Publications

Article

The Board's New Innovation Imperative: Directors Need to Rethink Their Roles and Their Attitude to Risk

By: Linda A. Hill and George Davis

As firms scramble for competitive advantage, boards—once the cautious voices urging management to mitigate risk—are now calling for breakthrough innovation. Indeed, avoiding risk is now seen as the riskiest proposition of all. In speaking with CEOs and board members... View Details

Keywords: Governing and Advisory Boards; Innovation Leadership; Risk and Uncertainty; Corporate Governance

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1 Mar 2013 - 2 Mar 2013
Conference Presentation

The Value of Flexibility in Baseball Roster Construction

By: Timothy Chan and Douglas S. Fearing

Drawing inspiration from the theory of production flexibility in manufacturing networks, we provide the first optimization-based analysis of the value of positional flexibility (the ability of a player to play multiple positions) for a major league baseball team in the... View Details

Keywords: Risk and Uncertainty; Design; Production; Resource Allocation; Groups and Teams; Adaptation; Sports

04 Nov 2020
News

The Long View: Persevering Through Past Crises

Subscribe on iTunes Subscribe on Spotify More Skydeck episodes “We are only as good as our experiences. I think of every setback as an experience to make me stronger, more marketable and a better executive or entrepreneur. While I wouldn't wish COVID on anyone, since... View Details

2024
Working Paper

Hidden Risk

By: Daniel Barth, Phillip Monin, Emil Siriwardane and Adi Sunderam

Since 2013, large U.S. hedge fund advisers have been required to report risk exposures in their regulatory filings. Using these data, we first establish that managers’ perceptions of risk contain useful information that is not embedded in fund returns. Investor flows... View Details

Keywords: Corporate Disclosure; Investment Funds; Risk and Uncertainty; Investment Return; Communication Strategy; Financial Services Industry

November 2022
Article

Opportunity Neglect: An Aversion to Low-probability Gains

By: Emily Prinsloo, Kate Barasz, Leslie K. John and Michael I. Norton

Seven preregistered studies (N = 2,890) conducted in the field, lab, and online document opportunity neglect: a tendency to reject opportunities with low probability of success, even when they come with little or no objective cost (e.g., time, money,... View Details

Keywords: Opportunities; Behavior; Risk and Uncertainty; Success; Perception

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2018
Working Paper

Bank Risk-Taking and the Real Economy: Evidence from the Housing Boom and Its Aftermath

By: Antonio Falato, Giovanni Favara and David Scharfstein

The short-termism of lenders amplifies boom-bust credit cycles, leading in turn to real costs for the aggregate economy. During the U.S. housing credit boom, publicly-traded banks increased mortgage lending activity and relaxed standards much more than privately-held... View Details

Keywords: Risk and Uncertainty; Financial Markets; Investment; Corporate Finance; Banks and Banking

May 2010
Column

Block-by-Blockbuster Innovation

By: Rosabeth Moss Kanter

Executives often find themselves debating the merits of incremental innovations versus game-changers, but that's a false dichotomy, says HBR columnist Rosabeth Moss Kanter. Even if a company is lucky enough to come up with the next Kindle, Swiffer, or smartphone,... View Details

Keywords: Innovation and Management; Resource Allocation; Product; Business Processes; Risk and Uncertainty

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November 1991 (Revised August 1994)
Background Note

Relevant Costs and Revenues

By: Arthur Schleifer Jr.

Develops the idea that the relevance of costs and revenues depends on what decisions are under consideration. Revenues and costs are relevant if they would be different under one decision choice than under the other. Teaching purpose: Basic background material for... View Details

Keywords: Decision Choices and Conditions; Cost; Revenue; Framework; Managerial Roles; Risk and Uncertainty

Educators

January 1988 (Revised March 1995)
Supplement

Digital Equipment Corp.: The Endpoint Model (C1)

By: David A. Garvin

To follow Digital Equipment Corp.: The Endpoint Model (B2). The division has just received a request for dramatically increased production. If it complies with the request, it will have to expedite production, override the MRP II system and the planned schedule. Should... View Details

Keywords: Decision Choices and Conditions; Markets; Production; Planning; Risk and Uncertainty; Situation or Environment; System

July 1998
Teaching Note

Hawthorne Plastics, Inc. TN

By: Paul W. Marshall, John S. Hammond and William L Berry

Teaching Note for (9-171-004). View Details

Keywords: Risk and Uncertainty; Production; Cost; Quality; Theory; Management Practices and Processes; Decisions

01 Mar 2008
News

Innovation, Inc.

uncertainty — not just the uncertainty surrounding the survival of their own firm, but that of the industry itself. The implications of this are that pioneer-entrepreneurs have to adopt specific strategies... View Details

Keywords: Julia Hanna; Mary Tripsas; Colleges, Universities, and Professional Schools; Educational Services; Management

April 2025
Article

How Central Banks Manage Climate and Energy Transition Risks

By: Esther Shears, Jonas Meckling and Jared Finnegan

Central banks have begun to examine and manage climate risks, including both transition risks of moving from fossil fuels to clean energy and physical climate risks. Here we provide a systematic assessment of how and why central banks address climate risks on the basis... View Details

Keywords: Banks and Banking; Risk and Uncertainty; Climate Change; Transition; Risk Management

2013
Working Paper

Do Strict Capital Requirements Raise the Cost of Capital? Banking Regulation and the Low Risk Anomaly

By: Malcolm Baker and Jeffrey Wurgler

Minimum capital requirements are a central tool of banking regulation. Setting them balances a number of factors, including any effects on the cost of capital and in turn the rates available to borrowers. Standard theory predicts that, in perfect and efficient capital... View Details

Keywords: Risk and Uncertainty; Cost of Capital; Capital Markets; Banks and Banking; Banking Industry; United States

2008
Working Paper

Variance-Seeking for Positive (and Variance-Aversion for Negative) Experiences: Risk-Seeking in the Domain of Gains?

By: Jolie Mae Martin, Gregory M. Barron and Michael I. Norton

In contrast to research which has conflated losses with negative experiences and gains with positive experiences, we argue that because reference points are set by memories of extremely good and bad experiences, most outcomes are seen as losses in positive domains and... View Details

Keywords: Change; Experience and Expertise; Marketing; Research; Risk and Uncertainty; Loss; Perspective

November 2002 (Revised February 2009)
Teaching Note

Value Retail (TN)

By: Arthur I Segel and Ani M Vartanian

Teaching Note for (9-803-008). View Details

Keywords: Investment; Risk and Uncertainty; Performance Effectiveness; Brands and Branding; Planning; Strategy; Luxury; Milan