RESEARCH IN ACTION
Impact of Supervisors on Workplace Conflict Management
Tenant Rights, Eviction, and Rent
Affordability: Understanding the Trade-offs
Cancer Treatment Sequences That Save Lives—and Money INSIDE THIS ISSUE
Impact of Supervisors on Workplace Conflict Management
Workplace conflict is an inevitable part of organizational life. It can arise from differences in values, personalities, or competition over limited resources, supervisors are often expected to play a pivotal role in resolving these conflicts. However, many supervisors lack the necessary training and support to effectively resolve internal disputes. This is why a recent study by Dr. Jone Pearce of the Merage School of Business at the University of California, Irvine and inspired by co-author Dr. Kimberly McCarthy of Cal State University, San Marcos, explored the significant impact supervisors can have on conflict resolution. Their article, published in the International Journal of Conflict Management, specifically highlights the crucial role of supervisory intervention in resolving disputes and retaining employees.
Research Background and Methodology
“Our study utilized a substantial dataset provided by the Federal Aviation Administration (FAA),” says Pearce, “which allowed us to analyze conflict management among air traffic controllers—a group known for high-pressure work environments. This robust dataset of over 5,000 employees, gathered through annual surveys conducted by the FAA, provided a rare glimpse into long-term conflict dynamics in high-stress settings.”
“What we found was that, for supervisors who could mediate a conflict among the people who report to them, the conflicts were more likely to be resolved,” Pearce says, “and the employees were more likely to stay with the organization.”
One of the primary findings of their study is that supervisors who actively mediate conflicts are more likely to see those conflicts resolved, with employees choosing to remain with the organization. “What we found was that, for supervisors who could mediate a conflict among the people who report to them, the conflicts were more likely to be resolved,” Pearce says, “and the employees were more likely to stay with the organization.” This suggests that supervisory intervention not only reduces workplace tensions but also positively impacts employee retention.
The Role of Supervisor Training
However, their study also found that many supervisors are not adequately trained to handle conflict effectively. “Most supervisors are not trained in how to deal with conflict or how to mediate,” Pearce says. “They’re not
clinical psychologists.” The study advocates for training supervisors in basic conflict resolution skills, emphasizing that these techniques are well-established but often neglected in leadership development programs.
Implications for Organizations
The findings underscore the need for organizations to invest in training programs that equip supervisors with conflict resolution skills. As Dr. Pearce notes, “Most conflict studies almost never talk about how we can train supervisors on how to handle a conflict.” She suggests that simple mediation training could drastically improve conflict outcomes, reducing turnover and enhancing workplace morale.
Conclusion
Dr. McCarthy and Dr. Pearce’s study presents compelling evidence that supervisors can be instrumental in resolving workplace conflicts, particularly when equipped with the right skills. “Our research calls for a shift in organizational focus toward conflict resolution training for supervisors,” Pearce says. “As organizations seek to maintain healthy work environments, investing in supervisor training could be a critical step toward sustainable conflict management.”
Dr. McCarthy and Dr. Pearce’s study presents compelling evidence that supervisors can be instrumental in resolving workplace
conflicts, particularly when equipped with the right skills. “Our research calls for a shift in organizational focus toward conflict resolution training for supervisors,” Pearce says. “As organizations seek to maintain healthy work environments, investing in supervisor training could be a critical step toward sustainable conflict management.”
Jone L. Pearce is Distinguished Professor Emerita of organization and management at the University of California, Irvine. She conducts research on how workplace interpersonal processes may be affected by political structures and organizational policies and practices. Her work has appeared in over 100 scholarly publications such as the Academy of Management Journal, Academy of Management Review, Journal of Applied Psychology, and Organization Science. She has edited several volumes and written several books.
Tenant Rights, Eviction, and Rent Affordability: Understanding the Trade-offs
In a groundbreaking study recently published in The Journal of Urban Economics, Professor Ed Coulson of the Merage School of Business at the University of California, Irvine, along with coauthors Thao Le (J. Mack Robinson College of Business, Georgia State University), Victor Ortego Marti (Department of Economics, University of California, Riverside), and Lily Shen (Department of Finance, Clemson University), explore the profound impacts of tenant protections on urban housing markets. Their research article, Tenant Rights, Eviction, and Rent Affordability, investigates how tenant-friendly policies shape eviction rates, rent prices, and housing supply dynamics.
“There has been a lot of attention paid to evictions in the past half-decade,” Coulson says, pointing to a surge of interest in housing stability and affordability. The team drew inspiration from a robust new database that cataloged eviction filings across U.S. cities, providing a rich dataset to examine market responses.
Methodology: Digging Deep into LandlordTenant Laws
Coulson’s team employed a two-pronged approach: empirical data analysis and theoretical modeling. “My co-authors and I started this process by just buying these landlord guides and going through them one by one, page by page, looking at what kind of laws they had,” Coulson says. “We meticulously compiled and analyzed state-by-state landlord-tenant regulations, ranging from eviction notice periods to security deposit rules, and constructed an index for comparison.” This index, normalized for consistency, served as the basis for correlating legal structures with local housing outcomes— rent levels, vacancy rates, and eviction frequencies among them.
Key Findings: The Surprising Impact of Tenant Protections
“What we found was what people might have expected,” Coulson says, “but also some things they might not.” Tenant-friendly regions saw higher rents and tighter housing markets—outcomes many would anticipate. Yet, contrary to fears of supply shrinkage, the data suggested that landlords did not withdraw properties from the market. “We think causality is a little bit difficult to untangle here,” Coulson notes, “but we have this result that shows that supply rises rather than falls.”
This counterintuitive rise in supply, Coulson argues, is driven by rising rents incentivizing landlords to maintain or even expand their property holdings.
“The increase in
demand is bigger than the increase in supply,” Coulson explains, which ultimately leads to higher rents and lower vacancy rates.
Implications for Policy and Practice
The implications of these findings are multifaceted. Stronger tenant protections may reduce eviction rates and bolster housing stability, yet they also contribute to rent increases and lower vacancies. For landlords, higher rents may offset concerns over restricted evictions, while policymakers are left to balance tenant security with affordability concerns.
“It’s neither good nor bad to change landlord-tenant regulation structures,” Coulson says. “It all depends on how much weight you put on the various outcomes when you do that.”
“It’s neither good nor bad to change landlord-tenant regulation structures,” Coulson says. “It all depends on how much weight you put on the various outcomes when you do that.” This nuanced perspective invites policymakers to weigh trade-offs carefully.
Conclusion: Rethinking Housing Policy
Coulson and his team’s work adds a new layer of understanding to housing market dynamics. Their findings challenge assumptions about landlord reactions to tenant protections, suggesting that housing supply may not be as fragile as previously thought. As urban centers face mounting pressures around housing affordability, this research provides crucial insights for shaping effective, balanced policies.
“You can change these structures,” Coulson explains, “but it’s important to recognize that these changes have these knock-on effects of higher rent and basically tighter housing markets.”
As the housing crisis persists and urban centers face mounting pressures around housing affordability, this research provides crucial insights into shaping more effective and balanced policies.
N. Edward Coulson is a prominent Professor of Economics and serves in the school’s Center for Real Estate as Director of Research. In this capacity, Coulson advances the real estate program’s agenda of excellence in teaching, research and professional outreach. His research is focused on the mismeasurement of rent in the Consumer Price Index, and its implications for macroeconomic policy; the bias in residential appraisals; the impact of homeownership on people’s lives and neighborhoods; home prices; multifamily housing and its management; historic districts; the relationship between REITs and other asset markets; and many others.
Cancer Treatment Sequences That Save Lives—and Money
In the evolving landscape of cancer treatment, the sequencing of therapies plays a crucial role in determining both clinical outcomes and cost-effectiveness. One recent study, Modeling Cost-effectiveness Analysis of Treatment Sequencing, authored by Professor L. Robin Keller of the Merage School of Business at the University of California, Irvine, presents a comprehensive analysis of how different cancer treatment sequences impact patient outcomes and healthcare costs. This new study, co-authored by Jiaru Bai (College of Business, Stony Brook University, NY) and Cristina del Campo (Complutense University of Madrid, Spain) and recently published in Socio-Economic Planning Sciences, introduces novel models that help policymakers and healthcare providers optimize treatment strategies.
Research Background and Methodology
This research explores various treatment paths for cancer patients, emphasizing how the order of therapies can influence effectiveness and economic efficiency. “Utilizing advanced cost-effectiveness modeling techniques, we examined multiple treatment sequences to identify optimal pathways that maximize patient survival rates while minimizing overall costs,” says Keller. “We wanted to understand not just which treatments were effective, but how their sequencing could fundamentally alter both patient outcomes and economic viability.” Keller further noted that “simulation models and real-world data allowed us to predict outcomes under different sequencing scenarios, providing a clearer picture of what works best and why.”
Key Findings
choosing the right treatment; it’s about the order in which it’s given. We found that altering the sequence could either enhance or inhibit the effectiveness of the entire protocol.”
Conversely, their study found that reversing the sequence led to diminishing returns both in terms of patient health and economic cost. These findings underscore the importance of strategic planning in oncology treatment to optimize both patient outcomes and cost savings.
Fiscal and Longevity Implications
“Optimizing treatment sequencing is not just about improving outcomes—it’s about making care sustainable.”
One of the standout findings from their research is that specific sequences of chemotherapy, targeted therapy, and immunotherapy yielded significantly different results. “For instance, initiating treatment with targeted therapy followed by immunotherapy showed improved survival rates in certain cancer types,” Keller says. “It’s not just about
The implications of this research are profound for healthcare providers and policymakers. “We found that, by understanding the cost-effectiveness of treatment sequencing, medical professionals can better advise patients, and health systems can allocate resources more efficiently,” Keller says. “If healthcare providers understand the sequencing effects, they can tailor their approach not only for better patient care but also for cost containment.”
Moreover, the study suggests that current treatment guidelines could be enhanced by integrating cost-
effectiveness analysis, potentially leading to more standardized and economically sound cancer care protocols.
Future Research Directions
Professor Keller and her co-authors advocate for further studies that explore treatment sequencing in other cancer types and diverse patient populations. They also highlight the need for integrating genetic markers and personalized medicine into sequencing models to refine predictions and enhance patient care.
Keller noted the importance of expanding the research, saying, “There’s so much potential to further refine these models. Personalized medicine is the next frontier, and sequencing will be a critical part of that evolution.”
These advancements could lead to more tailored treatment plans that reflect individual patient responses to different therapies.
Next Steps
This study by Keller, Bai, and del Campo lays the foundation for a deeper understanding of treatment planning in oncology and
opens avenues for future research to build upon these findings. Keller summarized the study’s impact by saying, “Optimizing treatment sequencing is not just about improving outcomes—it’s about making care sustainable.”
This focus on cost-effectiveness may serve as a guide for more resource-conscious healthcare planning, potentially reshaping how treatment pathways are structured in future oncology care.
L. Robin Keller is Professor Emerita of organization and decision technologies with research that spans the areas of multiple attribute decision making, fairness, perceived risk, probability biases, problem structuring, temporal discounting, and planning protection against terrorism, environmental, health, and safety risks. She has edited several volumes, authored several books and is the recipient of multiple awards.
Research Abstracts
Latest Published Work by Merage School Faculty Members
Accounting Abstracts
Professors Chuchu Liang and Ben Lourie
Title: “Too Much of a Good Thing? Administrative Support Staff and Firm Performance”
Co-authors: Alex Nekrasov and Tonni Xia (PhD Alumnus)
Accepted at: Journal of Accounting, Auditing and Finance
Abstract: Administrative support staff aid firms in managing and motivating employees. However, our understanding of their role is limited. Using unique data from employee profiles, we find that administrative intensity, defined as the proportion of administrative support employees, is negatively associated with future firm performance. This negative association disappears when administrative intensity is low, suggesting a certain level of administrative intensity may be beneficial. Further analysis shows that greater administrative intensity is associated with better employee relationships: lower turnover and higher job satisfaction. However, administrative intensity is negatively associated with innovation quality and quantity. Finally, we find that firms with higher administrative intensity experience lower future stock returns, suggesting investors do not fully use this information. Overall, our findings reveal the trade-offs of administrative support: while firms with higher administrative intensity enjoy better relationships with employees, these firms also exhibit worse innovation, resulting in overall poorer financial performance.
Finance Abstracts
Professor Michael Imerman
Title: “The Economics of FinTech: Understanding Digital Transformation in Financial Services”
Co-author: Frank J. Fabozzi
Accepted at: MIT Press
Abstract: Technological innovation has shaped the role of finance since the introduction of the ATM in the 1960s, but never more consequentially than by the massive digital revolution in the financial services industry known as FinTech. The Economics of FinTech is a comprehensive introduction to this rapidly evolving and increasingly important domain, and a groundbreaking exploration of how FinTech is reshaping finance. Michael Imerman and Frank Fabozzi distill the dynamic developments of this multidisciplinary field into a cohesive, accessible guide that covers the economic underpinnings of FinTech innovation, framed within the established principles of financial intermediation, management theory, and data science. Coverage includes in-depth
analysis of emerging technologies and innovations across various sectors of financial services as well as the entrepreneurial finance of FinTech such as funding, valuation, and startup management.
Professor Yuhai Xuan
Title: “How Does Health Insurance Affect Firm Employment and Performance? Evidence from Obamacare”
Co-authors: Heitor Almeida, Ruidi Huang, and Ping Liu
Accepted at: Management Science (Journal on Financial Times Top 50 list)
Abstract: This paper studies how mandating employers to provide health insurance of a minimum quality and the associated increases in health insurance premia affect firm employment and performance. Using hand-collected firm-level employee health insurance data around the passage of the Patient Protection and Affordable Care Act (PPACA), we show that the PPACA is associated with a significant increase in health insurance premia for employees in company-sponsored health insurance plans. In response, employers with greater exposure to the PPACA reduce employee enrollments in their health insurance plans to a larger extent after the law’s enactment. Our analysis suggests that employers achieve this reduction in enrollment by shifting employment composition from full-time employees to part-time, temporary, or seasonal workers, who are not covered in employer-sponsored health insurance plans. Furthermore, we find no evidence of deterioration in performance at companies more exposed to the increase in health insurance premia. Overall, our findings illustrate how firms adapt to and mitigate cost increases associated with regulatory changes through strategic labor practices.
Economics and Public Policy Abstracts
Professor Ed Coulson
Title: “Tenant Rights, Eviction and Rent Affordability”
Co-authors: Thao Le, Victor Ortego Marti, Lily Shen
Accepted at: Journal of Urban Economics
Abstract: We use state-level differences in landlord-tenant laws to estimate their impact on rental housing affordability. We construct a Tenant Rights Index (TRI) spanning 1997 to 2016 to assess its effects on eviction rates and rental market outcomes. Increased TRI correlates with higher median rent, higher rent-value ratio, and increased homelessness. To rationalize our findings, we develop a search and matching model of the rental market with free entry of both landlords and tenants, and an endogenous
eviction mechanism. In our environment, more stringent eviction regulations reduce evictions and raise the relative demand for housing. However, stricter regulations also lead to higher rents and lower vacancy rates. We calibrate the model to the US rental market to quantitatively assess the mechanism in our model. An increase in eviction costs has a larger impact on the eviction rate and market tightness, with a relatively smaller effect on rents and vacancy rates. Our findings suggest that while stringent regulations may reduce evictions, they could lead to unintended consequences such as inflated house prices and heightened homelessness. Policymakers must carefully balance these potential drawbacks against the goal of tenant protection to avoid exacerbating existing housing affordability challenges.
Professor Ed Coulson
Title: “Default Costs and Repayment of Underwater Mortgages”
Co-authors: Jan Brueckner, James Conklin, Moussa Diop
Accepted at: Journal of Financial and Quantitative Analysis (Journal on Financial Times Top 50 list)
Abstract: We explore an overlooked phenomenon in mortgage markets: repayment of underwater mortgages. Using a sample of mortgages terminated between 2007 and 2016, we show that such repayment indeed occurs, and that it is affected by the same factors commonly used in studies of default: the magnitude of home equity and the borrower’s credit score, which captures default cost as well as liquidity. A novel insight is that underwater repayers, unlike most defaulters, are not liquidity constrained, providing a much cleaner environment to study default costs. We estimate lower bounds on these costs. Our results indicate that default costs are substantial.
Professor Ed Coulson
Title: “Warmth of the Welcome: Immigration and Local Housing Price Dynamics”
Co-authors: Xun Bian, Xiaojin Sun
Accepted at: Real Estate Economics
Abstract: We examine the impact of immigration on local housing price dynamics in the U.S. Leveraging a newly developed instrument by Burchardi et al. (2024), we find that immigration affects both county-level housing price appreciation and within-county spatial dispersion in housing price changes. Our estimates suggest that, on average, an immigration inflow equal to 1% of a county’s initial population raises housing price appreciation by approximately 6.8 percentage points and lowers within-county dispersion by about 1.5 percentage points. Importantly, these effects vary across
counties and appear to be shaped by local attitudes toward immigrants. Using several county-level proxies for such attitudes, we find that immigration increases housing price appreciation and reduces within-county dispersion only in counties where residents are more educated, younger, and less racially biased. Overall, our findings highlight that the impact of immigration on housing price dynamics is highly dependent on the local social and demographic context, particularly natives’ attitudes toward immigrants.
Operations and Decision Technologies Abstracts
Professor Emerita L. Robin Keller
Title: “Modeling Cost-effectiveness Analysis of Treatment Sequencing”
Co-authors: Jiaru Bai (PhD Alumna) and Cristina del Campo
Accepted at: Socio-Economic Planning Sciences
Abstract: In clinical practice, patients with cancer often undergo treatment with a sequence of drugs, usually because of diminishing effectiveness over time or resistance development. However, few cost-effectiveness analyses have included that fact in their model. This paper aims at closing that gap by presenting a model that reflects the possibility of the patient switching from one therapeutic agent to another one throughout the long-term duration of his/her life.
Organization and Management Abstracts
Professor Patrick Bergemann
Title: “Blindfolding, Perceptual Dehumanization and Tolerance for State-Sanctioned Killing: A Theory of Illegitimate Punishment”
Co-author: Katrina Fincher
Accepted at: European Journal of Social Psychology
Abstract: The present work integrates cultural practices, perceptual psychology and social cognition to explore the psychological effects of blindfolding in state-sanctioned punishment. Across four studies, we demonstrate how the use of blindfolds—a seemingly minor aspect of punishment rituals—attenuates configural face processing, a change we argue alters social behavior. Studies 1 and 2 demonstrate that blindfolds are associated with a tolerance for harsher punishments. Studies 3 and 4 explore the legitimacy of punitive action; findings from these studies suggest that blindfolding
rituals hold the largest effect when the punishment would not be seen as legitimate. These results suggest that historically ingrained punitive rituals may subtly exploit psychological biases to shape public attitudes, offering insights into the psychological underpinnings of institutional legitimacy and societal compliance.
Professor Patrick Bergemann
Title: “Organizational Scarring, Legal Consciousness, and the Diffusion of Local Government Litigation Against Opioid Manufacturers”
Co-authors: Amanda Sharkey, Kathryne Young, Christof Brandtner
Accepted at: American Sociological Review
Abstract: Between 2017 and 2020, local government attorneys’ offices in the U.S. filed a surge of lawsuits against opioid manufacturers, distributors, and retailers. Aimed at recovering the costs of the opioid epidemic, this “affirmative litigation” was a novel action for most of them. Participation necessitated a tectonic shift in how they viewed the relationship between their usual “defensive” legal roles and the law itself. To understand how this occurred, we employ a mixed-methods approach using in-depth interviews and event-history analysis. Our investigation reveals the importance of “organizational scarring,” wherein one organization develops a latent sense of having been wronged by another entity—a feeling which lies dormant but may be activated later. Here, scarring resulted from the Big Tobacco lawsuits. As many localities perceived it, states’ distribution of settlement money unfairly disadvantaged them. This scar lay dormant until the possibility of opioid litigation arose, triggering distrust of state legal action and causing local government attorneys to reconceptualize affirmative litigation as befitting their roles— which facilitated their decisions to sue. Our findings not only shed light on a tactic that local governments are increasingly using to respond to public health crises, but also inform research on organizational learning, diffusion, and legal consciousness.
Associate Professor Ming Leung
Title: “Approaching or avoiding? Gender asymmetry in reactions to prior job search outcomes by gig workers in female- versus male-typed job domains”
Co-authors: Tiantian Yang and Jiayi Bao
Accepted at: Social Forces
Abstract: Despite recent increases in females entering male-typed job domains, women are more likely to exit these jobs than men, leading to a “leaky-pipeline” phenomenon and contributing to continued occupational gender segregation. Extant work has
demonstrated that women are less likely to reapply to employers who previously rejected them for jobs in male-typed job domains. However, these studies leave unexamined whether women will reapply to other employers in those job domains and, if so, whether this pattern differs in female-typed job domains, hampering our confidence in the contribution of these patterns to gender segregation. This paper investigates whether employer rejection dampens women’s job-seeking persistence more than men’s for all employers and across male versus female job domains. Regression analyses of more than 700,000 applications for over 200,000 job postings by roughly 70,000 freelancers in an online contract labor market demonstrate that women are more likely than men to reduce job-seeking activity from all employers following rejections in the male-typed IT and programming job domain. Women are also more likely than men to seek jobs in other domains outside IT and programming following job-seeking rejection. By contrast, female freelancers in female-typed writing and translation jobs do not exhibit similar gendered behavior patterns. Implications for research on gender segregation, careers, and hiring are discussed.
Associate Professor Ming Leung
Title: “Reactions, Revisions, and Rehiring: Changes in Employers’ Gendered Preferences in Online Labor Markets”
Co-author: Claire Daviss
Accepted at: Organization Science (Journal on Financial Times Top 50 list)
Abstract: Employers in online labor marketplaces prefer women over men because of stereotypes that women are more trustworthy. These stereotypes are especially salient in this context because of the uncertainty in online transactions. Yet, employers’ interactions with women and men workers might moderate the influence of trustworthiness stereotypes and, by extension, employers’ hiring preferences for individual women and men as well as gender categories in general. By exploiting rare access to large-scale, longitudinal hiring data from an online labor marketplace, we examine how employers’ interactions with workers shape their subsequent hiring preferences. Using linear probability models with job fixed effects, we find that employers prefer rehiring workers with whom they previously had positive interactions over unknown workers. Men workers benefit more than women workers from positive interactions, suggesting that these interactions decrease the influence of negative stereotypes about men’s trustworthiness. We additionally find that employers prefer hiring workers of the same gender as workers with whom they previously had positive interactions, suggesting that employers’ interactions with individual women and men shape their preferences for hiring women and men in general. These findings point to a
nuanced theoretical relationship between employers’ interactions with workers and their social category preferences in hiring under conditions of immense uncertainty.
Associate Professor Ming Leung & Associate Professor Sharon Koppman
Title: “Applying While Black: The collateral effects of racial differences in work histories”
Co-author: Prasanna Parasurama
Accepted at: Administrative Science Quarterly (Journal on Financial Times Top 50 list)
Abstract: It is well known that hiring practices that treat job seekers differently by race contribute to racial disparities in employment. Yet practices that treat job seekers equivalently may also contribute to racial disparities if there are preexisting racial differences. We focus on the prominent practice of using a job seeker’s work history to make inferences about her suitability for a given job. Scholars and practitioners alike have long assumed work histories result from job seekers’ strategic choices about where to apply and what jobs to accept and are therefore race neutral. However, Black job seekers face structural constraints—namely, anticipating and experiencing racial discrimination—that restrict the job search strategies and resulting jobs available to them. As a result, they are less likely than their White peers to construct the related and specialized work histories employers value. These differences in work histories contribute to the racial disparities that Black job seekers experience. We test and find support for this argument using over 490,000 job applications for all 3,683 publicly posted jobs over seven years at two U.S. technology companies. This study uncovers a novel pathway through which race shapes employment, contributing to the literature on racial discrimination and categorization in labor markets.
Professor Emerita Jone Pearce
Title: “Supporting Resolution: The Impact of Supervisors on Workplace Conflict Management”
Co-author: Kimberly McCarthy (PhD Alumna)
Accepted at: International Journal of Conflict Management
Abstract: In this study we investigate the role of supervisors in managing workplace conflict, with a focus on introducing and empirically testing a new construct called Supervisor Conflict Management Support (SCMS). The results confirm preliminary theory of how SCMS influences conflict resolution and organizational outcomes, including contextual factors such as conflict severity and expression norms. The results demonstrate that SCMS significantly improves conflict resolution outcomes
and enhances organizational commitment while reducing employees’ intent to stay. Moderating analyses revealed that SCMS is most effective under lower conflict severity and restrictive expression norms. By examining supervisor conflict management support in a high-stakes organizational context, the findings contribute to advancing conflict management theory and offer practical insights for supervisory training aiming to improve workplace conflict resolution.
Strategy and Entrepreneurship Abstracts
Professor Philip Bromiley
Title: “A Review of Cognitive Biases in Strategic Decision Making”
Co-author: Devaki Rau
Accepted at: Long Range Planning
Abstract: This paper presents an integrative review of empirical research (2000 - 2023) on cognitive biases that affect decision makers in established organizations as they make strategic decisions. We examine patterns in the measures, antecedents, and outcomes of two broad categories of biases: systematic biases that operate similarly across individuals (e.g., overconfidence, escalation of commitment, loss aversion, and myopic loss aversion), and idiosyncratic biases that depend on the decision maker’s experience and past interactions (e.g., myopia and local search bias). We also distinguish between findings with strong empirical evidence and those with less empirical support. Our review indicates researchers measure both types of bias using one or more of three broad approaches: assuming or inferring the bias, measuring it directly, and experimentally manipulating the bias and observing its effects. We find strong empirical support for firm ownership, performance or performance relative to aspirations, and CEO compensation and wealth as antecedents to loss aversion and myopic loss aversion. We also find that loss aversion has strong but mixed effects on outcomes such as diversification or internationalization, acquisitions, R&D intensity or investments, and risk taking. Findings with less empirical support include, among others, mostly mixed effects of loss aversion and framing on innovation, mostly positive effects of overconfidence on innovation and risk taking, and negative effects of overconfidence on corporate social responsibility, performance, and forecasting. Based on our findings, we discuss the challenge of identifying and measuring a bias in a way that is relevant to strategic management and suggest directions for future research.
Assistant Professor Luke Rhee
Title: “Founder’s Entry Strategy and Funding Performance in the Crowdfunding Industry: The Mediating Role of Founder Attention”
Co-authors: Joon Mahn Lee, Dalee Yoon
Accepted at: Strategic Entrepreneurship Journal (Journal on Financial Times Top 50 list)
Abstract: Building on recent studies on founders’ entry strategy and the attentionbased view, our study examines the underexplored relationship between entrepreneurial entry mode and funding performance. We offer a novel perspective on how different entry strategies, such as hybrid, portfolio, and full-time entrepreneurship, impact start-up performance. Additionally, we develop a theoretical framework highlighting founder attention as a mediator in this relationship. Our research was conducted in the crowdfunding context, with findings remaining consistent across multiple measures of founder attention and funding performance. To address potential endogeneity concerns, we employ two-stage instrumental variable analyses, and a propensity score matching method, ensuring the robustness of our results.
Awards and Honors
Professor Luke Rhee Best Published Paper Award
This award is presented by the Academy of Management’s Communication, Digital Technology, and Organization (CTO) Division. It recognizes one paper published last year in a top journal in the fields of information systems, organizations and strategy.
Title: “Borrowing Networks for Innovation: The Role of Attention Allocation in Secondhand Brokerage”
Co-Author: Paul Leonardi
Abstract: This study investigates how people connecting with brokers who span structural holes in a firm’s communication networks can enhance their innovative performance. Through sociometric data from a large software company, we observe that individuals who pay attention to information from brokers achieve higher innovative performance compared with those who ignore such information. The advantage of paying attention to brokers’ information is more pronounced when people operate in highly constrained networks. Yet, our post hoc analysis reveals that people typically allocate less attention to information from brokers than from local colleagues—they systematically do the opposite of what they should do for innovative performance. Our findings regarding the role of attention for secondhand brokerage make significant contributions to studies of networks and innovation for behavioral strategy.
Illustrations by Emily Young ’20