Behavioral

New research co-authored by Professor Olav Sorenson finds that managers are biased against ideas that are proposed by employees outside of their own work groups, hurting innovation and performance.

How does a successful company maintain a climate in which new ideas and risk-taking are encouraged? Tim Brown, CEO and president of the design consultancy IDEO, describes how he thinks about innovation and why empathy is an important part of the equation.

As housing, unemployment, the stock market, and the overall economy show signs of recovery, Professor Robert Shiller writes in the New York Times that we understand little about how people’s confidence affect these major turning points. "…[P]ublic thinking is inscrutable. We can keep trying to understand it, but we’ll be puzzled again the next time the markets or the economy make major moves."

Languages differ in how much they distinguish between the present and the future. Professor Keith Chen found that speakers of languages that do not rely on the future tense make more future-oriented choices, including saving more money, retiring with more wealth, and smoking less.

At the moment we consume, say, a chocolate bar, our brains seamlessly synthesize sensory phenomena, ideas, memories, and expectations—which means that we often don't fully understand why we like the things we like. Psychologist Paul Bloom describes how storytelling and marketing can add layers of meaning to our pleasures.

Guilt may be a key mechanism for enhancing pleasure, according to new research co-authored by Professor Ravi Dhar.

Nathan Novemsky, professor of marketing, explains to his Problem Framing course how Prospect Theory–the series of ideas and experimental observations that lie at the root of behavioral economics–elucidates one of the psychological biases that can cause people to approach the same problem in very different ways. Understanding these biases can help one see problems more clearly.

Does economic inequality provide incentives for success? Does it introduce instability into the financial system? A political scientist and an economist discuss how inequality affects government, markets, and the risks faced by ordinary people.

Are there leaders in everyday life? A long body of literature argues that a small number of individuals have an outsize influence on what the rest of us buy, wear, and consume. But marketing professionals and scholars have been debating how to make use of these opinion leaders.

Behavioral economist Dan Ariely's research has found that the cumulative impact of various forms of cheating has a significant effect on the world economy. His experiments show that people, across a wide range of situations, will cheat just a little bit, even when given the opportunity to get away with more; but reminders of core values can reduce cheating. He discusses the implications of these ideas for managers and professional organizations.