Model managers
Decision Making and Biases in Cybersecurity Capability Development: Evidence from a Simulation Game Experiment
Mohammad Jalali, Michael Siegel & Stuart Madnick
MIT Working Paper, December 2017
Abstract:
We developed a simulation game to study how well decision makers understand two fundamental aspects of complexity in cybersecurity: potential delays in building capabilities, and uncertainties in predicting cyber-incidents. Analyzing 1,479 simulation runs, we compared the performances of a group of experienced professionals to an inexperienced control group. Experienced subjects did not understand the mechanisms of delays any better than inexperienced subjects. Both groups also exhibited similar errors when dealing with the uncertainty of cyber-incidents. Our findings highlight the importance of training for decision-makers, and lay the groundwork for future research in uncovering mental biases about the complexities of cybersecurity.
Process Flexibility in Baseball: The Value of Positional Flexibility
Timothy Chan & Douglas Fearing
Management Science, forthcoming
Abstract:
This paper introduces the formal study of process flexibility to the novel domain of sports analytics. In baseball, positional flexibility is the analogous concept to process flexibility from manufacturing. We study the flexibility of players (plants) on a baseball team who produce innings-played at different positions (products). We develop models and metrics to evaluate expected and worst-case performance under injury risk (capacity uncertainty) with continuous player-position capabilities. Using Major League Baseball data, we quantify the impact of flexibility on team and individual performance and explore the player chains that arise when injuries occur. We discover that top teams can attribute at least one to two wins per season to flexibility alone, generally as a result of long subchains in the infield or outfield. The least robust teams to worst-case injury, those whose performance is driven by one or two star players, are over four times as fragile as the most robust teams. We evaluate several aspects of individual flexibility, such as how much value individual players bring to their team in terms of average and worst-case performance. Finally, we demonstrate the generalizability of our framework for player evaluation by quantifying the value of potential free agent additions and uncovering the true "MVP" of a team.
Decision-maker beliefs and the sunk-cost fallacy: Major League Baseball's final-offer salary arbitration and utilization
Quinn Keefer
Journal of Economic Psychology, forthcoming
Abstract:
We use Major League Baseball final-offer arbitration (FOA) to analyze how sunk costs affect high stakes decisions while controlling for the beliefs of the decision maker. FOA gives us an explicit measure of a team's beliefs; the team's final offer is a direct measure of its perceived value of the player. Using an instrumental variables approach, we find salary has a meaningful impact on player utilization, measured in plate appearances. FOA also allows us to directly compute the average treatment effect of FOA outcomes on compensation, and to therefore, examine the validity of our instrumental variables strategy. When a player's request is chosen in FOA his compensation is 39% greater and he receives 35.6-45.2 additional plate appearances, 7.5-9.6% of the mean. Furthermore, we find arbitration hearings do not affect (i) team success through changing expenditures, (ii) individual productivity, (iii) team beliefs, or (iv) utilization prior to arbitration. Sunk costs have a significant effect, both statistically and economically, on high stakes decisions made by experts, even while controlling for beliefs.
It's about time: Earlier rewards increase intrinsic motivation
Kaitlin Woolley & Ayelet Fishbach
Journal of Personality and Social Psychology, June 2018, Pages 877-890
Abstract:
Can immediate (vs. delayed) rewards increase intrinsic motivation? Prior research compared the presence versus absence of rewards. By contrast, this research compared immediate versus delayed rewards, predicting that more immediate rewards increase intrinsic motivation by creating a perceptual fusion between the activity and its goal (i.e., the reward). In support of the hypothesis, framing a reward from watching a news program as more immediate (vs. delayed) increased intrinsic motivation to watch the program (Study 1), and receiving more immediate bonus (vs. delayed, Study 2; and vs. delayed and no bonus, Study 3) increased intrinsic motivation in an experimental task. The effect of reward timing was mediated by the strength of the association between an activity and a reward, and was specific to intrinsic (vs. extrinsic) motivation - immediacy influenced the positive experience of an activity, but not perceived outcome importance (Study 4). In addition, the effect of the timing of rewards was independent of the effect of the magnitude of the rewards (Study 5).
The Price of Financial Precarity: Organizational Costs of Employees' Financial Concerns
Jirs Meuris & Carrie Leana
Organization Science, May-June 2018, Pages 398-417
Abstract:
Personal finances are becoming an increasingly prominent source of distress for a substantial proportion of the population in many developed economies. In this paper, we examine the organizational consequences of this trend by proposing that financial precarity can undermine a person's ability to perform at work. Across two studies, we demonstrate that people who are worried about their financial situation have less cognitive capacity available to them, which subsequently spills over into their work performance. In Study 1, we demonstrate this relationship in a field study with short-haul truck drivers where we combine survey responses with lagged archival data on preventable accidents. We find that a one-standard-deviation increase in financial worry is associated with a 0.4% increase in the probability of a preventable accident because of its detrimental effects on cognitive capacity. In Study 2, we establish the causal ordering among the variables by manipulating financial worry in a laboratory environment using a driving simulation task, confirming the results of Study 1. We discuss the implications of the research findings for organizational theory and workplace practice, arguing that it may be in employers' self-interest to undertake initiatives that reduce employees' financial precarity.
Learning by Contributing: Gaining Competitive Advantage Through Contribution to Crowdsourced Public Goods
Frank Nagle
Organization Science, forthcoming
Abstract:
As the economy becomes more information based, firms are increasingly using crowdsourced public goods as inputs for innovation and production. Counterintuitively, some firms pay their employees to contribute to the creation of these goods, which can be used freely by their competitors. This study argues that such firms learn by contributing as they receive feedback from the crowd of more experienced users and are therefore able to better capture value from using the goods. Data on firm contributions to open source software (OSS), an important crowdsourced public good, is used to test the theoretical predictions. Using matching and panel data methods to help address endogeneity concerns, this study shows that contributing firms capture up to 100% more productive value from usage of OSS than their free-riding peers. Furthermore, this paper examines what types of contributions are most beneficial and in what technological environments such learning can best be applied.
Allocating Effort and Talent in Professional Labor Markets
Derek Neal & Gadi Barlevy
Journal of Labor Economics, forthcoming
Abstract:
In many professional service firms, new associates work long hours while competing in up-or-out promotion contests. Our model explains why. We argue that the productivity of skilled partners in professional service firms (e.g. law, consulting, investment banking, and public accounting) is quite large relative to the productivity of their peers who are competent and experienced but not well-suited to the partner role. Therefore, these firms adopt personnel policies that facilitate the identification of new partners. In our model, both heavy workloads and up-or-out rules serve this purpose.
How perceptions of one's organization can affect perceptions of the self: Membership in a stable organization can sustain individuals' sense of control
Devon Proudfoot & Aaron Kay
Journal of Experimental Social Psychology, May 2018, Pages 104-115
Abstract:
Building on contemporary perspectives regarding the role that group identification can play in sustaining control motives, we propose that being a member of a stable organization - one experienced as predictable and consistent rather than changing and in flux - can maintain individuals' sense of control. Four studies test this prediction. We observe that higher social identification as an organizational member (as compared to lower identification) is associated with an increased generalized sense of personal efficacy in life specifically when one's organization is experienced as relatively stable (Study 1 and Study 2). Further, the perceived stability of one's organization moderates the extent to which those who recently experienced a threat to personal control - and are thereby motivated to reestablish feelings of control - seek increased social identification as an organizational member (Study 3 and Study 4). Results suggest that membership in a stable organization can provide a psychological buffer against threats to personal control encountered in daily life outside work. Contributions to understanding the ways in which people maintain feelings of personal control in the social world are discussed.
Social Media and the Development of Shared Cognition: The Roles of Network Expansion, Content Integration, and Triggered Recalling
Paul Leonardi
Organization Science, forthcoming
Abstract:
This study explores whether employees who have access to social media are more likely than employees who do not to develop shared cognition - similar perceptions of what and whom coworkers know. It also uncovers the behaviors associated with social media that allow employees to develop such shared cognition about their coworkers' knowledge and social structures. I conducted a multimethodological, longitudinal field study of the use of one type of social media - a social networking site - by employees at a large financial services organization. In this paper, I draw on comparative data from two matched-sample groups within the same organization to show that users of the social networking site developed their cognition through three interrelated processes - network expansion, content integration, and triggered recalling. Because all members of the organization enacted this process with data from the same common pool (content on the social networking site), their cognitions became shared. A difference-in-differences estimation showed that shared cognition developed much more strongly over six months in the group that used the social networking site than the group that did not use it.
How Do Firms Appropriate Value from Employees with Transferable Skills? A Study of the Appropriation Puzzle in Actively Managed Mutual Funds
Victoria Sevcenko & Sendil Ethiraj
Organization Science, forthcoming
Abstract:
How do firms benefit from employees with transferable skills? The prevailing view is that labor market frictions that impede employee mobility or strategies that constrain skill transferability are the primary instruments for firms to appropriate value from human capital. The empirical evidence, however, suggests that employees continue to be mobile, and firms pay premiums to attract and retain employees with transferable skills. To reconcile theory with data, we use data from the mutual fund industry, where it is widely documented that active fund managers appropriate more value than they generate. We develop a theory of positive externalities stemming from transferable human capital that we argue accrue mostly to the firm, and provide evidence of such externalities in the mutual fund context. Empirically, we decompose the skills of mutual fund managers into task- and firm-specific components and argue that managers with task-specific skills generate positive externalities at the firm level that are not reflected in their performance measured at the fund level. We advance and test empirical hypotheses on the existence of these positive unmeasured externalities by examining whether managers with task-specific skills are more likely to be associated with activities such as mentoring, increased risk taking, and generating spillovers at the firm level. Our results show that managers with task-specific skills are indeed associated with greater positive externalities, compared with managers with firm-specific skills. We discuss the implications of our results for the literature on human capital value creation and appropriation.
Tasks Interrupted: How Anticipating Time Pressure on Resumption of an Interrupted Task Causes Attention Residue and Low Performance on Interrupting Tasks and How a "Ready-to-Resume" Plan Mitigates the Effects
Sophie Leroy & Theresa Glomb
Organization Science, May-June 2018, Pages 380-397
Abstract:
This paper explores the attention regulation challenges brought by interruptions. In contrast to much of the research on interruptions that looks at the effects on the interrupted task, this paper examines the difficulty of focusing attention and performing well on interrupting tasks. Integrating research on attention residue, time pressure, and implementation intention, we predict that when people anticipate resuming their interrupted work under time pressure, they will find it difficult to switch their attention to the interrupting task, leading to attention residue and low performance. A ready-to-resume intervention, in which one briefly reflects on and plans one's return to the interrupted task, mitigates this effect such that attention residue is reduced and performance on the interrupting task does not suffer. Data collected across four studies support these hypotheses.