Author: EconLearner

“It was obvious in March that the war was a colossal mistake—and that there were voices warning of the great dangers and difficulties of the invasion,” says Georgy Egorov, professor of managerial economics and decision sciences at the Kellogg School. “At the end of the day, the decision-making process boiled down to a few people close to Putin who acted like yes.”In the long view of history, this failure to seek wise counsel is more the rule than the exception. From Emperor Nicholas II’s decision to enter World War I to Saddam Hussein’s invasion of Kuwait, authoritarian leaders have a…

Fortunately for them, market dynamics will soon turn in their favor.Today, Baby Boomers earn far more than their younger counterparts—which is to be expected, since older workers generally earn more on average.What is surprising, however, is that the wage gap between older and younger workers is wider than when Boomers entered the workforce. In fact, the gap between workers over 55 and under 35 grew by 61 percent in the United States between 1979 and 2018.So why didn’t Baby Boomers see their wages stay low throughout their careers? That is, with Boomers being such a large group, why didn’t they…

As has been well documented, because these models are calibrated to generate original content, inaccurate results are inevitable — even expected. So these tools also make it much easier to manufacture and spread disinformation online. The speed of these advances has some very knowledgeable people nervous. In a recent I open a letterTech experts including Elon Musk and Steve Wozniak have called for a six-month pause in AI development, asking:must are we letting the machines flood our information channels with propaganda and untruth?’ No matter how fast these AI systems progress, we’ll have to get used to a lot of…

One way scientists measure this is by showing that a particular study is repeatable, meaning that if the study is run repeatedly using the same methodologies, it will produce consistent results each time.However, for a variety of complex reasons, when tested, studies often fail to be replicated. Indeed, a 2016 poll of 1,500 scientists showed that the majority believe that science is going through a “reproducibility crisis”, where many published results cannot be reproduced. Replication failure is estimated to be the source of the over $20 billion in losses across science and industry every year.“That which makes science science it’s…

This practice has grown in popularity, with companies such as Bomba’s, Tom’s and Warby Parker making charitable donations, in cash or in kind, on behalf of consumers. Giving by Proxy is even expanding outside of the retail context, with some companies beginning to use the promise of a charitable gift as an incentive for strong employee performance.What is not known, however, is how this practice affects consumer behavior afterwards. Does an experience with proxy giving make people more or less likely to be charitable themselves? Any change could have a big impact on the net social impact of these initiatives.When…

Performance reviews are incredibly important for addressing performance issues, rewarding excellence and encouraging everyone to give their best effort. But leaders face a common conundrum: Should they compare their team members relative to each other or evaluate everyone independently? Each option—relative (or stacked) and absolute performance metrics—has its advantages in measuring results and improving performance. Each also has some significant drawbacks.When considering which option might be the best motivator for your team, you’ll want to distinguish between two levels of motivation, he says George Georgiadis, associate professor of strategy at the Kellogg School. The first is the degree of motivation:…

“Humans are natural social learners. We’re constantly scanning the environment to understand what other people are doing and what we can learn from it,” says William Brady, assistant professor of management and organizations at Kellogg. “Social learning happens whenever we observe people, get feedback from them, imitate them, and incorporate that information into our understanding of the rules.”Social media represents a new frontier for this type of learning. What happens when this all-important observation and imitation of others is mediated by algorithms controlled by tech companies whose goals are to keep people’s attention on platforms?All kinds of problems, according to…

While private sector organizations can use such inducements and threats to increase motivation and performance, public sector executives often cannot offer performance-based pay and have difficulty firing underperforming employees.These organizations often rely on promotional incentives. To earn a higher salary, workers are told, you have to work hard and climb the ladder.Erika Deserrano, associate professor of managerial economics and decision science at Kellogg, wanted to find out how well this approach actually works. There was little existing research to support the idea that merit promotions—and the associated pay increase they bring—act as a powerful motivator for employees.So to learn more,…

One obvious answer is politics: as candidates, all four men had sharply different visions for the country’s future.But new research by William Brady, assistant professor of management and organizations at the Kellogg School, highlights another important way in which US presidential candidates stand out from one another: moral language.The study — they co-sign Kobe Hackenburg of Oxford University and Manos Tsakiris of the University of London — is based on analyzes of candidate tweets from the 2016 and 2020 elections. It reveals that Democrats and Republicans rely on morally charged language, but do so in very different ways.”Specifically,” Brady explains,…

A new paper by Tessa Charlesworth, assistant professor of management and organizations at the Kellogg School, explores this complex question by computationally analyzing language use over 115 years, from 1900 to 2015. Specifically, Charlesworth and her colleagues — Nishanth Sanjeev of New York University and Mark L. Hatzenbuehler and Mahzarin R. Banaji of Harvard University—examined how the characteristics associated with various social groups have changed over time.They explored both the manifest and implicit meanings of these stereotypes. “I often give the analogy of an iceberg,” says Charlesworth. “There is the tip of the iceberg that we can see above the…