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Health Policy (Management)

Maryaline Catillon

Abstract:
The Payoff for Good Science: Incentives to Meet Drug Trial Standards in Academia and Industry
Valid and rigorous scientific research is critical to informed decisions in healthcare. Yet, many published clinical trials do not meet consensus scientific standards. This paper explores why by studying academic and industry scientists' incentives to adequately randomize, blind and report results in drug trials. To compare the payoffs from adequate and inadequate trials addressing exactly the same question, I assembled a database combining scientific methods, experimental results, scientific impact, bibliometric information and funding for 23,321 drug trials published between 1990 and 2018, and assessed in Cochrane Reviews. I estimate the effect of meeting six scientific standards on three outcomes: the direction and significance of experimental results; the impact factor of publication journal and number of citations the paper receives; and a citation-weighted measure of market expanding scientific evidence. I reach three main results. First, scientific standards are critical to experimental results of drug trials: increasing numbers of inadequacies increase the probability of a positive result by 7% per inadequacy. Second, good science yields higher academic prestige: each inadequacy yields a 10% penalty in impact factor. Third, articles with more inadequacies are not different in evidence supporting drug sales. Thus, individual scientists benefit marginally from more scientifically accurate studies, while pharmaceutical companies that support such trials do not. Journal editors and regulators may need to strengthen incentives to meet scientific standards in drug trials. In the meantime, healthcare decision makers and patients need to be wary of inadequate drug trials supporting adoption.
Faculty Advisor(s): D.Cutler (Chair), R.Freeman, and A. Stern
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Philip Saynisch

Abstract:
Decomposing Volume’s Impact on Judgment and Skill: Lessons from Kidney Transplantation (with R. Huckman and N. Trichakis)
In markets for credence goods, such as medical care, suppliers act as not only as providers but also as expert advisors: they diagnose a buyer’s need for a service (i.e., judgment) before providing it (i.e., skill). This dual role of the supplier introduces a crucial complication to learning-by-doing explanations of the volume-outcome relationship, as the observed improvements in outcomes may result from better decision-making or better execution. This paper aims to explore an area of medicine - kidney transplantation - where clinical judgment and surgical skill are clearly delineated and separately observable. We find that greater lagged volume for a given transplant center is predictive of lower rates of organ offer acceptance across the spectrum of organ quality. To assess center performance, we evaluate outcomes along two dimensions following decisions to refuse an offered organ: (1) whether the potential recipient accepted a better-quality organ within one year of a refusal and (2) whether the potential recipient died or was removed from the transplant waitlist for medical reasons within one year of a refusal. We find that larger centers perform worse on both dimensions. We then assess how volume relates to post-surgical outcomes and find evidence of reduced rates of post-transplant death or graft failure within one year at larger transplant centers. This tension between improved skill and reduced judgment quality implies that practice may not make perfect in the context of complex medical care. Experience may need to be supplemented with decision support or other tools to improve outcomes.
Faculty Advisor(s): R. Huckman (Chair), G. David, and A. Stern
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Lauren Taylor

Abstract:
Accepting Tainted Funds: The Especially Difficult Case of Non-Profits
Non-profits are attracting substantial negative attentions for decisions to accept money from donors accused of wrongdoing. For non-profits, the challenge of deciding under what conditions to accept donated resources fits into a general class of ethical problems related to the lengths economic actors should go to maintain morally clean hands. I describe the unique features of non-profit organizations that make this case particularly vexing and provide a framework by which non-profits can evaluate donations. I argue that donations that violate the Wrongful Benefit Principle should be rejected on the basis that to accept would be intrinsically wrong. Other donations should be evaluated based on a Logic of Double Effect.
Faculty Advisor(s): D.Cutler, N. Hsieh, C.Winship, and M.Kruk
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Marketing

Dafna Goor

Abstract:
The Impostor Syndrome from Luxury Consumption
The present research proposes that luxury consumption can be a double-edged sword: while luxury consumption yields status benefits, it can also make consumers feel inauthentic, because consumers perceive it as an undue privilege. As a result, paradoxically, luxury consumption may backfire and lead consumers to behave less confidently due to their undermined feelings of self-authenticity. Feelings of inauthenticity from luxury consumption are less pronounced among consumers with high levels of chronic psychological entitlement, and they are reduced when consumers’ sense of entitlement is temporarily boosted. The effects are robust across studies conducted in the lab and in field settings such as the Metropolitan Opera, Martha’s Vineyard, a luxury shopping center, and the Upper East Side in New York, featuring relevant consumption contexts and participant populations including luxury target segments.
Faculty Advisor(s): A.Keinan (Co-Chair), M. Norton (Co-Chair), C.Morewedge, and J. Gourville
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Organizational Behavior

Yanhua Bird

Abstract:
Strategic Downward Selection: Evidence from a Peer-to-peer Platform Market
Contrary to the general view that market participants seek exchange partners with superior market standing for materials, information, and visibility, this article posits that in some markets in which one’s success depends almost entirely on counterparties’ evaluations—a rarely considered situation in the literature of exchange partner selection—they may seek partners with inferior standing. I propose that concerns regarding evaluations—that will be made by one’s exchange partners after transactions— influence whom one chooses to transact with at the outset. Specifically, market participants infer exchange partners’ evaluation standards from their relative market standing. Comparing themselves with their prospective partners, they anticipate that those with higher market standing are likely to have higher evaluation standards that can be difficult to meet. To reduce evaluation anxiety, they therefore seek partners with inferior standing who are more likely to be satisfied with their offerings and provide positive evaluations. I test these ideas using data on a peer-to-peer lodging platform market in which evaluations are crucial and all participants list their own homes, making it an ideal testing ground. Analysis of user transaction data and interview data strongly supports my prediction: instead of choosing guests with nicer or equivalent homes, a host is more inclined to approve requests from prospective guests with inferior homes. This is more pronounced when the host had recently experienced a decrease in ratings such that the host’s evaluation anxiety is heightened, and when the host is familiar with the comparison group, such as domestic guests, so social comparison is easier. This study contributes to theories of exchange partner selection, evaluation, and commensuration and advances the literature on peer-to-peer economies.
Faculty Advisor(s): J. Battilana (Chair), Y. Lei, C. Marquis, and M. Toffel
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Karen Huang

Abstract:
Veil-of-ignorance Reasoning Favors the Greater Good
The “veil of ignorance” is a moral reasoning device designed to promote impartial decision-making by denying decision-makers access to potentially biasing information about who will benefit most or least from the available options. Veil-of-ignorance reasoning was originally applied by philosophers and economists to foundational questions concerning the overall organization of society. Here we apply veil-of-ignorance reasoning in a more focused way to specific moral dilemmas, all of which involve a tension between the greater good and competing moral concerns. Across six experiments (N = 5,690), three pre-registered, we find that veil-of-ignorance reasoning favors the greater good. Participants first engaged in veil-of-ignorance reasoning about a specific dilemma, asking themselves what they would want if they did not know who among those affected they would be. Participants then responded to a more conventional version of the same dilemma with a moral judgment, a policy preference, or an economic choice. Participants who first engaged in veil-of-ignorance reasoning subsequently made more utilitarian choices in response to a classic philosophical dilemma, a medical dilemma, a real donation decision between a more vs. less effective charity, and a policy decision concerning the social dilemma of autonomous vehicles. These effects depend on the impartial thinking induced by veil-of-ignorance reasoning and cannot be explained by a simple anchoring account, probabilistic reasoning, or generic perspective-taking. These studies indicate that veil-of-ignorance reasoning may be a useful tool for decision-makers who wish to make more impartial and/or socially beneficial choices.
Faculty Advisor(s): A. Brooks, M. Bazerman, J. Greene, and M. Norton
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Jeffrey Lees

Abstract:
Moral mind reading: The accuracy of meta-perception and motive attribution in contexts of immoral behavior
Across two actor and four observer samples we assess the accuracy of actor meta-perception and observe motive-attribution in contexts of immoral behavior. We examine the extent to which immoral actors can accurately predict the moral motive attributions third-party observers will make of their behavior, and the extent to which observers can accurately predict the self-reported motives of immoral actors. Using a direct approach where we solicit instances of immoral behavior and accompanying motives and meta-motives, we find that immoral actors have low levels of meta-perceptive accuracy, whereas observers have low to moderate levels of accuracy in judging the self-reported motives of immoral actors. Further componential analyses of judgment accuracy reveal differential levels of accuracy across motive-valence for both actors and observers, and systematic directional biases in judgments of emotional motives across actors and observers. Accuracy is also positively moderated by trait empathic-concern and cognitive ability, and negatively moderated by trait Machiavellianism and propensity for workplace deviance.
Faculty Advisor(s): F. Gino, M.Cikara, and A. Waytz
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Strategy

Hyunjin Kim

Abstract:
The Value of Competitor Information: Evidence from a Field Experiment
Understanding the competitive environment is considered central to strategic decision-making, but growing evidence suggests that firms may lack knowledge about their competitors even when the costs to acquiring it are low. Is competitor information not as valuable as theorized? I empirically explore this question by running a field experiment in collaboration with Yelp across 3,218 businesses in the personal care industry, where treatment firms receive easily accessible information on their nearby competitors’ prices. I find that over 46% of firms are not aware of their competitors’ prices prior to receiving information. However, once firms receive competitor information, they are 17% more likely to change their prices and do so in performance-enhancing ways, which ultimately results in higher proxies of performance. Treatment effects are larger for firms that face higher levels of competition and firms without prior experience using price promotions, suggesting that a lack of competition or capabilities to use information may not fully explain firms’ lack of knowledge. Given this large positive impact of competitor information, why had firms not invested in this information on their own? Evidence from interviews and a follow-up experiment across control firms suggest managers appear to have underestimated the value of paying attention to this information, because outdated knowledge they held falsely led them to believe they were already aware of it. These findings suggest that inattention may be a key barrier that leads firms to fail to realize gains from even readily accessible data.
Faculty Advisor(s): D. Yao (Chair), R. Henderson, M. Luca, and A. Pallais
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Technology & Operations Management

Grace Gu

Abstract:
Disintermediation in Online Marketplaces
As an intermediary improves trust between the two sides of its market to facilitate matching and transactions, it faces an increased risk of disintermediation, where customers and service providers circumvent the platform to transact directly. Using a large-scale randomized control experiment, my dissertation finds that, while improved user trust increases the likelihood of high-quality service providers being hired, it also increases disintermediation, as users have less need for the platform in future transactions. This offsets the revenue gains from hiring more high-quality sellers. These effects are stronger when both sides are geographically proximate to each other, when jobs are highly divisible, and when users have high ratings on the platform. Overall, my dissertation provides important managerial lessons on how platforms can mitigate the tension between trust-building and disintermediation.
Faculty Advisor(s): F. Zhu, S. Greenstein, and M. Iansiti
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James Sappenfield

Abstract:
The Value of Innovators to Firms: Causal Evidence on Inventor Death and Firm-Level Response
This study estimates the value of innovative human capital to the firm. To do so, it leverages the unexpected deaths of inventors as a source of exogenous variation in firms’ human capital assets. Employing event study methods, I estimate that the average inventor’s human capital accounts for approximately62% of the value of granted patents and has an asset value of approx. $3 million USD. Analyses show markets anticipate long-run costs of inventor loss. Using a differences-in-differences design, I estimate the impact of inventor death events on treated firms relative to matched control firms. The results show that, following inventor loss, the market valuation of firms’ intangible assets falls as do firms’ gross profits. Additional analyses suggest one potential cause: the loss of inventors leads to significant, lasting decreases in firm innovativeness, even among the deceased’s non-collaborator peers, and these losses likely harm firm competitiveness over the long run.
Faculty Advisor(s): S. Greenstein (Chair), P. Choudhury, and C. Stanton
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“Working with spectacular doctoral students is a real joy, and I take great pride in seeing my former students thrive as professors at the best management schools in the world.”
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Professor