INFORMS Journal on Computing, 2022, 34(3):1819-1840

Electricity wholesale markets are complex, and renewable energy sources can cause electricity prices to be more volatile because of the intermittent nature of renewable sources. Independent power producers (IPPs) who own both traditional coal-fired thermal generators and renewables face significant challenges when submitting offers to sell electricity.

This paper proposes a new plan called an integrated stochastic optimal strategy to help IPPs participate in both the day-ahead and real-time markets (i.e., two-settlement electricity markets) and sell electricity at the best price possible. This strategy involves the IPP submitting an offer for all periods to the day-ahead market and using a multistage stochastic programming setting to provide real-time market offers for each period.

This strategy has the advantage of achieving maximum profits for both markets over a given operational time horizon. It has been proven to be more profitable than alternative self-scheduling strategies that do not take into account real-time information about renewable energy output and electricity prices.

To make the plan more efficient, we explore using polyhedral structures to derive strong valid inequalities, including convex hull descriptions for certain special cases, which strengthens the proposed model’s formulation. Polynomial-time separation algorithms are then established to speed up the branch-and-cut process. Finally, both numerical and real case studies demonstrate the potential of the proposed strategy to improve profits for IPPs.

Production and Operations Management, advance online publication, 2023

Online platforms are experimenting with various methods such as content screening to moderate the effects of fake, biased, and inflammatory content. However, they face a challenge in using machine learning algorithms to manage online content due to the labelling problem. This means that labelled data used to train the model are limited and expensive to obtain.

To address this issue, we propose a domain-adaptive approach that leverages human judgment to improve fake content detection. We start with a source domain dataset that includes both deceptive and trustworthy general news compiled from a large collection of labelled news sources based on human judgments and opinions.

Next, we use advanced deep learning models to extract distinguishing linguistic features commonly found in the source domain news. We transfer these features associated with the source domain to improve fake content detection in three target domains: political news, financial news, and online reviews. We show that domain-invariant linguistic features learned from a source domain with abundant labelled examples can significantly improve fake content detection in a target domain with very few or highly unbalanced labelled data. We further show that these linguistic features are most useful when there is a high level of transferability between source and target domains.

Our study provides insights into managing online content and resources when applying machine learning for fake content detection. We also outline a modular architecture that can be used to develop content screening tools in a wide range of fields.

Academy of Management Journal, advance online publication, 2023

Pay transparency is an important issue in the workplace as it can promote fairness and help close pay gaps. However, our study reveals some unintended consequences of this practice. We surveyed over 100 medical device firms and discovered that as pay becomes more transparent, managers are more likely to avoid challenging discussions about pay differences by nudging everyone towards a standardised salary (pay compression), which often falls at the lower end of an acceptable range. Consequently, high-performing employees may seek alternative forms of recognition, leading to negotiations with their supervisors for personalised benefits and bonuses (i-deals). Ironically, this shift towards opaque negotiations concerning total compensation packages undermines efforts to reduce pay gaps, as managers may compensate employees in less transparent ways.

Our study implies that while pay transparency can be a step towards a more equitable workplace, it is not a one-size-fits-all solution. Companies need to consider the broader implications of their compensation policies, including non-monetary rewards, and ensure that their efforts towards transparency truly promote fairness and understanding among employees.

MIS Quarterly, 2023, 47(1), 63-96

Unstructured multimedia data (text and audio) provides unprecedented opportunities to derive actionable decision-making in the financial industry, in areas such as portfolio and risk management. However, due to formidable methodological challenges, the promise of business value from unstructured multimedia data has not materialized. In this study, we use a design science approach to develop DeepVoice, a novel nonverbal predictive analysis system for financial risk prediction, in the setting of quarterly earnings conference calls. DeepVoice forecasts financial risk by leveraging not only what managers say (verbal linguistic cues) but also how managers say it (vocal cues) during the earnings conference calls. The design of DeepVoice addresses several challenges associated with the analysis of nonverbal communication. We also propose a two-stage deep learning model to effectively integrate managers’ sequential vocal and verbal cues. Using a unique dataset of 6,047 earnings call samples (audio recordings and textual transcripts) of S&P 500 firms across four years, we show that DeepVoice yields remarkably lower risk forecast errors than that achieved by previous efforts. The improvement can also translate into nontrivial economic gains in options trading. The theoretical and practical implications of analyzing vocal cues are discussed.

MIS Quarterly, 2023, 47(1), 391-422

The COVID-19 pandemic has underscored the urgent need for healthcare entities to develop resilient strategies to cope with disruptions caused by the pandemic. This study focuses on the digital resilience of certified physicians who adopted an online healthcare community (OHC) to acquire patients and conduct telemedicine services during the pandemic. We synthesize the resilience literature and identify two effects of digital resilience—the resistance effect and the recovery effect. We use a proprietary dataset that matches online and offline data sources to study the digital resilience of physicians. A difference-in-differences (DID) analysis shows that physicians who adopted an OHC had strong resistance and recovery effects during the pandemic. Remarkably, after the COVID-19 outbreak, these physicians had 35.0% less reduction in medical consultations in the immediate period and 31.0% more bounce-back in the subsequent period as compared to physicians who did not adopt the OHC. We further analyze the sources of physicians’ digital resilience by distinguishing between new and existing patients from both online and offline channels. Our subgroup analysis shows that, in general, digital resilience is more pronounced when physicians have a higher online reputation rating or have more positive interactions with patients on the OHC platform, providing further support for the mechanisms underlying digital resilience. Our research has significant theoretical and managerial implications beyond the context of the pandemic.

Journal of Financial and Quantitative Analysis, 2023, 58(2), 647-676

We study the importance of peer effects among sell-side analysts who work at the same brokerage house, but cover different firms. By mapping the information network within each brokerage, we identify analysts who occupy central positions in the network. Central analysts incorporate more information from their coworkers and produce better research. Using shocks to network structures around brokerage mergers, we identify the influence of peer effects and the importance of industry expertise on analysts’ performance. A portfolio strategy that exploits the forecast revisions of central analysts earns up to 24% per annum.

Journal of Personality and Social Psychology, 2023, 124(3), 461–482

In the context of COVID-19 government-ordered lockdowns, more individualistic people might be less willing to leave their homes to protect their own health, or they might be more willing to go out to relieve their boredom. Using an Australian sample, a pilot study found that people’s lay theories were consistent with the latter possibility, that individualism would be associated with a greater willingness to violate lockdown orders. Using a longitudinal data set containing location records of about 18 million smartphones across the United States, Study 1 found that people in more individualistic states were less likely to comply with social distancing rules following lockdown orders. Additional analyses replicated this finding with reference to counties’ residential mobility, which is associated with increased individualism. In a longitudinal data set containing mobility data across 79 countries and regions, Study 2 found that people in more individualistic countries and regions were also less likely to follow social distancing rules. Preregistered Study 3 replicated these findings at the individual level: People scoring higher on an individualism scale indicated that they had violated social distancing rules more often during the COVID-19 pandemic. Study 4 found that the effect of individualism on violating social distancing rules was mediated by people’s selfishness and boredom. Overall, our findings document a cultural antecedent of individuals’ socially responsible behavior during a pandemic and suggest an additional explanation for why the COVID-19 pandemic has been much harder to contain in some parts of the world than in others.

Journal of Personality and Social Psychology, 2022, 123(6), 1223–1242

People are excessively confident that they can judge others’ characteristics from their appearance. This research identifies a novel antecedent of this phenomenon. Ten studies (N = 2,967, 4 preregistered) find that the more people believe that appearance reveals character, the more confident they are in their appearance-based judgments, and therefore, the more they support the use of facial profiling technologies in law enforcement, education, and business. Specifically, people who believe that appearance reveals character support the use of facial profiling in general (Studies 1a and 1b), and even when they themselves are the target of profiling (Studies 1c and 1d). Experimentally inducing people to believe that appearance reveals character increases their support for facial profiling (Study 2), because it increases their confidence in the ability to make appearance-based judgments (Study 3). An intervention that undermines people’s confidence in their appearance-based judgments reduces their support for facial profiling (Study 4). The relationship between the lay theory and support for facial profiling is weaker among people with a growth mindset about personality, as facial profiling presumes a relatively unchanging character (Study 5a). This relationship is also weaker among people who believe in free will, as facial profiling presumes that individuals have limited free will (Study 5b). The appearance reveals character lay theory is a stronger predictor of support for profiling than analogous beliefs in other domains, such as the belief that Facebook likes reveal personality (Study 6). These findings identify a novel lay theory that underpins people’s meta-cognitions about their confidence in appearance-related judgments and their policy positions.

Operations Research, 69(5): 1349-1650, 2021

The authors propose a model that allows publishers of online advertising to balance the trade-off between short-term profit and long-term benefit.

Online publishers sell their advertising resources via either an upfront market or a spot market. In the upfront market, the publisher enters into a contract with each advertiser, guaranteeing an agreed number of impressions over a specified period at a fixed price. These contracts often vary in length, so the publisher has many contracts at any given time, each with a varying time span. In the spot market, the publisher auctions off its remaining advertising resources in real time among advertisers who want to display their ads during the current period.

This practice of ad delivery suffers from two major inefficiencies. First, the upfront market and the spot market are often managed separately. This ignores the value of coordination and integration and thus misses potential profit. The second inefficiency is related to how advertising is sold in the spot market: simple auction mechanisms are theoretically appealing, but have many drawbacks in practice.

The authors propose integrating ad delivery planning for guaranteed ads and spot market ads. They study how an online advertising publisher should allocate its advertising resources to different guaranteed ads and to spot market ads, considering the uncertain supply of ad resources, the requirement of guaranteed ads, and the bids submitted from advertisers in the spot market.

The proposed integrated planning of guaranteed and non-guaranteed ads is shown to be capable of achieving higher profit and also ensuring effective delivery of guaranteed ads.

Journal of Applied Psychology, advance online publication, 2022

Despite the universal norm of reciprocity that one ought to reciprocate what they have received, help recipients do not always return the favour.,

Organisational life requires that employees help each other, supporting their co-workers and thus enhancing work relationships and work performance. Yet an employee who benefits from a supportive relationship might sabotage the person who supports them in the relationship. The authors propose an explanation for this “biting the hand that feeds” phenomenon.

Their results show that help recipients develop negative perceptions of help givers if they perceive the help givers as more competent than they are. This causes them to experience a threat to their status and feelings of envy towards the help givers. The more envy that help recipients experience toward help givers, the more likely they are to undermine those who help them. In this way, help givers are sometimes even punished for helping. Help recipients are even more likely to respond negatively if are motivated by a desire for higher status.

The authors’ findings are in contrast to social exchange theory, which suggests that after receiving help, people reciprocate by helping the original help giver. Instead, these findings underscore the importance of status dynamics in helping interactions by highlighting that help recipients, especially those motivated by a desire for higher status, may paradoxically undermine help givers when they perceive help givers as a threat to their own status.

Journal of Marketing, 86(6), 95-115 (2022)

The authors shed new light on how marketers can design influencer marketing campaigns to maximise their effectiveness. They reveal how the effectiveness of engaging social-media influencers to promote a firm’s offerings depends on factors related to the influencers themselves, their followers, and the content of sponsored posts.

Many marketers have turned to online influencers to promote their brands and products on social media as consumers grow increasingly skeptical toward traditional marketing. This has propelled the growth of influencer marketing, a communication strategy in which a firm selects and incentivises online influencers to engage their followers on social media in an attempt to promote the firm’s offerings. A firm selects and pays online influencers who have built networks of followers on social media. Influencers share content while weaving brand endorsements into their personal stories and posts. This results in content that appears authentic and provides consumption value.

However, limited research has considered the costs of paying influencers to promote a firm’s offerings. When might such a marketing strategy woo potential customers, and when might it put them off?

The authors examine how the effectiveness of using influencers to market a firm’s offerings is determined by factors related to the sender of a message (the influencer), the receiver of the message (the influencer's followers), and the message itself (the influencer's posts).

Their findings show that the effectiveness of paying influencers to promote a firm’s offerings is enhanced by influencer originality, follower size, and sponsor salience; while effectiveness is diminished by posts that announce new product launches. They also find that tensions arise when firms select influencers and manage their content. The effectiveness of influencer marketing is affected in an inverted U-shaped pattern by the frequency of influencer activity, follower–brand fit, and the degree of positivity of a post. This suggests that firms that adopt a balanced approach towards these variables can achieve greater marketing effectiveness.

Management Science, advance online publication, 2022

Operating under both supply-side and demand-side uncertainties, a mobile-promotion platform conducts advertising campaigns for individual advertisers. Campaigns arrive dynamically over time, which is divided into seasons; each campaign requires the platform to deliver a target number of mobile impressions from a desired set of locations over a desired time interval. The platform fulfills these campaigns by procuring impressions from publishers, who supply advertising space on apps via real-time bidding on ad exchanges. Each location is characterized by its win curve, that is, the relationship between the bid price and the probability of winning an impression at that bid. The win curves at the various locations of interest are initially unknown to the platform, and it learns them on the fly based on the bids it places to win impressions and the realized outcomes. Each acquired impression is allocated to one of the ongoing campaigns. The platform’s objective is to minimize its total cost (the amount spent in procuring impressions and the penalty incurred due to unmet targets of the campaigns) over the time horizon of interest. Our main result is a bidding and allocation policy for this problem. We show that our policy is the best possible (asymptotically tight) for the problem using the notion of regret under a policy, namely the difference between the expected total cost under that policy and the optimal cost for the clairvoyant problem (i.e., one in which the platform has full information about the win curves at all the locations in advance): The lower bound on the regret under any policy is of the order of the square root of the number of seasons, and the regret under our policy matches this lower bound. We demonstrate the performance of our policy through numerical experiments on a test bed of instances whose input parameters are based on our observations at a real-world mobile-promotion platform.

MIS Quarterly, 46(2), 1135-1164

A herding cue is a lean information signal that an individual receives about the aggregate number of others who have engaged in a behavior that may result in herd behavior. Given the ease with which they can be leveraged as implementation interventions or design features on online sites, herding cues hold the promise to provide a means to influence adoption behaviors. Yet, little attention has been devoted in the IS adoption literature to understanding the effects of herding cues. Given that herding cues are just one of several forms of social influence on adoption behaviors and are relatively lean in nature, understanding their viability as an implementation intervention necessitates understanding their effects in the presence of (1) other forms of social influence, which also serve to reduce uncertainty and signal the appropriateness of technology adoption, and (2) an individual’s own beliefs about adopting. In this vein, we conducted a randomized field experiment to examine the use of a herding cue as an implementation intervention to hasten adoption behaviors. The research model was evaluated using survival analysis by combining the data from the field experiment with two waves of surveys, and archival logs of adoption. Our results show that a herding cue (1) directly impacts the time it takes an individual to adopt a technology, (2) amplifies the effects of peer behaviors (another type of informative social influence), but has no impact on the effect of subjective norm (a form of normative social influence), and (3) dampens the effects of an individual’s private beliefs about the usefulness of a technology. Our paper disentangles herding information signals to define a herding cue as distinct from other herd behavior triggers, explores how it may interact with other forms of social influences and private beliefs to influence adoption behaviors, and, on a practical level, provides evidence of how a herding cue can be a tangible intervention to accelerate technology adoption.

Journal of Marketing Research, 58(5), 968–980

Consumption of used products has the potential to symbolically connect present and previous users of these products, something that may appeal to lonely consumers. Accordingly, across seven studies, feeling lonely increased consumers’ preference for previously owned products. Specifically, the authors found that the proportion of lone shoppers was higher in a used versus a regular bookstore, lone individuals (vs. those sitting in pairs) were more likely to select a used over a new product, people without (vs. with) a date on Valentine’s Day expressed stronger preference for used products, and individual differences in loneliness during the COVID-19 pandemic predicted interest in used products. Other studies documented that the desire to symbolically connect underlies the effect of loneliness on consumption. At a time when loneliness is on the rise, the authors discuss implications for the marketing of used products and how loneliness might motivate consumers to reduce waste.

Journal of Management Information Systems, 38, 4, 2021, 898-930

How do fake news flags affect the spread of fake news? How do forwarding restrictions affect the spread of fake news and its ability to survive?

The authors study the impact of two kinds of intervention by China’s largest social media platform to prevent the spread of fake news stories: flagging individual fake-news stories, and imposing a forwarding restriction on accounts that publish fake news stories.

They show that a fake news flag significantly alters the spread of fake news. The forwarding behaviour of followers with strong ties to the focal account is not greatly affected by a fake news flag as these followers are more likely to have the same views and beliefs as the focal account, and are affected by confirmation bias. Such followers also tend to be influential social media users. However, more distant followers, who are less likely to have the same views and beliefs as the focal account, are less likely to forward a story that has been marked as false. The fake news flag thus prevents a story from spreading farther and more broadly in a ripple effect.

Marketing Science, forthcoming

The authors study owner behaviours on a leading peer-to-peer (P2P) car sharing platform in China with the aim of improving matching efficiency on P2P sharing platforms.

P2P sharing platforms act as marketplaces that enable the sharing of idle resources. When a renter requests an owner's resource, the owner needs to decide whether to accept the request: accepting it helps the renter fill up the idle periods of the resource and generate a payoff, but reduces the flexibility to serve a future request for a longer duration.

The authors develop a framework that helps owners understand the trade-offs that they face on P2P platforms when deciding whether to accept a renter’s request. Owners can use this framework to optimise their decisions, while platforms can use this framework to improve their operations.

The paper identifies two types of owners: myopic owners make their acceptance decisions for each incoming request in isolation, while forward-looking owners make their acceptance decisions after taking into account a) how their decision will affect the availability state of their car, and b) the possible arrival of future requests. Both groups of owners are similar in number but forward looking, strategic owners are more likely to be female, experienced, and younger.

Journal of Financial and Quantitative Analysis, forthcoming

We find that organization capital is negatively related to the cost of bank loans. This finding is robust to additional analyses including those that address omitted variable bias and reverse causality. In addition, we find that organization capital reduces all-in-spread-undrawn. When we decompose the bank loan cost, we find that organization capital increases facility fees due to its risk-engendering characteristics. Finally, we find that organization capital is positively associated with a high likelihood of the presence of inventors and innovation output, consistent with the argument that organization capital is embedded in the key talent within a firm.

Academy of Management Journal, forthcoming

Although teams of negotiators are widely assumed to be better at unlocking integrative solutions than individual negotiators, the interteam negotiation context is characterized by unique challenges which can make effective collaboration between teams difficult. We extend our theoretical understanding of interteam negotiations by offering novel insights about when and why teams realize their potential in integrative negotiations. Specifically, we propose a theoretical model that explains how hierarchical team structures reduce information elaboration within teams, which reinforces “fixed-pie” assumptions that prompt the reliance on value claiming behaviors between teams and lower high-quality outcomes such as the joint gain achieved. Across four studies, each involving interactive team-on-team negotiations, we provide support for the hypothesized effects of formal intrateam hierarchies on joint gain, and test a useful intervention to mitigate the harmful effects of hierarchically structured teams at the negotiation table. Contributions to the literatures on team negotiations, interteam collaboration, and hierarchical differences within teams are discussed.

Academy of Management Journal, forthcoming

Organizations need to both differentiate themselves while conforming to their audiences’ expectations. To meet this demand, organizations may span different categories. However, valuing spanners is challenging for audiences. We contend that spanners’ valuation depends on category nesting, as the congruence of informational cues varies between basic categories and subcategories. Furthermore, we expect that more expert audiences find spanners to be more congruent (and hence, more valuable) at a subordinate level than at a basic level of categorization. We test our hypotheses using a mixed methods design in the context of venture capital investments. We analyze observational data on more than 29,000 venture capital deals and develop two experimental studies. Our findings support our hypotheses that subcategory-spanning lowers valuation, and that this effect is attenuated as investors’ expertise increases. Our experimental studies further show that congruence is a causal mechanism explaining these effects. Our findings have important implications for research on organizational conformity and optimal distinctiveness, categorization in markets from an information processing perspective, and the impact of expertise on valuation.

Journal of Applied Psychology, 107, 193-220

Although workplace incivility has received increasing attention in organizational research over the past two decades, there have been recurring questions about its construct validity, especially vis-à-vis other forms of workplace mistreatment. Also, the antecedents of experienced incivility remain understudied, leaving an incomplete understanding of its nomological network. In this meta-analysis, we validate the construct of incivility by testing its reliability, convergent and discriminant validity, as well as its incremental predictive validity over other forms of mistreatment. We also extend its nomological network by drawing on the perpetrator predation framework to systematically study the antecedents of experienced incivility. Based on 105 independent samples and 51,008 participants, we find extensive support for incivility's construct validity. Besides, we demonstrate that demographic characteristics (gender, race, rank, and tenure), personality traits (agreeableness, conscientiousness, neuroticism, negative affectivity, and self-esteem), and contextual factors (perceived uncivil climate and socially supportive climate) are important antecedents of experienced incivility, with contextual factors displaying a stronger association with incivility. In a supplementary primary study with 457 participants, we find further support for the construct validity of incivility. We discuss the theoretical and practical implications of this study.

The Accounting Review, forthcoming

The Securities and Exchange Commission (SEC) regulates and monitors, under the securities laws, the financial reporting and disclosure of SEC registrants (companies) to increase transparency and protect investors. The securities laws also consider the companies’ interests and allow them to make confidential treatment requests to redact certain information in SEC filings and not publicly disclose such information for a specified period of time, if the information is both proprietary and immaterial to investors - proprietary in the sense that disclosure may reveal trade secrets or information about profitability that harm companies’ competitiveness. There has been an overall uptick in confidential treatment requests in recent years.

Although prior studies provide evidence that companies use redactions to protect proprietary information from their competitors, anecdotal evidence suggests otherwise. For example, Tesla, in the two fiscal quarters ending June 30 and September 30, 2017, in which the company lost $955 million, made an unusually high number of confidential treatment requests, allowing the company to generate almost 3,000 redactions. In another example, TheStreet questioned SolarCity’s redactions in 2015, speculating that the withheld information was unfavourable to investors. In yet another example, Asensio.com questioned the Universal Display Corporation’s heavy redaction in its supply and licensing agreements with Samsung, which potentially allows the company to withhold unfavourable information regarding its red emitter sales.

Journal of Applied Psychology, forthcoming

Colquitt et al. (Journal of Applied Psychology, 2000, 85, p. 678) integrative theory based on meta-analysis and model testing has served as the foundation for the authors' understanding of training motivation. However, the applicability of the theory today may be limited for several reasons. There has been significant growth in training motivation research since Colquitt et al. (Journal of Applied Psychology, 2000, 85, p. 678) proposed and tested their theory. Also, advances in meta-analysis and model testing allow for a more complete and rigorous test of the theory than was previously possible. As a result, the authors propose and test a contemporary and comprehensive theory of training motivation based on Colquitt et al. (Journal of Applied Psychology, 2000, 85, p. 678) and other studies conducted over the last 20 years. To do so, they conducted an updated meta-analytic review of 167 independent studies and tested a mediation model of training motivation theory using both conventional meta-analytic structural equation modeling (MASEM) and full-information MASEM (FIMASEM). The results support a partially mediated model of training motivation that includes additional antecedents (e.g., openness to experience, extroversion, agreeableness, and goal orientation) and learning outcomes (e.g., turnover intentions and job satisfaction) not included in Colquitt et al. (Journal of Applied Psychology, 2000, 85, p. 678). In addition, the authors conducted exploratory analyses to understand the relative importance of the antecedents of both motivation to learn and learning outcomes and the moderating role of training and studying characteristics on the relationships between motivation to learn and its antecedents and consequences. Finally, they discuss the implications of the results for theory, practice, and future research directions.

Journal of Applied Psychology, forthcoming

Conventional research on gratitude has focused on the benefits of expressing or experiencing gratitude for the individual. However, recent theory and research have highlighted that there may too be benefits associated with receiving others’ gratitude. Grounded in the Work-Home Resources model, the authors develop a conceptual model to understand whether, how, and for whom service providers (i.e., healthcare professionals) benefit from receiving service beneficiaries’ (i.e., patients) gratitude in their daily work. They hypothesize that perceived gratitude from service beneficiaries enhances service providers’ relational energy at work, which spills over to benefit their family lives later in the day. In addition, they hypothesize that the effect of gratitude on relational energy and its subsequent spillover effect to the family are contingent on employees’ occupational identity. Two experience sampling studies with data collected from healthcare professionals and their spouses for two consecutive weeks (each) provided support for the hypothesized model. The authors conclude by discussing the theoretical and practical implications of their work.

Journal of Financial Economics, 141(1), 372-393 (2021)

Using a comprehensive US hedge fund activism dataset from 2003 to 2018, the authors find that activist hedge funds are about 52% more likely to target firms with female CEOs compared to firms with male CEOs. They find that firm fundamentals, the existence of a “glass cliff,” gender discrimination bias, and hedge fund activists’ inherent characteristics do not explain the observed gender effect. They also find that the transformational leadership style of female CEOs is a plausible explanation for this gender effect: instead of being self-defensive, female CEOs are more likely to communicate and cooperate with hedge fund activists to achieve intervention goals. Finally, the authors find that female-led targets experience greater increases in market and operational performance subsequent to hedge fund targeting.

Management Science, forthcoming

The authors study how daily labour supply responds to unanticipated earnings shocks among Singapore's taxi drivers using a novel identification strategy that makes use of idiosyncratic variation in booking cancellations and passenger no-shows (CNS) that drivers repeatedly receive. The results provide new and more compelling evidence in support of the income-targeting model of labour supply. Not only the average responses on the extensive margin, but also the responses on the intensive margin as well as the heterogeneous response at different income levels and across driver characteristics are all consistent with the income-targeting model. Drivers work longer and earn more per hour following CNS. The CNS effects exhibit a U-shaped pattern, are strongest when cumulative income is close to the average shift income, and become insignificant when the income level is too low or too high. The effects are most pronounced in the first hour of CNS and fade away quickly afterward. Drivers achieve higher productivity by reducing break time, taking more jobs, driving faster, driving to places with more earning opportunities, and having more time with passengers on board. They choose the response strategies that are complementary to their ability and circumstance such as schedule flexibility and potential for productivity improvement: Those with flexible working schedules tend to prolong their shifts further, while those with flexibility in earnings rate tend to increase their subsequent productivity more. The authors’ novel identification strategy strengthens the empirical literature on daily labour supply, while their findings of the heterogeneity effects offer new insights on income-targeting behaviours.

Journal of Financial Economics ,forthcoming

Journal of Accounting and Economics, 70(1), 101334 (2020)

One of the fundamental questions in financial economics is how information affects the capital market. Social media, with user-generated content, speed and wide reach, has the potential to facilitate the aggregation of information and help stock price formation (crowd wisdom effect). It also provides fertile ground for disinformation to spread and hinder price discovery (rumor mill effect).

The authors of this paper investigate whether social media can play a negative information role by hindering price discovery in the presence of highly speculative rumors with a focus on merger rumors. They examine Twitter activity and price evolution around merger rumors, using a sample of 304 rumors about mergers and acquisitions that appeared in the media from 2009 to 2014.

The investigation finds evidence of the rumor mill effect in the presence of highly speculative rumors. Specifically, user Twitter activity around merger rumors distorts, rather than facilitates, price discovery.

Operations Research, forthcoming

Customer reward programs are widely used as a means to foster customer loyalty, increase acquisition and retention, and boost long-term profitability. Although these programs are becoming more complex, most of them have one thing in common - consumers purchasing and accumulating a specified number of points (redemption threshold), often within a given time period (expiration term) can redeem the points for rewards. Together these requirements are referred to as “redemption hurdles” in this paper.

The authors study the role of redemption hurdles in shaping consumer behavior and reward program profitability with a focus on the popular "Buy X, Get One Free" (BXGO) programs, which set a redemption threshold (X), and possibly an expiration term for the reward (free products/services). In their modeling framework, forward-looking consumers repeatedly interact with the seller (a monopolistic firm offering a nondurable product) over a long time horizon, and strategically make purchase and redemption decisions.

Contemporary Accounting Research, forthcoming

Understanding the association between quasi-indexer ownership and insider trading is important given the externalities that insider trading can impose on shareholders, the importance of quasi-indexers in the capital markets, and their mixed monitoring incentives. The prior literature has produced a mixed set of results regarding this association. These results are difficult to interpret because the association between them is likely endogenous and prior studies have not employed effective identification strategies to address this issue. In this study, the authors examine the effects of quasi-indexer institutional ownership on insider trading using the plausibly exogenous discontinuity in quasi-indexer ownership around the Russell 1000/2000 index cutoff. Using both regression discontinuity and instrumental variable research designs, they find higher quasi-indexer ownership leads to less insider trading (both buys and sells) and less profitable sell trades. The effects for sells are concentrated among insider trades that, ex ante, are more likely to be based on private information. Their evidence on the profitability of buys is mixed. In addition, they find firms with higher quasi-indexer ownership are more likely to have and/or more strictly enforce blackout policies. Overall, the results suggest that quasi-indexers can reduce the agency costs associated with insider trading through their direct and indirect monitoring activities.

Management Science, forthcoming

The authors study the impacts of social interactions on competing firms’ quality differentiation, pricing decisions, and profit performance. Two forms of social interactions are identified and analyzed: (1) market-expansion effect (MEE) - the total market expands as a result of both firms’ sales - and (2) value-enhancement effect (VEE) - a consumer gains additional utility of purchasing from one firm based on this firm’s previous and/or current sales volume. The authors consider a two-stage duopoly competition framework, in which both firms select quality levels in the first stage simultaneously and engage in a two-period price competition in the second stage. In the main model, they assume that each firm sets a single price and commits to it across two selling periods. They find that both forms of social interactions tend to lower prices and intensify price competition for given quality levels. However, MEE weakens the product-quality differentiation and is benign to both high-quality and low-quality firms. It also benefits consumers and improves social welfare. By contrast, VEE enlarges the quality differentiation and only benefits high-quality firms, but is particularly malignant to low-quality firms. It further reduces the consumers’ monetary surplus. Such impact is consistent, regardless of whether the VEE interactions involve previous or current consumers. The authors further discuss several model extensions, including dynamic pricing, combined social effects, and various cost structures, and verify that the aforementioned impacts of MEE and VEE are qualitatively robust to those extensions. Their results provide important managerial insights for firms in competitive markets and suggest that they need to not only be aware of the consumers’ social interactions, but also, more importantly, distinguish the predominant form of the interactions so as to apply proper marketing strategies.

Journal of Applied Psychology, 106(2), 250-267 (2021)

Drawing upon social comparison theory, the authors developed and tested a model to examine potential negative coworker reactions toward proactive employees. They theorized that a focal employee’s proactive personality is positively related with his or her high relative standing in the group, which in turn exposes him or her to being the target of coworker envy. This may then reduce the focal employee’s received help from coworkers and give rise to coworker undermining. The authors further reasoned that employee prosocial motivation moderates the serial mediated relationships. Their hypotheses were generally supported in 3 field studies involving a total of 1,069 employees from 223 groups. Proactive personality was negatively and indirectly related to received help from coworkers, via relative leader-member exchange (RLMX) and relative job performance, and then via being envied by coworkers (Study 1). Results also generally supported the positive and indirect effect of proactive personality on coworker undermining via the same set of sequential mediators (e.g., RLMX and then being envied, Study 2). The indirect effects of proactive personality on coworker helping and undermining (e.g., via relative job performance and coworker envy) were only significant when employees’ prosocial motivation was low (Study 3). This research contributes to a more complete and balanced theorization of the influences of proactive personality in organizations.

INFORMS Journal on Computing, 33(1), 86–104 (2021)

Most existing facility location models assume that the facility cost is either a fixed setup cost or made up of a fixed setup and a problem-specific concave or submodular cost term. This structural property plays a critical role in developing fast branch-and-price, Lagrangian relaxation, constant ratio approximation, and conic integer programming reformulation approaches for these NP-hard problems. Many practical considerations and complicating factors, however, can make the facility cost no longer concave or submodular. By removing this restrictive assumption, the authors study a new location model that considers general nonlinear costs to operate facilities in the facility location framework. The general model does not even admit any approximation algorithms unless P = NP because it takes the unsplittable hard-capacitated metric facility location problem as a special case. They first reformulate this general model as a set-partitioning model and then propose a branch-and-price approach. Although the corresponding pricing problem is NP-hard, they effectively analyse its structural properties and design an algorithm to solve it efficiently. The numerical results obtained from two implementation examples of the general model demonstrate the effectiveness of the solution approach, reveal the managerial implications, and validate the importance to study the general framework.

Journal of Financial and Quantitative Analysis, forthcoming

The authors examine the value impact of independent directors nominated by activists (Activist IDs). Firms appointing Activist IDs experience larger value increases than firms appointing other directors, particularly when Activist IDs have private firm experience and when their nominators remain as shareholders. This value increase persists over a long period and is greater than that of activism events without director appointments. The increase is also higher among firms with greater monitoring needs and entrenched boards. Moreover, the appointments of Activist IDs are greeted more positively by the market, and Activist IDs obtain more favourable shareholder votes and additional future directorships.

Journal of Financial Economics, forthcoming

This paper studies the disciplinary spillover effects of proxy contests on companies that share directors with target firms, that is, interlocked firms. In difference-in-differences tests, the author finds that interlocked firms reduce excess cash holdings, increase shareholder payouts, cut CEO compensation, and engage in less earnings management in the year after proxy contests. The effects are more pronounced when both the interlocked and target firms have a unitary board and when the interlocking director is up for election, is younger, or has shorter tenure. Overall, the evidence highlights the importance of directors’ career concerns in policy spillovers across firms with board interlocks.

The Accounting Review, 95 (5): 149–184 (2020)

The authors investigate the relationship between societal trust and managers' decisions to voluntarily issue earnings forecasts. They reason that managers are more likely to issue earnings forecasts in high-trust countries than in low-trust countries because investors view these voluntary disclosures as more credible information about the firm's future profitability. They find evidence consistent with these predictions, suggesting that societal trust fosters corporate voluntary disclosure. The authors also document that societal trust works as a substitute for country-level formal institutions in terms of its implications for management earnings forecast (MEF) issuance. Additionally, they find a stronger relationship between firm-level commitment to credible disclosure and MEFs in low-trust countries, suggesting that country-level societal trust relates to the effectiveness of firm-level credibility-enhancing mechanisms. Finally, they show that firms from countries with higher societal trust issue more precise and accurate MEFs that contain more information about multiple items.

Contemporary Accounting Research, 37(2), 1107–1139 (2020)

Political uncertainty has attracted considerable attention in both research and public policy circles in recent years. For corporates, it may generate demand uncertainty, a major determinant of cost behaviour, and affect corporate activities. Uncertainty over a possible shift in national leadership may disturb firms’ regular operations and shapes economic outcomes. Such uncertainty reaches its peak during election periods when competing parties formulate their regulatory and economic policies and outline their platforms for stimulating growth.

This study analyses the impact of election-driven political uncertainty on firms’ cost stickiness (varied cost responses to activity changes). By analysing a large panel of elections in 55 countries, the authors show that political uncertainty surrounding elections can affect cost stickiness. They find that the variation in cost behaviours is more obvious during election years and the importance of political uncertainty to cost stickiness is greater in countries with sound political and legal institutions. Their results imply that managers retain slack resources when political uncertainty is high but will be resolved soon.

Journal of Applied Psychology, forthcoming

Literature on personality development mainly adopts two theoretical perspectives. From the classic trait perspective, environmental factors cannot change adult personality traits because personality traits are endogenous. From the transactional perspective, the environment can influence adult personality development, although rarely dramatically. Organizational research mostly assumes that personality traits cause work behaviours and attitudes, not vice versa.

This study looks at personality development from the new angle of work roles (role-based perspective) and examines what, how, and why personality traits develop after one’s adoption of leadership roles. It investigates whether and how transitioning from an employee into a supervisory role (leadership emergence) shapes one’s personality development. The authors propose that during such role transitions, individuals experience increases in job role demands and expectations, fostering growth in conscientiousness and emotional stability. Their findings show that becoming a leader causes subsequent small but substantial increases in conscientiousness over time to cope with new job role demands. The relationship between becoming a leader and change of emotional stability is not significant. Findings of this research provide important implications for both organizations and employees in better planning leadership succession and managing career development.

Contemporary Accounting Research, forthcoming

Using a large U.S. sample, the authors find a significant and positive relation between patents and corporate tax planning, and the effect is incremental to the effect of R&D on tax planning. They employ a quasi-natural experiment based on staggered industry-level innovation shocks to identify the positive causal effect of patents on corporate tax planning. They also find that patents are not associated with tax planning for domestic firms, but their association with tax planning is concentrated in multinational firms, which have the ability to shift domestic income to low-tax countries. Moreover, the authors find that the identified effect mainly exists in the post-check-the-box (CTB) rule period when shifting income among affiliates becomes more flexible and convenient. Finally, they use two income shifting models and find that patents, rather than R&D, facilitate tax planning through an income shifting channel. Overall, their results suggest that R&D and patents facilitate firms’ tax planning in distinct ways: R&D facilitates tax planning as intended through tax credits and deductions, whereas patents are used to avoid taxes aggressively by taxpayers through income shifting.

Management Science, forthcoming

Firms often register trademarks as they launch new products or services. The authors find that the number of new trademark registrations positively predicts firm profitability, stock returns, and underreaction by analysts in their earnings forecasts. Using the Federal Trademark Dilution Act (FTDA) as an exogenous shock to trademark protection, they find that greater trademark protection strengthens the predictability of new trademark registrations. Together, their evidence suggests that investors undervalue new trademark registrations.

Journal of Financial and Quantitative Analysis, forthcoming

How does social capital affect trust? Evidence from a Chinese peer-to-peer lending platform shows regional social capital affects the trustee’s trustworthiness and the trustor’s trust propensity. Ceteris paribus, borrowers from higher social capital regions receive larger bid from individual lenders, have higher funding success, larger loan size, and lower default rates, especially for low-quality borrowers. Lenders from higher social capital regions take higher risks and have higher default rates, especially for inexperienced lenders. Cross-region transactions are most (least) likely to be realized between parties from high (low) social capital regions.

The Accounting Review, 95(3), 343–370 (2020)

This study examines how cross-firm differences in financial reporting practices affect how peer-firm accounting information is used to evaluate CEO performance. The author proposes that efficient relative evaluation using accounting performance requires peer firms to have comparable financial reporting systems, allowing boards to reduce the information processing costs associated with differences in firms’ financial reporting practices. Supporting this view, when peer selection takes financial reporting comparability into account, he finds evidence that the earnings of peer firms with high financial reporting comparability serve as a performance benchmark for determining CEOs’ cash compensation. His paper empirically corroborates the substantial anecdotal evidence of the use of peer firms’ accounting performance as a significant element in boards’ evaluation of CEO performance.

Management Science, forthcoming

This study examines the effects of jurisdictions’ corporate taxes and other policies on firms’ headquarters (HQ) location decisions. Using changes in state corporate income tax rates across time and states as the setting, the authors find that a one-percentage-point increase in the HQ state corporate income tax rate increases the likelihood of firms relocating their HQ out of the state by 16.8%, and an equivalent decrease in the HQ state rate decreases the likelihood of HQ relocations by 9.1%. Exploiting the unique tax policy features within the state apportionment system lends strong support to the interpretation that taxation drives this effect. Their analyses also demonstrate that state income tax features affect the destination of the HQ move. They contribute to the literature on corporate decision-making by showing how state income taxation affects a real corporate decision that has significant economic consequences for the company and the state.

INFORMS Journal on Computing, forthcoming

A solar power plant is a large-scale photovoltaic (PV) system designed to supply usable solar power to the electricity grid. Building a solar power plant needs consideration of arrangements of several important components, such as PV arrays, solar inverters, combiner boxes, cables, and other electrical accessories. The design of solar power plants is very complex because of various optimization parameters and design regulations. In this study, the authors address the cable-routing problem arising in the planning of large-scale solar power plants, which aims to determine the partition of the PV arrays, the location of combiner boxes, and cable routing such that the installation cost of the cables connecting the components is minimized. They formulate the problem as a mathematical programming problem, which can be viewed as a generalized capacitated minimum spanning tree (CMST) problem, and then devise a branch-and-price-and-cut (BPC) algorithm to solve it. The BPC algorithm uses two important valid inequalities, namely the capacity inequalities and the subset-row inequalities, to tighten the lower bounds. The authors also adopt several acceleration strategies to speed up the algorithm. Using real-world data sets, they show by numerical experiments that their BPC algorithm is superior to the typical manual-based planning approach used by many electric power planning companies. In addition, when solving the CMST problem with unitary demands, their algorithm is highly competitive compared with the best exact algorithm in the literature.

Strategic Management Journal, 41(10), 1933-1951 (2020)

This study draws attention to the impact of prior board experiences on the variation in new insider CEOs' degree of “insiderness” in terms of commitment to the status quo and their propensity to make strategic change. The authors theorize and find that new insider CEOs' prior board experience at the focal firm has a negative effect on strategic change, whereas their prior board experience at other firms has a positive effect. Moreover, the positive effect of prior board experience at other firms is stronger (weaker) for new insider CEOs who have less (more) prior board experience at the focal firm. Their study contributes to upper echelons theory and research on new CEOs, and has important implications for organizational practices regarding CEO succession and strategic change.