The pharmaceutical market has experienced a massive wave of vertical integration between pharmacy benefit managers (PBMs) and health insurers in recent years. Using a unique dataset on insurer-PBM contracts, we document increasing vertical integration in Medicare Part D–vertically integrated insurers’ market share increased from about 30% to 80% between 2010 and 2018.…Read More
Listening to the other side is essential for communication and conflict resolution. However, even when a listener listens well, the speaker may still exclaim, “You are not listening to me!” We reason this occurs because speakers think someone who disagrees with them simply has not listened.…Read More
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
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
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.…Read More
Mack Institute Research Assistant Lennart Meincke and Wharton Associate Professor of Management Andrew Carton have released a new working paper in our series of working papers on ChatGPT spearheaded by Mack Faculty Director Christian Terwiesch. The new paper, entitled “Beyond Multiple Choice: The Role of Large Language Models in Educational…Read More
Mack Institute Research Assistant Lennart Meincke, Wharton Professor Ethan Mollick and Mack Institute Co-Director and Wharton Professor Christian Terwiesch have published the next in Terwiesch’s series of working papers on ChatGPT. The new paper evaluates how LLMs can be used for idea generation and explores methods to increase the novelty,…Read More
I study investors’ trade-off between ETFs and open-ended mutual funds in the presence of idiosyncratic liquidity risk and aggregate uncertainty. Based on a portfolio choice model, I show that ETFs and mutual funds provide liquidity at different maturities. Mutual funds (ETFs) are preferred by investors facing high (low) idiosyncratic liquidity risk and shorter (longer) investment horizons. In equilibrium, the pooling of investors into fund types based on their expected investment horizon directly emerges from the differential frictions of ETFs and mutual funds. Over the long-term, payoff complementarities in mutual funds dilute investors fund holdings and generate underperformance vis-à-vis ETFs. Yet, in the short-run, ETFs can be mispriced due to intermediary arbitrage constraints. The optimal size of the mutual fund sector relative to ETFs decreases in the illiquidity of portfolio assets but increases in the proportion of mutual fund shares held via retirement accounts.…Read More
We apply a strategic multiplexity perspective to analyze how the simultaneous consideration of multiple types of ties in a network can sharpen our understanding of innovation diffusion in that network. While prior research suggests that multiplex ties increase information flow and thereby facilitate innovation uptake in networks, this prediction may not hold when conflicts exist among some of these ties.…Read More
In this paper, we develop and test a theoretical framework that considers how established firms forming partnerships with startups may be subject to spatial and temporal myopia and how these tendencies are moderated by the established firms’ histories of experiencing essential failures and successes in solving R&D problems. …Read More
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
Many healthcare organizations struggle to improve their patient experience scores despite significant effort. Enthusiasm has grown about the potential for patient narratives stories about care experiences in patients’ own words to provide insights that advance organizational learning about care and thus how to improve it. However, there is no evidence establishing an association between narrative use and organizational performance…Read More
This project adapts online learning techniques to unstructured data, focusing on neural networks. We posit a non-parametric multi-armed bandit algorithm with context that uses a neural network for its underlying function approximation. We theoretically analyze and prove guarantees on the regret under this algorithm…Read More
This paper develops a theoretical model to study the economic incentives for a social media platform to moderate user-generated content. We show that a self-interested platform can use content moderation as an effective marketing tool to expand its installed user base, to increase the utility of its users, and to achieve its positioning as a moderate or extreme content platform.…Read More
Uber. Upwork. TaskRabbit. The world of work is transforming and my research agenda attempts to identify and explain 1) how work is changing and 2) how these changes affect workers, especially those who are marginalized or vulnerable.…Read More
We investigate whether the effect of network position on innovation is causal or spurious. Although empirical evidence demonstrates that certain structural positions in alliance networks (e.g. structural holes) affect firm innovation, it is hard to disentangle the factors allowing a firm to put itself in a certain position from the innovation outcomes that stem from being in that position.…Read More
Globally, 1.5 billion people live off the grid, their only access to electricity often limited to operationally-expensive fossil fuel generators. Solar power has risen as a sustainable and less expensive option, but its generation is variable during the day and non-existent at night.…Read More
I quantify the impact of trade secret protection on labor outsourcing, and consequently, on aggregate productivity.…Read More
Tolga Dizdarer, PhD Candidate, The Wharton School, Gerry Tsoukalas, Operations, Information & Decisions, The Wharton School, and Gérard Cachon, Operations, Information & Decisions, The Wharton School Abstract: Service platforms like Uber and AirBnb create markets that connect customers with service providers. Platforms provide the medium of interaction and receive commissions from…Read More
We establish the relevance of human capital to startup financing. Using administrative databases from the Central Bank of Brazil, we obtain information on private firms, their founders and their access to bank credit.…Read More
