Each year, faculty of the University of Washington Foster School of Business produces influential research—on a dizzying array of topics—that advances academic theory and advises management practice. Here are some highlights from the 2012-13 academic year.
Humility may be a virtue. It’s also a competitive advantage. Michael Johnson finds that humble people—who view themselves accurately, are teachable, and appreciate others’ strengths—tend to be the best performers in individual and team settings. They also make the most effective leaders.
Thomas Gilbert finds that inattentive investors react to old macroeconomic information when it’s newly presented (in, say, the monthly jobs report or Leading Economic Indicator). This creates a golden opportunity for savvier investors—arbitrageurs—to turn a quick profit at their expense by selling or buying those over- or under-inflated stocks.
CEO Acid Test
How good is a CEO? And how can you tell? Sarah McVay introduces the Manager Ability Score, the most precise measure of a chief executive’s ability, relative to industry peers, to transform corporate resources into revenues.
The US population is chronically under-vaccinated against influenza. But a study by Debabrata Dey and Hamed Mamani demonstrates then even modest government-subsidized incentives to get vaccinated would prevent a far greater toll on the population and the economy—even in a light flu season.
Cheater’s High Nicole Reudy learns that cheaters feel a rush of confidence and control after committing an ethical breach—a “cheater’s high” that can be more powerful than gain or guilt in determining why it is that people choose to cheat, in both small and significant ways.
The Uncertainty Tax
Jonathan Brogaard and Andrew Detzel show that indecisive economic policy—excessive debate and/or ambiguity on federal tax, spending, regulation and debt decisions—creates an environment of uncertainty that has an ill effect on financial markets. And this malaise can outlast the uncertainty itself.
Wait to innovate? Natalie Mizik finds that some public companies artificially time the introduction of innovations to convince investors of the firm’s continual improvement. This “innovation ratchet” strategy is rewarded by the capital markets, though at the expense of revenue growth in product markets.
The Upside of Piracy
Atanu Lahiri and Debabrata Dey find that a certain level of digital piracy introduces a kind of “shadow” competition that drives manufacturers of information goods to invest in quality to stay in—and ahead of—the game. The result? Greater innovation and better products at moderated prices.
Jacob Thornock sheds first light on a pervasive form of tax evasion that involves disguising investments in US securities by routing them via shell corporations based in offshore tax havens from the Cayman Islands to Switzerland to Singapore.
Shame v. Guilt
Nidhi Agrawal demonstrates that public service announcements can backfire when the message does not fit the emotional state of its intended audience. A poorly designed anti-drinking message that elicits shame, for example, can drive a young person to drink even more.
Truth in Trending
An award-winning study by Thomas Lee and Terence Mitchell demonstrates that measuring job satisfaction over time and in the context of colleagues is by far the best predictor of voluntary turnover—whether or not an employee decides to quit.
How do you build an ethical culture? Bruce Avolio demonstrates that, in the complex topography of the modern organization, it’s not as easy as setting standards at the top and expecting them to trickle down an orderly chain of command.