transient manifestations.

The Strategic Role of Business Insurance

�� — Thu, 19 Oct 2017 18:41:09 +0000

Authors: Juan Serpa and Harish S. Krishnan

Publication: Management Science, Vol. 63, No. 2, February 2017

Abstract:

The use of business insurance has been traditionally studied in a single-firm setting, but in reality preventing operational accidents involves the (unobservable) efforts of multiple firms. We show that, in a multifirm setting, insurance can be used strategically as a commitment mechanism to prevent excessive free riding by other firms. In the presence of wealth imbalances, contracts alone leave wealth-constrained firms with inefficiently low incentives to exert effort (because of limited liability) and firms with sufficient wealth with excessive incentives. Insurance allows the latter to credibly commit to lower effort, thereby mitigating the incentives of the wealth-constrained firms to free ride. This finding shows that insurance can improve the efficiency of risk management efforts by decreasing free-riding problems.

Read full article: Management Science

The Impact of Supply Chains on Firm-Level Productivity

�� — Thu, 19 Oct 2017 18:32:38 +0000

Authors: Juan Serpa and Harish S. Krishnan

Publication: Management Science, Vol. 64, No. 2, February 2018

Abstract:

Firms in a vertical relationship are likely to affect each other’s productivity. Exactly how does productivity spill over across this type of relationship (i.e., through which mechanisms)? Additionally, how does the relative importance of these mechanisms depend on the structure of the supply chain?

To answer these questions, we decompose the channels of upstream productivity spillovers—from customers to suppliers—by developing a structural econometric model on a sample of approximately 22,500 supply chain dyads.

We find that the “endogenous channel” (i.e., the effect of the customer’s own productivity on the supplier’s productivity) is by far the most important source of spillovers. This is especially true if (i) the supplier has a concentrated customer base, (ii) the supplier and the customer have similar operational characteristics, and (iii) the relationship has medium maturity.

In the converse scenarios, we find, it is more important to have a partner with a portfolio of favorable “contextual” characteristics (high inventory turnover, financial liquidity, and asset turnover) than to have a productive partner.

Read full article: Management Science

Firm Expansion, Size Spillovers and Market Dominance in Retail Chain Dynamics

�� — Thu, 19 Oct 2017 18:23:40 +0000

Authors: Jason R. Blevins, Ahmed Khwaja and Nathan Yang

Publication: Management Science, Forthcoming

Abstract:

We develop and estimate a dynamic game of strategic firm expansion and contraction decisions to study the role of firm size on future profitability and market dominance. Modeling firm size is important because retail chain dynamics are more richly driven by expansion and contraction than de novo entry or permanent exit. Additionally, anticipated size spillovers may influence the strategies of forward looking firms making it difficult to analyze the effects of size without explicitly accounting for these in the expectations and, hence, decisions of firms. Expansion may also be profitable for some firms while detrimental for others.

Thus, we explicitly model and allow for heterogeneity in the dynamic link between firm size and profits as well as potential for persistent brand effects through a firm-specific unobservable. As a methodological contribution, we surmount the hurdle of estimating the model by extending the Bajari, Benkard and Levin (2007) two-step procedure that circumvents solving the game. The first stage combines semi-parametric conditional choice probability estimation with a particle filter to integrate out the serially correlated unobservables.

The second stage uses a forward simulation approach to estimate the payoff parameters. Data on Canadian hamburger chains from their inception in 1970 to 2005 provides evidence of firm-specific heterogeneity in brand effects, size spillovers and persistence in profitability. This heterogeneous dynamic linkage shows how McDonald’s becomes dominant and other chains falter as they evolve, thus affecting market structure and industry concentration.

Read full article: Management Science

Market and Regional Segmentation and Risk Premia in the First Era of Financial Globalization

�� — Wed, 18 Oct 2017 18:27:44 +0000

Authors: David Chambers, Sergei Sarkissian and Michael J. Schill

Publication: Review of Financial Studies, Forthcoming

Abstract:

We study market segmentation effects using data on U.S. railroads that list their bonds in New York and London between 1873 and 1913. This sample provides a unique setting for such analysis because of the precision offered by bond yields in cost of capital estimation, the geography-specific nature of railroad assets, and ongoing substantial technological change. We document a significant reduction in market segmentation over time. Whilst New York bond yields exceeded those in London in the 1870s, this premium disappeared by the early 1900s. However, the segmentation premium persisted in the more remote regions of the United States.

Read full article: Review of Financial Studies

Two-Sided Reputation in Certification Markets

�� — Wed, 18 Oct 2017 18:15:28 +0000

Authors: Matthieu Bouvard and Raphaël Levy

Publication: Management Science, Forthcoming

Abstract:

In a market where sellers solicit certification to overcome asymmetric information, we show that the profit of a monopolistic certifier can be hump-shaped in its reputation for accuracy: a higher accuracy attracts high-quality sellers but sometimes repels low-quality sellers. As a consequence, reputational concerns may induce the certifier to reduce information quality, thus depressing welfare. The entry of a second certifier impacts reputational incentives: when sellers only solicit one certifier, competition plays a disciplining role and the region where reputation is bad shrinks. Conversely, this region may expand when sellers hold multiple certifications.

Read full article: Management Science

To Thine Own Self Be True? Facades of Conformity, Values Incongruence, and the Moderating Impact of Leader Integrity

�� — Wed, 18 Oct 2017 18:08:16 +0000

Authors: Patricia Faison Hewlin, Tracy L. Dumas and Meredith Flowers Burnett

Publication: Academy of Management Journal, Vol. 60, No. 1, February 2017

Abstract:

When employees feel that their values do not match those of the organization, they often respond by pretending to fit in. We examine how leader integrity influences the tendency to create facades of conformity, proposing that employees will actually fake more when leaders are principled. In a laboratory experiment (Study 1), undergraduate students whose values ostensibly differed from those of other discussion group members and the university administration created more facades when they perceived the discussion group leader as having high integrity. A two-wave survey of employed adults (Study 2) replicated the moderation effect and also revealed negative effects of facade creation on work engagement. In both studies, our results indicate that, ironically, when leader integrity is high, the tendency to create facades of conformity in response to low values congruence is magnified. Additionally, our findings reveal that positive attributes in leaders may not always result in positive responses from followers. The results from our study also show that facades of conformity may serve as a partial explanatory mechanism in the relationship between values congruence and employee engagement.

Read full article: Academy of Management Journal

Popularity or Proximity: Characterizing the Nature of Social Influence in an Online Music Community

�� — Wed, 18 Oct 2017 18:01:14 +0000

Authors: Sanjeev Dewan, Yi-Jen (Ian) Ho and Jui Ramaprasad

Publication: Information Systems Research, Vol. 28, No. 1, March 2017

Abstract:

We study social influence in an online music community. In this community, users can listen to and “favorite” (or like) songs and follow the favoriting behavior of their social network friends—and the community as a whole. From an individual user’s perspective, two types of information on peer consumption are salient for each song: total number of favorites by the community as a whole and favoriting by their social network friends. Correspondingly, we study two types of social influence: popularity influence, driven by the total number of favorites from the community as a whole, and proximity influence, due to the favoriting behavior of immediate social network friends. Our quasi-experimental research design applies a variety of empirical methods to highly granular data from an online music community. Our analysis finds robust evidence of both popularity and proximity influence. Furthermore, popularity influence is more important for narrow-appeal music compared to broad-appeal music. Finally, the two types of influence are substitutes for one another, and proximity influence, when available, dominates the effect of popularity influence. We discuss implications for design and marketing strategies for online communities, such as the one studied in this paper.

Read full article: Information Systems Research

Social Media Affordances or Connective Action: An Examination of Microblogging Use During the Gulf of Mexico Oil Spill

�� — Tue, 17 Oct 2017 20:18:27 +0000

Authors: Emmanuelle Vaast, Hani Safadi, Liette Lapointe, and Bogdan Negoita

Publication: MIS Quarterly, Vol. 41, No. 4, 2017, pp. 1179-1205

Abstract:
This research questions how social media use affords new forms of organizing and collective engagement. The concept of connective action has been introduced to characterize such new forms of collective engagement in which actors coproduce and circulate content based upon an issue of mutual interest. Yet, how the use of social media actually affords connective action still needed to be investigated.

Mixed methods analyses of microblogging use during the Gulf of Mexico oil spill bring insights to this question and reveal, in particular, how multiple actors enacted emerging and interdependent roles with their distinct patterns of feature use. The findings allow us to elaborate upon the concept of connective affordances as collective level affordances actualized by actors in team interdependent roles. Connective affordances extend research on affordances as a relational concept by considering not only the relationships between technology and users but also the interdependence type among users and the effects of this interdependence onto what users can do with the technology. This study contributes to research on social media use by paying close attention to how distinct patterns of feature use enact emerging roles.

Adding to IS scholarship on the collective use of technology, it considers how the patterns of feature use for emerging groups of actors are intricately and mutually related to each other.

Read full article: MIS Quarterly

A Configural Approach to Coordinating Expertise in Software Development Teams

�� — Tue, 17 Oct 2017 18:36:10 +0000

Authors: Srinivas Kuduravalli, Samer Faraj and Steven L. Johnson

Publication: MIS Quarterly, Vol. 41, No. 1, March 2017

Abstract:

Despite the recognition of how important expertise coordination is to the performance of software development teams, understanding of how expertise is coordinated in practice is limited. We adopt a configural approach to develop a theoretical model of expertise coordination that differentiates between design collaboration and technical collaboration. We propose that neither a strictly centralized, top-down model nor a largely decentralized approach is superior. Our model is tested in a field study of 71 software development teams. We conclude that because design work addresses ill-structured problems with diverse potential solutions, decentralization of design collaboration can lead to greater coordination success and reduced team conflict. Conversely, technical work benefits from centralized collaboration. We find that task knowledge tacitness strengthens these relationships between collaboration configuration and coordination outcomes and that team conflict mediates the relationships. Our findings underline the need to differentiate between technical and design collaboration and point to the importance of certain configurations in reducing team conflict and increasing coordination success in software development teams. This paper opens up new research avenues to explore the collaborative mechanisms underlying knowledge team performance.

Read full article: MIS Quarterly

What Users Do Besides Problem-Focused Coping In the IT Security Context: An Emotion-Focused Coping Perspective

�� — Tue, 17 Oct 2017 18:29:05 +0000

Authors: H. Liang, Y. Xue, Alain Pinsonneault and A. Wu

Publication: MIS Quarterly, Forthcoming

Abstract:

We propose that individuals employ both PFC and EFC to volitionally cope with IT security threats, and conceptually classify EFC into two categories: inward and outward. Our research model is tested by two studies: an experiment with 140 individuals and a survey of 934 respondents.

Our results indicate that both inward EFC and outward EFC are stimulated by perceived threat, but that only inward EFC is reduced by perceived avoidability. Interestingly, inward EFC and outward EFC are found to have opposite effects on PFC. While inward EFC impedes PFC, outward EFC facilitates PFC. By integrating both EFC and PFC in a single model, we provide a more complete understanding of individual behavior under IT security threats.

Moreover, by theorizing two categories of EFC and showing their opposing effects on users’ security behaviors, we further examine the paradoxical relationship between EFC and PFC, thus making an important contribution to IT security research and practice.

The Spillover Effects of Health IT Investments on Regional Healthcare Costs

�� — Tue, 17 Oct 2017 18:16:44 +0000

Authors: Hilal Atasoy, Pei-Yu Chen and Kartik K. Ganju

Publication: Management Science, Vol. 64, No. 6, 2018

Abstract:

Electronic health records (EHR) are often presumed to reduce the significant and accelerating healthcare costs in the United States. However, evidence on the relationship between EHR adoption and costs is mixed, leading to skepticism about the effectiveness of EHR in decreasing costs. We argue that simply looking at the hospital-level effects can be misleading because the benefits of EHR can go beyond the adopting hospital by creating regional spillovers via information and patient sharing. When patients move between hospitals, timely and high-quality records received at one hospital can affect the costs of care at another hospital. We provide evidence that although EHR adoption increases the costs of the adopting hospital, it has significant spillover effects by reducing the costs of neighboring hospitals. We further show that these spillovers are linked to information and patient sharing. Specifically, the spillovers are stronger when more hospitals in the region are in health information exchange networks and in the same integrated delivery systems, which can share information more easily. Furthermore, utilizing regional characteristics that can affect the extent of patient sharing such as urban versus rural areas, population density, average distance between hospitals, and hospital density, we find that locations with higher patient and hospital concentration experience stronger regional spillovers. Additionally, spillovers are stronger after the HITECH (Health Information Technology for Economic and Clinical Health) Act that increased EHR adoption and use. Overall, our findings suggest that we need to take into account externalities to understand the benefits of health IT investments and form policy decisions.

Read full article: Management Science

E-Mail Interruptions and Individual Performance: Is There a Silver Lining?

�� — Tue, 17 Oct 2017 17:57:46 +0000

Authors: Shamel Addas and Alain Pinsonneault

Publication: MIS Quarterly, Vol. 42, No. 2, January 2018

Abstract:
Interruption of work by e-mail and other communication technologies has become widespread and ubiquitous. However, our understanding of how such interruptions influence individual performance is limited. This paper distinguishes between two types of e-mail interruptions (incongruent and congruent) and draws upon action regulation theory and the computer-mediated communication literature to examine their direct and indirect effects on individual performance.

Two empirical studies of sales professionals were conducted spanning different time frames: a survey study with 365 respondents and a diary study with 212 respondents. The results were consistent across the two studies, showing a negative indirect effect of exposure to incongruent interruptions (interruptions containing information that is not relevant to primary activities) through subjective workload, and a positive indirect effect of exposure to congruent interruptions (interruptions containing information that is relevant to primary activities) through mindfulness.

The results differed across the two studies in terms of whether the effects were fully or partially mediated, and we discuss these differences using meta-inferences. Technology capabilities used during interruptions episodes also had significant effects: rehearsing (fine-tuning responses to incoming messages) and reprocessing (reexamining received messages) were positively related to mindfulness, parallel communication (engaging in multiple e-mail conversations simultaneously) and leaving messages in the inbox were positively related to subjective workload, and deleting messages was negatively related to subjective workload.

This study contributes to research by providing insights on the different paths that link e-mail interruptions to individual performance and by examining the effects of using capabilities of the interrupting technology (IT artifact) during interruptions episodes. It also extends the experimental tradition that focuses on isolated interruptions. By shifting the level of analysis from specific interruption events to overall exposure to interruptions over time and from the laboratory to the workplace, our study provides realism and ecological validity.

Read full article: MIS Quarterly

Power Distance Belief, Power, and Charitable Giving

�� — Tue, 17 Oct 2017 17:51:21 +0000

Authors: Dahee Han, Ashok K. Lalwani and Adam Duhachek

Publication: Journal of Consumer Research, Vol. 44, No. 1, June 2017

Abstract:

Three studies examine the relation between power distance belief (PDB), the tendency to accept and expect inequalities in society; power, the control one has over valued resources; and charitable giving. Results suggest that the effect of PDB depends on the power held by the donor. In low-PDB contexts, people high (vs. low) in psychological power tend to be more self-focused (vs. other-focused), and this leads them to be less charitable. In high-PDB contexts, however, people high (vs. low) in psychological power tend to be more other-focused (vs. self-focused), and this leads them to be more charitable. The authors also explore several boundary conditions for these relationships and conclude with the implications of these findings.

Read full article: Journal of Consumer Research

Illiquidity Premia in the Equity Options Market

�� — Tue, 17 Oct 2017 16:32:07 +0000

Authors: Peter Christoffersen, Ruslan Goyenko, Kris Jacobs, Mehdi Karoui

Publication: Review of Financial Studies, Vol. 31, No. 3, March 2018

Abstract:

Standard option valuation models leave no room for option illiquidity premia. Yet we find the risk-adjusted return spread for illiquid over liquid equity options is 3:4% per day for at-the-money calls and 2:5% for at-the-money puts. These premia are computed using option illiquidity measures constructed from intraday effective spreads for a large panel of U.S. equities, and they are robust to different empirical implementations. Our findings are consistent with evidence that market makers in the equity options market hold large and risky net long positions, and positive illiquidity premia compensate them for the risks and costs of these positions.

Read full article: Review of Financial Studies

Value is in the Eye of the Beholder: The Relative Valuation Roles of Earnings and Book Value in Merger Pricing

�� — Thu, 28 Sep 2017 14:33:03 +0000

Author: MaryJane Rabier

Publication: The Accounting Review, Vol. 93, No. 1, 2018, pp. 335-362

Abstract:

Gupta and Gerchek (2002) argue that different acquirers can arrive at different equity valuations for the same target depending on their strategic intent. A reason for acquirers' equity valuations to vary, holding target fundamentals constant, may be that individual acquirers place different weights on underlying fundamentals. I examine this possibility using Burgstahler and Dichev (1997)'s theoretical framework. They argue that the relative importance of earnings and book value depends on expected adaptation, which is the likelihood that the existing earnings generating process will be altered. Using restructuring costs to proxy for expected adaptation at the individual acquirer level, I find that the association between the target's earnings (book value) and acquirers' bid prices is decreasing (increasing) in expected adaptation, consistent with theoretical predictions. These findings are less pronounced during merger waves and intense bid competition for the target.

Read full article: The Accounting Review

Acquisition Motives and the Distribution of Acquisition Performance

�� — Thu, 28 Sep 2017 14:26:01 +0000

Author: MaryJane Rabier

Publication: Strategic Management Journal, Vol. 38, No. 13, 2017

Abstract:

Research summary:

I examine how acquisition motives relate to the distribution of post-acquisition performance. I argue that acquisitions motivated by operating synergies have the potential to experience greater gains than acquisitions driven by financial synergies but are harder to value and implement, making them more uncertain. Using SEC filings, conference calls and press releases to capture acquisition motives, I find that acquirers pursuing operating synergies are more likely to experience highly positive and highly negative long-term returns than acquirers pursuing financial synergies.

I also find that acquisition experience and geographic proximity to targets soften acquirers' extreme downside outcomes in operating synergy acquisitions. My theory and results suggest that approaches that emphasize average outcomes for acquirers and use industry classifications to capture acquisition motives may be incomplete.

Managerial summary:

Managers engage in acquisitions for various reasons. In this study, I find that reasons related to operating synergies (e.g., revenue growth through new product offerings or cost savings through economies of scale) are more likely to result in extreme high and low performance outcomes for the acquiring firm compared to reasons related to financial synergies (e.g., diversification of cash flow streams).

In addition, I find that the acquirer's prior acquisition experience and the geographic proximity between the target and acquirer help soften the extreme low performance outcomes related to operating synergies.

Read full article: Strategic Management Journal

Monetizing Freemium Communities: Does Paying for Premium Increase Social Engagement?

�� — Wed, 11 Jan 2017 15:33:49 +0000

Authors: Bapna, R., Ramaprasad , J., Umyarov , A.

Publication: MIS Quarterly, 42(3), 719-735

Abstract:

Making sustainable profits from a baseline zero price and motivating free consumers to convert to premium subscribers is a continuing challenge for all freemium communities. Prior research has causally established that social engagement (Oestreicher-Singer and Zalmanson 2013) and peer influence (Bapna and Umyarov 2015) are two important drivers of users converting to premium subscribers in such communities. In this paper, we flip the perspective of prior research and ask whether the decision to pay for premium subscription causes users to become more socially engaged. In the context of the Last.fm music listening freemium social community, we establish, using a novel 41 month long panel dataset, a look-ahead propensity score matching (LA-PSM) procedure coupled with a difference-in-difference estimator of the treatment effect, that payment for premium leads to more social engagement. Specifically, we find that paying for premium leads to an increase in both content-related and community-related social engagement. Free users who convert to premium listen to 287.2% more songs, create 1.92% more playlists, exhibit a 2.01% increase in the number of forum posts made, and gain 15.77% more friends. Thus, premium subscribers create value not only for themselves by consuming more content, but also for the community and site by organizing more content and adding more friends, who are subsequently engaged by the social diffusion emerging from the focal user’s activities.

Read full abstract: MISQ, December 15, 2016

Measuring the Efficiency of Category-Level Sales Response to Promotions

�� — Thu, 06 Oct 2016 18:19:47 +0000

Authors: Trivedi, M., Gauri, D.K., Yu, M.

Publication: Management Science, Vol. 63, No. 10, October 2017

Abstract:

�������� Desautels Faculty of Management - Desautels 22

Faculty Achievements: Daphne Demetry Associate Professor in Strategy and Organization appointed Senior Editor Organization Science

Faculty Achievements: Patrick Augustin Associate Professor in Finance appointed Associate Editor Management Science

Dual Pathways of Value Creation from Digital Strategic Posture: Contingent Effects of Competitive Actions and Environmental Uncertainty

Do Early Words from New Ventures Predict Fundraising? A Comparative View of Social Media Narratives

Managing Channel Profits with Positive Demand Externalities

Reject and Resubmit: A Formal Analysis of Gender Differences in Reapplication and Their Contribution to Women’s Presence in Talent Pipelines

Managing Airfares Under Competition: Insights from a Field Experiment

Bots with Feelings: Should AI Agents Express Positive Emotion in Customer Service?

Constrained optimization of objective functions determined from random forests

Retail power in distribution channels: A double-edged sword for upstream suppliers

Can Cross-Border Funding Frictions Explain Financial Integration Reversals?

Competition and coopetition for two-sided platforms

The Impact of Advertising Creative Strategy on Advertising Elasticity

Augmenting Password Strength Meter Design using the Elaboration Likelihood Model: Evidence from Randomized Experiments

What warrants our claims? A methodological evaluation of argument structure

How is Liquidity Priced in Global Markets?

Trajectory Dynamics in Innovation: Developing and Transforming a Mobile Money Service Across Time and Place

Identifying Perverse Incentives in Buyer Profiling on Online Trading Platforms

Going viral or growing like an oak tree? Towards sustainable local development through entrepreneurship

More than the Quantity: The Value of Editorial Reviews for a UGC Platform

The Dual Impact of Product Line Length on Consumer Choice

Institutional Trading around Corporate News: Evidence from Textual Analysis

The Effects of Analyst-Country Institutions on Biased Research: Evidence from Target Prices

Does Private Country-by-Country Reporting Deter Tax Avoidance and Income Shifting? Evidence from BEPS Action Item 13

Promotion Optimization for Multiple Items in Supermarkets

Under the Umbrella: Goal-Derived Category Construction and Product Category Nesting

Constant Job-Allowance Policies for Appointment Scheduling: Performance Bounds and Numerical Analysis

A Simple Rule for Pricing with Limited Knowledge of Demand

Trust, Collaboration, and Economic Growth

A Fluid Model for One-Sided Bipartite Matching Queues with Match-Dependent Rewards

The New Food Truck in Town: Geographic Communities and Authenticity-Based Entrepreneurship

Make Way for the Algorithms: Symbolic Actions and Change in a Regime of Knowing

Prof. Lisa Cohen co-edits special virtual issue of Administrative Science Quarterly

Prof. Ganju's paper selected as finalist for NIHCM Research Award

Manufacturer’s 1-Up from Used Games: Insights from the Secondhand Market for Video Games

When Paying for Reviews Pays Off: The Case of Performance-Contingent Monetary Rewards

In Sickness and in Debt: The COVID-19 Impact on Sovereign Credit Risk?

Learning Through Crowdfunding

The impact of an augmented reality game on local businesses: a study of Pokémon go on restaurants

Inventory in Times of War

Theorizing Process Dynamics with Directed Graphs: A Diachronic Analysis of Digital Trace Data

Losing Touch: An Embodiment Perspective on Coordination in Robotic Surgery

When Digital Technologies Enable and Threaten Occupational Identity: The Delicate Balancing Act of Data Scientists

Financial Returns to Firms’ Communication Actions on Firm-Initiated Social Media: Evidence from Facebook Business Pages

Software Patents and Firm Value: A Real Options Perspective on the Role of Innovation Orientation and Environmental Uncertainty

Maxime Cohen appointed Associate Editor of Management Science

The Role of Decision Support Systems in Attenuating Racial Biases in Healthcare Delivery

Cross-Listings and the Dynamics between Credit and Equity Returns

Sovereign credit risk and exchange rates: Evidence from CDS quanto spreads

Measuring sovereign bond market integration

Sharing is caring: Social support provision and companionship activities in healthcare virtual support communities

What users do besides problem-focused coping when facing IT security threats: An emotion-focused coping perspective

How does the implementation of enterprise information systems affect a professional's mobility? An empirical study

Yu Ma article selected as a finalist 2019 Paul E. Green Award

Collective Information System Use: A Typological Theory

A Primal-Dual Lifting Scheme for Two-Stage Robust Optimization

Professor Ramaprasad appointed Associate Editor of Management Science

Extrinsic versus Intrinsic Rewards for Contributing Reviews in an Online Platform

Robust Dual Dynamic Programming

The Effects of Analyst‐Country Institutions on Biased Research: Evidence from Target Prices

Optimizing Foreclosed Housing Acquisitions in Societal Response to Foreclosures

A Smart-City Scope of Operations Management

Designing Risk‐Adjusted Therapy for Patients with Hypertension

Supply Diagnostic Incentives under Endogenous Information Asymmetry

A Model of Two-Sided Costly Communication for Building New Product Category Demand

Oversight and Efficiency in Public Projects: A Regression Discontinuity Analysis

Supply Chain Proximity and Product Quality

Cutting the Cord: Mutual Respect, Organizational Autonomy, and Independence in Organizational Separation Processes

Informed Options Trading Prior to Takeover Announcements: Insider Trading?

Inspiration from the 'Biggest Loser': Social Interactions in a Weight Loss Program

A Large-Scale Approach for Evaluating Asset Pricing Models

Ruslan Goyenko paper "Illiquidity Premia in Equity Option Markets" selected Editor's Choice in Review of Financial Studies

Asset Pricing with Countercyclical Household Consumption Risk

What Is the Consumption-CAPM Missing? An Information-Theoretic Framework for the Analysis of Asset Pricing Models

The Effects of Asymmetric Social Ties, Structural Embeddedness and Tie Strength on Online Content Contribution Behavior

Love Unshackled: Identifying the Effect of Mobile App Adoption in Online Dating

Designing Risk-Adjusted Therapy for Patients with Hypertension

Did Europe Move in the Right Direction on E-Waste Legislation?

Juan Serpa's article featured in Management Science

�� Desautels Faculty of Management - Desautels 22