• 2008-2009
• 2007-2008
• 2006-2007
• 2005-2006
• 2004-2005
• 2003-2004
• 2002-2003
• 2001-2002
• 2000-2001
• 1999-2000
• 1998-1999
• 1997-1998
• 1996-1997
• 1995-1996
• Working
  Papers
  Home

HBS Working Papers: 2007-2008

All HBS Working Papers are copyrighted by their authors. For permission to reproduce or to request a copy, contact an author directly.

• To search for a paper by title, browse the alphabetical index of titles below.
• To search for a paper by author, number, unit/area, date, or keyword in title, use the Find button on your browser.
• To view a paper's abstract, click its title in the index below.
• If complete text of a paper is available (this will be indicated in the index by an asterisk*), there will be a "complete text" link in the abstract below. Papers are usually in the form of a pdf downloadable in Adobe Acrobat Reader. Some papers may be available to HBS only.
• To view an HBS author's biography or to send e-mail, click his or her name in the abstracts below. Authors without an available biography are from outside HBS.
• To go to an academic area's homepage, click the unit/area.
• The dates listed here refer to the latest revision of the paper.
• An HBS Number is a unique identifier assigned to that HBS Working Paper.

Civil society actors have been pushing for greater accountability of the World Bank for at least three decades. This paper outlines the range of accountability mechanisms currently in place at the World Bank along four basic levels: (1) staff, (2) project, (3) policy, and (4) board governance. We argue that civil society organizations have been influential in pushing for greater accountability at the project and policy levels, particularly through the establishment and enforcement of social and environmental safeguards and complaint and response mechanisms. But they have been much less successful in changing staff incentives for accountability to affected communities, or in improving board accountability through greater transparency in decision making, more representative vote allocation, or better parliamentary scrutiny. In other words, although civil society efforts have led to some gains in accountability with respect to Bank policies and projects, the deeper structural features of the institution - the incentives staff face and how the institution is governed- remain largely unchanged.
37 pages

Over the past two decades, no two economies have averaged more rapid economic growth than China and Vietnam. But while China's income inequality has risen rapidly over that same time frame, Vietnam's has only grown moderately. Structural and socio-cultural determinants fail to account for these divergent pathways. Existing political variables are also unhelpful. China and Vietnam are coded in exactly the same way, even in the path-breaking work on authoritarian regimes. In this paper, we take a deeper look at political institutions in the two countries, demonstrating that profound differences between the polities directly impact distributional choices. In particular, we find that Vietnamese elite institutions require construction of broader coalitions of policymakers, place more constraints on executive decision making, and have more competitive selection processes. As a result, there are stronger political motivations for Vietnamese leaders to provide equalizing transfers that limit inequality growth.
46 pages

We test whether accounting can be used as political currency. Our setting is the US congressional election of 2004, where outsourcing of US jobs was a campaign issue. We find that the largest corporate donors to principal candidates in closely watched congressional races manage earnings downwards in the two quarters immediately preceding the 2004 election. We find no evidence of such downwards earnings management among corporate donors to candidates in all other congressional races. Election outcomes for candidates are also systematically associated with the extent of donors' downwards earnings management in closely watched races, but not all other races. The findings are consistent with firms managing accounting information in circumstances where this is likely to benefit allied politicians.
40 pages

We develop an institutional theory of how local communities continue to matter for organizations, and why community factors are particularly important in a global age. Since globalization has taken center stage in both practitioner and academic circles, research has shifted away from understanding effects of local factors. In this paper, our aim is to redirect theoretical and empirical attention back to understanding the determinants and importance of local influences. We review classical and contemporary research from organizational theory, sociology and economics that have focused on geographic influences on organizations. We adapt Scott's (2001) influential three pillars model, including regulative, social-normative and cultural-cognitive features to conceptualize an overarching model of how communities influence organizations. We suggest that because organizations are simultaneously embedded in communities and organizational fields, by accounting for both of these different levels, researchers will better understand isomorphism and change dynamics. Our approach thus runs counter the idea that globalization is a homogeneity-producing process, and the view that society is moving from particularism to universalism. With globalization, not only has the local remained important, but in many ways local particularities have become more visible and salient, and so understanding these dynamics will be helpful for researchers addressing institutional isomorphism and change.
49 pages

This paper analyzes the literature that has been published on institutional entrepreneurship since Paul DiMaggio introduced the notion in 1988. Based on a systematic selection and analysis of articles, the paper outlines an emerging consensus on the definition and process of institutional entrepreneurship. It also presents the previously identified enabling conditions for, and reviews the research methods that have been applied to the study of, institutional entrepreneurship. Finally, the paper highlights future directions for research on this topic. Researchers are encouraged to use this paper to build sophisticated, targeted research designs that will add value to the growing body of literature on institutional entrepreneurship.
52 pages

Marketing is essential for the organic growth of a company. Not surprisingly, firms spend billions of dollars on marketing. Given these large investments, marketing managers have the responsibility to optimally allocate these resources and demonstrate that these investments generate appropriate returns for the firm. In this chapter we highlight a two-stage process for marketing resource allocation. In stage one, a model of demand is estimated. This model empirically assesses the impact of marketing actions on consumer demand of a company's product. In stage two, estimates from the demand model are used as input in an optimization model that attempts to maximize profits. This stage takes into account costs as well as firm's objectives and constraints (e.g., minimum market share requirement). Over the last several decades, marketing researchers and practitioners have adopted various methods and approaches that explicitly or implicitly follow these two stages. We have categorized these approaches into a 3x3 matrix, which suggests three different approaches for stage-one demand estimation (decision calculus, experiments and econometric methods), and three different methods for stage-two economic impact analysis (descriptive, what-if and formal optimization approach). We discuss pros and cons of these approaches and illustrate them through applications and case studies.
46 pages

We explore a new channel for attracting inflows using a unique dataset of corporate 401(k) retirement plans and their mutual fund family trustees. Families secure substantial inflows by being named trustee of a 401(k) plan. This affords the plan sponsor potential influence on the family's portfolio decisions. Consistent with this, we find that family trustees significantly overweight their 401(k) client firm's stock. Trustee overweighting is more pronounced when the conflict of interest of the trustee family is more severe and when other mutual funds are selling the client firm's stock. This overweighting is not explained by superior information. We quantify a potentially large benefit to the 401(k) sponsor firm of having its price propped up by its trustee fund's more severe overweighting. We also estimate the resulting loss to mutual fund investors, which can be large in some cases.
45 pages

After the 1995 crisis, the Mexican banking system experienced significant changes in bank accounting standards. Most of these changes took place between 1996 and 2001, and had a significant impact in the structure and interpretation of financial information of banks. This document explains the major changes on bank accounting, their purpose and structure, and discusses their impact on financial information reported by Mexican banks. It also provides the English equivalent of the major accounting terms used by Mexican banks. The main purpose of this document is to provide a standardized guide to better understand financial information produced before and after the crisis, within the current context of internationalization of Mexican banks' ownership.
32 pages

Using loan-level data from Mexico, we study the relationship between the organizational structure of banks and the terms of lending to small businesses. We find that banks with decentralized lending structures - where branch managers have autonomy over the terms of lending - give larger loans to small firms and those with more "soft information" - particularly in states with weak legal enforcement of financial contracts. However, decentralized banks are also more responsive to the competitive environment when setting loan terms. They are more likely to restrict credit and to charge higher interests rates when they have market power, more so to smaller firms that have fewer outside options for external finance. These findings highlight a 'darker side' to decentralized banks and suggest that the relative benefit of a decentralized bank structure for small business lending depends critically on the nature of the competitive environment in which banks are located.
35 pages

Using a sample of 620 non-binding, majority-vote (MV) shareholder proposals between 1997 and 2004, we analyze the frequency, determinants and consequences of boards' implementation decisions. The frequency of implementation has almost doubled after 2002, reaching more than 40%. Shareholder pressure (e.g. the voting outcome and the influence of the proponent) and the type of proposals are the main determinants of the implementation decision, while traditional governance indicators do not seem to matter. Outside directors implementing MV shareholder proposals experience a one-fifth reduction in the likelihood of losing their board seat and in the likelihood of losing other directorships.
61 pages

The optimal moment to address the question of how to improve human decision making has arrived. Thanks to fifty years of research by judgment and decision making scholars, psychologists have developed a detailed picture of the ways in which human judgment is bounded. This paper argues that the time has come to focus attention on the search for strategies that will improve bounded judgment because decision making errors are costly and are growing more costly, decision makers are receptive, and academic insights are sure to follow from research on improvement. In addition to calling for research on improvement strategies, this paper organizes the existing literature pertaining to improvement strategies, highlighting promising directions for future research.
12 pages

We compare three potential mechanisms for alleviating the asymmetric information between the public acquirers and private venture capital-backed targets. First, because venture capitalists repeatedly sell their portfolio companies through acquisitions, venture capitalists may be able to certify the quality of the assets that an outside party is buying because they are "staking their reputation" on not selling overvalued assets. Second, personal and professional relationships may "bridge" the asymmetric information. This bridge may be particularly strong if both firms were financed by the same venture capital firm. Third, geographic proximity may also reduce the asymmetric information between a target and an acquiring firm. In a sample of 1,083 acquisitions of venture capital-backed private companies from 1976 and 2001, we find strong evidence that venture capital firms can form a bridge between acquiring firms and target firms that reduces asymmetric information associated with the transaction. Acquisition announcement period returns are more positive for acquisitions in which both the target and the acquirer are financed by the same venture capital firm. Similarly, we find that having a common investor increases both the likelihood that a transaction will be all stock as well as the fraction of stock in the overall acquisition payment. Targets that are concerned that the acquirer is potentially overvalued may be less willing to accept stock in an acquisition. A common investor can reduce this uncertainty about overvaluation. Hence, our evidence shows that the bridge runs in both directions. In addition, an acquisition is more likely to take place when there is a common venture capital investor linking the acquirer and the target. Finally, we show that long-run post-acquisition abnormal returns are higher for the acquiring firms when the target and the acquirer share a common venture capital investor.
38 pages

Innovative regulatory programs are encouraging firms to police their own regulatory compliance and voluntarily disclose, or "confess," the violations they find. Despite the "winwin" rhetoric surrounding these government voluntary programs, it is not clear why companies would participate and whether the programs themselves do anything to enhance regulatory effectiveness. Tasked with monitoring the legality of its own operations, why would a firm that identifies violations turn itself in to regulators rather than quietly fix the problem? And why would regulators entrust regulated entities to monitor their own compliance and enforce the law against themselves? This paper addresses these questions by investigating the factors that lead organizations to self-disclose violations, the effects of selfpolicing on regulatory compliance, and the effects of self-disclosing on the relationship between regulators and regulated firms. We investigate these research questions in the context of the US Environmental Protection Agency's Audit Policy.
16 pages

Abstract is not available at this time
26 pages

No abstract available
33 pages

As regulators increasingly embrace cooperative approaches to governance, voluntary public-private partnerships and self-regulation programs have proliferated. However, because few have been subjected to robust evaluation, little is known about whether these innovative approaches are achieving their objectives and enhancing regulatory effectiveness. In the context of a federal government program that encourages companies to voluntarily self-police and self-disclose regulatory violations, we examine how participation affects the behaviors of regulators and regulated facilities. We find that on average, facilities that committed to self-police experienced a decline in abnormal events resulting in toxic pollution, and that regulators reduced their scrutiny over self-policing facilities. Upon closer examination, we find strong evidence of these effects among facilities with clean past compliance records, but find no such evidence of among facilities with more problematic compliance histories. These findings support the theoretical promise of meaningful self-policing practices and suggest that voluntary disclosure can serve as a reliable signal of future compliance-but only among a subset of facilities.
38 pages

The last twenty years have witnessed the rise of disaggregated "clusters," "networks," or "ecosystems" of firms. In these clusters the activities of R&D, product design, production, distribution, and system integration may be split up among hundreds or even thousands of firms. Different firms will design and produce the different components of a complex artifact (like the processor, peripherals, and software of a computer system), and different firms will specialize in different stages of a complex production process. This paper considers the pricing behavior and profitability of these so-called modular clusters. In particular, we investigate a possibility hinted at in prior work: that for composite goods, a vertical pricing externality operating across complements can offset horizontal competition between substitutes. In this paper, we isolate the offsetting price effects and show how they operate in large (as well as small) clusters. We argue that it is possible in principle for a modular cluster of firms to mimic the pricing behavior and profitability of a vertically integrated monopoly. We then use our model to compare open and closed standards regimes, to understand how commoditization affects a cluster, to determine the relative profits of platform firms and firms that depend on the platform, and to assess the impact of horizontal and vertical mergers. Our model highlights a collective action problem: what is good for an individual firm is often not good for the cluster. We speculate that this conflict may be a source of strategic tension in platform firms.
49 pages

This paper reports on a small-scale survey of the potential American demand for prize-linked savings accounts, an account that awards prizes as part of the saving product's return. In October 2006, Centra Credit Union launched a prize-linked savings pilot. As part of that initiative, we conducted a mall intercept survey of over 500 people in Clarksville, Indiana, the community where the program was launched. This preliminary data suggests that low-to-moderate income Americans may have substantial demand for prize-linked savings, with a majority of survey participants expressing an interest in opening a prize-linked savings account. As predicted by theory and international experience, interest in prize-linked savings is greatest among people who do not have regular saving habits, who have little actual savings, who play lotteries extensively, and who are optimistic about their futures.
30 pages

Servicizing, a novel business practice that sells product functionality rather than products, has been touted as an environmentally beneficial business practice. This paper describes how servicizing transactions mitigate some problems associated with sales transactions, but creates several others. The success of servicizing-or product service systems-requires manufacturers to develop contracts that attract customers while protecting their interests. Several propositions are offered to facilitate empirical testing of the concepts discussed.
32 pages

Noncooperative games are examined from the point of view of an outside observer who believes that the players are rational and that they know at least as much as the observer. The observer is assumed to be able to observe many instances of the play of the game; these instances are identical in the sense that the observer cannot distinguish between the settings in which different plays occur. If the observer does not believe that he will be able to offer beneficial advice then he must believe that the players are playing a correlated equilibrium, though he may not initially know which correlated equilibrium. If the observer also believes that, in a certain sense, there is nothing connecting the players in a particular instance of the game then he must believe that the correlated equilibrium they are playing is, in fact, a Nash equilibrium.
22 pages

This paper examines the extent to which the positive relationship between personal wealth and entry into entrepreneurship is due to financing constraints. I exploit a tax reform and use unique micro-data from Denmark to study how exogenous changes in the cost of external finance shape both the probability of entering entrepreneurship and the characteristics of those who become entrepreneurs. As expected, differences-in-differences estimates show that the entry rates for individuals who faced an increase in the cost of finance fell by 40% relative to those whose cost of external finance was unchanged. However, while some of the fall in entry was due to less wealthy individuals with high human capital (confirming the presence of financing constraints), the greatest relative decline in entry came from individuals with lower human capital, many of whom were above median wealth. This finding suggests that an important part of the positive relationship between personal wealth and entrepreneurship may be driven by the fact that wealthy individuals with lower ability can start new businesses because they are less likely to face the disciplining effect of external finance.
34 pages

We propose a model for analyzing an intermediary's incentives to increase the search costs incurred by consumers looking for sellers (stores). First, we show that the quality of the search service offered to consumers is more likely to be degraded (i.e. the probability that consumers find their favorite store in the first round of search is less than 1) when the intermediary derives higher revenues from consumers shopping at the lesser-known store relative to revenues from consumers shopping at the more popular store. Second, the intermediary may have an incentive to degrade the quality of search even further when its design decision influences the prices charged by stores. By altering the composition of demand faced by stores, the intermediary can force the latter to price lower and thereby increase total consumer traffic.
45 pages

This study explores the importance of cross-border social networks for entrepreneurship in developing countries by examining ties between the Indian expatriate community and local entrepreneurs in India's software industry. We find that entrepreneurs located outside software hubs - in cities where monitoring and information flow on prospective clients is harder - rely significantly more on diaspora networks for business leads and financing. Relying on these networks is also related to better firm performance, particularly for entrepreneurs located in weaker institutional environments. Our results provide micro-evidence consistent with a view that cross-border social networks serve an important role in helping entrepreneurs to circumvent the barriers arising from imperfect local institutions in developing countries.
41 pages

A key role of corporate managers is to encourage subsidiaries to adopt innovative practices. This paper examines the conditions under which corporate managers use information provision to encourage subsidiaries' adoption of advanced management practices. Focusing on the distribution of expertise across subsidiaries, we propose that corporate managers elect an information provision strategy when (i) subsidiaries, on average, possess moderate levels of related expertise, (ii) subsidiaries exhibit significant heterogeneity in this expertise, and (iii) the subsidiaries are more diversified and less concentrated. We examine the efforts to diffuse pollution prevention practices exhibited by manufacturing firms in the information and communication technology sector in the United States, and find empirical support for the four hypotheses developed here. The research presented in this paper has implications for our understanding not only of who adopts advanced environmental management practices, but more broadly, of when firms adopt information provision strategies to encourage knowledge transfer within the organization.
37 pages

The digital interactive transformation in marketing is not unfolding, as many thought it would, on the model of direct marketing. That model anticipated that digital media using rich profiling data would intrude marketing messaging more deeply and more precisely into consumer lives than broadcast media had been able to do. But the technology that threatened intrusion is delivering seclusion. The transformation is unfolding on a model of consumer collaboration, in which consumers use digital media that lie beyond the control of marketers to communicate among one another, responding to marketing's intrusions by disseminating counterargument, information sharing, rebuttal, parody, reproach and, though more rarely, fandom. Globally the media of collaboration range from consumer review sites like Epinions and Trip Advisor, to collaborative networking sites like Bebo, Facebook, Orkut and Meetup, to trading sites like Craigslist and EBay, and user-generated content sites like YouTube, Cyworld, and blogs. This paper reviews five emerging paradigms governing marketing in the environment of these new media. It concludes that while meaning-making remains the central purpose of marketing communication, the shift from broadcasting to interaction within digital communities is moving the locus of control over meanings from marketer to consumer and rewarding more participatory, more sincere, and less directive marketing styles.
28 pages

Purpose - This paper provides a systematic comparison of the level of business diversification in China and eight other large economies for the 2001 to 2005 period. We investigate reasons why Chinese firms are more diversified than companies elsewhere.
Design/methodology/approach - We collect data on the number of business segments in which publicly traded companies operate from the Thomson One Banker database. We analyze the data using nonparametric tests and regression analysis.
Findings - The mean number of business segments per firm varies significantly by country. Notably, there is no evidence in our sample that emerging-market companies are systematically more diversified than their developed-market counterparts. In most countries, firms have become less diversified over time. However, there is no such trend in China. The level of diversification of Chinese enterprises does not vary over our study period (2001-2005), making Chinese firms the most diversified in our sample by 2005. China's growth rate does not seem to explain the higher level of firm diversification. However, we find that Chinese state-owned enterprises diversify their operations more aggressively than other Chinese firms.
Research limitations/implications - Ownership data and business group affiliations were not available for all firms in our sample, making it difficult to control for these effects across economies.
Practical implications - Government involvement in state-owned enterprises may be contributing to a divergence in the pattern of business diversification between China and other economies.
Originality/value - This paper quantifies anecdotal evidence that Chinese firms are more diversified than similar firms in other countries.
11 pages

How persistent are the effects of legal institutions adopted or inherited in the distant past? A substantial literature argues that legal origins have persistent effects that explain clear differences in investor protections and financial development around the world today (La Porta et al, 1998, 1999 and passim). This paper examines the persistence of the effects of legal origins by examining new estimates of different indicators of financial development in more than 20 countries in 1900 and 1913. The evidence presented does not yield robust results that can sustain the hypothesis of persistence effects of legal origin, but it is not powerful enough to reject it either. Then the paper examines if there were systematic differences in the extent of investor protections across countries, since that is the main channel through which legal origin affects financial development, and shows that all the evidence supports the idea of relative convergence in corporate governance practices across legal families circa 1900. The paper concludes that, if the evidence presented is representative, the variation observed in financial development around the world today is likely a product of events of the twentieth century rather than a consequence of long-term (and persistent) differences occasioned by legal traditions.
64 pages

We study the interplay of inequality and trust in a dynamic game, where trust increases efficiency and thus allows higher growth of the experimental economy in the future. We find that trust is initially high in a treatment starting with equal endowments, but decreases over time. In a treatment with unequal endowments, trust is initially lower yet remains relatively stable. The difference seems partly due to the fact that equal start positions increase subjects' inclination to condition their trust decisions on wealth comparisons, whereas conditional trust is much less prevalent with unequal initial endowments. As a result, with respect to efficiency, the initially more unequal economy fares worse in the short run but better in the long run, and the disparity of wealth distributions across economies mitigates over time.
27 pages

This paper seeks to answer three questions. First, which drives the success of a platform, installed base, platform quality or consumer expectations? Second, when does a monopoly emerge in a platform-based market? Finally, when is a platform-based market socially efficient? We analyze a dynamic model where an entrant with superior quality competes with an incumbent platform, and examine long-run market outcomes. We find that the answers to these questions depend critically on two parameters: the strength of indirect network effects and consumers' discount factor of future applications. In addition, contrary to the popular belief that indirect network effects protect incumbents and are the source of market inefficiency, we find that under certain conditions, indirect network effects could enhance entrants' quality advantage and market outcomes hence could be more efficient with stronger indirect network effects. We empirically examine the competition between the Xbox and PlayStation 2 consoles. We find that Xbox has a small quality advantage over PlayStation 2. In addition, the strength of indirect network effects and consumers' discount factor in this market are within the range in which platform success is driven by quality advantage and the market is potentially efficient. Counterfactual experiments suggest that PlayStation 2 could have driven Xbox out of the market had the strength of indirect network effects more than doubled or had consumers' discount factor increased by fifty percent.
48 pages

Abstract is not available at this time
20 pages

We tend to assume that great leaders must make difficult choices between two or more conflicting outcomes. In an interview study with 26 CEOs of top American and European companies (incl. IKEA, Campbell Soups, Nokia, H&M), we find that instead of choosing between conflicting outcomes such as long-term strategy or short-term performance drivers, top tier managers argue that their role is to embrace such paradoxes to make both things happen simultaneously. The study identifies five groups of practices that make this possible. Together, they reveal a systematic approach to managerial work at the top, which is seldom found in the literature. By building on the engagement of many in the development of the organization, the practices are important for our understanding of how a CEO facilitates the partaking of many in strategy making. The paper contributes to theory by relating the current findings to the literature on the connection between commitment and performance and on the strategic management literature that focuses on the proliferation of strategy and strategy as practice.
42 pages

The ethnic composition of US scientists and engineers is undergoing a significant transformation. This study applies an ethnic-name database to individual patent records granted by the United States Patent and Trademark Office to document these trends with greater detail than previously available. Most notably, the contributions of Chinese and Indian scientists to US technology formation increase dramatically in the 1990s, before noticeably leveling off after 2000 and declining in the case of India. Growth in ethnic innovation is concentrated in high-tech sectors; the institutional and geographic dimensions are further characterized.
27 pages

SA 8000, along with other types of certification standards and corporate codes of conduct, represents a new form of private governance of working conditions, initiated and implemented by companies, labor unions, and non-governmental activist groups. Whether these codes represents a substantive or merely symbolic approach to governing working conditions is the subject of an ongoing debate, which to date has been dominated by philosophical and political discourse due to a lack of systematic evaluation. Very little empirical evidence is available to indicate whether these codes legitimately distinguish adopting companies and factories as providing better working environments (e.g., health and safety, freedom of association, fair pay practices) and whether these codes have affected their business outcomes (e.g., staff turnover and absenteeism, product defect rates, sales growth). In this book chapter, we review the existing evaluations of other private codes governing workplace conditions, including the Ethical Trading Initiative's Base Code, Nike's code of conduct, and Fair Trade. We then describe several key elements of program evaluation that are becoming standard practice in other domains, which we believe should be incorporated in future evaluation studies of these codes. We emphasize the importance of examining performance over time, comparing adopters to non-adopters, and incorporating strategies to overcome selection bias. Evaluations that meet the highest methodological standards are critical to inform the debates about this new form of private governance, and to highlight opportunities for improvement in their standards and monitoring procedures.
19 pages

SFAS 142 requires firms to use unverifiable fair-value estimates to determine goodwill impairments. Standard setters suggest managers will use the discretion given by such estimates to convey private information on future cash flows, while agency theory predicts managers will use the discretion opportunistically. We test these alternative hypotheses using a sample of firms with market indications of goodwill impairment (firms with book goodwill and two successive years of book-to-market ratios above one). We find non-impairment of goodwill is increasing in firm characteristics predicted to be associated with greater managerial discretion. We also find evidence that the discretion is being used in a manner consistent with agency-based predictions. The evidence does not confirm managerial discretion is being used to convey private information.
55 pages

We analyze platform competition for content in the presence of strategic interactions between content distributors and content providers. We provide a model of bargaining and price competition within these industries, and show that whether or not a piece of content ends up exclusive to one platform depends crucially on whether or not the content provider maintains control over the pricing of its own good. If the content provider sells its content outright and relinquishes control over its price, the content will tend to be exclusive unless there are sufficient market expansion effects. On the other hand, if the content provider maintains control of its pricing, the strategic interaction between prices set by the content provider and by the platforms leads to a non-monotonic relationship between exclusivity and content quality: both high and low quality content will multihome and join both platforms, but there will be a range of content that will maintain exclusivity despite foreclosing itself from selling to a portion of the market. In addition, we show that contrary to standard results on double marginalization and pricing of complementary goods, a platform who already has exclusive access to content may prefer to relinquish control over pricing of that content and the associated revenues to the content provider as a result of the incentive to reduce price competition at the platform level.
32 pages

This paper examines how a company sets out to build an operations-based advantage. In particular, we investigate the implementation of a lean operating system at an Indian software services firm. By studying the attempted introduction and impact of lean management techniques in a non-manufacturing setting we move beyond the artifacts and gain insight into the principles that may lead to improved performance. Combining a detailed case study and empirical analysis we document the internal processes that the lean initiative influences. We find that lean projects perform better than the non-lean projects in our sample in many, but not all cases. Building on this result we see that the impact of the techniques on problem solving, coordination, and standardization of work improve the way that the firm learns as well as its productivity. We also gain insight into what elements do not translate well from manufacturing and what challenges exist in a unique setting, such as this.
34 pages

We develop a model that, at the aggregate level, is similar to the one sector neoclassical growth model, while, at the disaggregate level, has implications for the path of observable measures of technology adoption. We estimate our model using data on the diffusion of 15 technologies in 166 countries over the last two centuries. We evaluate the implications of our estimates for aggregate TFP and per capita income. Our results reveal that, on average, countries have adopted technologies 47 years after their invention. There is substantial variation across technologies and countries. Over the past two centuries, newer technologies have been adopted faster than old ones. The cross-country variation in the adoption of technologies accounts for at least a quarter of per capita income differences.
48 pages

Our paper describes inventory trends for both public and private U.S. firms in six retail segments between 1993 and 2005. This period coincided with the deployment of large-store formats, multiple store formats and extensive channel blurring in the U.S. retail industry. Our analysis is based on aggregate segment-level data from the Annual Retail Trade Survey (ARTS), the Monthly Retail Trade Survey (MRTS), and the U.S. Bureau of the Census end-of-month inventory survey. We find that the end-of-month inventory significantly increased in four of the six retail segments studied and that, after controlling for sales and macroeconomic factors, the positive time trends for the end-of-month inventory remained significant. Though all categories of macroeconomic factors investigated were found to be significant for at least one segment, only consumer price index, personal savings rate, and real gross domestic product were strongly significant. To explore further the dynamics of the segments and to provide an explanation for the increasing inventory trends, we examined the relationships between inventory, gross profit dollars, and gross margin return on inventory. We find that inventory is positively correlated to gross profit dollars but negatively correlated to gross margin return on inventory. This supports a potential explanation: Inventory trends may reflect the use of higher inventory levels by retailers to drive increased profits but with overall reduced gross profitability returns on the inventory investment. These results support the notion that the increased deployment of large-store, multiple store formats and the strategy of channel blurring by retailers, have generally increased both inventory levels and gross profit dollars across retail segments.
33 pages

    A variety of academic work argues a relationship exists between the structure of a development organization and the design of the products that this organization produces. Specifically, products are often said to "mirror" the architectures of the organizations from which they come. This dynamic occurs because an organization's problem solving routines and normal patterns of communication tend to constrain the space of designs within which it searches for new solutions. Such a link, if confirmed empirically, would be important, given that product architecture has been shown to be an important predictor of product performance, product variety, process flexibility and industry evolution.
    We explore this relationship in the software industry by use of a technique called Design Structure Matrices (DSMs), which allows us to visualize the architectures of different software products and to calculate metrics to compare their levels of modularity. Our research takes advantage of a natural experiment in this industry, where products exist that fulfill the same function, but that have been developed using very different organizational modes — specifically, open source versus closed source development. We use DSMs to analyze a sample of matched-pair products — products that perform the same function but that have been developed via these contrasting modes of organization.
    Our results reveal significant differences in modularity, consistent with a view that larger, more distributed teams tend to develop products with more modular architectures. Furthermore, the differences between systems are substantial — the pairs we examine vary by a factor of eight, in terms of the potential for a design change to propagate to other system components. We conclude by highlighting some implications of this result for both innovating managers, as well as researchers in the field. We also assess how future work in this area might proceed, based upon these first steps in measuring "design."
33 pages

Drawbacks of existing procedures are illustrated and a method of efficient fair division is proposed that avoids them. Given additive participants' utilities, each item is priced at the geometric mean (or some other function) of its two highest valuations. The utilities are scaled so that the market clears with the participants' purchases proportional to their entitlements. The method is generalized to arbitrary bargaining sets and existence is proved. For two or three participants, the expected utilities are unique. For more, under additivity, the geometric mean separates the prices where uniqueness holds and where it fails; it holds for the geometric mean except in one case where refinement is needed.
28 pages

Many consumers have had the experience of entering discount membership clubs to make a few purchases, only to leave with enough pasta to outlast a nuclear winter. We suggest that the presence of membership fees can lead consumers to infer a "fees → savings" link, spurring them to increase their spending independent of the actual savings afforded by such clubs. Using both field data and studies in which we created our own "membership clubs," we show that 1) fees serve as a signal of price discounts, such that stores that charge fees are perceived as offering better deals for identical items; 2) the presence of fees can increase consumer spending and overall store profitability; and 3) the presence of fees can drive choice of retail outlets, such that stores with membership fees are more popular even when they offer the same goods at the same prices as stores without fees.
32 pages

In much of the developing world, many farmers grow crops for local or personal consumption despite export options which appear to be more profitable. Thus many conjecture that one or several markets are missing. We report here on a randomized controlled trial conducted by DrumNet in Kenya that attempts to help farmers adopt and market export crops. DrumNet provides smallholder farmers with information about how to switch to export crops, makes in-kind loans for the purchase of the agricultural inputs, and provides marketing services by facilitating the transaction with exporters. The experimental evaluation design randomly assigns pre-existing farmer self-help groups to one of three groups: (1) a treatment group that receives all DrumNet services, (2) a treatment group that receives all DrumNet services except credit, or (3) a control group. After one year, DrumNet services led to an increase in production of export oriented crops and lower marketing costs; this translated into household income gains for new adopters. However, one year after the study ended, the exporter refused to continue buying the cash crops from the farmers because the conditions of the farms did not satisfy European export requirements. DrumNet collapsed in this region as farmers were forced to sell to middlemen and defaulted on their loans. The risk of such events may explain, at least partly, why many seemingly more profitable export crops are not adopted.
40 pages

Objective. To link safety related concerns raised by frontline staff about hospital work systems (operational failures) to the safety and efficiency of hospitals, and to contrast these concerns with national patient safety initiatives.
Data Sources. Primary data include semi structured interviews with frontline staff and 1732 staff identified operational failures at 20 U.S. hospitals from 2004-2006.
Study Design. Senior level managers observed frontline staff work with particular attention to patient safety issues and facilitated open discussion meetings with employees about their safety related concerns.
Data Collection. Hospitals submitted data on the operational failures they identified through their interactions with frontline workers. Data were analyzed for type of failure and frequency of occurrence. Interviews were conducted with frontline staff.
Principal Findings. The two most frequent categories of operational failures, equipment/supplies and facility issues, posed safety risks and diminished staff efficiency, but have not been priorities in national initiatives.
Conclusions. Our study suggests an underutilized strategy for improving patient safety and staff efficiency: leveraging frontline staff experiences with work systems to identify and remove operational failures. In contrast to the perceived tradeoff between safety and efficiency, fixing operational failures can yield benefits for both. Thus, prioritizing improvement of work systems in general, rather than focusing more narrowly on specific clinical conditions, can increase safety and efficiency of hospitals.
30 pages

The Future of Social Enterprise considers the confluence of forces that is shaping the field of social enterprise, changing the way that funders, practitioners, scholars, and organizations measure performance. We trace a growing pool of potential funding sources to solve social problems, much of it stemming from an intergenerational transfer of wealth and new wealth from financial and high-tech entrepreneurs. We examine how these organizations can best access the untapped resources by demonstrating mission performance and then propose three potential scenarios for how this sector might evolve:

Consolidation: In this scenario, funding will keep growing in a gradual, linear fashion and organizations will compete for resources by demonstrating performance. The sector will consolidate, with some efficient organizations gaining scale, some merging and then growing, and some failing to achieve either scale or efficiency and eventually shutting down.
Entrepreneurial: In a more optimistic future, existing and new enterprises will apply strategies to achieve and demonstrate performance, improving efficiency and effectiveness and attracting new funding sources. More organizations will enter a reformed, competitive field of social change with new entrepreneurial models, established traditional organizations, and innovative funding strategies fueling widespread success.
Expressive: Rather than focusing exclusively on performance, funders and organizations may view their investment as an expressive civic activity. As much value is placed on participating in a cause as on employing concrete measures of impact or efficiency. In this scenario, funding will flow as social entrepreneurs experiment with new models based on a range of individual priorities and relationships.
10 pages

We propose a two-level-game (Putnam, 1988) perspective on gender in job negotiations. At Level 1, candidates negotiate with the employers. At Level 2, candidates negotiate with domestic partners. In order to illuminate the interplay between these two levels, we review literature from two separate bodies of literature. Research in psychology and organizational behavior on candidate-employer negotiations sheds light on the effects of gender on Level 1 negotiations. Research from economics and sociology on intra-household bargaining elucidates how negotiations over the allocation of domestic labor at Level 2 influence labor force participation at Level 1. In conclusion, we integrate practical implications from these two bodies of literature to propose a set of prescriptive suggestions for candidates to approach job negotiations as a two-level game and to minimize disadvantageous effects of gender on job negotiation outcomes.
31 pages

Although observers of human behavior have long been aware that people regularly struggle with internal conflict when deciding whether to behave responsibly or indulge in impulsivity, psychologists and economists did not begin to empirically investigate this type of want/should conflict until recently. In this paper, we review and synthesize the latest research on want/should conflict, focusing our attention on the findings from an empirical literature on the topic that has blossomed over the last 15 years. We then turn to a discussion of how individuals and policy makers can use what has been learned about want/should conflict to help decision makers select far-sighted options.
50 pages

We examine long-horizon stock returns around hedge fund activism in a comprehensive sample of 13D filings by portfolio investors between 1993 and 2006. Abnormal returns surrounding investor activism are high for the subset of targets that are acquired ex-post, but not detectably different from zero for targets that remain independent a year after the initial activist request. Announcement returns show a similar pattern. Firms that are targeted by activists are more likely to get acquired than those in a control sample. We argue that the combination of hedge funds' short investment horizons and their large positions in target firms makes M&A the only attractive exit option. The results also suggest that hedge funds may be better suited to identifying undervalued targets and prompting a takeover, than at engaging in long-term corporate governance or operating issues.
50 pages

In making strategic decisions about how to capture value from innovation, managers often look at two critical domains-the intellectual property environment and the architecture of the industry-as beyond their control. Yet, the intellectual property environment and the architecture of the industry can have profound influences on who wins (and who does not) from innovation. In this paper, we argue that under the right circumstances, these two domains can be shaped by managers in ways that favor one firm over another. By understanding these forces, managers will be in a better position to utilize the full tool kit of available mechanisms (and strategies) to capture value from innovation. Perhaps somewhat surprisingly, we show that more IP protection and building stronger barriers around innovation are not always the best path to capturing value. Paradoxically, innovators can sometimes benefit by weakening the intellectual property environment and opening the architecture of the industry. In this article we explain why and how. We also show how management can shape the architecture of the industry in ways that have consequences for the distribution of profits amongst firms in an industry.
38 pages

Sociologists have extensively documented that networks influence market exchange through improved matching and vouching. In this paper, I propose that networks can also blunt the signal of market participation, as actors who are on the market surrounded by their network are pooled together with those who use their networks for other reasons. To control the clarity of that signal, actors would like to choose strategically whether to appear with their networks on the market. However, reality puts restrictions on their ability to do so. On-line social networks, where actors can always appear with their networks, alleviate these restrictions and make the pooling effect stronger. The consequences of greater pooling on-line differ by exchange type. For example, they are positive for actors who are looking for a job, but are already employed, and so cannot be seen as looking. By pooling themselves with actors who are using on-line networks to utilize their social capital better, the employed job seekers can be on the market, while claiming that they are not. However, the greater pooling has negative consequences for actors who are single and earnestly looking for a spouse. In this market, it is important to signal capacity for commitment, so greater pooling of those who are there only for their friends with those who are ready to commit works against the latter. Data used to derive these arguments come from an extensive qualitative research project with various on-line social networks, recruiters, employees, as well as those who are looking for a job or for a relationship.
45 pages

    Much academic work asserts a relationship between the design of a complex system and the manner in which this system evolves over time. In particular, designs which are modular in nature are argued to be more "evolvable," in that these designs facilitate making future adaptations, the nature of which do not have to be specified in advance. In essence, modularity creates "option value" with respect to new and improved designs, which is particularly important when a system must meet uncertain future demands.
   Despite the conceptual appeal of this research, empirical work exploring the relationship between modularity and evolution has had limited success. Three major challenges persist: first, it is difficult to measure modularity in a robust and repeatable fashion; second, modularity is a property of individual components, not systems as a whole, hence we must examine these dynamics at the microstructure level; and third, evolution is a temporal phenomenon, in that the conditions at time t affect the nature of the design at time t+1, hence exploring this phenomenon requires longitudinal data.
   In this paper, we tackle these challenges by analyzing the evolution of a successful commercial software product over its entire lifetime, comprising six major "releases." In particular, we develop measures of modularity at the component level, and use these to predict patterns of evolution between successive versions of the design. We find that modularity has a strong and unambiguous impact on design evolution. Specifically, we show that i) tightly-coupled components are "harder to kill," in that they have a greater likelihood of survival in subsequent versions of a design; ii) tightly-coupled components are "harder to maintain," in that they experience more surprise changes to their dependency relationships that are not associated with new functionality; and iii) tightly-coupled components are "harder to augment," in that the mix of new components added in each version is significantly more modular than the legacy design.
36 pages

In this paper we examine the economic consequences of over 150 shareholder proposals to expense employee stock options (ESO) submitted during the proxy seasons of 2003 and 2004 - the first case where the SEC has allowed an accounting matter to be subject to an advisory vote at an annual meeting. We find evidence suggesting that ESO expensing shareholder proposals affected accounting and compensation choices. With respect to accounting choices, we find that: (i) targeted firms were more likely to adopt ESO expensing relative to a control sample of S&P 500 firms, (ii) within targeted firms, the likelihood of adoption increases in the degree of voting support for the proposal; (iii) non-targeted firms were more likely to adopt ESO expensing when a peer firm was targeted by a proposal. With respect to the effect on compensation practices, we find that: (i) targeted firms where the proposal was approved experienced a decrease in the level of CEO compensation relative to the control sample of S&P 500 firms; (ii) within targeted firms, the degree of voting support for the proposal was associated with a decrease in the level of CEO compensation and a decrease in the use of ESO in CEO compensation.
50 pages

Front-line staff possess immense functional and experiential knowledge from which their organizations can benefit. This premise has led to widespread promotion of collaboration - among front-line staff and between staff and managers - as a strategy to integrate front-line staff knowledge for performance improvement. Collaboration refers to individuals working together to achieve a common goal via information-sharing, joint decision-making, and coordination of activities. In contrast to prior work, we distinguish forms of collaboration by three organizational goals - unit management, routine production, and process improvement, and examine whether collaboration for these different goals has different effects on performance. This paper reports on a longitudinal study of 23 neonatal intensive care units (NICUs) in a structured, quality improvement program. We test the relationship between collaboration within the NICU and improvement in patient outcomes, as measured by risk-adjusted infant mortality (n=1061). The effects of collaboration vary by goal. Collaboration in unit management increases the chance of mortality, while collaboration in routine production and in process improvement are associated with a reduced chance of mortality. The implications of these findings for research on organizational learning, human resource management and operations management are discussed.
33 pages

Co-locating knowledge workers from different disciplines may be a necessary but insufficient step to generating multidisciplinary knowledge. We explore the role of assumptions underlying knowledge creation within the field of organizational studies, and investigate how incompatible assumptions across subgroups may inhibit the generation of multidisciplinary knowledge. While organizational studies research commonly assumes dynamic open systems with recursive influence between environments and interactions, studies of micro-processes in organizations often assume implicitly that interactions among organizational members are closed systems. We suggest that this incompatibility between assumptions may inhibit knowledge sharing in organizational studies research. We empirically assess this assertion by analyzing studies of negotiation published in top peer-reviewed management, psychology, sociology, and industrial relations journals from 1990 to 2005. Our findings illuminate a continuum of open-systems to closed-systems assumptions underlying this micro-process research. Analysis of the rate of citation of the articles in our data set by non-negotiation organizational studies research reveals that open systems assumptions increase the likelihood that a negotiation article will be cited in organizational studies, after controlling for other known effects on citation rate, such as outlet, discipline, length, number of citations and methodology. Our findings suggest that multidisciplinary fields can enhance their knowledge sharing by attending to the compatibility of assumptions held by sub-groups within the field.
37 pages

Over the past decade, one of the most important developments in the corporate loan market has been the increasing participation of institutional investors in lending syndicates. As lenders, institutional investors routinely receive private information about borrowers. However, most of these investors also trade in public securities. This leads to a controversial question: do institutional investors use private information received in the loan market to trade in public securities? In this paper, we examine the stock trading of institutional investors that also hold loans in their portfolio. Specifically, we look at the abnormal returns on stock trades following loan renegotiations. By collecting SEC filings of loan amendments, we are able to identify institutional investors that had access to private information disclosed by the borrower during loan renegotiations. Our results indicate that institutional managers that participate in loan renegotiations consequently trade in stock of the same company and outperform other managers by approximately 8.8% in annualized terms in the month following loan renegotiation.
46 pages

In recent studies, the success rate of software development projects has been found to be low (about 29%). The majority of the challenges can be traced back to the requirements engineering workflow (RE). Although it is widely acknowledged that the difficulties faced in RE are multifarious, recent research has primarily focused on limited factors. This ongoing research project addresses this limitation by integrating the fields of social and organizational psychology, organizational behavior, and software engineering. The primary goals are to (a) develop and validate an interdisciplinary multidimensional model, which focuses on the complex interrelationships among requirements workflow related risk factors, individual, team and organizational competencies, software processes, techniques, tools, and requirements workflow success and (b) develop a set of instruments to assess RE risk factors and to design, evaluate, and apply effective measures to mitigate those risks. The data collection consists of interviews with RE experts and other experienced practitioners (e.g., managers, business and technical people) in eight major North American and European financial services companies as well as an international internet survey in collaboration with journals and organizations. The present paper gives an overview of the initial findings of 61 interviews and highlights some of the key factors.
12 pages

We use a new firm level data set that establishes the location, ownership, and activity of 650,000 multinational subsidiaries-close to a comprehensive picture of global multinational activity. A number of patterns emerge from the data. Most foreign direct investment (FDI) occurs between rich countries. The share of vertical FDI (subsidiaries which provide inputs to their parent firms) is larger than commonly thought, even within developed countries. More than half of all vertical subsidiaries are only observable at the four-digit level because the inputs they are supplying are so proximate to their parent firms' final good that they appear identical at the two-digit level. We call these proximate subsidiaries 'intra-industry' vertical FDI and find that their location and activity are significantly different to the inter-industry vertical FDI visible at the two-digit level. These subsidiaries are not readily explained by the comparative advantage considerations in traditional models, where firms locate their low skill production stages abroad in low skill countries to take advantage of factor cost differences. We find that overwhelmingly, multinationals tend to own the stages of production proximate to their final production giving rise to a class of high-skill intra-industry vertical FDI.
33 pages

Combining new, hand-collected data with a widely studied dataset, we examine how firms use marketing actions to manage reported earnings.

In contrast to prior literature that suggests firms reduce marketing expenditures in order to boost reported earnings, we find that soup manufacturers roughly double the frequency of all marketing promotions (price discounts, feature advertisements, and aisle displays) at the fiscal year-end and that they engage in similar behavior following periods of poor financial performance. In addition to offering promotions more frequently, we find that firms offer deeper price discounts to manage earnings during these periods.

Furthermore, our results confirm managers' stated willingness to sacrifice long-term value in order to smooth earnings (Graham, Harvey and Rajgopal, 2005). We estimate that marketing actions can be used to boost quarterly net income by up to 20% depending on the depth of promotion. But there is a price to pay, with the cost in the following period being 23.5% of quarterly net income.

Finally, a unique aspect of our research setting allows us to test who is responsible for the earnings management. While firms appear unable to increase the frequency of display promotions in the short run, they can reallocate these promotions within their portfolio of brands. We find that firms shift display promotions away from smaller revenue brands and toward larger ones following periods of poor financial performance, indicating the behavior is being driven by parties higher in the firm than the brand managers.
49 pages

A premier economist of the twentieth century and a founder of neoclassical thought, Irving Fisher was also an active participant in the field of economic forecasting. Fisher made theoretical contributions to the understanding of economic fluctuations, popularized the use of index numbers, and wrote frequently on the importance of future expectations to businesspeople. He also published forecasts through syndicated newspaper columns and made public pronouncements on the future of the economy-including a notorious statement on the eve of the October 1929 stock-market crash that optimistically predicted that a new high "plateau" for stock prices had been reached. Despite Fisher's poor prediction on that occasion, he played a neglected, but significant role in the growth of the forecasting industry and in the rise of a class of early business analysts.
55 pages

The early development of large multidivisional corporations in Latin America required much more than capable managers, new technologies, and large markets. Behind such corporations was a market for capital in which entrepreneurs had to attract investors to buy either debt or equity. This paper examines the investor protections included in corporate bylaws that enabled corporations in Brazil to attract investors in large numbers, thus generating a relatively low concentration of ownership and control in large firms before 1910. Archival evidence such as company statutes and shareholder lists document that in many Brazilian corporations voting rights provisions, in particular, maximum vote provisions and graduated voting scales (that provided for less than proportional votes as shareholdings increase), balanced the relative voting power of small and large investors. In companies with such provisions the concentration of ownership and control is shown to have been significantly lower than in the average company. Overall, from the sample of Brazilian companies studied it seems like the concentration of control was significantly lower before 1910 than what it is today.
39 pages

This paper explores how "learning" occurs in the context of environmental policy formulation and implementation. Rather than viewing policy learning as a rational and technocratic process, the emphasis here is on the political and institutional contexts within which opportunities for policy learning emerge. In particular, opportunities for policy learning are examined with respect to: a) agenda or priority-setting on environmental issues; b) stakeholder access and representation in policy formulation; and c) accountability in implementation. Examples are drawn from the experiences of South Africa and Brazil. Several preliminary factors are identified that may enhance policy learning, while acknowledging the constraints of bounded rationality and relationships of power.
39 pages

We provide new evidence on the success of long-run risks in asset pricing by focusing on the risks borne by stockholders. Exploiting micro-level household consumption data, we show that long-run stockholder consumption risk better captures cross-sectional variation in average asset returns than aggregate or non-stockholder consumption risk, and provides more plausible economic magnitudes. We find that risk aversion estimates around 10 can match observed risk premia for the wealthiest stockholders across sets of test assets that include the 25 Fama and French size and value portfolios, the market portfolio, bond portfolios, and the entire cross-section of stocks
71 pages

We study the effect of small windfalls on consumer spending decisions by comparing the purchases online grocery customers make when redeeming $10-off coupons with the purchases they make without coupons. Controlling for customer fixed effects and other variables, we find that grocery spending increases by $1.59 when a $10-off coupon is redeemed. The extra spending associated with coupon redemption is focused on groceries that a customer does not typically buy. These results are consistent with the theory of mental accounting but are not consistent with the standard permanent income or lifecycle theory of consumption. While the hypotheses we test are motivated by mental accounting, we also discuss some alternative psychological explanations for our findings.
33 pages

Background
Research over the last several decades indicates the failure of existing nutritional labels to substantially improve the healthiness of consumers' food and beverage choices. The obstacle for policy-makers is to encapsulate a wide body of scientific knowledge into a labeling scheme that is also comprehensible to the average shopper. Here, we describe our method of developing a nutrition metric to fill this void.

Methods
We asked leading nutrition experts to rate the healthiness of 205 sample foods and beverages, and after verifying the similarity of their responses, generated a model that calculates the expected average healthiness rating that experts would give to any other product based on its nutrient content.

Results
The form of the model is a linear regression that places weights on 12 nutritional components (total fat, saturated fat, cholesterol, sodium, total carbohydrate, dietary fiber, sugars, protein, vitamin A, vitamin C, calcium, and iron) to predict the average healthiness rating that experts would give to any food or beverage. We provide sample predictions for other items in our database.

Conclusions
Major benefits of the model include its basis in expert judgment, its straightforward application, the flexibility of transforming its output ratings to any linear scale, and its ease of interpretation. This metric serves the purpose of distilling expert knowledge into a form usable by consumers so that they are empowered to make healthier decisions.
27 pages

This paper constructs a unified theory of the location of transactions and the boundaries of firms. It proposes that systems of production can be viewed as networks of tasks. Transactions, defined as mutually agreed-upon transfers with compensation, are located within the task network and serve to separate one set of tasks from another. Placing a transaction in a particular location in turn requires work to define, count (or measure), and pay for the transacted objects. The costs of this work (labeled mundane transaction costs) are generally low at module boundaries and high in their interiors.
Several novel implications arise from this work. Among these: Modularizations create new module boundaries, hence new transaction locations where entry and competition can arise. Areas in the task network where transfers are dense and complex should not be modularized. Instead these areas should be located in transaction-free zones so that the costs of transacting do not overburden the system. The boundaries of transaction-free zones constitute breakpoints where firms and industries may split apart.
58 pages

We present three studies demonstrating that outcome information biases ethical judgments of others' ethically questionable behaviors. In particular, we show that the same behaviors produce more ethical condemnation when they happen to produce bad than good outcomes, even if the outcomes are largely determined by chance. Our studies show that individuals judge behaviors as less ethical, more blameworthy and to be punished more harshly when such behaviors led to undesirable consequences, even if they saw those behaviors as acceptable before they knew its consequences. Furthermore, our results demonstrate that a rational, analytic mindset can override the effects of one's intuitions in ethical judgments. Implications for both research and practice are discussed.
41 pages