Human behavior and decision-making

Human behavior and decision-making is a featured research topic at Harvard Business School.

Ever since their origins about three decades ago, the Behavioral Science areas of economics, ethics and managerial psychology have been rapidly evolving. In the 1980's and 1990's, early work by Max Bazerman in judgment and negotiation, Matthew Rabin in behavioral economics, and James Sebenius in negotiations was instrumental in shaping research on Human Behavior & Decision-Making. Today, our research focuses on individual and interactive judgment and decision making and explores the role of personal bias, cognition and learning, time, perception, ethics and morality, and emotion.

Featured Works

Book | 2014
The Power of Noticing: What the Best Leaders See
Max Bazerman
This book will examine the common failure to notice critical information due to bounded awareness. The book will document a decade of research showing that even successful people fail to notice the absence of critical and readily available information in their environment due to the human tendency to focus on a limited set of information. This work is still in its formative stages, and I welcome comments about how bounded awareness affects you and your organization and how you have created solutions to such problems.
Keywords: Interpersonal Communication; Judgments; Negotiation; Negotiation Process; Relationships;

Citation:
Bazerman, Max. The Power of Noticing: What the Best Leaders See. New York: Simon & Schuster, 2014. View Details
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Article | Psychological Science | 2014
Time, Money, and Morality
F. Gino and C. Mogilner
Money, a resource that absorbs much daily attention, seems to be present in much unethical behavior thereby suggesting that money itself may corrupt. This research examines a way to offset such potentially deleterious effects—by focusing on time, a resource that tends to receive less attention than money but is equally ubiquitous in our daily lives. Across four experiments, we examine whether shifting focus onto time can salvage individuals' ethicality. We found that implicitly activating the construct of time, rather than money, leads individuals to behave more ethically by cheating less. We further found that priming time reduces cheating by making people reflect on who they are. Implications for the use of time versus money primes in discouraging or promoting dishonesty are discussed.
Keywords: Money; Ethics;

Citation:
Gino, F., and C. Mogilner. "Time, Money, and Morality." Psychological Science 25, no. 2 (February 2014): 414–421. View Details
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Article | Journal of Experimental Psychology: General
The (Perceived) Meaning of Spontaneous Thoughts
Carey K. Morewedge, Colleen Giblin and Michael I. Norton
Spontaneous thoughts, the output of a broad category of uncontrolled and inaccessible higher-order mental processes, arise frequently in everyday life. The seeming randomness by which spontaneous thoughts arise might give people good reason to dismiss them as meaningless. We suggest that it is precisely the lack of control over and access to the processes by which they arise that leads people to perceive spontaneous thoughts to reveal meaningful self-insight. Consequently, spontaneous thoughts potently influence judgment. A series of experiments provides evidence supporting two hypotheses. First, we hypothesize that the more a thought is perceived to be spontaneous, the more it is perceived to provide meaningful self-insight. Participants perceived more spontaneous kinds of thought to reveal greater self-insight than more controlled kinds of thought in Study 1 (e.g., intuition versus deliberation), and perceived thoughts with the same content and target to reveal greater self-insight when spontaneously than deliberately generated in Studies 2 and 3 (i.e., childhood memories and impressions formed, respectively). Second, we hypothesize that greater self-insight attributed to thoughts that are (perceived to be) spontaneous leads those thoughts to more potently influence judgment. Participants felt more sexually attracted to an attractive person whom they thought of spontaneously than deliberately in Study 4, and reported their commitment to a current romantic relationship would be more affected by the spontaneous than deliberate recollection of a good or bad experience with their partner in Study 5.
Much human thought arises unbidden, spontaneously intruding upon consciousness. The thought and name of a former lover might come to mind during dinner with one's spouse. Or worse, it may be blurted out during an intimate moment. Because no trace of the past lover is present, the thought lacks an apparent cause. In the latter case it almost certainly occurs without intent, given its potential consequences. The seeming randomness of such thoughts might provide reason to dismiss them as the wanderings of a restless mind. We propose that it is precisely the lack of control over and access to the process by which spontaneous thoughts come to mind that leads them to be perceived to reveal special self-insight. Drawing on previous theory and research, we propose that the greater self-insight they are attributed leads spontaneous thoughts to exert a greater impact on attitudes and behavior than similar deliberate thoughts.
Compare a wife's thought of a former lover while perusing her yearbook to that same thought during an intimate moment with her husband. In the former case, the reason for the production of that thought is clear ("I thought of him because I looked at his picture while reminiscing about the past"). In the latter case, she lacks both control over the thought and access to its origin. We suggest that its apparent spontaneity should lead her to attribute it special meaning ("Why would I think of him in this moment unless it is important?"), and it should consequently exert a greater influence on her judgment ("I must still have feelings for him"). In this paper, we report a series of five studies examining how the perceived spontaneity of thought influences the extent to which it is believed to yield meaningful self-insight and influences judgment.
Keywords: Spontaneous Thoughts; Self-Insight; Meaning; attribution; Judgment and Decision Making; Decision Making; Cognition and Thinking;

Citation:
Morewedge, Carey K., Colleen Giblin, and Michael I. Norton. "The (Perceived) Meaning of Spontaneous Thoughts." Journal of Experimental Psychology: General 143, no. 4 (August 2014): 1742–1754. View Details
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Article | Academy of Management Annals
Past, Present and Future Research on Multiple Identities: Toward an Intrapersonal Network Approach
Lakshmi Ramarajan
Psychologists, sociologists, and philosophers have long recognized that people have multiple identities—based on attributes such as organizational membership, profession, gender, ethnicity, religion, nationality, and family role(s) and that these multiple identities shape people's actions in organizations. The current organizational literature on multiple identities, however, is sparse and scattered and has yet to fully capture this foundational idea. I review and organize the literature on multiple identities into five different theoretical perspectives: social psychological; microsociological; psychodynamic and developmental; critical; and intersectional. I then propose a way to take research on multiple identities forward using an intrapersonal identity network approach. Moving to an identity network approach offers two advantages: first, it enables scholars to consider more than two identities simultaneously, and second, it helps scholars examine relationships among identities in greater detail. This is important because preliminary evidence suggests that multiple identities shape important outcomes in organizations, such as individual stress and well-being, intergroup conflict, performance, and change. By providing a way to investigate patterns of relationships among multiple identities, the identity network approach can help scholars deepen their understanding of the consequences of multiple identities in organizations and spark novel research questions in the organizational literature.
Keywords: Networks; Research; Organizations; Identity;

Citation:
Ramarajan, Lakshmi. "Past, Present and Future Research on Multiple Identities: Toward an Intrapersonal Network Approach." Academy of Management Annals 8 (2014): 589–659. View Details
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Article | Organizational Behavior and Human Decision Processes | March 2014
Cheating More for Less: Upward Social Comparisons Motivate the Poorly Compensated to Cheat
Leslie K. John, George Loewenstein and Scott Rick
Intuitively, people should cheat more when cheating is more lucrative, but we find that the effect of performance-based pay rates on dishonesty depends on how readily people can compare their pay rate to that of others. In Experiment 1, participants were paid 5 cents or 25 cents per self-reported point in a trivia task, and half were aware that they could have received the alternative pay rate. Lower pay rates increased cheating when the prospect of a higher pay rate was salient. Experiment 2 illustrates that this effect is driven by the ease with which poorly compensated participants can compare their pay to that of others who earn a higher pay rate. Our results suggest that low pay rates are, in and of themselves, unlikely to promote dishonesty. Instead, it is the salience of upward social comparisons that encourages the poorly compensated to cheat.
Keywords: dishonesty; social comparison; pay secrecy; Motivation and Incentives; Fairness; Decision Making; Compensation and Benefits;

Citation:
John, Leslie K., George Loewenstein, and Scott Rick. "Cheating More for Less: Upward Social Comparisons Motivate the Poorly Compensated to Cheat." Special Issue on Behavioral Ethics. Organizational Behavior and Human Decision Processes 123, no. 2 (March 2014): 101–109. View Details
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Article | Proceedings of the National Academy of Sciences of the United States of America | 2014
Investors Prefer Entrepreneurial Ventures Pitched by Attractive Men
A.W. Brooks, L. Huang, S.W. Kearney and F. Murray
Entrepreneurship is a central path to job creation, economic growth, and prosperity. In the earliest stages of start-up business creation, the matching of entrepreneurial ventures to investors is critically important. The entrepreneur's business proposition and previous experience are regarded as the main criteria for investment decisions. Our research, however, documents other critical criteria that investors use to make these decisions: the gender and physical attractiveness of the entrepreneurs themselves. Across a field setting (three entrepreneurial pitch competitions in the United States) and two experiments, we identify a profound and consistent gender gap in entrepreneur persuasiveness. Investors prefer pitches presented by male entrepreneurs compared with pitches made by female entrepreneurs, even when the content of the pitch is the same. This effect is moderated by male physical attractiveness: attractive males were particularly persuasive, whereas physical attractiveness did not matter among female entrepreneurs.
Keywords: Prejudice and Bias; Entrepreneurship; Investment; Gender;

Citation:
Brooks, A.W., L. Huang, S.W. Kearney, and F. Murray. "Investors Prefer Entrepreneurial Ventures Pitched by Attractive Men." Proceedings of the National Academy of Sciences of the United States of America 111, no. 12 (March 25, 2014): 4427–4431. View Details
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Chapter | The Interdisciplinary Science of Consumption | 2014
Appetite, Consumption, and Choice in the Human Brain
Brian Knutson and Uma R. Karmarkar
Although linked, researchers have long distinguished appetitive from consummatory phases of reward processing. Recent improvements in the spatial and temporal resolution of neuroimaging techniques have allowed researchers to separately visualize different stages of reward processing in humans. These techniques have revealed that evolutionarily conserved circuits related to affect generate distinguishable appetitive and consummatory signals, and that these signals can be used to predict choice and subsequent consumption. Review of the literature surprisingly suggests that appetitive rather than consummatory activity may best predict future choice and consumption. These findings imply that distinguishing appetite from consumption may improve predictions of future choice and illuminate neural components that support the process of decision making.

Citation:
Knutson, Brian, and Uma R. Karmarkar. "Appetite, Consumption, and Choice in the Human Brain." Chap. 9 in The Interdisciplinary Science of Consumption, edited by Stephanie D. Preston, Morten L. Kringelbach, and Brian Knutson, 163–184. Cambridge, MA: MIT Press, 2014. View Details
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Recent Publications

Article | Management Science | December 2019
Patent Trolls: Evidence from Targeted Firms
Lauren Cohen, Umit Gurun and Scott Duke Kominers
We provide the first large-sample evidence on the behavior and impact of nonpracticing entities (NPEs) in the intellectual-property space. We find that, on average, NPEs appear to behave as opportunistic “patent trolls.” NPEs sue cash-rich firms and target cash in business segments unrelated to alleged infringement at essentially the same frequency as they target cash in segments related to alleged infringement. By contrast, cash is neither a key driver of intellectual-property lawsuits by practicing entities (e.g., IBM and Intel) nor of any other type of litigation against firms. We find further suggestive evidence of NPE opportunism: targeting of firms that have reduced ability to defend themselves, repeated assertions of lower-quality patents, increased assertion activity nearing patent expiration, and forum shopping. We find, moreover, that NPE litigation has a real negative impact on innovation at targeted firms: firms substantially reduce their innovative activity after settling with NPEs (or losing to them in court). Meanwhile, we neither find any markers of significant NPE pass-through to end innovators nor of a positive impact of NPEs on innovation in the industries in which they are most prevalent.
Keywords: Patent trolls; patents; innovation; Patents; Lawsuits and Litigation; Ethics; Innovation and Invention;

Citation:
Cohen, Lauren, Umit Gurun, and Scott Duke Kominers. "Patent Trolls: Evidence from Targeted Firms." Management Science 65, no. 12 (December 2019): 5461–5486. (Cited in the United States Federal Trade Commission Report on Patent Assertion Entities, 2016.) View Details
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Article | Management Science | December 2019
Communicating with Warmth in Distributive Negotiations Is Surprisingly Counterproductive
M. Jeong, J. Minson, M. Yeomans and F. Gino
When entering into a negotiation, individuals have the choice to enact a variety of communication styles. We test the differential impact of being “warm and friendly” versus “tough and firm” in a distributive negotiation, when first offers are held constant and concession patterns are tracked. We train a natural language processing algorithm to precisely quantify the difference between how people enact warm versus tough communication styles. We find that the two styles differ primarily in length and their expressions of politeness (Study 1). Negotiators with a tough communication style achieved better economic outcomes than negotiators with a warm communication style, both in a field experiment (Study 2) and in a laboratory experiment (Study 3). This was driven by the fact that offers delivered in tough language elicited more favorable counteroffers. We further find that the counterparts of warm versus tough negotiators did not report different levels of satisfaction or enjoyment of their interactions (Study 3). Finally, in Study 4 we document that individuals’ lay beliefs are in direct opposition to our findings: participants believe that authors of warmly worded negotiation offers will be better liked and will achieve better economic outcomes.
Keywords: Negotiation Style; Communication Strategy; Perception; Performance Effectiveness; Outcome or Result;

Citation:
Jeong, M., J. Minson, M. Yeomans, and F. Gino. "Communicating with Warmth in Distributive Negotiations Is Surprisingly Counterproductive." Management Science 65, no. 12 (December 2019): 5813–5837. View Details
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Article | Journal of Finance | December 2019
Brokers and Order Flow Leakage: Evidence from Fire Sales
Andrea Barbon, Marco Di Maggio, Francesco Franzoni and Augustin Landier
Using trade-level data, we study whether brokers play a role in spreading order flow information. We focus on large portfolio liquidations, which result in temporary drops in stock prices, and identify the brokers that intermediate these trades. We show that these brokers’ best clients tend to predate on the liquidating funds: at the beginning of the fire sale, they sell their holdings in the liquidated stocks in order to then cover their positions once asset prices start recovering. The predatory trades generate at least 50 basis points over ten days and cause the liquidation costs for the distressed fund to almost double. These results suggest a broker’s role in fostering predatory behavior and raise a red flag for regulators. Moreover, our findings highlight the trade-off between slow execution and potential information leakage in the decision of optimal trading speed.
Keywords: predatory trading; back running; fire sales; Brokers; Stocks; Price; Information; Knowledge Dissemination; Ethics;

Citation:
Barbon, Andrea, Marco Di Maggio, Francesco Franzoni, and Augustin Landier. "Brokers and Order Flow Leakage: Evidence from Fire Sales." Journal of Finance 74, no. 6 (December 2019): 2707–2749. (LEAD ARTICLE.) View Details
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Case | HBS Case Collection | November 2019
Starbucks: Reaffirming Commitment to the Third Place Ideal
Francesca Gino, Katherine B. Coffman and Jeff Huizinga
On April 12, 2018, two African American entrepreneurs had scheduled a business meeting at a Starbucks in Philadelphia’s Rittenhouse Square neighborhood. They sat without ordering, waiting for a local businessman to show up for the meeting. The store manager called 911 on them, despite the fact that they were behaving neither violently nor disruptively. When the police arrived soon after the call, they arrested the young men. The incident was viewed by the Starbucks’ leadership team, including the CEO, as “a disheartening situation” and, in the words of John Kelly, the company’s Senior VP of Public Affairs and Social Impact, “a profound failure to live up to our ideals and a violation of our values.” Starbucks, which employed around 175,000 individuals nationwide and served more than 4 million customers daily in its approximately 8,000 U.S. stores, strived to abide by its mission statement: “…To inspire and nurture the human spirit, one cup, one person, one neighborhood at a time.”
The case describes how the company and its leadership responded to the crisis. To react to the incident, the leadership decided to close down its stores for a day of unconscious bias training, aimed at raising awareness of racial bias and discrimination in particular. The company also started a journey of providing more training and development for the partners, to assure that they lived by the company values on a daily basis, and revised store policy that, the leadership believed, contributed to how the store managers and employees in the Rittenhouse Square store behaved back in April 2018. As the case closes, CEO Steve Johnson reflects on how he could assure that every Starbucks employee not only understood the company mission and values, but truly connected to them emotionally and carry them out daily in their work.
Keywords: Mission and Purpose; Values and Beliefs; Prejudice and Bias; Crisis Management; Employees; Training;

Citation:
Gino, Francesca, Katherine B. Coffman, and Jeff Huizinga. "Starbucks: Reaffirming Commitment to the Third Place Ideal." Harvard Business School Case 920-016, November 2019. View Details
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Working Paper | HBS Working Paper Series | 2019
When to Apply?
Katherine Coffman, Manuela Collis and Leena Kulkarni
Labor market outcomes depend, in part, upon an individual’s willingness to put herself forward for different career opportunities. In this paper, we use both laboratory and field experiments to better understand decisions around willingness to apply for higher return, more challenging work, with a focus on gender differences. We find that, in male-typed domains, women are less likely to view themselves as well-qualified for a given opening, both because of differences in forecasts about own ability, but also, and importantly, because of differences in how high men and women believe “the bar” is. We show that these beliefs matter for application decisions. Finally, we provide evidence that a simple intervention, in which required qualifications are stated more precisely and objectively, helps to close the gender gap in willingness to apply, increasing both the average talent and the diversity of the applicant pool.
Keywords: beliefs; Gender; Information; Performance; Labor; Perception; Decision Making;

Citation:
Coffman, Katherine, Manuela Collis, and Leena Kulkarni. "When to Apply?" Harvard Business School Working Paper, No. 20-062, August 2019. View Details
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Case | HBS Case Collection | November 2019 (Revised November 2019)
Martini Klinik: Prostate Cancer Care 2019
Michael E. Porter, Jens Deerberg-Wittram and Thomas W. Feeley
Since its establishment in 2005, Hamburg’s Martini Klinik had single-mindedly focused on prostate cancer care with a commitment to measure long term health outcomes for every patient. A wholly owned subsidiary of the University Hospital Hamburg, Martini Klinik was a “hospital in a hospital” in close proximity to other medical departments and services. By 2019, Martini Klinik had become the largest prostate cancer treatment program in the world with 8,000 outpatient cases and more than 2,500 surgical cases annually. Patients came from all over Germany and from around the world. A new and expanded facility was under construction to have the capacity to manage more patients with prostate cancer.
Keywords: health care; Michael Porter; Jens Deerberg-Wittram; Clifford Marks; prostate cancer; health care policy; value agenda; integrated practice units; outcomes measurement; Health Care and Treatment; Value; Health Disorders; Insurance; Medical Specialties; Outcome or Result; Measurement and Metrics; Business Processes; Insurance Industry; Health Industry; Germany;

Citation:
Porter, Michael E., Jens Deerberg-Wittram, and Thomas W. Feeley. "Martini Klinik: Prostate Cancer Care 2019." Harvard Business School Case 720-359, November 2019. (Revised November 2019.) View Details
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Case | HBS Case Collection | November 2019
Edita: Making Choices in Uncertain Times
Caroline M. Elkins, Juan Alcacer, Alpana Thapar and Youssef Abdel Aal
After 15 years of steady growth and expansion, Edita, a leading Egyptian snack producer, faced a series of challenges in the wake of the Arab Spring. In January 2011, the Egyptian Revolution sparked political and economic turmoil that reflected the waves of protest and violence already spreading throughout North Africa and parts of the Middle East. Hani Berzi, CEO of Edita, managed to navigate the company through this period, though the severe devaluation of the Egyptian pound in November 2016 meant yet another period of crisis for the country’s economy and, with it, the snack food industry. Hani was faced with a series of hard decisions that would determine Edita’s future. He held a crisis management meeting with his executive team and on the agenda were two key decisions. Should they increase their prices as a short-term strategy to survive the turbulent period at the risk of losing market share? Should Edita aim to diversify risk by tapping into underserved rural areas in Egypt or rather by expanding its presence in regional markets? Or, should the company adopt some combination of both strategies, or neither, and instead devise another course for addressing the crisis?
Keywords: Decision Making; Developing Countries and Economies; Economy; Business or Company Management; Price; Crisis Management; Growth and Development Strategy; Distribution; Risk and Uncertainty; Business Strategy; Expansion; Currency; Food and Beverage Industry; Egypt; Africa; Middle East;

Citation:
Elkins, Caroline M., Juan Alcacer, Alpana Thapar, and Youssef Abdel Aal. " Edita: Making Choices in Uncertain Times." Harvard Business School Case 320-026, November 2019. View Details
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Working Paper | HBS Working Paper Series | 2019
Pathways to Materiality: How Sustainability Issues Become Financially Material to Corporations and Their Investors
Jean Rogers and George Serafeim
As sustainability issues, also labelled environmental, social, and governance (ESG) issues, become financially material, companies, investors, and regulators are designing strategies and policies to improve sustainability disclosure and performance. In this paper, we outline a framework of how sustainability issues become financially material arguing that materiality is not a “state of being” but a “process of becoming.” Our framework could assist companies and investors to make resource allocation decisions based on expectations about future materiality, social entrepreneurs and NGOs to develop their theories of social change, and policy makers to design disclosure regulations. Moreover, our framework generates predictions about the conditions under which sustainability issues become financial material that could be empirically tested in the future.
Keywords: materiality; ESG; Pharmaceutical Companies; Business ethics; sustainability; environment; finance; accounting; disclosure; disclosure and access; regulation; social impact; valuation; Environmental Sustainability; Social Issues; Corporate Governance; Ethics; Corporate Disclosure; Corporate Accountability; Resource Allocation;

Citation:
Rogers, Jean, and George Serafeim. "Pathways to Materiality: How Sustainability Issues Become Financially Material to Corporations and Their Investors." Harvard Business School Working Paper, No. 20-056, November 2019. View Details
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Case | HBS Case Collection | November 2019
Rechargeable Batteries, 2017: Gigafactory Wars in the Offing?
John R. Wells and Benjamin Weinstock
In 2017, the global market for rechargeable lithium-ion (Li-ion) batteries was 126 gigawatt-hours (GWh) valued at $37 billion, growing by $10 billion in two years. Once confined largely to consumer electronics and appliances, the rapid increase in demand was spurred by the adoption of electric cars and buses. Moreover, the falling cost of batteries was sparking interest in another potential huge market – the electrical utility sector. Batteries could be used to store electricity in periods of low demand and release it when demand was high, significantly reducing the need for peak generation capacity. However, historically, the costs of doing this had been prohibitively high.
In response to the expected demand, several companies had announced “gigafactories,” plants that, combined, could produce many times more output than total global demand in 2017. Tesla, Inc., the electric car maker, was the first. In 2014, it announced a 35 GWh battery plant, costing $5 billion, to be built in Nevada, enough capacity to fulfil global demand in 2013. In 2017, Tesla CEO Elon Musk said he would announce an additional four gigafactory locations to supply the global market.
Tesla was not alone in its battery ambitions. In late 2016, start-up Alevo began delivery of its new “GridBank” batteries from a 3.5 million square-foot facility in North Carolina, with the potential to scale to 60 GWh. Alevo claimed its batteries lasted four times longer and were safer than the conventional Li-ion batteries used by Tesla. Anxious not to be reliant on third parties, in 2017, several automakers had announced plans to build battery capacity, including General Motors and Daimler. Indeed, Daimler announced two plants for its Mercedes brand cars, one in Germany and one in China. New start-ups were also entering the fray, with Northvolt AB of Sweden partnering with ABB of Switzerland to build a 32 GWh facility. Ten new gigafactories were announced in the first six months of 2017, although not all were Li-ion. For instance, Toyota announced it was to invest in a new solid state technology that would reduce weight and lengthen battery life. Meanwhile, industry global leaders in China and Korea such as CATL, BYD, Samsung and LG Chem were planning their own gigafactory expansions. Whether the market would develop fast enough to absorb this supply, and which technologies would finally win, was unclear in 2017.
Keywords: batteries; rechargeable batteries; lithium-ion; lithium-ion batteries; electric vehicle; electric vehicles; Energy Entrepreneurship; energy markets; energy storage; Battery; demand uncertainty; demand forecasting; Supply ＆ demand; supply and demand; capacity planning; Tesla; China; Technological and Scientific Innovation; technological change; technology change; technology commercialization; policy; policy change; subsidies; Power/Energy; power grid; energy policy; developing markets; alevo; Samsung; LG Chem; CATL; Northvolt; General Motors; Energy; Entrepreneurship; Technological Innovation; Policy; Demand and Consumers; Forecasting and Prediction; Supply and Industry; Emerging Markets; Factories, Labs, and Plants; Competitive Strategy;

Citation:
Wells, John R., and Benjamin Weinstock. "Rechargeable Batteries, 2017: Gigafactory Wars in the Offing?" Harvard Business School Case 720-371, November 2019. View Details
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Working Paper | 2019
The Old Boys' Club: Schmoozing and the Gender Gap
Zoë B. Cullen and Ricardo Perez-Truglia
The old boys’ club refers to the alleged advantage that male employees have over their female counterparts in interacting with powerful men. For example, male employees may schmooze with their managers in ways that female employees cannot. We study this phenomenon using data from a large financial institution. We use an event study analysis of manager rotation to estimate the causal effect of managers’ gender on their employees’ career progression. We find that when male employees are assigned to male managers, they are promoted faster in the following years than they would have been if they were assigned to female managers. Female employees, on the contrary, have the same career progression regardless of the manager’s gender. These differences in career progression cannot be explained by differences in effort or output. This male-to-maleadvantage can explain a third of the gender gap in promotions. Moreover, we providesuggestive evidence that these manager effects are due to socialization between maleemployees and male managers. We show that these manager effects are present only if the employee works in close proximity to the manager. We use survey data to show that, after transitioning to a male manager, male employees spend more time with their managers. Finally, we study a shock to socialization within males, based on the anecdotal evidence that employees who smoke tend to spend more time together. We find that when male employees who smoke switch to male managers who smoke, they spend more of their breaks with their managers and are promoted faster in the following years. Moreover, the effects of these smoking manager switches are similar in timing and magnitude to the effects of the gender manager switches.
Keywords: gender; career; promotions; Socialization; Networking; Gender; Personal Development and Career; Wages;

Citation:
Cullen, Zoë B., and Ricardo Perez-Truglia. "The Old Boys' Club: Schmoozing and the Gender Gap." NBER Working Paper Series, No. 26530, December 2019. View Details
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