Buying Strawberries in Winter: Globalization and the Gains from Variety

Over the past three decades, global trade has more than tripled the variety of international goods available to U.S. consumers. New research measures how consumers have benefited from this growth in variety.

Suresh Ramanathan

Most metrics of customer satisfaction are individual-centric and ignore the fact that many experiences with products and services are actually jointly consumed. Our research indicates that people might evaluate products or services differently depending on whether they consumed it alone or with someone else.

…When designing experiences…it’s important to create conditions where people can actually observe and subtly interact with each other. What you want … [ Read more ]

The Benefits of Transparency

Regulators often justify new disclosure regulation by arguing that it reduces firms’ cost of capital; until now, there has been little evidence to support this argument. Recent research examines how the effectiveness of a country’s legal institutions and securities regulation is related to international differences in the cost of equity capital.

Accounting Reform: The Costs and Benefits of Marking-to-Market

Accounting is often seen as a veil, a mere detail of measurement that does not affect the economic fundamentals of a firm. However, the intensity of the public debate surrounding accounting reforms in recent years suggests that there may be more at stake than obscure debates on measurement. Currently, attention is focused on the initiative of the International Accounting Standards Board (IASB) and the U.S. … [ Read more ]

The Science of Economics

In the study “What Do Laboratory Experiments Tell Us About the Real World?” University of Chicago professors Steven D. Levitt and John A. List address the challenges of interpreting experimental work in economics by constructing a model to help shed light on experimental results that likely are generalizable. While the basic strategy underlying lab experiments in the physical sciences and economics is similar, the fact … [ Read more ]

Selected Papers on Entrepreneurship

Capital Ideas offers a collection of four articles:

In “Bet on the Horse,” Per Strömberg and Berk A. Sensoy and Steven N. Kaplan study how particular types of entrepreneurial firms evolve. In so doing, the findings shed light on the relative importance of a company’s product and market versus the company’s founders and management team.

“How Smart is Smart Money?” focuses attention on the role of … [ Read more ]

Working With Pay Pals: Creating Incentive Pay Programs

Recent research suggests that productivity is substantially higher when employees’ monetary incentives are based solely on individual effort.

For Richer or For Poorer: Working Spouses and Labor Inequality

Since the 1960s, have married women increased their participation in the labor force to compensate for the decline in employment and disappointing earnings growth of their husbands? Are married men working less today because their wives are working more?

Cash Flow and Outcomes

As a firm’s cash flow increases, it is expected that its investment in potential revenue-generating opportunities will also increase. However, recent research examining the auctions of oil and gas leases shows that greater cash flow does not lead to investment in a greater number of tracts, a larger amount of acreage, or more productive, revenue-generating tracts. Instead, greater cash flow leads to paying more for … [ Read more ]

The Ramifications of Restatements

Outside board members fear the legal and financial consequences they may face as a result of financial reporting failures. However, recent research suggests that outside directors of companies issuing earnings restatements are more likely to suffer a blow to their reputations and employability. When companies restate earnings, outside directors tend to lose board positions with both the restating companies and other companies. The losses are … [ Read more ]

The Court of Public Opinion

The media plays a crucial role in shaping the public image of corporate managers, and in doing so can pressure them to behave according to social norms.

Selected Papers on Marketing

A collection of marketing-related articles from Capital Ideas. Includes:
– – – – – – – – – – – – – – – – – – – – – – – – – –
Weighing the Options
Research by Christopher K. Hsee and France Leclerc

– – – – – – – – – – – – – – – – – – – – – – … [ Read more ]

Selected Papers on Entrepreneurship

A collection of entrepreneurship-related articles from Capital Ideas. Includes:
– – – – – – – – – – – – – – – – – – – – – – – – – –
Entrepreneurs: Will They Stay or Will They Go?
Research by Stanislav D. Dobrev

– – – – – – – – – – – – – – – – – … [ Read more ]

Mixed Messages: How Men And Women Differ In Their Responses To Marketing Messages

Marketers continue to seek the answers: which advertisements resonate with men, and which with women? In most cases, a single page of advertising with a bold headline, few lines of text and a simple image generally appeals to male audiences, while an ad with multiple images and lots of imagination-provoking detail and text is effective with female consumers. According to Chicago associate marketing professor Joan … [ Read more ]

Give Me Shelter

The responsiveness of taxpayers to changes in marginal tax rates has become perhaps the most central issue in public finance, and nowhere is the debate more heated than at the very high end of the income distribution. Yet it seems there is little direct evidence on the rich and their money. Data used to study tax responsiveness of the rich – based on actual tax … [ Read more ]

Beyond the Protestant Work Ethic

New research suggests a link between religion and attitudes that are conducive to economic growth.

Accounting For Tastes: A Simple Theory of Advertising As A Good Or Bad

“Economists, traditionally, have had a very uneasy relationship with advertising,” says University of Chicago professor Gary Becker. “Consumer preferences were thought to be either too stable or too easily manipulated.” But in his latest book, “Accounting For Tastes,” Becker employs the tools of modern economic analysis to confront the problem of preferences and values — how they are formed and how they affect our behavior. … [ Read more ]

The Evolution of U.S. Corporate Governance: We Are All Henry Kravis Now

The 1980s brought a phenomenal dollar volume of corporate takeovers and restructuring activity — activity distinguished by an unprecedented level of leveraged buyouts (LBOs) and hostile takeovers led by raiders such as Henry Kravis of Kohlberg Kravis & Roberts (KKR) fame. Despite the resurgence of takeovers in the 1990s, LBOs and raiders have not reappeared. Their legacy, however, remains. As finance professor Steven Kaplan of … [ Read more ]

Not Beyond Repair

How Organizational Practices Can Compensate for Individual Shortcomings