Publications

October 2012
Article

The Effect of Reference Point Prices on Mergers and Acquisitions

By: Malcolm Baker, Xin Pan and Jeffrey Wurgler

Prior stock price peaks of targets affect several aspects of merger and acquisition activity. Offer prices are biased toward recent peak prices although they are economically unremarkable. An offer's probability of acceptance jumps discontinuously when it exceeds a... View Details

Keywords: Mergers and Acquisitions; Stocks; Price; Valuation; Negotiation

10 Nov 2015
First Look

November 10, 2015

of research, the authors have concluded that four biases stand in the way: we focus too heavily on success, are too quick to act, try too hard to fit in, and rely too much on experts. Each of these biases... View Details

Keywords: Sean Silverthorne

September 2, 2014
Article

Development of In-Group Favoritism in Children's Third-Party Punishment of Selfishness

By: Jillian J. Jordan, Katherine McAuliffe and Felix Warneken

When enforcing norms for cooperative behavior, human adults sometimes exhibit in-group bias. For example, third-party observers punish selfish behaviors committed by out-group members more harshly than similar behaviors committed by in-group members. Although evidence... View Details

Keywords: Ontogeny; Cooperation; Equality and Inequality

Summer 2021
Article

Predictable Country-level Bias in the Reporting of COVID-19 Deaths

By: Botir Kobilov, Ethan Rouen and George Serafeim

We examine whether a country’s management of the COVID-19 pandemic relate to the downward biasing of the number of reported deaths from COVID-19. Using deviations from historical averages of the total number of monthly deaths within a country, we find that the... View Details

Keywords: COVID-19; Deaths; Reporting; Incentives; Government Policy; Health Pandemics; Health Care and Treatment; Country; Crisis Management; Outcome or Result; Reports; Policy

August 2020 (Revised December 2020)
Background Note

A Note on Ethical Analysis

By: Nien-hê Hsieh

To engage in ethical analysis is to answer such questions as “What is the right thing to do?” “What does it mean to be a good person?” “How should I live my life?” Ethical analysis, on its own, is often not adequate for doing the right thing or being a good... View Details

Keywords: Ethics; Framework; Decision Making; Prejudice and Bias

Educators

May 2016
Article

When Performance Trumps Gender Bias: Joint Versus Separate Evaluation

By: Iris Bohnet, Alexandra van Geen and Max Bazerman

We examine a new intervention to overcome gender biases in hiring, promotion, and job assignments: an "evaluation nudge," in which people are evaluated jointly rather than separately regarding their future performance. Evaluators are more likely to focus on individual... View Details

Keywords: Prejudice and Bias; Selection and Staffing; Decision Choices and Conditions; Performance; Gender

13 Sep 2018
HBS Seminar

Ashley Swanson, Wharton, University of Pennsylvania

Research Summary

Analyst Disagreement, Forecast Bias and Stock Returns

We present evidence of inefficient information processing in equity markets by documenting that biases in analysts' earnings forecasts are reflected in stock prices. In particular, investors fail to account for analysts' tendency to withhold negative views and to issue... View Details

June 2010
Case

Legendary Pictures & ABRY Partners

This case focuses on the review by the private equity firm ABRY Partners of an opportunity to invest in a film financing vehicle, Legendary Pictures. Before 2004, private equity firms had avoided co-investing with film studios in film productions because of their... View Details

Keywords: Private Equity; Investment; Film Entertainment; Entertainment and Recreation Industry

Educators

2007
Chapter

Behavioral Corporate Finance: A Survey

By: Malcolm Baker, Richard Ruback and Jeffrey Wurgler

Research in behavioral corporate finance takes two distinct approaches. The first emphasizes that investors are less than fully rational. It views managerial financing and investment decisions as rational responses to securities market mispricing. The second approach... View Details

Keywords: Decisions; Prejudice and Bias; Debt Securities; Financial Management; Price; Theory; Investment; Problems and Challenges; Behavioral Finance; Corporate Finance

January 2012 (Revised March 2012)
Case

Dimensional Fund Advisors (DFA)'s Entry into the Retirement Market

By: Lauren Cohen and Christopher Malloy

This case examines Dimensional Fund Advisors (DFA)'s decision to enter the retirement market with their new "Dimensional Managed DC" product, a complete retirement solution that aimed to provide investors with what they really wanted: the same standard of living in... View Details

Keywords: Retirement; Asset Management

Educators

Article

How Much Should We Trust Staggered Difference-In-Differences Estimates?

By: Andrew C. Baker, David F. Larcker and Charles C.Y. Wang

We explain when and how staggered difference-in-differences regression estimators, commonly applied to assess the impact of policy changes, are biased. These biases are likely to be relevant for a large portion of research settings in finance, accounting, and law that... View Details

Keywords: Difference In Differences; Staggered Difference-in-differences Designs; Generalized Difference-in-differences; Dynamic Treatment Effects; Mathematical Methods

November 12, 2021
Editorial

The Psychology Behind Meeting Overload

By: A.V. Whillans, Dave Feldman and Damian Wisniewski

Bad meetings are the bane of the corporate world — and yet despite what appears to be an overwhelming consensus that they’re often unnecessary and unproductive, many workplaces continue to struggle to avoid them. In this piece, the authors discuss the psychological... View Details

Keywords: Meetings; Collaboration; Psychology; Time Management; Communication