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Kelley expert available to discuss Bernard Madoff's legacy, long-term effect of his scheme
Bernard “Bernie” Madoff, convicted architect of an infamous and epic securities Ponzi scheme with thousands of investors, died behind bars on April 14 at the age of 82. Noah Stoffman, an associate professor of finance and Weimer Faculty Fellow at the Indiana Kelley School of Business, has researched the effect of such fraud beyond the direct investments that were lost by victims. His 2018 paper, “Trust Busting: The Effect of Fraud on Investor Behavior,” co-authored with professors at Cornell University and the University of Texas-Dallas, showed that the collapse of the Madoff Ponzi scheme had an effect not only on his many direct victims, but also on the general level of trust in financial services. “People who live in the same areas as victims of the fraud withdrew assets from investment advisers and increased their deposits in banks. Financial advisers in these areas were also more likely to close. Our analysis shows that advisers who provided services that can build trust—such as financial planning advice—saw lower levels of withdrawals. Our evidence suggests that this decline in trust shock was transmitted through social networks,” Stoffman said. Stoffman’s research focuses on the investment decisions of professional money managers and individual investors, and on the effect of technological innovation on asset prices. Much of his work highlights the importance of social interaction in the spread of information in financial markets. Stoffman teaches courses on analysis of financial data to undergraduates, MBAs, and doctoral students at the Kelley School. He can be reached at 812-955-1758 (m) or nstoffma@indiana.edu.
Product Returns Represent Billion-Dollar Strategic Blind Spot for Major Retailers
“Product returns have never, to our knowledge, been explicitly included as a stage in a major customer journey model,” the authors note in their paper. “This exclusion represents a strategic blind-spot for marketers.” In December 2020, Linne Fulcher, vice president, customer strategy, science and journeys at Walmart U.S., published a blog post that outlined Walmart’s new return policy. Dubbed “Carrier Pickup by FedEx,” the service was just in time for the holidays, free, and “here to stay,” Fulcher wrote. She described the policy as “an incredibly convenient way to make that unwanted gift ‘magically’ disappear,” whether customers bought items in a store, online, or from a third party vendor. “We want the returns experience to be easy, safe and seamless,” she added. Returns are big business. According to the National Retail Federation (NRF), U.S. consumers returned an estimated $428 billion worth of merchandise last year—approximately 10.6 percent of total U.S. retail sales. The numbers for ecommerce are even more startling: online shopping accounted for roughly $565 billion of 2020 retail sales, of which $102 billion in merchandise—about 18 percent—was returned. However, retail advisory firm Optoro noted in 2019 that of 117 top retailers, not even a third of them quantify the full cost of returns. Even before the pandemic hit, Sandy Jap, Sarah Beth Brown professor in marketing, Ryan Hamilton, associate professor of marketing, and former Goizueta Business School dean, Tom Robertson, were perplexed at how little academic research existed regarding returns. “Instead of viewing returns as a nuisance and an added cost, they are an opportunity to engage with customers and build brand loyalty,” explains Robertson. “Returns are part and parcel of the new retail landscape. This has been exacerbated by the strong uptick in online.” To help retailers identify opportunities, Jap, Hamilton, and Robertson wrote “Many (Un)happy Returns? The Changing Nature of Retail Product Returns and Future Research Directions,” published in Journal of Retailing last year. The article is essentially a researcher’s road map for exploring this “strategically important area,” says Jap. Some retailers, such as Warby Parker and Stitch Fix, have built returns into their business models. Others, like Zappos and Nordstrom, have made consumer-generated returns easy, assuming that doing so engenders brand loyalty and repeat business. Yet most retailers seem “to lack a coherent philosophy” on returns and “appear not to have built return rates into their business models at all,” the trio state in their paper. “There are so many interesting and important questions to be answered around product returns,” says Hamilton. “Important as returns are, the academic marketing research has barely scratched the surface.” “Many (Un)happy Returns” highlights five specific areas where advancements in theory and practice would provide opportunity for greater understanding: 1. How product returns transform the customer journey 2. The “dark side” of returns—exploring the gray area between justified returns and outright fraud 3. The effects of returns on traditional retailer supply chains 4. Customer response to easy product returns and practices 5. The effect of retailers’ product return practices on their reputation “These questions represent a range of important directions for assembling a body of work on retailer-initiated and customer-initiated return behaviors and processes,” they write. “Ultimately, these might serve to improve the performance of return forecasting models, illuminate optimal go-to-market strategies and distribution processes in the evolving, technology-oriented marketplace that characterizes retailing today.” Each of the five points above are detailed in a piece recently published by Emory University. That article is attached here: If you are a journalist looking to cover this topic or if you are simply interested in learning more, then let us help. Ryan Hamilton, associate professor of marketing at Emory’s Goizueta Business School. Sandy Jap holds the Sarah Beth Brown Endowed Professorship of Marketing Chair at Emory’s Goizueta Business School. Both are available to speak with media, simply click on eithr expert's icon now – to book an interview today.
Villanova University Professor Breaks Down Wage Gaps as Equal Pay Day Approaches
March 24 marks Equal Pay Day, dedicated to public awareness of the difference in average earnings between men and women. This will be the 25th Equal Pay Day since it was created by the National Committee on Pay Equity. David Anderson, PhD, is an associate professor of analytics at the Villanova School of Business, whose academic research focuses on how companies can measure and address gender pay gaps. (Along with his doctoral advisor, Dr. Anderson also started PayAnalytics, which helps companies measure and close gender and racial pay gaps. They've worked with companies that have from 40 to 100,000 employees to help them close pay gaps.) He explains that there are two key numbers to consider regarding pay gaps: "The 'raw' or 'unadjusted' pay gap is the number when we say, 'women earn 77 cents on the dollar compared to men,'" said Dr. Anderson. "The second is the 'adjusted' pay gap, which is typically smaller, in the single digits of percentages. This is what equal pay for equal work laws usually target." Anderson notes that these divides are calculated differently: "The unadjusted pay gap is a society issue in terms of who has access to education and opportunity, who gets promoted and which types of work are paid more or less money. The adjusted pay gap is calculated within companies and measures how much less women are paid on average compared to men with similar qualifications doing similar work. These are driven by such things as access to overtime, but also this is where bias comes into play—both individual bias and systemic bias." The intersection of gender and sexuality poses additional influence on pay gaps (as well as other workplace discrepancies), and progress on addressing wage gaps is also changing due to our current world. "I think with COVID and the impact it has taken on women's careers, particularly on mothers, it is quite likely we are moving backwards right now," said Dr. Anderson. So how do we combat these gaps? Dr. Anderson believes one step is instituting company regulations. "There's a ton of work on the adjusted pay gap, but very little on the raw pay gap. This is understandable—no one company can fix the unadjusted pay gap by itself, but they can be expected to meet equal pay for equal work requirements. The adjusted pay gap is a company-level responsibility, so it is a really nice target for regulations, while the unadjusted pay gap requires broader social changes, e.g., more flexible parental leave and more access to managerial positions." For the future, Dr. Anderson predicts changes due to COVID: "I think on the domestic front the effects of COVID will definitely make things worse in the short-term. But I think equal pay is on the Biden administration's agenda, so there's probably going to be forward movement on that front on a national level as well as in states, such as California, Massachusetts and New York, that are passing and enforcing stricter laws which will start to have an impact as well," said Dr. Anderson.
New research examining the economic impact of micromobility on local economies found shared e-scooter systems created an estimated $13.8 million in additional sales across 370 food and beverage companies in four cities over six months in 2019, as compared to four similar cities over the same time period without e-scooter programs. The study compared consumer purchase patterns in four cities that allowed operation of shared e-scooter systems – Atlanta, Austin, San Francisco, and Washington, D.C. – to similar cities that did not at the time – Boston, Houston, Phoenix, and Seattle. The study used extensive econometric methods to uncover purchasing that was caused by e-scooter rides, which would not have occurred otherwise. “The post-COVID economic recovery remains slow, but this research shows we shouldn’t ignore the positive impact of micromobility on small businesses,” said Dan McCarthy, senior author of the study and assistant professor of marketing at Emory University’s Goizueta Business School. “This is especially relevant for the food and beverage sector, a significant source of jobs, which is suffering sales declines larger than most other sectors of the economy.” The study uncovered e-scooter usage generated significant positive economic spillovers for the food and beverage industry purchasing in a similar way that consumers make impulse purchases at grocery stores – its effects are larger for businesses where the consumption happens more quickly, and businesses selling at lower prices. Across the cities studied with e-scooter programs, total sales in the food and beverage category increased by an estimated 0.6 percent on average, or approximately $921 in incremental spending per available e-scooter for the food and beverage companies over the six-month period studied in the analysis. “Since these companies represent approximately 15 percent of the overall food and beverage market in these cities, the actual impact could be much larger,” said McCarthy. “If, for instance, subsequent research confirmed a similar level of uptick across all food and beverage companies in these markets driven by micromobility, the overall full-year economic impact could be close to $200 million.” If you're interested in learning more - there's a full article published by Emory Business attached. And, if you're a journalist looking to cover this exciting and emerging topic - then let us help. Dan McCarthy is an Assistant Professor of Marketing at Emory University's Goizueta School of Business. His research specialty is the application of leading-edge statistical methodology to contemporary empirical marketing problems. Dan is available to speak with media - simply click on his icon now to arrange an intwrview today.
What’s it all mean as ‘Big-Tech’ pivots to privacy? Let our Experts help explain if you are covering
The business of the internet as we know it, is about to change. As companies in the past have thrived, boomed, and found serious cash and success harvesting your data – that model may soon be coming to an end. With companies like Google and Apple leading the way, odds are a serious transformation is about to come and the know that notice has been served, it is getting a lot of attention. The decision, coming from the world’s biggest digital advertising company, could help push the industry away from the use of such individualized tracking, which has come under increasing criticism from privacy advocates and faces scrutiny from regulators. Google’s heft means the change could reshape the digital ad business, where many companies rely on tracking individuals to target their ads, measure the ads’ effectiveness, and stop fraud. Google accounted for 52% of last year’s global digital ad spending of $292 billion, according to Jounce Media, a digital ad consultancy. About 40% of the money that flows from advertisers to publishers on the open internet—meaning digital advertising outside of closed systems such as Google Search, YouTube, or Facebook—goes through Google’s ad buying tools, according to Jounce. March 03 – The Wall Street Journal. But what will this mean for powerhouses like Facebook or the multitude of apps and carriers who rely on data, and the money that comes with it to succeed? What lies ahead will be interesting, and if you are a journalist looking to cover this topic – then let our experts help. Vilma Todri is an Assistant Professor of Information Systems & Operations Management at Emory University’s Goizueta Business School. Previously, she worked for Google where she was developing integrated cross-platform advertising strategies for large business clients that partnered with Google and recently wrote a comprehensive paper on this very topic. Vilma is available to speak with media about this subject – simply click on her icon now to arrange an interview today.
What We Can Learn From Celebrating Irish-American Heritage Month
About two weeks ago, President Joseph Biden declared March 2021 Irish-American Heritage Month. In an official statement, the president said, "We owe a debt of gratitude to the Irish-American inventors and entrepreneurs who helped define America as the land of opportunity... The fabric of modern America is woven through with the green of the Emerald Isle." As the director of the Center for Irish Studies at Villanova University, an institution founded by Irish Augustinians to educate the children of Irish immigrants, Joseph Lennon, PhD, agrees. He hopes to use this presidential declaration as an opportunity to expand the conversation around what it means to be of Irish descent beyond wearing green and watching the annual St. Patrick's Day parade. The way Dr. Lennon sees it, "there is much more to Irish America than a parade and parties." With such a rich history of Irish immigrants and their descendants living in and contributing to the development of the United States, Dr. Lennon sees March 2021 as an important time to reflect on the "contributions and travails of this ethnicity" in a way that reaches beyond "silly slogans and marketing schemes." He reminds us, "there are over 30 million Irish Americans. The Irish contributed massively to the infrastructure of industrial America and later to the civil, education and business worlds—not to mention the Catholic Church." Dr. Lennon also hopes this month will help redefine the larger notion of what it looks like to be Irish and American. He notes that "38% of African Americans have Irish ancestry," but acknowledges that "this is a complicated issue," since in some cases this may stem from abuses suffered during the American practice of slavery. It is important conversations like these that Dr. Lennon wants to bring to light during Irish-American Heritage Month, and he stresses that "more research is needed into understanding this history—as well as the unions between Irish immigrants and northern-bound African Americans during the late nineteenth century." Per Dr. Lennon, these historical events are tied to our present day. He sees a need for "the level of recent racist attachments to Irishness... to be confronted with historical knowledge and anti-racist understandings." With such important issues in mind, Dr. Lennon wants to impart that "the Irish diaspora is global and diverse and Irish culture runs much more deeply and broadly in America than we might guess by just attending the St. Patrick's Day celebrations." He adds, "I'm curious to see if the conversation continues past St. Patrick's Day this year." Despite most St. Patrick’s Day events and programs being virtual in 2021, there are many opportunities to celebrate Irish-American heritage this year. At Villanova, the Center for Irish Studies is hosting a virtual St. Patrick's Day Celebration called "Links Across the Atlantic" on Wednesday, March 17, from 10:00 a.m. to 9:00 p.m. This free celebration will include live entertainment segments, from an Irish breakfast tutorial with study abroad director Mary Madec to lunchtime laughs with actor Johnny Murphy, and will culminate with a streamed Irish music fèis (or festival) in partnership with Tune Supply, featuring We Banjo 3, the Friel Sisters and One for the Foxes! For more information or to register for this event, please click here.
Why online recommendations make it easier to hit “buy”
When it is time to buy something online, perhaps a coffee maker, you might head to Amazon and browse items for sale. One particular model might spark interest. The product page may contain recommendations for other goods: complementary products such as coffee filters; or recommendations for different, competitor coffee maker brands offering unique features and prices. E-commerce websites commonly use product recommendations — called co-purchase and co-view recommendations — to keep users locked into the sales funnel and increase customer retention. But what impact do these types of recommendations actually have on consumers? How do they influence one’s willingness to pay for the original product searched? In fact, the level of influence depends on how close a consumer is to making that purchase, says Jesse Bockstedt, associate professor of information systems & operations management at Emory’s Goizueta Business School. In addition, what type of recommendation the consumer sees plays a role in purchasing as well. To shed empirical light on this, Bockstedt teamed with Mingyue Zhang from the Shanghai International Studies University. “We were curious. We knew that recommendation systems are integral to how consumers discover products online – a good 35 percent of Amazon sales can be attributed to recommendations, for instance,” Bockstedt says. “But we knew a lot less about how recommendations change consumer behavior in relation to a focal product.” Specifically, the researchers were interested in looking at the effect of complementary versus substitutable products, and what impact the price of these types of products had on consumer behavior. They also wanted to know whether these effects were more or less amplified depending on whether consumers were at the exploratory phase in the buying process or ready to go ahead and make the purchase. To unpack the dynamics at play, Bockstedt and Zhang ran two experiments that simulated the online purchasing experience. The researchers had volunteers go through the process of evaluating different products and then report back on how much they were willing to pay for each. “We asked volunteers to look at a product page for a computer mouse, and we randomly assigned different recommendations to that page – some that were for other mice, and others that were for goods and products that would complement the original mouse. Going through the experiment, we also manipulated the price that volunteers saw on different pages, both for the recommended substitute and complementary products,” he says. “Finally, we looked at the effect of timing and the sales funnel. In one case we had volunteers look for a highly specific mouse and recommended a particular product page to them. To simulate the more exploratory phase, we gave them many pages and asked them to click on the one they found most interesting.” In total, Bockstedt and Zhang put 200+ volunteers through the replica virtual purchasing experience and recorded their willingness to pay the advertised price for the focal product on scale of 0 to 100, depending on what they had seen and the point in the sales funnel they had seen the recommendations. If you are looking to learn more about this research and the results, Emory has a full article published for reading and review. If you are a journalist looking to cover this topic or if you are simply interested in learning more, then let us help. Jesse Bockstedt, associate professor of information systems and operations management at Emory’s Goizueta Business School. He is available to speak with media, simply click on his icon now – to book an interview today.
Personality matters: the tie between language and how well your video content performs
Why does one piece of online video content perform better than another? Does it come down to its relevance, production values, and posting and sharing strategies? Or are other dynamics at play? There are plenty of theories about what, when and how to post if you want to drive the performance of your video. But new research by Goizueta’s Rajiv Garg, associate professor of information systems and operations management, sheds empirical and highly nuanced new light on the type of language to inject in a content if you really want to accelerate consumption. And it turns out that a lot of it depends on personality. Together with Haris Krijestorac of HEC Paris and McCombs’ Maytal Saar-Tsechansky, Garg has run a large-scale study, analyzing the words spoken and used in speech-heavy videos posted to YouTube, and then organizing those words by personality – how they “score” in terms of the so-called Big Five personality traits. “The Big Five is a system or taxonomy that has been used by psychologists and others since the 1980s to organize different types of personality traits. These traits are extroversion, agreeableness, openness, conscientiousness, and neuroticism,” says Garg. “In previous research into video content performance, we’ve looked into mechanisms such as posting and re-posting on different channels and how they impact the virality of one video over another. But we were intrigued by the role of language and how different words map to these personality traits, which in turn might have an impact on user emotion or response.” Emory has this entire comprehensive article that includes more details on the Big Five and it is available for reading here: If you are a journalist looking to cover this topic – then let our experts help with your story. Rajiv Garg from Emory’s Goizueta Business School is available to speak with media – simply click on his icon now to arrange an interview today.
A federal budget is coming soon – and as Canada is still stuck in the grips of COVID-19 and the thin ice its economy is still walking on, it is expected sooner or later, the tab will have to be paid and that bill will be satisfied with taxes. Recently, Don Scott, Director of Tax Services at Welch wrote an insightful piece where he lends his many years of wisdom, experience and perspective to share what he thinks will be how Canada’s federal government digs itself out of what has been more than a year of bills and bailouts. In his piece, he looks at whether or not the government will raise such revenue streams as: corporate and business tax rates personal income taxes capital gains principle residence redemptions and even the GST It’s required reading for anyone interested in the finances of the federal government – and if you are a journalist looking to cover this topic, then let us help. Don Scott is the Director of Tax Services at Welch and is a nationally recognized expert for his extensive knowledge in the area of Personal and Corporate Tax Planning. Don is available to speak with media regarding the upcoming budget, to arrange an interview today – simply click on his icon now.
Online ratings systems shouldn’t just be a numbers game
When you’re browsing the internet for something to buy, watch, listen, or rent, chances are that you will scan online recommendations before you make your purchase. It makes sense. With an overabundance of options in front of you, it can be difficult to know exactly which movie or garment or holiday gift is the best fit. Personalized recommendation systems help users navigate the often-confusing labyrinth of online content. They take a lot of the legwork out of decision-making. And they are an increasingly commonplace function of our online behavior. All of which is in your best interest as a consumer, right? Yes and no, says Jesse Bockstedt, associate professor of information systems and operations management at Emory’s Goizueta Business School. Bockstedt has produced a body of research in recent years that reveals a number of issues with recommendation systems that should be on the radar of organizations and users alike. While user ratings, often shown as stars on a five- or ten-point scale, can help you decide whether or not to go ahead and make a selection, online recommendations can also create a bias towards a product or experience that might have little or nothing to do with your actual preferences, Bockstedt says. Simply put, you’re more likely to watch, listen to, or buy something because it’s been recommended. And, when it comes to recommending the thing you’ve just watched, listened to, or bought yourself, your own rating might also be heavily influenced by the way it was recommended to you in the first place. “Our research has shown that when a consumer is presented with a product recommendation that has a predicted preference rating—for example, we think you’ll like this movie or it has four and a half out of five stars—this information creates a bias in their preferences,” Bockstedt says. “The user will report liking the item more after they consume it if the system’s initial recommendation was high, and they say they like it less post-consumption, if the system’s recommendation was low. This holds even if the system recommendations are completely made up and random. So the information presented to the user in the recommendation creates a bias in how they perceive the item even after they’ve actually consumed or used it.” This in turn creates a feedback loop which can reflect authentic preference, but this preference is very likely to be contaminated by bias. And that’s a problem, Bockstedt says. “Once you have error baked into your recommendation system via this biased feedback loop, it’s going to reproduce and reproduce so that as an organization you’re pushing your customers towards certain types of products or content and not others—albeit unintentionally,” Bockstedt explains. “And for users or consumers, it’s also problematic in the sense that you’re taking the recommendations at face value, trusting them to be accurate while in fact they may not be. So there’s a trust issue right there.” Online recommendation systems can also potentially open the door to less than scrupulous behaviors, Bockstedt adds. Because ratings can anchor user preferences and choices to one product over another, who’s to say organizations might not actually leverage the effect to promote more expensive options to their users? In other words, systems have the potential to be manipulated such that customers pay more—and pay more for something that they may not in fact have chosen in the first place. Addressing recommendation system-induced bias is imperative, Bockstedt says, because these systems are essentially here to stay. So how do you go about attenuating the effect? His latest paper sheds new and critical light on this. Together with Gediminas Adomavicius and Shawn P. Curley of the University of Minnesota and Indiana University’s Jingjing Zhang, Bockstedt ran a series of lab experiments to determine whether user bias could be eliminated or mitigated by showing users different types of recommendations or rating systems. Specifically they wanted to see if different formats or interface displays could diminish the bias effect on users. And what they found is highly significant. Emory has published a full article on this topic – and its available for reading here: If you are a journalist looking to cover this topic or if you are simply interested in learning more, then let us help. Jesse Bockstedt, associate professor of information systems and operations management at Emory’s Goizueta Business School. He is available to speak with media, simply click on his icon now – to book an interview today.