Publications

We review a program of research examining three questions. First, why is the morality of people's behavior inconsistent across time and situations? We point to people's ability to convince themselves they have a license to sin, and we demonstrate various ways people use their behavioral history and others—individuals, groups, and society—to feel licensed. Second, why are people's moral judgments of others' behavior inconsistent? We highlight three factors: motivation, imagination, and repetition. Third, when do people tolerate others who fail to practice what they preach? We argue that people only condemn others' inconsistency as hypocrisy if they think the others are enjoying an “undeserved moral benefit.” Altogether, this program of research suggests that people are surprisingly willing to enact and excuse inconsistency in their moral lives. We discuss how to reconcile this observation with the foundational social psychological principle that people hate inconsistency.

Nike, a leading global sportswear brand, has always emphasized the performance of their shoes and athletic gear. In 20-teens, the company set out to also add sustainability to their corporate goals. A small innovation team in the company aimed to create a shoe, the Space Hippie, with the lowest possible carbon footprint using post-industrial waste from Nike’s operations. The team had to rethink traditional material sourcing, production processes, and collaborations with both internal stakeholders and external manufacturing partners.

Challenges in producing the Space Hippie were multifaceted. The team needed to ensure that the recycled materials maintained requisite performance and durability while achieving significant reductions in carbon emissions. They encountered issues like bio-contaminants in recycled yarns and the need for new purification standards since industry benchmarks did not exist. Additionally, they had to convince Nike’s marketing and manufacturing teams of the viability and marketability of the shoe's unconventional design and name, "Space Hippie".

After overcoming these obstacles, the project prompted internal reflection on the balance between innovative material use, market readiness, and the broader implications for Nike's sustainability narrative. Nike wondered what elements of the Space Hippie project could be institutionalized for future products and how the lessons learned could influence broader corporate practices and environmental objectives.

Open banking facilitates data sharing consented to by customers who generate the data, with the regulatory goal of promoting competition between traditional banks and challenger fintech entrants. We study lending market competition when sharing banks’ customer transaction data enables better borrower screening for fintechs. Open banking promotes competition if it helps level the playing field for all lenders in screening borrowers; however, if it over-empowers fintechs, it can also hinder competition and leave all borrowers worse off. Due to the credit quality inference from borrowers’ sign- up decisions, this remains true even if borrowers have the control of whether to share their banking data. We also study extensions with fintech affinities and data sharing on borrower preferences.

We investigate whether a market served by a multiproduct monopolistic seller can be segmented in a way that benefits all consumers and the seller. The seller can offer a different product menu in each market segment, combining second- and third-degree price discrimination. We show that markets for which profit maximization leads to inefficiency can, generically, be segmented into two market segments in a way that increases the surplus of all consumers weakly and of some consumers and the seller strictly. Our constructive proof is based on deriving implications of binding incentive compatibility constraints when profit maximization implies inefficiency.

The Philadelphia School District, one of the largest in the United States, educates approximately 200,000 students and faces numerous challenges typical of large urban districts, including low test scores, declining enrollments, and financial constraints. The district's special admissions high schools have historically been bright spots, renowned for their high standards and college preparation. 

However, the existing admissions process became a point of contention for its perceived lack of equity. Enterprising parents often relocated to ensure their children attended feeder middle schools that improved their chances of acceptance into these prestigious high schools. In response to concerns and a report highlighting the lack of representativeness in special admissions schools, Superintendent William Hite and his team devised a new, more equitable admissions policy. 

The new system, which fully took effect for the 2022-23 school year, replaced state test requirements with a computer-graded essay and introduced a centralized lottery. This method prioritized students from historically disadvantaged zip codes. The rollout faced significant hurdles, including a lawsuit from parents and logistical issues within the schools, leading to difficulties in managing new student demographics and leaving some schools with empty seats. These challenges prompted the new Superintendent, Tony Watlington, to seek improvements and reevaluate the selection process.

Currently owned by Vista Equity Partners and Onex Corporation, PowerSchool focuses on integrating K-12 education systems by uniting various software services such as student information systems (SIS), learning management systems (LMS), and enterprise resource planning (ERP) onto one comprehensive platform. Serving 12,000 customers and 45 million students across 90 countries, the company demonstrates a robust presence, particularly in the US and Canada.

PowerSchool's operational method under CEO Hardeep Gulati and strategic direction from Vista and Onex involves leveraging acquisitions to enhance its product offerings and broaden market penetration. This approach aims to provide a seamless and efficient educational management experience for K-12 institutions.

The dilemma faced by PowerSchool hinges on the decision to proceed with an initial public offering (IPO) amid fluctuating market conditions. Although the first half of 2021 witnessed high IPO activity due to favorable economic factors, signs of market cooling emerged by mid-year. The critical question is whether PowerSchool can meet the rigorous expectations of public markets, including consistent financial performance and the ability to withstand increased scrutiny over stock prices and profitability.

Aesthetics are critically important to market acceptance. In the automotive industry, an improved aesthetic design can boost sales by 30% or more. Firms invest heavily in designing and testing aesthetics. A single automotive “theme clinic” can cost more than $100,000, and hundreds are conducted annually. We propose a model to augment the commonly used aesthetic design process by predicting aesthetic scores and automatically generating innovative and appealing product designs. The model combines a probabilistic variational autoencoder (VAE) with adversarial components from generative adversarial networks (GAN) and a supervised learning component. We train and evaluate the model with data from an automotive partner—images of 203 SUVs evaluated by targeted consumers and 180,000 high-quality unrated images. Our model predicts well the appeal of new aesthetic designs—43.5% improvement relative to a uniform baseline and substantial improvement over conventional machine learning models and pretrained deep neural networks. New automotive designs are generated in a controllable manner for use by design teams. We empirically verify that automatically generated designs are (1) appealing to consumers and (2) resemble designs that were introduced to the market five years after our data were collected. We provide an additional proof-of-concept application using open-source images of dining room chairs.

The climate crisis is an emerging threat to U.S. financial stability. Costs related to infrastructure damage and business interruptions from weather- and climate-related disasters have risen steadily since 1980. At the same time, averting catastrophic global warming necessitates a rapid transition from fossil fuels to clean energy sources — and costs associated with the energy transition are estimated to be in the trillions of dollars annually. Growing concern about the climate threat to financial systems is reshaping how businesses, investors, financial institutions, and regulators approach climate-related financial risks. As part of this paradigm shift, the U.S. Securities and Exchange Commission (SEC), the federal agency that oversees and regulates securities (e.g., stocks, bonds, mutual funds), has proposed new rules that would require companies that are publicly traded in the United States (e.g., traded on American stock exchanges) to report (disclose) detailed information about risks to their businesses posed by climate change, including ways the businesses could be harmed by the escalating climate crisis (e.g., facility damage from severe events) and risks associated with their own contribution to climate change (e.g., financial risks related to their greenhouse gas emissions). As of October 20, 2023, the SEC proposal, Rules to Enhance and Standardize Climate-Related Disclosures for Investors, has yet to be formally adopted and may undergo significant change relative to its content and scope. Industry lobbying, legal challenges, and political headwinds may alter its final form, though it is widely expected that climate-related disclosure rules, even if modified, will ultimately be adopted. While the intention of the SEC proposal is to ensure that investors have better information about climate risks facing companies, it will have broad implications across the health care sector, impacting health care product and supply companies as well as direct care providers such as hospitals and health systems. For the purposes of this paper, companies that provide direct patient care are referred to as health care organizations (HCOs). If the SEC proposal is adopted, publicly traded HCOs, in addition to providing routine SEC financial filings, will be required to include climate-related financial risk disclosures. While the rules strictly apply only to publicly traded companies, it will create pressure for similar disclosures throughout the health care sector. All HCOs — publicly traded, nonprofit, government owned, and privately held — should consider adopting climate risk assessments and disclosures in anticipation of the new SEC climate rules. Here, the authors provide a brief overview of the proposed SEC climate rules as related specifically to publicly traded HCOs and discuss potential ramifications for the entire health care sector.

Using comprehensive data on U.S. corporate bond trades since 2002, we find evidence that retail bond investors overrely on untimely credit ratings to their financial detriment. Specifically, they appear to select bonds by first screening on a credit rating and then sorting by yield, buying the highest-yielding bonds within each rating level. Because yields lead credit rating changes, selecting on yield-within-rating means that retail investors systematically trade in the opposite direction of changing fundamentals, buy in advance of credit downgrades and defaults, and materially underperform a diversified portfolio. Our study provides new evidence of ill-informed retail trading in a market that is thought to be relatively sophisticated, corroborates regulators' concerns about investor overreliance on credit ratings, and contributes to the academic literature on the roles and consequences of credit ratings in debt markets.

South Asians working temporarily in richer Asian nations is the world's largest international migration corridor. We track down 3,512 (of 1.4 million) applicants to a government lottery that randomly allocated visas to Bangladeshis for low-skilled, temporary labor contracts in Malaysia, five years after the lottery. Most lottery winners migrate and migrants' earnings triple. Their remittance raises their family's standard of living in Bangladesh. The migrant's absence pauses marriage and childbirth, and shifts decision-making power towards females. Migration removes enterprising individuals, lowering household entrepreneurship, but does not crowd out other family members' labor supply. One group of applicants were offered deferred migration that never materialized. Improved migration prospects induce pre-migration investments in skills that generate no returns in the domestic market.

In office for less than a year, RIP Medical Debt CEO Allison Sesso received word in December of 2020 that the organization would be the recipient of a $50 million unrestricted gift from Mackenzie Scott. Sesso believed that the surprise windfall could be a gamechanger for the organization.

Craig Antico and Jerry Ashton had established RIP Medical Debt as an IRS 501c(3) organization in 2014 with the mission of ending medical debt. The two cofounders had worked in the debt collection industry and knew that overdue medical debt could be bought for pennies on the dollar. Antico and Ashton launched RIP Medical Debt to collect funds, purchase medical debt, and release the debtors from their obligations. When Sesso, who previously served as the Executive Director of the Human Services Council of New York, assumed the role of President and CEO in early 2020, the goal was to grow RIP from a start-up to a robust and sustainable organization.

If anything, 2020 had served to highlight the problems with medical debt. The COVID pandemic created a major health emergency and the protests following George Floyd’s murder had underscored the socioeconomic inequality in healthcare access and health outcomes. Over the year, 350 thousand Americans had died from COVID and life expectancy in the US dropped by 1.8 years.The pandemic had forced increasing numbers of Americans to take on high burdens of medical debt. Furthermore, the devastation of COVID cases and deaths had fallen disproportionately on communities of color.

Scott’s gift was roughly seven times RIP’s annual operating expenses. Eager to use this gift for maximum impact, Sesso had RIP embark on a strategic planning process. In addition to building trust and alignment among her remote team, Sesso wanted to identify the most effective path forward for the organization.

Conceivably, RIP could continue doing what it was doing, but simply do it on a bigger scale. Alternatively, the organization could use the money to improve its core operations in a way that it might work more efficiently - for example creating automated systems to replace manual processes.  Most ambitiously, RIP could rethink its entire operating model to better achieve the organization’s mission - to end medical debt. RIP’s model had been built on an understanding of how the medical debt system worked and its strategy had been to work within that system to retire debt.  However, with this large change in resources, RIP could try other strategies, such as direct advocacy, to better address the root causes of the problem.  

Royal Canin is a premium pet food brand in the Mars Petcare division. Founded in 1968 by veterinarian Jean Cathary in France, Royal Canin specializes in tailored nutritional solutions for pets, focusing on the specific needs of animals in various life stages and health conditions. Unlike mass-market brands, Royal Canin relies on endorsements from veterinary professionals rather than direct consumer advertising, creating a premium brand in the pet care industry.

The company faces several strategic challenges amidst a rapidly evolving pet care market. With the rise of online pet food sales and changes within the pet health care ecosystem, Royal Canin must adapt its strategy to stay ahead. One major issue is effectively communicating the benefits of their specialized nutritional products to pet owners, who may not be fully aware of how these products can improve their pets' health. Additionally, the specialized nature of their product lines often requires considering long-term investments. To help guide their plans, the company has undertaken a major review of its stakeholders.

This paper estimates the causal effect of equalizing revenues across public school districts on students’ intergenerational mobility. I exploit differences in exposure to equalization across seven cohorts of students in 20 US states, generated by 13 state-level school finance reforms passed between 1980 and 2004. Since these reforms create incentives for households to sort across districts and this sorting affects property values, post-reform revenues are endogenous to an extent that varies across states. I address this issue with a simulated instruments approach, which uses newly collected data on states’ funding formulas to simulate revenues in the absence of sorting. I find that equalization has a large effect on mobility of low-income students, with no significant changes for high-income students. Reductions in the gaps in inputs (such as the number of teachers) and in college attendance between low-income and high-income districts are likely channels behind this effect.

Municipal bond markets began pricing sea-level rise (SLR) exposure risk in 2013, coinciding with upward revisions to worst-case SLR projections and accompanying uncertainty around these projections. The effect is larger for long-maturity bonds and not solely driven by near-term flood risk. We use a structural model of credit risk to quantify the implied economic impact and distinguish between the effects of underlying asset values and of uncertainty. The SLR exposure premium exhibits a trend different from house prices and is unaffected by house price controls. Together, our results highlight the importance of climate uncertainty in driving municipal bond prices.

Building on social psychological research on individual bias, this article uses the concept of “perceived blameworthiness” to investigate whether Black and Latino boys are perceived by teachers as being more culpable, or “blameworthy,” than White boys for objectively identical, routine classroom misbehavior at school. To isolate teacher bias from true differences in behavior, I use an original video experiment involving 1,339 teachers in 295 U.S. schools. Teachers in the experiment are randomly assigned to view and respond to a video of a White, Black, or Latino boy committing identical misbehavior. I find that Black boys experience teacher blaming bias, where they are perceived as being more “blameworthy” than White boys for identical misbehavior. Results for Latino boys are directionally similar to those for Black boys but do not reach statistical significance. Findings have implications for racialized assessments of behavior across a range of evaluative contexts.

Addressing public health externalities often requires community-level collective action. Due to social norms, each person’s sanitation investment decisions may depend on the decisions of neighbors. We report on a cluster randomized controlled trial conducted with 19,000 households in rural Bangladesh where we grouped neighboring households and introduced (either financial or social recognition) rewards with a joint liability component for the group, or asked each group member to make a private or public pledge to maintain a hygienic latrine. The group financial reward has the strongest impact in the short term (3 months), inducing a 7.5–12.5 percentage point increase in hygienic latrine ownership, but this effect dissipates in the medium term (15 months). In contrast, the public commitment induced a 4.2–6.3 percentage point increase in hygienic latrine ownership in the short term, but this effect persists in the medium term. Non-financial social recognition or a private pledge has no detectable effect on sanitation investments.