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• Working Paper | HBS Working Paper Series | 2018

  The Impact of Pensions and Insurance on Global Yield Curves

  Robin Greenwood and Annette Vissing-Jorgensen

  We document a strong effect of pension and insurance company (P&I) assets on the long end of the yield curve. Using data from 26 countries, the yield spread between 30-year and 10-year government bond yields is negatively related to the ratio of pension assets (in funded and private pension and life insurance arrangements) to GDP, suggesting that preferred-habitat demand by the P&I sector for long-dated assets drives the long end of the yield curve. We draw on changes in regulations in several European countries between 2008 and 2013 to provide well-identified evidence on the effect of the P&I sector on yields and to show that P&I demand is in part driven by hedging linked to the regulatory discount curve. When regulators reduce the dependence of the regulatory discount curve on a particular security, P&I demand for the security falls and its yield increases. We describe settings in which pension discount rules can have a destabilizing impact on bond markets.

  Keywords: pension funds; Investment Funds; Insurance; Assets; Interest Rates; Bonds;

  Citation:

  Greenwood, Robin, and Annette Vissing-Jorgensen. "The Impact of Pensions and Insurance on Global Yield Curves." Harvard Business School Working Paper, No. 18-109, June 2018.  View Details

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• Working Paper | HBS Working Paper Series | 2018

  Learning to Become a Taste Expert

  Kathryn A. Latour and John A. Deighton

  Evidence suggests that consumers seek to become more expert about hedonic products to enhance their enjoyment of future consumption occasions. Current approaches to becoming an expert center on cultivating an analytic mindset. In the present research the authors explore the benefit to enthusiasts of moving beyond analytics to cultivate a holistic style of processing. In the taste context the authors define holistic processing as non-verbal, imagery based, and involving narrative processing. The authors conduct qualitative interviews with taste experts (Master Sommeliers) to operationalize the holistic approach to hedonic learning, and then test it against traditional analytic methods in a series of experiments across a range of hedonic products. The results suggest that hedonic learning follows a sequence of stages whose order matters and that the holistic stage is facilitated by attending to experience as a narrative event and by employing visual imagery. The results of this multi-method investigation have implications for both managers and academics interested in how consumers learn to become expert in hedonic product categories.

  Keywords: hedonic; wine; learning; expertise; holistic; analytic; sensory; taste; Learning; Experience and Expertise; Analysis; Perception;

  Citation:

  Latour, Kathryn A., and John A. Deighton. "Learning to Become a Taste Expert." Harvard Business School Working Paper, No. 18-107, June 2018.  View Details

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• Case | HBS Case Collection | January 2013 (Revised May 2018)

  Amazon, Apple, Facebook, and Google 2018

  John Deighton, Leora Kornfeld, John Deighton and Leora Kornfeld

  Four businesses had, by 2012, grown to dominate the infrastructure that all firms rely on to reach online customers. Will the balance of power among the four persist, will one take command at the expense of the other three, or are all four more vulnerable than they seem to outside forces? What are the implications for the pace at which consumers go online? Amara's Law claims that we tend to overestimate change in the short run, and underestimate it in the long run.

  Keywords: Online Technology; Internet; Competitive Advantage; Infrastructure; Mobile Technology; Growth and Development; Service Industry; Retail Industry; United States;

  Citation:

  Deighton, John, and Leora Kornfeld. "Amazon, Apple, Facebook, and Google 2018." Harvard Business School Case 513-060, January 2013. (Revised May 2018.) (request a courtesy copy.)  View Details

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