Mack Institute Research Archives

The Efficiency of Dynamic Electricity Prices

The marginal cost of electricity fluctuates hour-by-hour, yet retail customers typically face flat prices. Using data from all seven US wholesale markets and a new method to evaluate alternative rates set in advance that accounts for equilibrium price effects, we estimate efficiency gains from time-varying price schedules that better align price with cost. We have three main results. First, time-of-use rates and critical-peak pricing, the two most common time-varying rate plans, each correct about 10% of mispricing. Second, complex rate structures based on historical prices often backfire. Third, real-time pricing with price ceilings can capture most potential efficiency gains while limiting customer risk.…Read More

Consumer Behavior and Cryptocurrency Confidence

In our endeavor to grasp the driving forces behind cryptocurrency prices, we have developed the Consumer Cryptocurrency Confidence Index (c3i), derived from a set of questions asked monthly to consumers across the United States. Our analysis has uncovered several initial results and pointed to an extensive, exciting research program on consumer behavior that shapes the cryptocurrency markets. Firstly, we are rigorously validating to what extent the c3i can accurately predict changes in cryptocurrency prices as a leading indicator by exploring whether this relationship is merely correlation or potentially causal. Furthermore, we are investigating if consumer characteristics such as age, gender, and political leanings can enhance the accuracy of our index in predicting cryptocurrency prices. We are also examining if the relationship observed between c3i and cryptocurrency prices extends to broader stock market indices like the S&P…Read More

Algorithmic Governance: How Distributing Decision Rights Can Erode Participation

Algorithms play an increasingly important role in today’s digital economy. An emerging view highlighted the viability of utilizing algorithms as a governance device. With innovations in blockchain infrastructure and smart contracts algorithms, platforms can delegate formal authority to exchange partners and involve them in organizational decision-making processes. While some are optimistic that this governance innovation can bring about a more collaborative and democratic digital economy, this paper highlights potential challenges associated with decentralized governance systems. I argue that decentralized governance shifts the locus of opportunism from platform owners to a body of diffuse exchange partners. Appropriation no longer come…Read More

High-Flying Analytics: Harnessing Wearable Sensors and AI to Safeguard Military Aviators

For military aviators, functioning without fail within a high-stress work environment is a necessity. In order to complete critical missions, they make split-second decisions while piloting 44,000 lbs of hurtling machinery accelerating at up to 9G’s in high-altitude conditions. For less experienced pilots, managing the associated physical and mental fatigue is an integral and challenging component of executing flights safely and well. We collaborate with a pioneering company that innovatively outfits aviators at 22 USAF bases with wearable sensors that record both the physical stresses of sorties (flights) and the biophysical states and reactions of pilots in real time. Then, we develop analytical methods to make timely and accurate use of such novel wearable…Read More

Premium or Penalty? Differential Effects of Gender and Race on Internal Promotions to Top-Management Positions

Our groundbreaking research explores the evolving landscape of leadership diversity in top management. Despite the pressure on organizations to improve diversity, empirical evidence remains mixed. Our study uniquely examines the disparities in promotion outcomes for women and racial minorities, leveraging a vast dataset of approximately 100 million online job profiles from 7,000 large U.S. firms (2014-2023). We propose a new theory combining institutional and categorical inequality perspectives to explain why gender diversity has progressed more than racial diversity in top management. This research provides critical insights into the conditions that foster effective diversity initiatives in senior corporate roles.…Read More

Financial Reporting and Consumer Behavior

We show that financial reporting spurs consumer behavior. Using granular GPS data, we show that foot-traffic to firms’ commerce locations significantly increases in the days following their earnings announcements.…Read More

E-Governance and Digital Infrastructure in India

Philip Nichols, Legal Studies & Business Ethics, The Wharton School Abstract: An in depth, qualitative and descriptive examination of India’s digital infrastructure and the e-governance functions it enables. The research should produce (1) a descriptive white paper, with an intended audience of (a) policymakers in other emerging economies, (b) scholars…Read More

Can Artificial Intelligence Mitigate Inventor Productivity Decline after Co-Inventor Premature Death?

Although it is well documented that disruptive events, such as an inventor’s premature death, cause a large and persistent decline in their co-inventor’s innovation performance, strategies to mitigate these negative effects remain unexplored. This project aims to understand how an inventor’s skill and proficiency in artificial intelligence (AI) could counteract the productivity decline resulting from a co-inventor’s demise. We intend to first identify the specific challenges facing inventors in staying innovative after the unexpected death of their close collaborators. Furthermore…Read More

Strategic bootstrapping and startup experimentation

New ventures are grappling with the rising costs of capital (both debt and equity). As a result, investors of high-growth, technology-based startups are shifting focus to companies that can generate immediate cash. That is, investors are prioritizing cash flow positivity over growth. A recent report has documented that high-growth, technology-driven startups that are bootstrapped outperformed those that are VC-backed on both profitability and growth. Yet, the reason for this performance differential is poorly understood given that bootstrapping is an underexplored phenomenon due to the unavailability of large datasets to answer important questions. Through this study, we first seek to build a large, novel dataset that can facilitate research on bootstrapping. In addition, we immediately respond to two important questions pertaining to why bootstrapped startups may be better able to manage the balance between cash flow positivity and growth…Read More

Perceived Momentum in Media Consumption: Optimizing Binge-Watching

Every day, millions of people engage in the popular behavior called “binge-watching”, a type of media consumption where multiple episodes of the same TV show are seen in a row (Schweidel and Moe, 2016). Given how popular “binge-watching” is and how much streaming platforms are relying on it to recommend and create new content to stream, it is very important to understand whether consumers are satisfied by their binging sessions and whether recommendation systems are well calibrated in suggesting binge-worthy content that will maximize this satisfaction.…Read More

A Second Opinion: Impact of Generative AI on Information Acquisition Processes, Performance, and Service Quality

Since ChatGPT’s launch in November 2022, a surge of studies has underscored generative AI’s potential across a wide range of applications, including improving entrepreneurial performance, spurring innovation, and even providing more ethical advice. Less attention has been garnered about how AI impacts the efficiency of a decision-maker’s information search process. In the context of health care, medical providers review existing patient information (i.e., their medical history) and then must ask a series of questions to the patient or run diagnostic tests to make their diagnosis. While there is inherent uncertainty, the provider faces a trade-off between acquiring additional information from the patient to increase certainty over a diagnosis and…Read More

Career Effects of Venture Capital on High-Technology Startup Employees

Venture capital (VC) significantly contributes to job creation and innovation in high-tech startups, with around 50% of tech companies reaching IPOs in the past three decades having VC backing. While the benefits of VC on startups and regional economies are well-documented, its impact on individual career trajectories remains underexplored. This research proposal investigates how VC financing influences employee turnover and career progression within startups. VC investment can lead to higher wages and faster promotions, enhancing employee value. However…Read More

How vs. How and Why Nudges: When Stating Your Case Isn’t as Effective

Marketers and policymakers often use nudges to help consumers make welfare-increasing decisions, such as encouraging physically and mentally healthy choices. This research explores when one nudge is more effective than another. More specifically, it demonstrates nudges focusing on telling consumers how to do something are more effective than nudges telling consumers how and why to do something. This is because listing the reasons why a consumer should do something creates the potential for a mismatch between the listed reasons and a consumer’s personal reasons for considering engaging in a behavior. This mismatch, in turn, leads consumers to believe said behavior will benefit their quality of life less than they might have believed otherwise. These findings…Read More

Hiring Dilemmas: Assembling Human Capital in High-Growth Startups

How do high-growth, knowledge-based startups acquire human capital against the backdrop of the challenges and dilemmas that come with rapid organizational expansion? Human capital is a critical resource for these startups, allowing for increased production, knowledge, and resources. However, the dynamic nature of high-growth periods also poses significant challenges. Against the backdrop of a growing firm’s temporal change, these firms face dilemmas in who and when to hire. In my dissertation, am interested in understanding how growing startups attract, motivate, and retain human capital.…Read More

Multi-Channel Healthcare Operations: The Impact of Video Visits on the Usage of In-Person Care

Healthcare organizations have increasingly adopted video visits as an alternative care channel that offers higher convenience and holds promise for improving patients’ access to care. Despite the growing use, the impact of a new digital channel on care demand within existing physical channels has not been thoroughly investigated, especially in the primary care context of a traditional healthcare organization. We study a large healthcare system that made video visits available to a subset of its patients for primary care needs, prior to the COVID-19 pandemic. Using a difference-in-differences approach and visit data spanning over 9.5 million patient-months, we find that the introduction of video visits increases the demand for in-person primary care provider (PCP) visits by 20% and the demand for emergency department (ED) visits by 30%. We also find that patients who have poorer access to in-person care are more likely to initiate care via a video visit rather than an…Read More

Electric Vehicle (EV) Fleet and Charging Infrastructure: Decision-Making by Drivers

The gig economy is rapidly integrating electric vehicles (EVs) into its infrastructure, particularly within ride-hailing services such as Uber and Lyft. Algorithms play a crucial role in this ecosystem, determining customer pricing, driver compensation, and matching drivers with customers. While these algorithms have enabled efficient matching of supply and demand, they also face criticisms, including a lack of transparency, potential bias, and inefficiency. This study investigates the decision-making processes of EV drivers within the gig economy, focusing on how charging infrastructure and fleet size impact…Read More

Enabling Personalized Learning in Large Language Models via Reinforcement Learning

This project combines GPT-4 and reinforcement learning to develop a personalized learning platform for an introductory Python programming class. In collaboration with the National Taiwan University, this project will deploy and conduct a randomized control trial (RCT) to understand how to effectively use generative AI to improve student’s learning outcomes and skill development…Read More

Vertical Integration in the Video Streaming Market

Vertical integration in the video streaming market has become increasingly prevalent in recent years. Notable examples include Amazon’s merger with MGM, Walt Disney’s acquisition of Hulu, and the launch of streaming platforms by various studios such as Paramount and NBCUniversal. Many studios now license most of their shows to their vertically integrated streaming platforms, which has led to consumer complaints about the need for multiple subscriptions to access content that they…Read More

Artificial Intelligence, innovation, and product market dynamics

This research project aims to investigate the impact of artificial intelligence (AI) investments by non-tech firms (AI-adopters) on product market competition, innovation, and industry dynamics. By leveraging novel datasets, including firm-level AI-workers, product-level pricing and quantities, and textual information from company filings, this study seeks to provide new insights into how AI adoption…Read More

Commercialization and Scaling Strategies of Deeptech Ventures

This study explores the commercialization and growth strategies of deeptech startups. Deeptech or Hardtech start-ups are a unique set of ventures whose offerings are grounded in breakthrough science and/or engineering innovation (MIT report, 2023). They typically span sectors such as the life sciences, clean technology, advanced materials, robotics, chemicals and quantum computing.…Read More