Seeding the S-Curve? The Role of Early Adopters in Diffusion. Christian Catalini & Catherine Tucker. MIT Working Paper, August 2016, http://www.imapsource.org/doi/abs/10.4071/2016DPC-TA11
In October 2014, all 4,494 undergraduates at the Massachusetts Institute of Technology were given access to Bitcoin, a decentralized digital currency. As a unique feature of the experiment, students who would generally adopt first were placed in a situation where many of their peers received access to the technology before them, and they then had to decide whether to continue to invest in this digital currency or exit. Our results suggest that when natural early adopters are delayed relative to their peers, they are more likely to reject the technology. We present further evidence that this appears to be driven by identity, in that the effect occurs in situations where natural early adopters' delay relative to others is most visible, and in settings where the natural early adopters would have been somewhat unique in their tech-savvy status. We then show not only that natural early adopters are more likely to reject the technology if they are delayed, but that this rejection generates spillovers on adoption by their peers who are not natural early adopters. This suggests that small changes in the initial availability of a technology have a lasting effect on its potential: Seeding a technology while ignoring early adopters' needs for distinctiveness is counterproductive.
Saturday, July 29, 2017
John Roberts, Chief Judge, US Supreme Court. Commencement speech at his son's school
John Roberts, Chief Judge, US Supreme Court. Commencement speech at his son's school. Jun 03, 2017, http://time.com/4845150/chief-justice-john-roberts-commencement-speech-transcript/
Now the commencement speakers will typically also wish you good luck and extend good wishes to you. I will not do that, and I’ll tell you why. From time to time in the years to come, I hope you will be treated unfairly, so that you will come to know the value of justice. I hope that you will suffer betrayal because that will teach you the importance of loyalty. Sorry to say, but I hope you will be lonely from time to time so that you don’t take friends for granted. I wish you bad luck, again, from time to time so that you will be conscious of the role of chance in life and understand that your success is not completely deserved and that the failure of others is not completely deserved either. And when you lose, as you will from time to time, I hope every now and then, your opponent will gloat over your failure. It is a way for you to understand the importance of sportsmanship. I hope you’ll be ignored so you know the importance of listening to others, and I hope you will have just enough pain to learn compassion.
Whether I wish these things or not, they’re going to happen. And whether you benefit from them or not will depend upon your ability to see the message in your misfortunes.
Now the commencement speakers will typically also wish you good luck and extend good wishes to you. I will not do that, and I’ll tell you why. From time to time in the years to come, I hope you will be treated unfairly, so that you will come to know the value of justice. I hope that you will suffer betrayal because that will teach you the importance of loyalty. Sorry to say, but I hope you will be lonely from time to time so that you don’t take friends for granted. I wish you bad luck, again, from time to time so that you will be conscious of the role of chance in life and understand that your success is not completely deserved and that the failure of others is not completely deserved either. And when you lose, as you will from time to time, I hope every now and then, your opponent will gloat over your failure. It is a way for you to understand the importance of sportsmanship. I hope you’ll be ignored so you know the importance of listening to others, and I hope you will have just enough pain to learn compassion.
Whether I wish these things or not, they’re going to happen. And whether you benefit from them or not will depend upon your ability to see the message in your misfortunes.
How much compensation is too much? An investigation of the effectiveness of financial overcompensation as a means to enhance customer loyalty
How much compensation is too much? An investigation of the effectiveness of financial overcompensation as a means to enhance customer loyalty. By Tessa Haesevoets et al.
Judgment and Decision Making, March 2017, Pages 183–197
http://journal.sjdm.org/16/16929/jdm16929.pdf
Abstract: The present paper examines the effectiveness of financial overcompensation as a means to enhance customer loyalty after a product failure. Overcompensation implies that customers are entitled to a refund that is larger than the purchase price. It is, however, still unclear whether large overcompensations entail saturation effects, or alternatively, result in an actual drop in customer loyalty. We predicted that the overcompensation-loyalty relationship is generally characterized by an inverted U-shaped function. In line with this prediction, the results of four studies showed that mild overcompensations had, on average, a positive effect on customer loyalty beyond equal compensation, but only up to compensation levels of approximately 150% of the purchase price of faulty products. Beyond this level, the effectiveness of overcompensation diminished, eventually leading to a general drop in customer loyalty. Despite this overall pattern, two studies revealed robust individual differences in how customers react to increasing overcompensation. A majority of customers increased their loyalty when the overcompensation enlarged, but the curve flattened out in the high range. However, there was also a smaller portion of customers who reacted negatively to every form of overcompensation. A practical implication of these findings, therefore, is that companies should not offer compensations that are greater than 150% of the initial price, as these do not contribute to greater loyalty in any category of customers.
Judgment and Decision Making, March 2017, Pages 183–197
http://journal.sjdm.org/16/16929/jdm16929.pdf
Abstract: The present paper examines the effectiveness of financial overcompensation as a means to enhance customer loyalty after a product failure. Overcompensation implies that customers are entitled to a refund that is larger than the purchase price. It is, however, still unclear whether large overcompensations entail saturation effects, or alternatively, result in an actual drop in customer loyalty. We predicted that the overcompensation-loyalty relationship is generally characterized by an inverted U-shaped function. In line with this prediction, the results of four studies showed that mild overcompensations had, on average, a positive effect on customer loyalty beyond equal compensation, but only up to compensation levels of approximately 150% of the purchase price of faulty products. Beyond this level, the effectiveness of overcompensation diminished, eventually leading to a general drop in customer loyalty. Despite this overall pattern, two studies revealed robust individual differences in how customers react to increasing overcompensation. A majority of customers increased their loyalty when the overcompensation enlarged, but the curve flattened out in the high range. However, there was also a smaller portion of customers who reacted negatively to every form of overcompensation. A practical implication of these findings, therefore, is that companies should not offer compensations that are greater than 150% of the initial price, as these do not contribute to greater loyalty in any category of customers.
Monday, July 24, 2017
US cities must unlock the value of the land they sit on
US cities must unlock the value of the land they sit on, by Matthew Klein
There is an answer to local governments’ pension obligations and under-investment
Financial Times, July 21, 2017
https://www.ft.com/content/e20bd8d4-6de5-11e7-bfeb-33fe0c5b7eaa
Boston’s Logan International Airport was built in the wrong place. Instead of occupying undesirable plots on the outskirts of the city, it sits on almost 1,000 hectares of easily accessible waterfront property close to the urban core. The land should be home to condos and office towers, not take-offs and landings.
The question is whether it’s worth paying the high cost to move the airport for benefits that will not be realised for decades. Nobody knows. Today’s politicians will be long gone by then and have no incentive to explore whether the move would make the city better off in the long run.
The financial system provides a way round this problem: wise cities can use the market as a time machine to reap rewards today for good decisions about future investments. This would require cities to adopt the accounting and governance standards sought by activist investors in hoteliers, retailers and chain restaurants. In particular, cities should separate their real estate assets from the services they provide to their residents.
The potential rewards would be enormous. Excluding public parks, local governments own about a fifth of all the land within many US cities’ limits. It is worth at least $25tn, according to Dag Detter and Stefan Fölster in The Public Wealth of Cities. That figure dwarfs the $3.8tn in municipal bond debt and $7.5tn in accumulated pension obligations collectively owed by the US’s states and localities. Capturing this value and boosting yields by even a tiny amount could generate more than enough income to pay benefits to retired workers, invest in maintenance and develop additional infrastructure to accommodate growing populations.
Governments could start by figuring out the real value of what they own. Weirdly, the Governmental Accounting Standards Board thinks doing this for physical assets is too hard and “may negatively affect timeliness of financial reporting”. The result is that municipalities publish balance sheets with implausibly low estimates of their net worth. The Massachusetts Port Authority, which owns Logan airport, claims its landholdings are worth just $226.5m and that its total capital assets net of depreciation are worth about $3.1bn. A rough estimate suggests the value of the land under the airport alone could easily be worth tens of billions if dollars.
The next step would be transferring ownership of these assets to what Detter and Fölster call an “urban wealth fund”. Ideally, all publicly owned assets in a given city would be placed in the fund, regardless of whether they technically belong to the county, the city, the school system, the state or some other entity. The local governments would each have shares in the fund proportionate to the value of the assets they contributed. These shares would be reported as assets on the municipal balance sheets.
Independent managers with experience in real estate and finance would be charged with maximising the value of the portfolio. Cities would receive dividends from their stakes in these commercial properties and have the option to borrow against or sell their shares if desperate for cash.
Public officials would then have to decide whether it makes sense to pay fair market rents to stay in their properties. Moving offices might be inconvenient for government workers but the potential gains for taxpayers and citizens who depend on government services would be far greater. Leasing space in subway stations to shops might detract from the “historic” character of the US’s barbarous public transit systems, but the revenues could fund needed improvements, such as ventilation, without the need for debt or higher passenger fares.
The urban wealth fund wouldn’t have to be run purely for profit. Segments within the portfolio could have separate goals as long as they are simple and quantifiable. Public housing, for example, could be boosted by increasing density on existing plots and funding improvements by developing some of the freed-up land to sell at higher prices, as Andrew Adonis, head of the UK’s National Infrastructure Commission, has suggested.
Boston can afford to leave money on the table because the local economy has been booming and the city’s general obligation bonds have the country’s highest credit ratings. Other cities, such as Chicago, are being forced to cut services and raise taxes because of financial stress. Yet they, too, have enormous stocks of untapped wealth. With better governance, professional asset management and a little financial engineering, they could raise the money they need and invest.
matt.klein@ft.com
@M_C_Klein
There is an answer to local governments’ pension obligations and under-investment
Financial Times, July 21, 2017
https://www.ft.com/content/e20bd8d4-6de5-11e7-bfeb-33fe0c5b7eaa
Boston’s Logan International Airport was built in the wrong place. Instead of occupying undesirable plots on the outskirts of the city, it sits on almost 1,000 hectares of easily accessible waterfront property close to the urban core. The land should be home to condos and office towers, not take-offs and landings.
The question is whether it’s worth paying the high cost to move the airport for benefits that will not be realised for decades. Nobody knows. Today’s politicians will be long gone by then and have no incentive to explore whether the move would make the city better off in the long run.
The financial system provides a way round this problem: wise cities can use the market as a time machine to reap rewards today for good decisions about future investments. This would require cities to adopt the accounting and governance standards sought by activist investors in hoteliers, retailers and chain restaurants. In particular, cities should separate their real estate assets from the services they provide to their residents.
The potential rewards would be enormous. Excluding public parks, local governments own about a fifth of all the land within many US cities’ limits. It is worth at least $25tn, according to Dag Detter and Stefan Fölster in The Public Wealth of Cities. That figure dwarfs the $3.8tn in municipal bond debt and $7.5tn in accumulated pension obligations collectively owed by the US’s states and localities. Capturing this value and boosting yields by even a tiny amount could generate more than enough income to pay benefits to retired workers, invest in maintenance and develop additional infrastructure to accommodate growing populations.
Governments could start by figuring out the real value of what they own. Weirdly, the Governmental Accounting Standards Board thinks doing this for physical assets is too hard and “may negatively affect timeliness of financial reporting”. The result is that municipalities publish balance sheets with implausibly low estimates of their net worth. The Massachusetts Port Authority, which owns Logan airport, claims its landholdings are worth just $226.5m and that its total capital assets net of depreciation are worth about $3.1bn. A rough estimate suggests the value of the land under the airport alone could easily be worth tens of billions if dollars.
The next step would be transferring ownership of these assets to what Detter and Fölster call an “urban wealth fund”. Ideally, all publicly owned assets in a given city would be placed in the fund, regardless of whether they technically belong to the county, the city, the school system, the state or some other entity. The local governments would each have shares in the fund proportionate to the value of the assets they contributed. These shares would be reported as assets on the municipal balance sheets.
Independent managers with experience in real estate and finance would be charged with maximising the value of the portfolio. Cities would receive dividends from their stakes in these commercial properties and have the option to borrow against or sell their shares if desperate for cash.
Public officials would then have to decide whether it makes sense to pay fair market rents to stay in their properties. Moving offices might be inconvenient for government workers but the potential gains for taxpayers and citizens who depend on government services would be far greater. Leasing space in subway stations to shops might detract from the “historic” character of the US’s barbarous public transit systems, but the revenues could fund needed improvements, such as ventilation, without the need for debt or higher passenger fares.
The urban wealth fund wouldn’t have to be run purely for profit. Segments within the portfolio could have separate goals as long as they are simple and quantifiable. Public housing, for example, could be boosted by increasing density on existing plots and funding improvements by developing some of the freed-up land to sell at higher prices, as Andrew Adonis, head of the UK’s National Infrastructure Commission, has suggested.
Boston can afford to leave money on the table because the local economy has been booming and the city’s general obligation bonds have the country’s highest credit ratings. Other cities, such as Chicago, are being forced to cut services and raise taxes because of financial stress. Yet they, too, have enormous stocks of untapped wealth. With better governance, professional asset management and a little financial engineering, they could raise the money they need and invest.
matt.klein@ft.com
@M_C_Klein
Monday, July 10, 2017
The Perils of Proclaiming an Authentic Organizational Identity
The Perils of Proclaiming an Authentic Organizational Identity. By Balázs Kovács, Glenn Carroll & David Lehman. Sociological Science, January 2017, https://www.gsb.stanford.edu/faculty-research/publications/perils-proclaiming-authentic-organizational-identity
Abstract: An emerging body of research consistently demonstrates that individuals in developed consumer markets value authenticity. But how individuals respond to organizations that tout their identities as authentic is not so well understood. We argue that organizational attempts at explicitly proclaiming their own identity as authentic will generally be regarded by individuals with skepticism and devaluation. Across two studies with different research designs, we find consistent empirical evidence that individuals devalue organizations making identity self-claims of authenticity. The first study analyzed authenticity claims made in the texts of menus from 1,393 restaurants in Los Angeles and their corresponding 450,492 online consumer reviews recorded from 2009 to 2016. The second study used a controlled, minimalistic experimental setting with fictitious restaurant menus that examined reactions to generic authenticity self-claims. The findings illuminate how individuals respond to organizational identity claims about authenticity and raise interesting questions about other types of identity claims.
Abstract: An emerging body of research consistently demonstrates that individuals in developed consumer markets value authenticity. But how individuals respond to organizations that tout their identities as authentic is not so well understood. We argue that organizational attempts at explicitly proclaiming their own identity as authentic will generally be regarded by individuals with skepticism and devaluation. Across two studies with different research designs, we find consistent empirical evidence that individuals devalue organizations making identity self-claims of authenticity. The first study analyzed authenticity claims made in the texts of menus from 1,393 restaurants in Los Angeles and their corresponding 450,492 online consumer reviews recorded from 2009 to 2016. The second study used a controlled, minimalistic experimental setting with fictitious restaurant menus that examined reactions to generic authenticity self-claims. The findings illuminate how individuals respond to organizational identity claims about authenticity and raise interesting questions about other types of identity claims.
Distress tolerance and physiological reactivity to stress predict women’s problematic alcohol use
Distress tolerance and physiological reactivity to stress predict women’s problematic alcohol use. By Holzhauer, Cathryn Glanton; Wemm, Stephanie; Wulfert, Edelgard
Experimental and Clinical Psychopharmacology, Vol 25(3), Jun 2017, 156-165. http://dx.doi.org/10.1037/pha0000116
Abstract: Research has shown that measures of reactivity to distress—including distress tolerance and physiological reactivity to stress—are dysregulated in women who misuse alcohol. These variables may interact and create a risk profile for young adult women, reflecting patterns of stress reactivity that confer a risk for alcohol misuse. The current study tested this hypothesis by examining the independent and interactive associations of subjective distress tolerance, behavioral distress tolerance, and physiological stress reactivity with women’s alcohol misuse. The study was conducted with a sample of 91 college women recruited on a large northeastern university campus. Results showed that subjective levels of distress tolerance and physiological reactivity to stress (skin conductance reactivity, SCR), but not behavioral distress tolerance, were independently associated with alcohol misuse. In addition, subjective distress tolerance moderated the relationship between SCR and negative alcohol-related consequences. Specifically, women with low physiological reactivity (SCR) to a stressful task and greater urge to quickly rid themselves of distress (low subjective distress tolerance) endorsed a significantly greater number of adverse consequences from their alcohol use. These results extend prior findings by showing that, even among a nonclinical sample of women, lower stress reactivity in combination with low subjective distress tolerance is associated with increased risk for various drinking-related negative consequences.
Experimental and Clinical Psychopharmacology, Vol 25(3), Jun 2017, 156-165. http://dx.doi.org/10.1037/pha0000116
Abstract: Research has shown that measures of reactivity to distress—including distress tolerance and physiological reactivity to stress—are dysregulated in women who misuse alcohol. These variables may interact and create a risk profile for young adult women, reflecting patterns of stress reactivity that confer a risk for alcohol misuse. The current study tested this hypothesis by examining the independent and interactive associations of subjective distress tolerance, behavioral distress tolerance, and physiological stress reactivity with women’s alcohol misuse. The study was conducted with a sample of 91 college women recruited on a large northeastern university campus. Results showed that subjective levels of distress tolerance and physiological reactivity to stress (skin conductance reactivity, SCR), but not behavioral distress tolerance, were independently associated with alcohol misuse. In addition, subjective distress tolerance moderated the relationship between SCR and negative alcohol-related consequences. Specifically, women with low physiological reactivity (SCR) to a stressful task and greater urge to quickly rid themselves of distress (low subjective distress tolerance) endorsed a significantly greater number of adverse consequences from their alcohol use. These results extend prior findings by showing that, even among a nonclinical sample of women, lower stress reactivity in combination with low subjective distress tolerance is associated with increased risk for various drinking-related negative consequences.
Cognitive functioning, aging, and work: A review and recommendations for research and practice
Cognitive functioning, aging, and work: A review and recommendations for research and practice. By Fisher, Gwenith G.; Chaffee, Dorey S.; Tetrick, Lois E.; Davalos, Deana B.; Potter, Guy G.
Journal of Occupational Health Psychology, Vol 22(3), Jul 2017, 314-336. http://dx.doi.org/10.1037/ocp0000086
Abstract: There is a larger proportion and number of older adults in the labor force than ever before. Furthermore, older adults in the workforce are working until later ages. Although a great deal of research has examined physical health and well-being of working older adults, less research has focused on cognitive functioning. The purpose of this article is to provide a broad contemporary and multidisciplinary review of the intersection between cognitive functioning, aging, and work as a follow-up to a paper previously written by Fisher et al. (2014). We begin by providing definitions and background about cognitive functioning and how it changes over the life span. Next we discuss theories relevant to the intersection of cognitive functioning and work, including the use-it-or-lose-it hypothesis, the cognitive reserve hypothesis, hypotheses regarding environmental influences on intellectual functioning, and the job-demands-resources model. Then we summarize recent research about the effects of work on cognitive functioning, as well as ways that cognitive functioning may influence work motivation, learning, development, training, and safety. We conclude by emphasizing the importance of person-environment fit, suggesting avenues for future research, and discussing practical implications for the field of occupational health psychology.
Journal of Occupational Health Psychology, Vol 22(3), Jul 2017, 314-336. http://dx.doi.org/10.1037/ocp0000086
Abstract: There is a larger proportion and number of older adults in the labor force than ever before. Furthermore, older adults in the workforce are working until later ages. Although a great deal of research has examined physical health and well-being of working older adults, less research has focused on cognitive functioning. The purpose of this article is to provide a broad contemporary and multidisciplinary review of the intersection between cognitive functioning, aging, and work as a follow-up to a paper previously written by Fisher et al. (2014). We begin by providing definitions and background about cognitive functioning and how it changes over the life span. Next we discuss theories relevant to the intersection of cognitive functioning and work, including the use-it-or-lose-it hypothesis, the cognitive reserve hypothesis, hypotheses regarding environmental influences on intellectual functioning, and the job-demands-resources model. Then we summarize recent research about the effects of work on cognitive functioning, as well as ways that cognitive functioning may influence work motivation, learning, development, training, and safety. We conclude by emphasizing the importance of person-environment fit, suggesting avenues for future research, and discussing practical implications for the field of occupational health psychology.
In search of the psychological antecedents and consequences of Christian conversion: A three-year prospective study
In search of the psychological antecedents and consequences of Christian conversion: A three-year prospective study. By Hui, C. Harry; Cheung, Sing-Hang; Lam, Jasmine; Lau, Esther Yuet Ying; Yuliawati, Livia; Cheung, Shu Fai
Psychology of Religion and Spirituality, Vol 9(2), May 2017, 220-230. http://dx.doi.org/10.1037/rel0000082
Abstract: Religious conversion is often an overwhelming experience. Although self-reports by some converts about life before and after conversion often contain vivid descriptions of the type and extent of changes, few rigorous empirical studies have documented them. This 3-year longitudinal prospective study aimed to understand the precursors of conversion, and whether this event would result in psychological changes. A logistic regression on 455 non-Christian Chinese (of whom 46 later became Christian converts) showed that neither baseline personality, personal values, social axioms, nor psychological symptoms predicted whether one would be converted during the next three years. However, people who thought that there is one and only one true religion were more likely than others to be converted. We further formed a matched sample of 92 individuals who had been Christians throughout the study, and a matched sample of 92 nonbelievers who remained so throughout the study. Comparison between measures taken at the baseline and end of the study period showed that converted people were transformed not in personality but in symptoms of stress and anxiety, as well as several personal values.
Psychology of Religion and Spirituality, Vol 9(2), May 2017, 220-230. http://dx.doi.org/10.1037/rel0000082
Abstract: Religious conversion is often an overwhelming experience. Although self-reports by some converts about life before and after conversion often contain vivid descriptions of the type and extent of changes, few rigorous empirical studies have documented them. This 3-year longitudinal prospective study aimed to understand the precursors of conversion, and whether this event would result in psychological changes. A logistic regression on 455 non-Christian Chinese (of whom 46 later became Christian converts) showed that neither baseline personality, personal values, social axioms, nor psychological symptoms predicted whether one would be converted during the next three years. However, people who thought that there is one and only one true religion were more likely than others to be converted. We further formed a matched sample of 92 individuals who had been Christians throughout the study, and a matched sample of 92 nonbelievers who remained so throughout the study. Comparison between measures taken at the baseline and end of the study period showed that converted people were transformed not in personality but in symptoms of stress and anxiety, as well as several personal values.
Gaming the Chevron Doctrine?
Gaming the Chevron Doctrine? By Kent Barnett, Christina Boyd & Christopher Walker
University of Georgia Working Paper, June 2017, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2984302
Abstract: Do federal circuit courts consistently apply Chevron deference's framework when reviewing agency statutory interpretations? Or do political dynamics result in courts gaming the Chevron doctrine? To answer these questions, we empirically analyze circuit-court decisions from 2003 until 2013 that review agency statutory interpretations. Our results - from the largest and most comprehensive database of its kind - confirm longstanding intuition and earlier, more limited studies: courts do not consistently apply Chevron. Our findings, nevertheless, offer some surprising insights into the political dynamics of applying Chevron. When courts reviewed liberal agency interpretations, all panels - liberal, moderate, and conservative - were equally likely to apply Chevron. But when reviewing conservative agency interpretations, liberal panels applied Chevron significantly less frequently than conservative panels. Contrary to limited prior studies, we find no evidence of "whistleblower" or disciplining effects when judges of different judicial ideologies comprised the panel. Viewed together, our results provide important implications for the current debate on whether to eliminate, narrow, or clarify Chevron's domain.
Keywords: Administrative Law, Deference, Judicial Review, Chevron, Skidmore
University of Georgia Working Paper, June 2017, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2984302
Abstract: Do federal circuit courts consistently apply Chevron deference's framework when reviewing agency statutory interpretations? Or do political dynamics result in courts gaming the Chevron doctrine? To answer these questions, we empirically analyze circuit-court decisions from 2003 until 2013 that review agency statutory interpretations. Our results - from the largest and most comprehensive database of its kind - confirm longstanding intuition and earlier, more limited studies: courts do not consistently apply Chevron. Our findings, nevertheless, offer some surprising insights into the political dynamics of applying Chevron. When courts reviewed liberal agency interpretations, all panels - liberal, moderate, and conservative - were equally likely to apply Chevron. But when reviewing conservative agency interpretations, liberal panels applied Chevron significantly less frequently than conservative panels. Contrary to limited prior studies, we find no evidence of "whistleblower" or disciplining effects when judges of different judicial ideologies comprised the panel. Viewed together, our results provide important implications for the current debate on whether to eliminate, narrow, or clarify Chevron's domain.
Keywords: Administrative Law, Deference, Judicial Review, Chevron, Skidmore
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