Publications

March 2021
Article

Active Choice, Implicit Defaults, and the Incentive to Choose

By: John Beshears, James J. Choi, David Laibson and Brigitte C. Madrian

Home-delivered prescriptions have no delivery charge and lower copayments than prescriptions picked up at a pharmacy. Nevertheless, when home delivery is offered on an opt-in basis, the take-up rate is only 6%. We study a program that makes active choice of either home... View Details

Keywords: Active Choice; Defaults; Implicit Defaults; Incentives; Consumer Behavior; Decision Choices and Conditions; Motivation and Incentives

November 2019
Article

When and Why Defaults Influence Decisions: A Meta-analysis of Default Effects

By: Jon M. Jachimowicz, Shannon Duncan, Elke U. Weber and Eric J. Johnson

When people make decisions with a pre-selected choice option—a “default”—they are more likely to select that option. Because defaults are easy to implement, they constitute one of the most widely employed tools in the choice architecture toolbox. However, to decide... View Details

Keywords: Choice Architecture; Defaults; Default Effects; Decision Making; Behavior; Analysis

October 2020
Article

IQ from IP: Simplifying Search in Portfolio Choice

By: Huaizhi Chen, Lauren Cohen, Umit Gurun, Dong Lou and Christopher J. Malloy

Using a novel database that tracks web traffic on the SEC’s EDGAR servers between 2004 and 2015, we show that mutual fund managers gather information on a very particular subset of firms and insiders, and their surveillance is very persistent over time. This tracking... View Details

Keywords: Tracked Trades; Return Predictability; Institutional Trading; Insider Trading; Institutional Investing; Information; Investment Portfolio; Decisions; Management

SSRN

Article

Unhealthy Consumerism: The Challenge of Trading Off Price and Quality in Healthcare

By: Kate Barasz and Peter A. Ubel

Over the last decade, healthcare in many parts of the world has shifted toward a more patient-centric, consumeristic model, marked by an emphasis on choice and a proliferation of typical consumer-facing information (e.g., price and quality data). However, while the... View Details

Keywords: Medical Decision-making; Choice; Health Care and Treatment; Quality; Price; Consumer Behavior; Decision Making

13 Aug 2012
Research & Ideas

When Good Incentives Lead to Bad Decisions

readily be reclaimed by investors in the firm who lost money." In a new research paper, coauthored with World Bank economists Martin Kanz and Leora Klapper, Cole explores how various performance incentives affect lending View Details

Keywords: by Carmen Nobel; Banking

October 1994
Article

Issues in the Estimation and Application of Latent Structure Models of Choice

By: Ulf Bockenholt, Melinda S. de Borrero, Ham Bozdogan, Wayne DeSarbo, William R. Dillon, Sunil Gupta, Wagner Kamakura, Ajith Kumar, V. Ramaswamy and Michael Zenor

Keywords: Decision Choices and Conditions

August 2016
Article

Asymmetric Effects of Favorable and Unfavorable Information on Decision-making Under Ambiguity

By: Alexander Peysakhovich and Uma R. Karmarkar

Most daily decisions involve uncertainty about outcome probabilities arising from incomplete knowledge, i.e., ambiguity. We explore how the addition of partial information affects these types of choices using theoretical and empirical methods. Our experiments in both... View Details

Keywords: Ambiguity; Decision Making; Outcomes; Information; Decision Choices and Conditions; Outcome or Result

December 2001 (Revised February 2006)
Background Note

An Options-led Approach to Making Strategic Choices

By: Jan W. Rivkin

Summarizes some of the pitfalls of conventional strategic planning processes and proposes an alternative approach to making strategic choices. View Details

Keywords: Decisions; Management Practices and Processes; Strategic Planning; Strategy

Educators

Forthcoming
Article

Differentiating on Diversity: How Disclosing Workforce Diversity Influences Consumer Choice

By: Maya Balakrishnan, Jimin Nam and Ryan W. Buell

Companies are facing increased pressure to “walk the talk” on diversity, equity, and inclusion (DEI) in their operations. One specific call-to-action from stakeholders is the public disclosure of EEO-1s. Companies with 100+ employees are federally mandated to annually... View Details

Keywords: Consumer Behavior; Corporate Disclosure; Diversity; Employees; Perception

January 2002
Case

Lycos (A): The Tripod Decision

By: Giovanni M. Gavetti, Jan W. Rivkin and Elizabeth Johnson

The Internet portal Lycos has acquired Tripod, a provider of home-page-building tools, and now must decide how to integrate the acquisition. View Details

Keywords: Integration; Organizational Structure; Situation or Environment; Mergers and Acquisitions; Internet and the Web; Decision Choices and Conditions; Web Services Industry

Educators

November–December 1994
Article

A Framework for Risk Management

By: K. Froot, David S. Scharfstein and J. Stein

Keywords: Catastrophe Risk; Cost Of Capital; Banking And Insurance; Hedging; Banking; Decision Choice And Uncertainty; Framework; Risk Management; Corporate Finance; Asset Pricing; Financial Markets; Insurance; Policy; Natural Disasters; Insurance Industry

August 30, 2022
Article

School Choice Increases Racial Segregation Even When Parents Do Not Care About Race

By: Kalinda Ukanwa, Aziza C. Jones and Broderick L. Turner Jr.

This research examines how school choice impacts school segregation. Specifically, this work demonstrates that even if parents do not take the racial demographics of schools into account, preference differences between Black and White parents for other school... View Details

Keywords: Decision Choices and Conditions; Race; Policy; Early Childhood Education; Middle School Education; Secondary Education

March 2009
Article

Trade-offs in Staying Close: Corporate Decision Making and Geographic Dispersion

By: Augustin Landier, Vinay Nair and Julie Wulf

We document the role of geographic dispersion on corporate decision-making. Our findings include: (i) geographically dispersed firms are less employee friendly; (ii) dismissals of divisional employees are less common in divisions located closer to corporate... View Details

Keywords: Business Divisions; Business Headquarters; Decision Choices and Conditions; Geographic Location; Employees; Resignation and Termination; Retention

2001
Book

Driven: How Human Nature Shapes Our Choices

By: Paul R. Lawrence and Nitin Nohria

Keywords: Judgments

January 2015
Article

Poker-faced Morality: Concealing Emotions Leads to Utilitarian Decision Making

By: Jooa Julia Lee and F. Gino

This paper examines how making deliberate efforts to regulate aversive affective responses influences people's decisions in moral dilemmas. We hypothesize that emotion regulation—mainly suppression and reappraisal—will encourage utilitarian choices in emotionally... View Details

Keywords: Decisions; Moral Sensibility; Emotions

March 2016 (Revised January 2020)
Teaching Note

Behavioural Insights Team (A) and (B)

By: Michael Luca and Patrick Rooney

The Behavioural Insights Team case introduces students to the concept of choice architecture and the value of experimental methods (sometimes called A/B testing) within organizational contexts. The exercise provides an opportunity for students to apply these principles... View Details

Keywords: Behavioral Economics; Experiments; Choice Architecture; Public Entrepreneurship; Decision Choices and Conditions; Mathematical Methods; United Kingdom

February 2012
Article

CEO Relational Leadership and Strategic Decision Quality in Top Management Teams: The Role of Team Trust and Learning from Failure

By: Abraham Carmeli, Asher Tishler and Amy C. Edmondson

In this study, we examine a complex pathway through which CEOs, who exhibit relational leadership, may improve the quality of strategic decisions of their top management teams (TMTs) by creating psychological conditions of trust and facilitating learning from failures... View Details

Keywords: Leadership Development; Decisions; Management Teams; Trust; Learning; Management Analysis, Tools, and Techniques; Managerial Roles; Failure