Managing Success
Eliciting Advice Instead of Feedback Improves Developmental Input
Hayley Blunden et al.
Management Science, forthcoming
Abstract:
Most organizations encourage employees to provide feedback to one another to support learning, personal growth, and career advancement. However, employee feedback often fails to improve performance because it lacks concrete, specific guidance. We provide a temporal explanation for why workplace input processes routinely fail to produce valuable and concrete developmental insights: they are insufficiently focused on the future. In this paper, we theorize and demonstrate that encouraging input providers to think about the future leads them to produce more concrete developmental input. Across a large scale, preregistered field experiment (n = 27,432 comments) and two laboratory studies (n = 806), people provide more concrete and actionable developmental input when they are prompted to provide future-looking “advice” rather than “feedback,” a common method of soliciting input in organizations. The effect of soliciting advice on input concreteness was mediated by providers’ future focus. Moreover, in a follow-up study, such concrete input was assessed by independent raters as more useful. These findings highlight the role of temporal orientation in driving the content of developmental input. In doing so, our data suggest that individuals and organizations have the potential to promote higher-quality developmental input by attending to the temporal orientation that their input systems encourage.
The Rising Returns to R&D: Ideas Are not Getting Harder to Find
Yoshiki Ando, James Bessen & Xiupeng Wang
Boston University Working Paper, July 2025
Abstract:
R&D investment has grown robustly, yet aggregate productivity growth has stagnated. Is this because “ideas are getting harder to find”? This paper uses micro-data from the US Census Bureau to explore the relationship between R&D and productivity in the manufacturing sector from 1976 to 2018. We find that both the elasticity of output (TFP) with respect to R&D and the marginal returns to R&D have risen sharply. Exploring factors affecting returns, we conclude that R&D obsolescence rates must have risen. Using a novel estimation approach, we find consistent evidence of sharply rising technological rivalry and obsolescence. These findings suggest that R&D has become more effective at finding productivity-enhancing ideas, but these ideas may also render rivals’ technologies obsolete, making innovations more transient. Because of obsolescence, rising R&D does not necessarily mean rising aggregate productivity growth.
The Economics of Advice: Evidence from Start-up Mentoring
Amir Sariri
Management Science, forthcoming
Abstract:
This paper examines the role of advice in early firm development and growth, drawing on detailed data from a global program where angel investors and venture capitalists (VCs) mentored founders over several months. Leveraging variation in mentors’ availability to support start-ups because of personal scheduling conflicts, I find that advice significantly improves start-ups’ future market performance. To explore how advice shapes early firm development, I develop a novel typology of start-up activities, finding that a defining element of mentors’ advice is to do less and learn more. Although angels and VCs are consistent in this message, they differ significantly in when they choose to advise start-ups in achieving their business objectives. Angels are more likely than VCs to help founders design and execute product market experiments, whereas VCs provide more mentoring support on business analysis and planning tasks. I find evidence consistent with the hypothesis that experimentation is a skill developed via learning-by-doing, and angels have a skill advantage in that domain because of having more operational experience.
Local Labor Markets and Corporate Innovation
Cheng Jiang et al.
Journal of Financial and Quantitative Analysis, forthcoming
Abstract:
We construct a measure (fLMA) of the extent to which neighboring firms hire similar types of workers, based on the similarity between the labor profile of a firm and that of its locality. We show that a firm’s innovation is positively related to fLMA. The enhanced labor mobility induced by higher fLMA is an important channel for this positive relation. This relation is stronger when firms have increased outside job opportunities for employees, increased knowledge spillovers via coworkership, and more employee stock options. Innovation is higher when intellectual property ownership is with employers, not employees. This effect increases in fLMA.
When Rivalry Backfires: How Individual Skill and Risk of Status Loss Moderate the Effects of Rivalry on Performance
Tom Grad, Christoph Riedl & Gavin Kilduff
Management Science, forthcoming
Abstract:
Existing rivalry research finds that people try harder and perform better when competing against their rivals. However, are there conditions under which rivalry can harm performance? We integrate rivalry theory with regulatory fit theory to propose two moderators of rivalry: individual skill and situational risk for status change. We test our predictions using data from software programming contests involving more than 4.6 million competitive encounters across 16,846 software developers (“coders”) to examine the causal effects of rivalry and the conditions under which it may backfire. We find that, on average, coders who are randomly assigned to compete against a field of competitors with whom they share a rivalrous history exhibit higher performance, above and beyond other established drivers of performance in competition. Importantly, however, this positive effect of rivalry is moderated by (1) coders’ skill level, such that rivalry is more beneficial for more skilled coders and is harmful for less skilled coders, and (2) coders’ risk of experiencing a status change, such that coders who face a possible status loss exhibit decreased performance when competing against rivals. Thus, we extend research on rivalry by revealing the conditions under which it can harm performance, which is vital to understanding its role in organizations.
Rationally misplaced confidence
Derek Lemoine
Economic Theory, August 2025, Pages 1-38
Abstract:
I show that persistent underconfidence and overconfidence can each arise from rational Bayesian learning when effort and ability are complementary. Which arises depends on the decision-making environment, and in particular on the effect that greater effort has on the variance of outcomes. Agents learn away overconfidence and underconfidence at asymmetric rates because (i) Bayesian updating requires that their sensitivity to new information depend on their effort choices and (ii) their effort choices in turn depend on beliefs about their own ability. As one implication, I show that management can credibly induce additional effort from employees by designing feedback that generates average overconfidence through being conditionally vague.
On Resource Complementarity Among Startups, Accelerators, and Financial Investors: A Large-Scale Analysis of Sorting and Value Creation
Simone Santamaria & Stefano Breschi
Organization Science, forthcoming
Abstract:
We propose a theoretical framework and provide empirical evidence on how resource complementarity or substitutability between entrepreneurs and seed investors drives selection and value creation in the context of high-tech startups. Specifically, we argue that seed investors specialized in training programs -- startup accelerators -- are the ideal match for entrepreneurial teams equipped with strong technological competencies but lacking business knowledge. On the other hand, when entrepreneurs with extensive business knowledge pair up with accelerators, the value created is typically less. Combining information from Crunchbase and LinkedIn, we provide robust empirical evidence based on the assortative matching of start-ups and investors and the ex- post analysis of joint value creation.
Asset Specificity and Inefficient Bargaining: Theory and Evidence From Television Shows
Luís Cabral & Gabriel Natividad
Journal of Industrial Economics, forthcoming
Abstract:
Evidence from TV shows suggests that failed contract negotiations may lead to inefficient show cancellation. We propose a theoretical model of bargaining with asymmetric information that allows for this possibility. We derive various testable implications, all of which are borne by the data. We show that an increase in asset specificity of the actor-show match implies an increase in the probability of an agreement under efficient bargaining but a decrease under asymmetric information. We use this result as an identification strategy to place a 2% lower bound on the probability that a TV show is cancelled even though it would be efficient for it to continue.