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• Article | Journal of Economics & Management Strategy | Spring 2013

  Salience in Quality Disclosure: Evidence from the U.S. News College Rankings

  Michael Luca and Jonathan Smith

  How do rankings affect demand? This paper investigates the impact of college rankings, and the visibility of those rankings, on students' application decisions. Using natural experiments from U.S. News and World Report College Rankings, we present two main findings. First, we identify a causal impact of rankings on application decisions. When explicit rankings of colleges are published in U.S. News, a one-rank improvement leads to a 1-percentage-point increase in the number of applications to that college. Second, we show that the response to the information represented in rankings depends on the way in which that information is presented. Rankings have no effect on application decisions when colleges are listed alphabetically, even when readers are provided data on college quality and the methodology used to calculate rankings. This finding provides evidence that the salience of information is a central determinant of a firm's demand function, even for purchases as large as college attendance.

  Keywords: Rank and Position; Demand and Consumers; Quality; Decisions; Newspapers; United States;

  Citation:

  Luca, Michael, and Jonathan Smith. "Salience in Quality Disclosure: Evidence from the U.S. News College Rankings." Journal of Economics & Management Strategy 22, no. 1 (Spring 2013): 58–77.

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• Case | HBS Case Collection | 2013 (Revised from original 2012 version)

  Paul Thomson: Walker Insurance

  Michael Roberts, Jim Sharpe and Sonia Nagala Change

  Having just acquired Walker Insurance, Paul Thomson finds himself short of funds to support his original turnaround plan. He can request additional cash from his investor group, hunker down and grow at a slower rate or consider a proposal to buy his business. He has taken steps to re-virtualize the company and is challenged to build a salesforce to grow the business.

  Keywords: crisis management; Acquisitions; Search Funds; entrepreneurial management; entrepreneurs; entrepreneurship; Insurance; turnarounds; boards of directors; sales force management; Entrepreneurship; Insurance Industry; Florida;

  Citation:

  Roberts, Michael, Jim Sharpe, and Sonia Nagala Change. "Paul Thomson: Walker Insurance." Harvard Business School Case 813-057, April 2013. (Revised from original August 2012 version.)

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• Case | HBS Case Collection | 2013 (Revised from original 2012 version)

  SMARTBITES (A)

  Michael Roberts, Jeronimo Silva and Amar Bhide

  The case describes a Turkish brother-sister team who are evaluating the option of acquiring and operating a franchise of a US bakery/cafe in Turkey. They are comparing this option to that of simply starting a similar business.

  Keywords: Franchising; start-up; Franchise Ownership; Family Ownership; Cost vs Benefits; Multinational Firms and Management; Food and Beverage Industry; Retail Industry; Turkey; United States;

  Citation:

  Roberts, Michael, Jeronimo Silva, and Amar Bhide. "SMARTBITES (A)." Harvard Business School Case 813-074, January 2013. (Revised from original September 2012 version.)

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