Archive for the ‘Harvard University’ Category

Seesaws and Social Security Benefits Indexing

January 29, 2015 Comments off

Seesaws and Social Security Benefits Indexing
Source: Harvard Business School Working Papers

The price indexation of Social Security benefit payments has emerged in recent years as a flashpoint of debate in the United States. I characterize the direct effects that changes in that price index would have on retirees who differ in their initial wealth at retirement and mortality rates after retirement. I propose a simple but flexible theoretical framework that converts benefits reform first into changes to retirees’ consumption paths and then into a net effect on social welfare. I calibrate that framework using recently produced data on Social Security beneficiaries by lifetime income decile and both existing and new survey evidence on the normative priorities Americans have for Social Security. The results suggest that the value retirees place on protection against longevity risk is an important caveat to the widespread enthusiasm for a switch to a slower-growing price index such as the chained CPI-U.

The Decoupling Effect of Digital Disruptors

January 7, 2015 Comments off

The Decoupling Effect of Digital Disruptors (PDF)
Source: Harvard Business School Working Papers

While the Internet’s first wave of disruption was marked by the unbundling of digital content, the second wave, decoupling, promises to generate more casualties in an even broader array of industries. Digital start-ups are disrupting traditional businesses by inserting themselves at every juncture in the customer’s consumption chain. By decoupling-the act of separating activities that people are used to co-consuming-new digital businesses are disrupting retailing, telecom, and other industries. Decoupling allows consumers to benefit from the value created at a lower cost or effort compared to what is delivered by traditional businesses. For those companies, the only solutions are to either recouple activities or rebalance to create and capture value (i.e., revenues) from both activities separately. Here, digital technologies can be seen as an instrument that will both disrupt traditional business models and potentially preserve them.

Leveraging Market Power Through Tying: Does Google Behave Anti-Competitively?

December 23, 2014 Comments off

Leveraging Market Power Through Tying: Does Google Behave Anti-Competitively? (PDF)
Source: Harvard Business School Working Papers

I examine Google’s pattern and practice of tying to leverage its dominance into new sectors. In particular, I show how Google used these tactics to enter numerous markets, to compel usage of its services, and often to dominate competing offerings. I explore the technical and commercial implementations of these practices and then identify their effects on competition. I conclude that Google’s tying tactics are suspect under antitrust law.

Measuring Illegal and Legal Corruption in American States: Some Results from the Edmond J. Safra Center for Ethics Corruption in America Survey

December 16, 2014 Comments off

Measuring Illegal and Legal Corruption in American States: Some Results from the Edmond J. Safra Center for Ethics Corruption in America Survey
Source: Harvard University (Edmond J. Safra Center for Ethics)

Although corruption is not endemic in America as it is in several other countries, it does exist. According to the Justice Department, in the last two decades more than 20,000 public officials and private individuals were convicted for crimes related to corruption and more than 5,000 are awaiting trial, the overwhelming majority of cases having originated in state and local governments.1 Understanding the causes and the consequences of corruption and designing the policies in the fight against it starts with measuring corruption itself. How do we measure corruption, an activity that requires secrecy? The most commonly used measure of corruption in American states comes from the Justice Department’s “Report to Congress on the Activities and Operations of the Public Integrity Section.” These data cover a broad range of crimes from election fraud to wire fraud. The measure, based on the Justice Department data, suffers from several significant problems, however.

Design of Search Engine Services: Channel Interdependence in Search Engine Results

December 2, 2014 Comments off

Design of Search Engine Services: Channel Interdependence in Search Engine Results (PDF)
Source: Harvard Business School Working Papers

The authors examine prominent placement of search engines’ own services and effects on users’ choice of destinations. Using a natural experiment in which different results were shown to users who performed similar searches, they find that Google’s prominent placement of its Flight Search service increased the clicks on paid advertising listings by more than half while decreasing the clicks on organic search listings by about the same quantity. User substitution disproportionately affected the most visited travel sites, reducing use of organic listings sending no-charge traffic to those sites by lowering their prominence and perceived importance, while highlighting paid listings to the same sites. The authors consider the implications of such changes for online marketers and for search engine operators.

Financial Development and Technology Diffusion

December 2, 2014 Comments off

Financial Development and Technology Diffusion
Source: Harvard Business School Working Papers

We examine the extent to which financial market development impacts the diffusion of 16 major technologies, looking across 55 countries, from 1870 to 2000. We find that greater depth in financial markets leads to faster technology diffusion for more capital-intensive technologies, but only in periods closer to the invention of the technology. In fact, we find no differential effect of financial depth on the diffusion of capital-intensive technologies in the late stages of diffusion or in late adopters. Our results are consistent with a view that local financial markets play a critical role in facilitating the process of experimentation that is required for the initial commercialization of technologies. This evidence also points to an important mechanism relating financial market development to technology diffusion and economic growth.

An Economy Doing Half Its Job: Findings of Harvard Business School’s 2013 – 14 Survey on U.S. Competitiveness

November 4, 2014 Comments off

An Economy Doing Half Its Job: Findings of Harvard Business School’s 2013 – 14 Survey on U.S. Competitiveness (PDF)
Source: Harvard Business School

In 2013–14, Harvard Business School (HBS) conducted its third alumni survey on U.S. competitiveness. Our report on the findings focuses on a troubling divergence in the American economy: large and midsize firms have rallied strongly from the Great Recession, and highly skilled individuals are prospering. But middle- and working-class citizens are struggling, as are small businesses. We argue that such a divergence is unsustainable, explore its root causes, and examine actions that might mitigate it. We ask in particular, how can we create a U.S. economy in which firms both thrive in global competition and lift the living standards of the average American?


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