Publication database

We predict and find that regulated firms’ mandatory disclosures crowd out unregulated firms’ voluntary disclosures. Consistent with information spillovers from regulated to unregulated firms, we document that unregulated firms reduce their own disclosures in the presence of regulated firms’ disclosures. We further find that unregulated firms reduce their disclosures more the greater the strength of the regulatory information spillovers. Our findings suggest that a substitutive relationship between regulated and unregulated firms’ disclosures attenuates the effect of disclosure regulation on the market-wide information environment.

We initiate the study of naivete-based discrimination, the practice of conditioning offers on external information about consumers’ naivete. Knowing that a consumer is naive increases a monopolistic or competitive firm's willingness to generate inefficiency to exploit the consumer's mistakes, so naivete-based discrimination is not Pareto-improving, can be Pareto-damaging, and often lowers total welfare when classical preference-based discrimination does not. Moreover, the effect on total welfare depends on a hitherto unemphasized market feature: the extent to which the exploitation of naive consumers distorts trade with different types of consumers. If the distortion is homogenous across naive and sophisticated consumers, then under an arguably weak and empirically testable condition, naivete-based discrimination lowers total welfare. In contrast, if the distortion arises only for trades with sophisticated consumers, then perfect naivete-based discrimination maximizes social welfare, although imperfect discrimination often lowers welfare. And if the distortion arises only for trades with naive consumers, then naivete-based discrimination has no effect on welfare. We identify applications for each of these cases. In our primary example, a credit market with present-biased borrowers, firms lend more than socially optimal to increase the amount of interest naive borrowers unexpectedly pay, creating a homogenous distortion. The condition for naivete-based discrimination to lower welfare is then weaker than prudence.

This is an open access article.

We analyze conditions facilitating profitable deception in a simple model of a competitive retail market. Firms selling homogenous products set anticipated prices that consumers understand and additional prices that naive consumers ignore unless revealed to them by a firm, where we assume that there is a binding floor on the anticipated prices. Our main results establish that “bad" products (those with lower social surplus than an alternative) tend to be more reliably profitable than “good" products. Specifically, (1) in a market with a single socially valuable product and sufficiently many firms, a deceptive equilibrium - in which firms hide additional prices - does not exist and firms make zero profits. But perversely, (2) if the product is socially wasteful, then a profitable deceptive equilibrium always exists. Furthermore, (3) in a market with multiple products, since a superior product both diverts sophisticated consumers and renders an inferior product socially wasteful in comparison, it guarantees that firms can profitably sell the inferior product by deceiving consumers. We apply our framework to the mutual-fund and credit-card markets, arguing that it explains a number of empirical findings regarding these industries.

This is an open access article.

This case illustrates critical concepts and lessons about leading adaptive change in organizations, focusing on the challenges faced by Automécanique Industries during its transition from producing internal combustion engine (ICE) components to electric vehicle (EV) technologies. The case portrays the tensions between employees and management during a pivotal transformation, spotlighting employee reactions to change, possible miscommunication, and perceived leadership shortcomings. The central narrative centers on a letter written by Louis Tremblay, a senior technician, to CEO Isabelle Laurent. The letter, which gains traction among employees and leaks to external media, reflects the fears and frustrations of the workforce.
The case can be used directly in class, making it particularly suitable for executive education sessions or for classes in environments where students frequently fail to come to class prepared.
This case serves as a vehicle for exploring Heifetz’s theory of adaptive change (Heifetz & Linsky, 2002; Heifetz, Grashow, & Linsky, 2009), the psychological challenges of leading change (Kets de Vries et al., 2007), and the importance of transparent communication and trust-building in leadership. The case is adaptable for courses on leadership, organizational behavior, change management, and communication in both MBA and executive education settings.

FoodCo, a historically successful global player in the FMCG field, is navigating a digital transformation initiative. The case focuses on Anette Weber, a 43-year-old Swiss national and Senior Manager for Management Reporting, who recently relocated from the USA to Germany. Anette inherits an overworked, directionless, and low-morale team due to significant headcount reductions and role transitions to an outsourced partner. Shortly after Anette took charge, FoodCo’s CEO, Timothy Brooks, introduced a new vision: “Be the leader in nutrition, health, and wellness and the industry gold standard for financial performance, trusted by all stakeholders.” Anette saw this strategic change as an opportunity but faced challenges in revitalizing her team. Her executive coach advised her to reflect on seven key leadership transition challenges: authorizing oneself as a leader, balancing strategic direction with adaptability, learning and unlearning, driving organizational and cultural transformation, building teams and networks, communicating effectively, and being her best self. To align her team with the new vision, Anette aimed to shift focus from low value-adding tasks to advanced management reporting and forecasting using data analytics. This vision met resistance from department heads who viewed her team as a service provider for exception-based tasks. Additionally, past outsourcing experiences at FoodCo had been contentious. Anette, in her new role, must address team dynamics, organizational culture, and strategic leadership challenges to navigate tensions between innovation capability, focus, collaboration, and governance while ensuring her team aligns with FoodCo's broader strategic goals. But where to start? What shall she do first?

The case examines the challenges faced Simon Kendrick (a composite character), the Global Vice President of Strategy at CabloCorp, a global leader in the cable and engineering solutions market headquartered in Barcelona, as it seeks to implement a transformational shift from traditional volume-driven sales to value-added solutions. While some country general managers and sales leaders have embraced the change and achieved early successes, others cite resource constraints and market realities, and some remain detached. Simon struggles with differing responses—active skepticism, passive disengagement, and resource-related hesitancy—and seeks to align a centralized vision with diverse local realities. The case focuses on bringing about change to an organization that currently feels no pressure for transformation.

The pandemic has not wholly derailed DEI as much as feared. The insights from the DEI officers of globally active companies demonstrate optimism and inspiration for those designing DEI strategies in 2022.

Traditional luxury goods companies have treated digital as a channel. But they’re now starting to treat it as a marketplace in its own right, thanks largely to Blockchain technology, which has delivered the Non-Fungible Token. Today, the key ingredients of luxury – rarity, exclusivity, and cost — can also apply to virtual products, as companies like Balenciaga, Louis Vuitton, and Gucci have realized.