Capturing Economic Value from Innovation Investments 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

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

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

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

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

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

Private Equity, Corporate Acquirers, & Product Innovation: An Investigation of Corporate Science Acquisitions 1990-2022

Private equity has become an increasingly active player in technology acquisitions in recent years, yet most strategy scholarship has focused on the effects of corporate acquirer ownership on innovation outcomes, providing little guidance to managers on how to choose between the two M&A options. To remedy this gap, I examine how private equity and corporate acquirers differentially affect product innovation at acquired targets using hand-collected new product introduction announcements.…Read More

When Uber Comes to Town: Transportation and Health Care Inequality

Transportation is a critical factor in accessing healthcare services, but its role in shaping health disparities remains understudied. This research project investigates the impact of transportation on healthcare access and health inequality. Using large-scale datasets, the study aims to identify the causal effects of improved local accessibility on healthcare utilization…Read More

Market Design and Returns to Data in Mobile Advertising

Advertising supports a significant fraction of the internet, enabling free web search and news services. These ads are intermediated by advertising networks, which assign ad slots to potential advertisers through auctions. In this project, we will collaborate with a large mobile advertising intermediation network to investigate (i) to what extent a reduction in available data (e.g., due to Apple’s new privacy policies) lowers the value created by mobile advertising and (ii) whether more decentralized markets are desirable after accounting for the trade-off between this decrease in value and having a more competitive market.…Read More

Intermediation Dynamics in Emerging Markets: The Strategic Role of Local Agents in Overcoming Market Constraints

This study examines how local agents – intermediaries that connect firms such as digital platforms to last mile customers – respond to increased value capture by the firm and the heterogeneity in their responses to different customer segments. Utilizing a proprietary dataset of over 400,000 transactions on a digital platform in rural India I examine how agents, pivotal in bridging infrastructure and capability gaps, react to incentive changes.…Read More

Firm Scaling and the Structure of Career Opportunities

Our research delves into the evolution of startups into established organizations, focusing on how gender diversity influences this transition. Startups typically shift from informal management to formal bureaucratic structures as they grow. This study investigates the impact of increasing female employment on this process.…Read More

Building Business Foresight Capabilities

The objective of this research is to study how organizations can develop superior business foresight capabilities, defined as capabilities to develop accurate beliefs about future business opportunities and threats in an industry undergoing significant disruptive change. These capabilities will be embedded among people and processes that will include the use of Artificial Intelligence (AI) technologies such as Large Language Models (LLMs).…Read More

Price Regulation in Centralized College Admission Systems: Evidence from India

This project explores the effect of government price intervention on student enrollment decisions and education quality in private higher education markets with centralized admissions. In particular, the emphasis will be on understanding changes in the enrollment patterns and educational outcomes of historically underrepresented ethnic groups (Backward Castes, Scheduled Castes, and Scheduled Tribes).…Read More

The Effect of Economic and Social Conditions on Music Consumption

This project seeks to bridge this gap by investigating how circumstances that shape different facets of people’s identity affect their music consumption choices. These experiences may affect multiple dimensions of music consumption. The likelihood, frequency, time spent listening to music, likelihood of subscribing to a paid music account. For example, do people turn more to music during hard times? What type of music do they tune in to? Does music help people cope with these challenges?…Read More

Cash or Equity? Employees’ Compensation and the Gender of the Startup Founder

We extend recent studies on how gender shapes subordinate-supervisor interactions by documenting that employees may, under some conditions, negatively stereotype female supervisors in ways that make them more risk averse when choosing the form of compensation. we use employer-employee matched data from Sweden for the period 1991-2021 to assess whether an employee’s chosen compensation in the form of equity (at a given pay) varies with its founder’s gender.…Read More

Quality in the Generic Pharmaceutical Market

Asymmetric information about quality characterizes many important markets, including in healthcare, banking, real estate, and used goods. Without intervention, quality in these markets can easily deteriorate. Vertical intermediaries, such as distributors and retailers, may play a powerful role in disciplining quality when consumers are difficult to inform. I study the effects of informed intermediaries on quality and welfare in the context of US generic pharmaceuticals. This market is economically important, characterized by extreme levels of asymmetric information, and experienced a sharp increase in recalls and shortages after 2009. …Read More

Capability-Enhancing Foreign Investments, and Evolution of Corporate Scope In Software Services Offshore Outsourcing: Market Reactions and Implications for Competitive Advantage

How does the stock market react to competitive actions by firms and their rivals? In this study we empirically explore capability-seeking investments by firms from different strategic groups within an industry and examine their impact on rival firms in the competitive context of global software services.…Read More

Differentiation in Microenterprise: A Field Experiment in Zimbabwe

In explaining variation in productivity in microenterprise, research has focused primarily on the adoption of effective business practices and access to capital, with little focus on strategic positioning. In archival evidence, we find that offering a differentiated product or service is strongly correlated with firm performance. Using a combined sample of nearly 10,000 microenterprises across eight developing countries, we estimated that a standard deviation increase in differentiation is associated with approximately an 11 percent increase in revenues and an eight percent increase in profit…Read More

Reality Check: Subjective Well-being and the Value of the Metaverse

In this project, we adapt a classic philosophical method (Nozick’ 1974 “experience machine”) to understand the ways in which people think about the types of alternate realities presented by the metaverse, and with it, the type of value it may offer in the marketplace.…Read More