Marketing Is More Effective When Targeted to Personality Profiles, says new Rotman Study - May 2012 Advertisers spend enormous amounts of time and money attempting to tailor their advertising campaigns to the needs of different demographic groups. After all, the concerns of first-year college students are going to be different from those of retired professionals. Even within a given demographic category, however, there are many individual differences, such as personality, that shape consumer behavior. A new study in Psychological Science, a publication of the Association for Psychological Science, suggests that advertisements can be more effective when they are tailored to the unique personality profiles of potential consumers. “While persuasive messages are often targeted toward specific demographic groups,” says study author Jacob Hirsh, from the University of Toronto’s Rotman School of Management, “we wanted to see whether their effectiveness could be improved by targeting personality characteristics that cut across demographic categories.” Hirsh and his co-authors Sonia Kang, also from the Rotman School of Management and the University of Toronto Mississauga, and Galen Bodenhausen, from Northwestern University’s Kellogg School of Management, recruited 324 individuals.	Prof. Jacob Hirsh
Dominant East Asians face workplace harassment says study from Rotman School - May 2012 They have been stereotyped as a “model minority.” But when they don’t conform to common racial stereotypes, such as being non-dominant, even people of East Asian descent are “unwelcome and unwanted by their co-workers,” says a new paper from the University of Toronto’s Rotman School of Management. The study shows there is a difference between “descriptive” racial stereotypes – what people believe to be true about members of a particular group – and “prescriptive” racial stereotypes – how people want members of a particular group to behave. One experiment showed that participants held descriptive stereotypes of East Asians as being competent, cold, and non-dominant. A second showed that the most valued expectation of East Asians was that they “stay in their place,” and don’t take a dominating role. A third experiment showed that participants preferred a white co-worker over an East Asian co-worker if that co-worker had a dominant personality. “In general, people don’t want dominant co-workers but they really don’t want to work with a dominant East-Asian co-worker,” says Jennifer Berdahl, a Rotman professor who co-authored the study with graduate student Ji-A Min, after conducting similar research into workplace gender stereotyping. A fourth study, found that East Asians who exhibited a dominant personality at work reported higher levels of harassment than other workers. Those who “stayed in their place” did not.	Prof. Jennifer Berdahl
Blood drives do better with incentives, says University of Toronto study - May 2012 It’s called the gift of life. But more people will roll up their sleeves to donate blood if a gift card comes with it. That’s according to a new study from the University of Toronto. It shows a 15 to 20 percent rise in blood drive donations when incentives such as T-shirts, jackets, coupons or gift cards are thrown into the mix. “It’s a pretty remarkable increase,” says Nicola Lacetera, an assistant professor of strategic management at the University of Toronto’s Rotman School of Management and University of Toronto - Mississauga who wrote the paper with fellow investigators Mario Macis of Johns Hopkins University and Robert Slonim of the University of Sydney. The results have been borne out in subsequent studies, he says, including large randomized controlled trials run in the U.S. as well as in Argentina. “One study at a time, we believe we are building pretty robust evidence that there is a positive response to rewards,” says Prof. Lacetera.	Prof. Nicola Lacetera
Young Children Learn About Prejudice by Instruction, Older Children by Experience, Says Research from the University of Toronto - March 2012 For a 6-year old, one of the most powerful educational tools may be direct instruction, according to new research on how children learn about prejudice. Scientists found that as children get closer to age 10, they begin to rely more on their own experiences rather than what people tell them – but for youngsters, instruction trumps experience. “Young children are information hungry – they are eagerly searching for general rules to help in mapping out their social worlds,” said a study published in this month's Personality and Social Psychology Bulletin by Sonia Kang, an assistant professor of organizational behavior and human resource management at the University of Toronto's Rotman School of Management and the University of Toronto at Mississauga and Michael Inzlicht, an associate professor of psychology at UofT. Across two studies that investigated how children learn about rejection, they found that external instruction and experiences play distinct roles in shaping how children characterize other groups of people.	Prof. Sonia Kang
How do you say global business success? In English, says new Rotman research - March 2012 English continues to reign supreme in international business, and it’s not just because some of the biggest economies speak it. A new study from the University of Toronto’s Rotman School of Management shows countries that have English as at least one of their official languages, or whose main languages are linguistically close to English have higher rates of investment in other countries. Countries with high rates of English proficiency also do well. “The vast majority of the world’s trade and investment is actually among or between or involves English-speaking countries,” says researcher Walid Hejazi, an associate professor of international business at the Rotman School. Prof. Hejazi co-wrote the paper with Juan Ma, a PhD student at Harvard Business School. The two researchers used a “gravity model” framework to conduct their analysis of the 30 countries within the Organization for Economic Co-operation and Development (OECD). The model allowed them to control for variables such as GDP, population, cultural similarities, colonial histories and exchange rates. Once that analysis had been done, the researchers could see whether there was any other residual difference in foreign investment levels and trade that could be explained by language.	Prof. Walid Hejazi
Cultural “tightness” holds back female leadership – but not always, says University of Toronto study - March 2012 Countries that more strictly uphold their cultural norms are less likely to promote women as leaders – unless those norms support equal opportunity for both sexes, shows a new paper from the University of Toronto’s Rotman School of Management. "Cultural tightness can prevent the emergence of women leaders because tighter cultures may make a society's people more resistant to changing the traditionally-held practice that placed men in leadership roles,” says Prof. Soo Min Toh, who is cross-appointed to the Rotman School and the University of Toronto Mississauga, and co-wrote the paper with Prof Geoffrey Leonardelli at the Rotman School and UofT's Department of Psychology. Cultural tightness is described by Prof. Toh as the “degree to which norms are clear and pervasive.” Tight cultures have a lower tolerance for deviation from cultural norms and may even impose sanctions for doing so. Loose cultures tend to be more open to change and experience higher rates of change than tight cultures. Among 32 countries compared, New Zealand, Ukraine and Hungary – all culturally loose countries -- showed a high rate of female leadership, while Pakistan, South Korea, and Turkey – considered culturally tight -- were low.	Prof. Soo Min Toh
Upper class more likely to be scofflaws says new research from UC Berkeley and UofT's Rotman School - February 2012 The upper class has a higher propensity for unethical behavior, being more likely to believe – as did Gordon Gekko in the movie "Wall Street" – that "greed is good," according to a new study from researchers at the University of California, Berkeley and the University of Toronto’s Rotman School of Management. "The increased unethical tendencies of upper-class individuals are driven, in part, by their more favorable attitudes toward greed," said Paul Piff, a doctoral student in psychology at UC Berkeley and lead author of the paper published on February 27 in the journal Proceedings of the National Academy of Sciences. Other coauthors of the study are UC Berkeley psychologists Dacher Keltner, Rodolfo Mendoza-Denton and Daniel Stancato, and Prof. Stéphane Côté of the Rotman School. Piff's study is the latest in a series of UC Berkeley scholarly investigations into the relationship between socio-economic class and prosocial and antisocial emotions and behaviors, revealing new information about class differences during a time of rising economic tension. "As these issues come to the fore, our research – and that by others – helps shed light on the role of inequality in shaping patterns of ethical conduct and selfish behavior, and points to certain ways in which these patterns might also be changed," Piff said.	Prof. Stéphane Côté
Is the deal on? Rotman study shows why herd mentality best mode for group buying sites - February 2012 We might like to think we're not influenced by other people. But a new study into group buying mechanisms -- like those used on popular internet websites such as Groupon and LivingSocial -- reveals that telling buyers who come later to the offer how many have already signed up increases the number of purchasers. Researchers at the University of Toronto’s Rotman School of Management wanted to understand why group buying sites that have entered the market recently have enjoyed greater success than those operating a decade ago, such as Mercata and MobShop. Earlier attempts typically left potential buyers waiting for days before confirming whether or not they had got the offer they had signed up for. “We think one of the reasons group-buying has been successful recently is because of the short time horizon,” says Rotman Prof. Ming Hu, who co-wrote the study with Prof. Mengze Shi and PhD student Jiahua Wu. “It allows for a herding effect.”	Prof. Ming Hu
Time=Money=Less Happiness, Rotman study finds - February 2012 What does “free time” mean to you? When you’re not at work, do you pass the time -- or spend it? The difference may impact how happy you are. A new study shows people who put a price on their time are more likely to feel impatient when they’re not using it to earn money. And that hurts their ability to derive happiness during leisure activities. Treating time as money “can actually undermine your well-being,” says Sanford DeVoe, one of two researchers at the University of Toronto’s Rotman School of Management who carried out the study, which is to be published in the Journal of Experimental Social Psychology. Prof. DeVoe and PhD student Julian House based their conclusions on three experiments.	Prof. Sanford DeVoe
Finding it difficult to make a purchase? Try creating some distance from the problem - February 2012 Consumers who are having trouble making decisions can benefit from creating some psychological—or physical—distance, according to a new study in the Journal of Consumer Research. "Except for habitual purchases, consumers do not always have an easy time deciding, for example, what cereal to buy, where to send their children to school, or where to take their family for vacation," wrote Prof. Manoj Thomas of Cornell University and Prof. Claire Tsai of the Rotman School of Management. "Cognitive difficulty" is a common issue for consumers, and it affects their judgments, decisions, and behavior. Confused consumers are less satisfied with their choices and often defer selections and prolong searches. The authors examined whether psychological distance reduces the difficulty and anxiety in choice situations. They conducted four experiments where they altered the psychological distance from a given task by using subtle manipulations—varying the abstractness of thinking and having participants assume different body postures.	Prof. Claire Tsai
Pro athletes bolster star status through team selection, teammates and career evolution: Study - January 2011 Basketball fans in Cleveland may disagree, but two-time NBA Most Valuable Player Lebron James’ decision to play with a higher-profile Miami Heat team and all-star teammates shows sound marketing and career-management acumen, according to newly-published business school research focused on the evolution and importance of star status for today’s professional athletes. In order to maximize their earnings and endorsements, today’s celebrity athletes -- from James to David Beckham to Peyton Manning -- need to be mindful of the evolution of their star status. So what makes a star shine even brighter in the world of pro sports? It's a combination of not only personal performances and team records, but also includes the markets that athletes play in and the star calibre of the athletes they compete with. The study, “Investigating the evolution of star status in professional team sports,” describes the rise and fall of celebrated athletes using data from the National Basketball Association (NBA) from 1987 to 2008. Published in the International Journal of Research in Marketing, it was authored by professors Yupin Yang of the Beedie School of Business at Simon Fraser University in Vancouver and Mengze Shi from the Rotman School of Management at the University of Toronto.	Prof. Mengze Shi

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Paying physicians more to get more — or to get less - November 2011 Labour economics can provide a valuable perspective in addressing the supply of doctors and access to care, says an article in the December 6 issue of the Canadian Medical Association Journal (CMAJ). “Understanding and accurately predicting the response of physicians to incentives is essential if governments wish to increase the supply of physician services,” says Prof. Brian Golden, who holds the Sandra Rotman Chair in Health Sector Strategy at the University of Toronto's Rotman School of Management, who wrote the article with Rotman Prof. Doug Hyatt and Rosemary Hannam of the Rotman School's Centre for Health Sector Strategy. Access to health care in Canada is a challenge in many regions, and while there has been an oversupply of physicians in the past, many people currently have problems getting care. “Central to the issue of access is the adequacy of the supply of physicians — specifically, whether the number of physicians and their work effort sufficiently addresses the health care needs of the population,” write the authors. “Supply is appropriately managed when there is neither a shortage nor surplus of services.”	Prof. Brian Golden
How smart managers make dumb decisions and why shareholders encourage them - November 2011 From Enron in the United States to Satyam in India, there are plenty of examples of corporate managers lying about their companies’ earnings and ultimately hurting themselves and the businesses they work for. Why do they do it? A limited capacity to see the whole picture – known as “bounded rationality” -- combined with a faulty ethical compass are two big reasons, shows a new study from the University of Toronto’s Rotman School of Management. The study also finds that shareholders are just as guilty of the same weaknesses and that insider trading is linked to earnings manipulation. “For a long time we’ve asked ourselves, ‘How come smart, rational people carry out short-term schemes that in the long-term undoubtedly are going to sink them?’” says author Ramy Elitzur, who holds the Edward J. Kernaghan Professorship in Financial Analysis and is an associate professor of accounting. “The answer is - we’re not rational. We’re rational only in a limited sense.” The study bases its findings on a model of the manager-owner relationship over time. The model is also noteworthy for combining principles of game theory – used to predict strategic behaviour -- with the idea of bounded rationality – that our decisions are always made within the limits of available time, information, and the human capacity to analyze it .	Prof. Ramy Elitzur
Powerful, Intoxicated, Anonymous: The Paradox of the Disinhibited. – October 2011 Power can lead to great acts of altruism, but also corruptive, unethical behavior. Being intoxicated can lead to a first date, or a bar brawl. And the mask of anonymity can encourage one individual to let a stranger know they have toilet paper stuck to their shoe, while another may post salacious photos online. What is the common thread between these three disparate states? A new article by researchers at the Rotman School of Management at the University of Toronto and the Kellogg School of Management at Northwestern University presents a new model that explains how the diverse domains of power, intoxication, and anonymity produce similarly paradoxical social behaviors – for better or worse. According to the researchers, all three states work to break down inhibitions in a person, thus triggering the most prominent response in any given situation regardless of the consequences. As a result, alcohol, power, and anonymity can all inspire heroism and hedonism in the same person depending on the context. The paper, by Rotman Profs. Jacob Hirsh and Chen-Bo Zhong and the Kellogg School’s Adam Galinsky appears in the current issue of Perspectives on Psychological Science.“Disinhibition occurs when the forces that normally constrain behaviour are temporarily removed, allowing a person’s initial impulses to be expressed without hesitation, regardless of the consequence,” says Prof. Hirsh.	Prof. Jacob Hirsh Prof. Chen-Bo Zhong
Fall market jitters a SAD thing suggests paper from Rotman School of Management. – October 2011 It’s no surprise to researcher Lisa Kramer that financial market dips and crashes typically happen in the fall. Her most recent study, forthcoming in Social Psychological and Personality Science,  shows that people who experience seasonal depression shun financial risk-taking during seasons with diminished daylight but are more willing to accept risk in spring and summer. The work builds on previous studies by Kramer and others, suggesting seasonal depression may be sufficiently powerful to move financial markets. “We’ve never, until now, been able to tie a pervasive market-wide seasonal phenomenon to individual investors’ emotions,” says Prof. Kramer, who teaches behavioural finance at the University of Toronto’s Rotman School of Management. Titled, “This is Your Portfolio on Winter,” she co-wrote the study with the University of Waterloo’s Mark Weber.  The researchers based their findings on a study of faculty and staff at a large North American university. Participants were paid for each part of the study they joined, which included online surveys and behavioural assessments. They also had the option of putting some or all of their payment into an investment with 50:50 odds and where the potential gains exceeded the potential losses, to mimic financial risk. Participants who experienced seasonal depression chose more of the guaranteed payments and put less money at risk in winter, but their risk tolerance came more into line with other participants’ in summer. The complete study is available at: http://spp.sagepub.com/content/early/2011/07/15/1948550611415694.	Prof. Lisa Krameri
Wanna save? Keep it simple, says paper from the Rotman School of Management. – Semptember 2011 Toronto – If one savings goal is a good thing, two or more should be great, right? Not really. Those who want to save are more apt to keep socking money away and more of it too, if they have just one goal in mind, shows work done in multiple countries by two researchers at the University of Toronto’s Rotman School of Management. “If you have only one goal it puts you in a more action-oriented mindset and helps you save more,” says Min Zhao, an assistant professor of marketing who co-authored the study with marketing professor Dilip Soman. “Too much thinking about which goal is more important keeps people from acting.”   The study looked at a range of different research subjects, including modest households in rural India, middle-income Canadian dads, and working professionals living in Hong Kong. Results consistently showed that a single savings goal worked better than multiple goals. Individual studies also found single goals worked particularly well when it was harder to save. Having multiple goals resulted in people thinking about trade-offs between goals, rather than focusing on implementing their savings plan.  The findings suggest that financial or savings advisors may want to take a different tack with their clients. Banks sometimes advertise a list of reasons to save, but such a message could “backfire” says the study, because that introduces multiple goals, leading to eventual failure in clients’ savings plans.   The complete study is available here.	Prof. Dilip Soman
Bigger is better in pension funds – September 2011 The health of the pension system is front page news in countries around the world with an ongoing debate on required contribution rates or minimum retirement ages. An equally relevant issue is how efficiently savings invested in pension funds are managed. A paper written by two professors at the University of Toronto's Rotman School of Management points to economies of scale in pension funds as a powerful tool to increase the wealth accumulated for retirement. The largest pension funds -– those that average $37 billion in assets -- outperformed smaller plans –- an average of $1 billion in assets -- by 45 to 50 basis points, or 0.4 percent each year, the study found. The annual difference "sounds small, but it is huge economically," points out Lukasz Pomorski, an assistant professor of finance at the Rotman School, who co-authored the paper with colleague Alexander Dyck, who is the Rotman ICPM Professor in Pension Management. Click to read the full paper.	Prof. Lukasz Pomorski
Online advertising waters down impact of offline ad bans. – May 2011 Not allowed to advertise your booze or smokes on a billboard? That's okay. Research shows online advertising works especially well in places with government ad bans. "If you want to regulate the offline world, you have to remember that people have access online too and you have to think about how that online world is going to mitigate the effects of your regulation," says Avi Goldfarb, a marketing professor at the University of Toronto's Rotman School of Management who co-wrote a study on the topic with Catherine Tucker of MIT's Sloan School of Management. The researchers compared data on respondents in 17 U.S. states where there are advertising restrictions on alcohol, with data for respondents in 33 states that did not regulate such advertising. Respondents in states subject to restrictions were 8 percent less likely to say they would purchase an alcoholic beverage. But that gap narrowed to 3 percent when some of those consumers were exposed to online advertising for the product, suggesting the internet hurts the ability of local government to curb the effect of advertising on their residents.	Prof. Avi Goldfarb
Employees don't always share well with others, says new paper exposing "knowledge hiding." – May 2011 Why isn't knowledge transfer happening more often in companies spending money on it? Maybe it's because their staff don't always want to share. "We've had years of research in organizations about the benefits of knowledge-sharing but an important issue is the fact that people don't necessarily want to share their knowledge," says David Zweig, a professor of organizational behaviour and human resources management at the University of Toronto's Rotman School of Management and the University of Toronto at Scarborough. His paper, co-authored with Catherine Connelly of McMaster University, Jane Webster of Queen's University, as well as John Trougakos of the Rotman School and the University of Toronto at Scarborough, is the first to name this behaviour, "knowledge hiding." "A lot of companies have jumped on the bandwagon of knowledge-sharing," such as spending money on developing knowledge-sharing software, says Prof. Zweig. "It was a case of, 'If you build it they will come.' But they didn't come."	Prof. David Zweig
Dr. Jekyll and Mr. Hyde: The Two Sides of Emotional Intelligenc – April 2011 People often assume that having good emotional intelligence makes you a better person. Not so, say the authors of a study published in Psychological Science, a journal of the Association for Psychological Science. Emotional skills can be used for good or for evil—for the betterment of the group or for humiliating your coworkers. A popular book on emotional intelligence that came out in the mid 1990s equated emotional intelligence with good character. "There are definitely some studies that have suggested that, but also studies that have suggested the opposite," says Stéphane Côté, an associate professor of organizational behavior, at the Rotman School of Management at the University of Toronto, who co-wrote the study with Katy DeCelles, Julie McCarthy, and Ivona Hideg of the Rotman School and Gerben van Kleef of the University of Amsterdam. For example, one previous study conducted by a different research team found that bullies are good at identifying what causes other people's emotions—but they're still cruel.	Prof. Stéphane Côté
Greased Palm Psychology: Collectivism and Bribery. – April 2011 Toronto - Bribery is condemned in most cultures; but it is more common in some countries than in others. Is poverty, political instability, or lax regulation to blame? A new study published in an upcoming issue of Psychological Science, a journal of the Association for Psychological Science, suggests a surprising contributor: Collectivism—a culture that downplays individual self-determination and stresses interdependence and shared responsibility. “Collectivism may promote bribery by diffusing responsibility,” says Professor Nina Mazar, who conducted the study with Professor Pankaj Aggarwal, also at the University of Toronto’s Rotman School of Management. Collectivism may allow individuals to sidestep their personal morality and do business in ways they know to be wrong.	Prof. Nina Mazar
How do consumers estimate a good time? – March 2011 Consumers estimate they'll spend more time enjoying activities when the tasks are broken down into components, according to a new study in the Journal of Consumer Research. But using the same process for an unpleasant event decreases time estimates. "It has been well established that predicted consumption time plays a central role in consumers' evaluations and purchase decisions," write authors Claire I. Tsai and Min Zhao of the University of Toronto's Rotman School of Management. "If consumers foresee spending a lot of time using a product or service (such as gym membership or cable TV), they are more likely to purchase it." In three experiments with 500 participants the authors found that consumers' predicted consumption time was influenced by their assessment of the consumption experience (positive or negative) and the way the experience was represented. "Unpacking a pleasurable event into several subactivities increases the time consumers expect to spend on the event," the authors write. Click to read the full paper.	Prof. Claire Tsai Prof. Min Zhao
Improving financial reporting in private firms’ interest, new study of emerging markets suggests. - March 2011 Toronto – Improved financial reporting at private firms benefits not only potential outside investors but will help the firm make better business decisions for itself too, says a new study. The study is authored by Ole-Kristian Hope, the Deloitte Professor of Accounting and an associate professor of accounting at the Rotman School of Management at the University of Toronto, uses World Bank data on small private firms in 21 emerging market countries – Thailand, Brazil and Pakistan having the largest samples. The data includes financing sources and information on tax environments. Private emerging market companies were chosen so researchers could study what happens under conditions with the fewest reporting requirements. “Within our sample, the firms with higher quality accounting on average seem to make better investment decisions,” says Prof. Hope, who co-wrote the paper with Rotman colleague Feng Chen, Qingyuan Li of China’s Wuhan University and Xin Wang from The Chinese University of Hong Kong. The paper is forthcoming in The Accounting Review. Click to read the full paper.	Prof. Ole Kristian Hope
Speedy generic approval may not benefit consumers as much as expected - February 2011 Toronto – Faster approval times for generic drugs will get them into consumers' hands quicker, but may not make the price any better, a pricing and marketing researcher has found. A mathematical model created by Andrew Ching shows that fewer firms enter the marketplace because the chances of getting there first and commanding the best profits are dramatically smaller when drug approval times are shorter. Ching is an associate professor of marketing at the University of Toronto's Rotman School of Management. Using the drug clonidine, Prof. Ching's model showed the number of firms in the marketplace dropped by 25 percent, from 12 to nine, under a shortened approval time scenario. "Potentially, for the consumer, the price may not drop as much as you'd hope," said Prof. Ching. Under the current situation it takes companies an average of more than 20 months to get U.S. Food and Drug Administration (FDA) approval for generic versions of established drugs. That makes approval times uncertain and companies often must go through several rounds of review. Companies also pay several million dollars when they apply for FDA approval. Given these as well as other development costs, firms making it to the marketplace last sometimes experience losses. Click here to read the paper.	Prof. Andrew Ching
The Oscar Curse? Study Says that Oscar Win for Best Actress Increases the Risk of Divorce. – January 2011 Will Academy Award nominees Nicole Kidman and Annette Bening be at higher risk for a divorce if they win the Oscar for best actress next month? A long line of best actress winners including Joan Crawford, Bette Davis, Halle Berry and Kate Winslet experienced the end of their marriages not long after taking home their awards. A study by researchers at the University of Toronto’s Rotman School of Management and Carnegie Mellon University finds that Oscar winners in the Best Actress category are at a higher risk of divorce than nominees who do not win. By contrast, Best Actor winners do not experience an increase in the risk of divorce after an Oscar. “Research has shown that, in the general population, gender differences have historically given roles with greater power and status to men and roles with lesser status and power to women. Studies have demonstrated that breaching this social norm within a marriage—for example, when a wife earns more than her husband—can strain the relationship,” says Tiziana Casciaro, an assistant professor of organizational behavior at the Rotman School, who co-authored the study with Colleen Stuart, a post-doctoral fellow at Carnegie Mellon University, and Sue Moon, a PhD student at the Rotman School. The complete study is available. Click here to read the paper.	Prof. Tiziana Casciaro
"Vive la difference!" Seeing foreigners as foreign encourages local coworkers to assist them finds a Rotman study - January 2011 Toronto - Whether it's a company with local and ex-pat employees, countries in need of aid, or the elderly interacting with the young, a new research paper to be published in the journal Psychological Science says recognizing diversity can actually encourage people to help each other instead of sparking conflict. "The standard assumption has been that group-based differences serve as the basis for distrust, disagreement, or dispute," says Geoffrey Leonardelli, a professor of management and psychology who co-authored the paper with Soo Min Toh, also a management professor at the University of Toronto's Rotman School of Management. "However, we find that group-based differences can actually encourage cooperation across these group lines because they help to identify groups in need from groups that can give aid." Click to read the full paper.	Prof: Geoffrey Leonardelli
CEOs rewarded for wrong kind of growth, Rotman paper finds - January 2011 Growth is good, right? Not always. But compensation committees still tend to reward CEOs when their companies grow due to investments – even though that has been found to hurt long-term shareholder value – rather than only rewarding growth due to improved profitability, says a paper co-authored by a professor at the University of Toronto's Rotman School of Management. The practice sends CEOs a message to grow at all costs, while hurting chances for companies to further improve shareholder value. Still, corporate boards may not realize what they're doing, say the study's authors, which include Partha Mohanram, an associate professor of accounting at the Rotman School who also holds the CGA Ontario Professorship in Accounting. Click here to read the paper.	Prof. Partha Mohanrami

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Fatal Flaws Seen in Quebec's Failed Health Deductible Proposal - September 2010 Quebec's government recently withdrew its proposal to impose a form of user fees for healthcare. In a new C.D. Howe Institute Working Paper, "Fatal Flaws: Assessing Quebec's Failed Health Deductible Proposal," health policy experts Mark Stabile, C.D. Howe Fellow-in-Residence and Associate Professor at the Rotman School of Management, and Sevil N-Marandi, a graduate of the School of Public Policy at the University of Toronto, assess Quebec's failed proposal. Their recommendations lay out how future reforms in other provinces or in Quebec might be made more likely to succeed. Click to read the full paper.	Prof: Mark Stabile
Leaders of the pack display high EQ, Rotman study finds - September 2010 The ability to understand emotions is a key ingredient in people who become leaders in groups with no formal authority, a new paper has found. The findings come through two different studies using commerce students. Study participants were given an emotional ability test as part of the study, as well as a self-analysis of their emotional skills. Then, they organized themselves into small groups or were randomly assigned to small groups and were given a group project to do. At the end of the project they were asked to identify whom they thought had shown the greatest leadership. Those identified by their peers as leaders scored high on the emotional ability test, which included tasks such as identifying emotions in faces in a photograph, and rating the effectiveness of different emotion regulation strategies. People's perceptions of their own emotional skills, however, did not predict leadership as reliably. The study adds to evidence that emotional intelligence is a separate trait from other leadership qualities such as having cognitive intelligence and being cooperative, open to ideas, and conscientious. "Traditionally we've had the assumption that leaders have high IQ, are gregarious individuals, or happen to be dominant personalities," says researcher Stéphane Côté, a professor at the University of Toronto's Rotman School of Management and one of four researchers involved with the study.	Prof. Stéphane Côté
Increased worker flexibility not always a good thing, says new Rotman paper- August 2010 Companies trying to improve efficiency by building more flexibility into their workforce could end up too lean and drive costs up, says a new paper co-published by the University of Toronto's Rotman School of Management. "Flexibility is good, but too much of it is dangerous," says Oded Berman, who holds the Sydney C. Cooper Chair in Business and Technology and is a professor of operations management at the Rotman School. Prof. Berman co-authored the study with the University of Rochester's Edieal Pinker and University of Rochester graduate student, Hsiao-Hui Lee.Click to read the full paper.	Prof: Oded Berman
No Pain, No Gain? Concrete Thinking Increases Consumer Confidence - July 2010 The confidence you feel when making a choice might depend on whether you’re thinking concretely or abstractly, according to a new study in the Journal of Consumer Research. In three experiments across a sample of 750 participants, researchers found that subjective feelings of ease experienced during judgments (choosing a digital camera, art, movie, or charity) can increase or decrease confidence in their choice and the amount of donation depending on whether consumers are thinking concretely or abstractly. The study’s authors are Claire Tsai, an assistant professor of marketing at the Rotman School of Management and Ann L. McGill who Is the Sears Roebuck Professor of General Management, Marketing and Behavioral Science at The University of Chicago Booth School of Business. The authors use the example of studying for an exam. The experience of difficulty can lead to a feeling of high confidence, if the difficulty is interpreted as effort put forth to ensure a good grade. This aligns with conventional wisdom such as “no pain, no gain.” On the other hand, the same experience can lead to feeling of low confidence if processing the material is interpreted as inability to process the study materials (“Since I had to work so hard, I am probably not very good at this subject.”) Click to read the full paper.	Prof. Claire Tsai
Online ads can get too close for comfort - June 2010 Trying to have an impact in the brave new world of web advertising? You could match an ad to a web page’s content – such as putting a car ad on an auto consumer website. Or, you could make it stand out with eye-catching pop-up graphics and video. But don’t waste your marketing budget putting the two strategies together. The first large-scale study looking at thousands of online ad campaigns says that in combination, these approaches make viewers feel like their privacy is being invaded – and turns them off. “Usually more is better,” says Avi Goldfarb, an associate professor of marketing at the Rotman School of Management at the University of Toronto, who wrote the paper with Catherine Tucker of MIT’s Sloan School of Business. “If targeting works and visible ads work, you’d think visible, targeted ads would work even better – but they didn’t.” Click here to read the paper. Click to read the full paper.	Prof: Avi Goldfarb
Love it or hate it, PowerPoint shapes strategy-making - March 2010 It’s been banned as a productivity killer. It’s even been recently criticized by a U.S. military General as “dangerous” for over- simplifying sophisticated problems of warfare. Say what you like about PowerPoint, the computer software that presents business cases like a slide show, but one researcher at the Rotman School says that such critiques ignore the ways the technology is used to shape idea generation and build corporate strategies. “It’s easy to say that PowerPoint is taking over and that’s terrible … but what I observed is that the day-to-day use of PowerPoint is much more complex,” says Sarah Kaplan, a professor of strategic management who studies strategy making in uncertain environments. An eight-month examination of strategy making at a telecommunications company showed Prof. Kaplan that PowerPoint was more than just an omnipresent tool. It allowed for greater collaboration because more people had access to PowerPoint documents, it affected the parameters of the discussion (depending on what information was included, or excluded from the PowerPoint slides) and even shaped the influence individuals had in the strategy-building process. Click to read the full paper.	Prof. Sarah Kaplan
G20 Toronto summit unlikely to achieve major reform, study suggests - May 2010 Coordination of financial regulations makes sense for countries trying to minimize the effects of global financial uncertainty, says a paper from the Rotman School of Management. But the “prospect for effective cooperation is not encouraging,” says the paper, adding the G20’s size “may be a problem.” That’s because the more countries there are trying to coordinate their policies, and the more varied their financial structures, the less likely they are to get agreement, reducing the chances of successfully harmonizing regulations governing the group’s financial institutions. Based on that, “we should not expect too much of the Toronto summit,” of the G20, scheduled for June 26 and 27, says Paul Masson, the study’s co-author. Prof. Masson is a research fellow and adjunct professor at the Rotman School, and is a former adviser to the Bank of Canada as well as to the International Monetary Fund. Click to read the full paper.	Prof: Paul Masson
Fast food exposure can make us impatient. - March 2010 Fast food is not only bad for your body, but may also harm your bank account. Eating habits have shifted dramatically over the last few decades--fast food has become a multibillion dollar industry that has widespread influence on what and how we eat. The original idea behind fast food is to increase efficiency, allowing people to quickly finish a meal so they can move on to other matters. Researchers at the Rotman School of Management, however, have found that the mere exposure to fast food and related symbols can make people impatient, increasing preference for time saving products, and reducing willingness to save. “Fast food represents a culture of time efficiency and instant gratification,” says Chen-Bo Zhong, who co-wrote the paper with colleague Sanford DeVoe to be published in a forthcoming issue of Psychological Science. “The problem is that the goal of saving time gets activated upon exposure to fast food regardless of whether time is a relevant factor in the context. For example, walking faster is time efficient when one is trying to make a meeting, but it’s a sign of impatience when one is going for a stroll in the park. We’re finding that the mere exposure to fast food is promoting a general sense of haste and impatience regardless of the context.” Click to read the full paper.	Prof. Chen-Bo Zhong Prof: Sanford DeVoe
Packing your troubles away actually works says new Rotman paper. - March 2010 Finding it hard to get over a failed love interest? Just can't get details of a bad financial move out of your head? A new study from the Rotman School of Management suggests you might want to stick something related to your disappointment in a box or envelope if you want to feel better. In four separate experiments researchers found that the physical act of enclosing materials related to an unpleasant experience, such as a written recollection about it, improved people's negative feelings towards the event and created psychological closure. If you tell people, 'You've got to move on,’ that doesn't work," said Dilip Soman, who holds the Corus Chair in Communication Strategy at the Rotman School and is also a professor of marketing, who co-wrote the paper with colleagues Xiuping Li from the National University of Singapore and Liyuan Wei from City University of Hong Kong. "What works is when people enclose materials that are relevant to the negative memories they have. It works because people aren't trying to explicitly control their emotions." Click to read the full paper.	Prof: Dilip Soman
Darkness Increases Dishonest Behaviour. - March 2010 Darkness can conceal identity and encourage moral transgressions; thus Ralph Waldo Emerson wrote in “Worship” in The Conduct of Life (1860), “as gaslight is the best nocturnal police, so the universe protects itself by pitiless publicity.” New research shows that darkness may also induce a psychological feeling of illusory anonymity, just as children playing “hide and seek” will close their eyes and believe that other cannot see them, the experience of darkness, even one as subtle as wearing a pair of sunglasses, triggers the belief that we are warded from others’ attention and inspections. Psychological scientists and Rotman Professors Chen-Bo Zhong, Vanessa Bohns, along with Francesca Gino of the University of North Carolina at Chapel Hill, conducted three experiments to test whether darkness can license dishonest and self-interested behaviours. Across all three experiments, darkness had no bearing on actual anonymity, yet it still increased morally questionable behaviours. The paper was recently published in Psychological Science. Click to read the full paper.	Prof. Chen-Bo Zhong Prof. Vanessa Bohns
Earnings help predict the price of credit default swaps. - January 2010 Overexposure to credit default swaps (CDS) – a market-traded form of investment insurance – are believed to have contributed to last year’s financial meltdown. Trying to understand how CDS prices are determined, a team of researchers concludes that earnings have a major impact and in turn, CDS prices can seriously affect the economy. When earnings drop, CDS spreads rise. "Credit default swaps represent a huge market for trading credit risk and it's not going to disappear at all despite what people think," says study co-author Jeffrey Callen, the Joseph L. Rotman Professor of accounting at the Rotman School of Management. "If you don't understand pricing then of course you're in trouble if you don't know what's affecting the market." Click to read the full paper.	Prof: Jeffrey Callen

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Toy recall of 2007 hurt innocent companies. - December 2009 The well-publicized toy recalls of 2007 took potentially harmful toys off the shelves and affected the companies that made them. But a new study also shows that even companies not targeted by the recalls got hurt in the resulting consumer backlash, sometimes worse than the offenders. Meanwhile offending companies did not generally see other product categories affected. Almost all of the recalls involved toys made in China and many involved paint with elevated levels of lead. The study looked at the effects that the recalls had on sales of Infant and Preschool toys during the subsequent Christmas season. The authors found that Christmas sales for similar products by manufacturers named in the recalls were down by about 30% compared to other products that these manufacturers sold. But, these manufacturers’ sales of toys that were sufficiently dissimilar to those named in the recalls did not seem to be affected. “This may be because, in this industry, consumers do not recognize manufacturers as well as they recognize brands and trademarks. For example, consumers may identify brands such as Barbie and Hot Wheels without recognizing that both of these are, in fact, made by Mattel,” says Mara Lederman a professor at the Rotman School of Management and one of three study co-authors. Click to read the full paper.	Prof. Mara Lederman
Money changes what we think is fair, Rotman research finds. - December 2009 Thinking of rewarding your sales department for a job well done? You might not want to make cash part of the pay-off. A study to be published in an upcoming issue of Psychological Science, a journal of the Association for Psychological Science, shows that when it comes to distributing resources, people’s ideas about what’s fair change depending on what’s being handed out. If it’s something that has its own intrinsic value – in-kind goods such as food or vacation days – people are more likely to see equal distribution of such items as fair. But if it’s something that is only valuable when it’s exchanged – such as money or even credit card reward points – ideas of fairness shift to a more market-based attitude. In that case, the thinking is that people should receive according to what they’ve contributed. “What exactly is it about money that causes people to treat it so differently than other resources?” asks Sanford DeVoe, an assistant professor of organizational behaviour, at the University of Toronto’s Rotman School of Management who co-wrote the paper with Columbia University’s Sheena Iyengar. “The paper shows that it is the property of money being a medium of exchange,” Prof. De Voe says. “When you allocate something that only has its value in what it can be exchanged for, that is what activates a market mindset and really invokes these strong norms about input and effort leading to reward.” Click to read the full paper.	Prof: Sanford DeVoe
Canada Can Lead the World with Smart Pension Reform - - November 2009 The time has come to turn Canada’s supplemental pensions jumble into a coherent system with a clear goal and a clear plan to achieve it, according to Keith Ambachtsheer, Director of the Rotman International Centre for Pension Management and an adjunct professor of finance at the Rotman School Management. In the 2009 Annual Benefactors Lecture, published by the C.D. Howe Institute, Prof. Ambachtsheer sets out the goals of such a system and the principles on which it should be based. After reviewing current shortcomings, he proposes a two-pronged plan for turning supplemental pension arrangements into an integrated, effective system. His proposed Canada Supplementary Pension Plan (CSPP) would set a default, inflation-indexed, income-replacement target of 60 percent for middle-income workers. This would imply a default contribution rate of 10 percent on income over $30,000, up to the current maximum income with respect to which tax-deferred savings may be deducted. All Canadian workers without workplace pension plans could be auto-enrolled in the CSPP, with an option to opt out. Contributions would be deposited into personal pension accounts, with automatic partial annuitization between ages 45 and 65. Finally, a new arm’s-length agency would be created to manage the CSPP. Click to read the full paper.
Buying green can sometimes license unethical behaviour - October 2009 Those lyin’, cheatin’ green consumers. Just being around green products can make us behave more altruistically, a new study to be published in a forthcoming issue of Psychological Science has found. But buying those same products can have the opposite effect. Researchers found that buying green can lead people into less altruistic behaviour, and even make them more likely to steal and lie than after buying conventional products. Buying products that claim to be made with low environmental impact can set up “moral credentials” in people’s minds that give license to selfish or questionable behavior. “This was not done to point the finger at consumers who buy green products. The message is bigger,” says Nina Mazar, a marketing professor at the Rotman School of Management and a self-admitted green consumer. “At the end of the day, if we do one moral thing, it doesn’t necessarily mean we will be morally better in other things as well.” Mazar, along with her co-author Chen-Bo Zhong, an assistant professor of organizational behaviour at the Rotman School, conducted three experiments. Click to read the full paper.	Prof. Nina Mazar Prof. Chen-Bo  Zhong
Do your children push the boundaries? It may be a sign of future leadership abilities -September 2009 Children whose parents use a firm parenting style that still allows them to test the rules and learn from it are more likely to assume leadership roles as adults, according to a new study published in a recent edition of The Leadership Quarterly. Researchers used data from a long-term Minnesota study of twins, and found that children raised with an “authoritative” parenting style – where parents set clear limits and expectations while also being supportive of their children – assumed more leadership roles at work and in their communities later in life. “Some of these early examples of rule-breaking behaviour, more the modest type, don’t necessarily produce negative outcomes later in life – that was fairly intriguing,” says Maria Rotundo, a professor at the Rotman School of Management. “It doesn’t mean all children of authoritative parents are going to become leaders, but they are more likely to.” Click to read the full paper.	Prof. Maria Rotundo
Do promises matter to employees? Not as much as we once thought - August 2009 Years of research suggests that the promises organizations make to employees matter in establishing and maintaining a “psychological contract” between the two parties. However, new findings from Samantha Montes and co-author David Zweig, professors at the Rotman School of Management and the University of Toronto Scarborough, suggest that what an organization promises to employees (e.g., training opportunities, benefits, compensation) don’t matter nearly as much as what the organization actually delivers. In a study to be published in the Journal of Applied Psychology, the authors found that the influence of promises has little effect on employee’s emotional reactions toward the organization, their intentions to stay with the organization, and intentions to engage in citizenship behaviors. Click to read the full paper.	Prof. Samantha Montes
Cuts to rewards plans unlikely to hurt credit card use - July 2009 What would happen if credit card holders no longer received rewards? Not much – but it could cut consumer credit card debt, says a new study on the impact of rewards programs on credit and debit card use. The paper, co-published by the Rotman School of Management, found that removing rewards would result in only a small number of credit card customers switching to more debit card and cash transactions. “A lot of customers use credit cards or debit cards to pay because they like it. So if you take away the rewards, it’s not going to change their behaviour that much,” says Andrew Ching, a Rotman professor who co-wrote the study with Fumiko Hayashi of the Federal Reserve Bank of Kansas City. “Potentially, it could be better for everybody.”Click to read the full paper.	Prof. Andrew Ching
Most Managers are Logical Sloths - July 2009 Strategic managers, lacking training in how to build their own situational models and reasoning strategies as opposed to 'implementing' blueprints and recipes, tend to choose easy problems to make sense of their predicaments and use sub-optimally simplistic methods of framing complex problems, shows new research.“Managerial problems are not given – they are co-created, by the manager and his context, and what the manager's mind does often matters more than other features of the context” says the study’s author, Mihnea Moldoveanu, who has articulated a new research field called managerial algorithmics. “This model shows managers systematically avoid certain kinds of problems (logically hard ones) in favour of others (logically simple ones) when they try to make sense of their predicaments." His model shows that by and large "managers are logical sloths, even if they are sometimes informational hogs.” Managers seem to systematically avoid 'deep thought' about the situations they face and rather seek 'data', 'stories', 'frameworks' and 'prescriptions' that stand a very good chance of being logically incompatible, he says.Click to read the full paper.	Prof. Mihnea Moldoveanu
What’s in a name? For Analysts with a CFA charter it’s timelier, bolder, and more objective forecasting, Rotman study finds. June 2009 Tens of thousands of hopeful, sleep-deprived candidates around the world will soon sit through exams for the coveted designation of Certified Financial Analyst. Is it worth it? A new study shows analysts with the CFA designation issue timelier financial forecasts than those without the credential. They also tend to be bolder and more objective in those forecasts. But the study also found CFA charterholders were average in terms of their forecasting accuracy – perhaps because other analysts had the advantage of observing the forecasts issued by CFA charterholders before writing their own. “I think the results are in line with expectations,” says co-author Gus De Franco, an accounting professor at the Rotman School of Management. “The results prove that there’s value in the CFA charter and people who are taking the CFA program are being rewarded, at least in part.” Prof. De Franco also found that those who hold the CFA credential gave timelier forecasts even before obtaining the designation. Afterward, this only improved. These results are signs that CFA charterholders have a natural, innate edge on talent as well as acquire additional skills through the studying and program preparation process. Click to read the full paper.	Prof. Gus.De Franco
Government transfer pricing regulation can hurt more than help, Rotman study warns. June 2009 To mitigate the competitiveness of “gray markets”, multinational corporations may adjust internal transfer prices for products transferred to foreign subsidiaries. Gray markets arise when products meant for foreign sale end up back in the local market, often at reduced consumer prices, through unauthorized distribution channels. Cars, pharmaceuticals and computer software are all popular gray-market goods. Multinationals also adjust transfer prices to shift profits from high tax to low tax jurisdictions. As a result, many governments have mandated the use of “arm’s length” transfer prices – which are higher than those the multinational would otherwise choose – between international subsidiaries. By mandating the use of arm’s length transfer prices, domestic governments are assured of a larger share of international tax revenues; but they should be careful, says a new study. Higher arm’s length transfer prices can also increase prices in the foreign markets that are the source of gray market goods. This increases the cost base of the gray market and makes the gray market a weaker competitor when it “leaks” products back to the domestic market. “Our paper shows that both the firm and the domestic economy may be better off if governments simply allow multinationals the discretion to set their own internal transfer prices,” says Francesco Bova, an assistant professor of accounting at the Rotman School of Management. Prof. Bova co-authored the study with Prof. Romana Autrey of Harvard Business School. Click to read the full paper.	Prof. Francesco Bova
Promotional tests can discourage some of the best candidates - May 2009 Standardized tests are a common choice for organizations looking for an objective way of fairly evaluating who is the best person for the job. But new research looking at the use of promotional exams with Ontario police officers shows that these tests may discourage candidates from applying and create anxiety that could hurt a candidate’s performance. If this happens, the whole organization could be hurt, rather than helped by the promotions process. This groundbreaking research is forthcoming in the journal Personnel Psychology. “These data really speak to the fact that the process needs to be looked at from the perspective of the applicant,” said study co-author Julie McCarthy, an organizational behaviour professor at the Rotman School. Organizations “need to ensure that the process they are using is fair and that people are going to have positive reactions to the process, even if they do not receive a promotion,” Prof. McCarthy said. Researchers looked at the examples of police officers writing exams through the Ontario Police College for the purpose of promotion to higher policing ranks such as sergeant or staff sergeant. “We partnered with OPC for several years. They are really committed to providing high-quality exams and considering candidates’ perceptions when planning improvements”, said McCarthy. The study found that officers who felt the process was fair were more likely to recommend it to other officers. Such positive “word of mouth” is important as police agencies and other organizations try to get their best candidates to compete for increasingly responsible positions in an era of impending retirements. But fairness perceptions were not related to exam performance. Candidates who did better on the exams were those who were motivated to do well. The study also suggested organizations can help employees do their best in promotional processes by developing test preparation and coping tools designed to manage exam anxiety. “Anxiety is complex – it can both help and hurt exam performance.” Anxiety management techniques should teach candidates to channel their arousal into productive behaviours, such as carefully responding to exam questions, and help them to avoid negative behaviours, like mind wandering, that tend to accompany this arousal.  Prof. McCarthy co-authored this study with former Rotman colleague Coreen Hrabluik, now at Deloitte, and R. Blake Jelley from the University of Prince Edward Island’s School of Business. All three are members of the Society for Industrial and Organizational Psychology. Blake Jelley also serves as Secretary of the Canadian Society for Industrial and Organizational Psychology.	Prof. Julie McCarthy
Exclusive marketing contracts best when competition is fierce, Rotman study finds. - March 2009 Agencies selling marketing services are often faced with the dilemma of whether to sell a service exclusively to a single firm in a given market category or to work with more than one. Using a mathematical model, a new study by a professor from the Rotman School of Management shows that choice should depend on how different the firms and products potentially being marketed are from each other; how much of their target customer market they are already capturing and; how much more of that market a marketing service company can reach for a firm. The study was recently published In the International Journal of Research in Marketing. Study author Prof. David Soberman found that marketing companies make higher profits by selling exclusive marketing contracts in a given category when firms and products in the category are very similar to each other. Likewise, if there is a high degree of market “differentiation” between companies and products, non-exclusive contracts is the way to go. Click to read the full paper.	Prof. David Soberman
Sexual behaviour at work still a problem shows new study from UofT’s Rotman School. - April 2009 Be careful of that raunchy joke that gets all the laughs. As funny as folks at work may find it, it’s probably hurting morale. That’s one conclusion of a groundbreaking new paper from the Journal of Applied Psychology co-authored by researchers from the Rotman School of Management and the University of British Columbia's Sauder School of Management. The study’s authors looked at the effect of sexual behavior in the workplace such as sexual jokes, innuendo, discussions of sexual matters or flirtation. And in a research first, they investigated if men and women got anything positive out of the behaviour, such as enjoyment and social bonding. “We approached the study with an open mind,” said Prof. Jennifer Berdahl of the Rotman School, who co-authored the study with Prof. Karl Aquino pf the Sauder School. “We thought, ‘Maybe these behaviours are a positive thing for employees who enjoy them.’ And then we found that they weren’t.” Click to read the full paper.	Prof. Jennifer Berdahl
Nice guys can finish first, and so can their teams - March 2009 A new study, published in the Journal of Personality and Social Psychology,  says that a person can influence a group to become more efficient in achieving its goals by making cooperative, collective behaviour seem acceptable and appropriate, and thereby encouraging others to act similarly. The study, authored by Rotman Professor Mark Weber and his collaborator at Northwestern University, calls such individuals “consistent contributors” – people who contribute all the time, regardless of others’ choices. Click to read the paper.	Prof. Mark Weber
Careful contest design helps everyone win, new study shows - March 2009 They win some, they lose some. Trial and error is the method most companies use to decide the prize structure for promotional sweepstakes and contests – a marketing tool poised to cost North American firms nearly $2 billion this year. But those companies have a better shot at hitting their marketing targets consistently thanks to findings in a new paper published in the Journal of Marketing Research. Knowing which type of consumers a company is trying to target – current customers or potential new ones -- is key to deciding a contest’s prize structure, says Mengze Shi, a marketing professor at the Rotman School of Management at the University of Toronto who co-wrote the paper with Ajay Kalra of the Jones Graduate School of Management at Rice University. Firms should also know how much risk the targeted consumers feel they are taking by participating in a contest and how much of a chance they believe they have of winning. Click to read the paper.	Prof. Mengze Shi

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Relaxed trade rules boost African development, University of Toronto study finds - December 2008 Often thought to be hobbled by corruption, poor infrastructure and a weak financial system, African exporters rose to the opportunities presented by a U.S. trade liberalization policy, a recent University of Toronto study has found. The African Growth and Opportunity Act (AGOA) of 2000 dropped duty charges on thousands of products for the 42 sub-Saharan countries that qualified. The act was found to be directly responsible for a "surprisingly large," 28% increase in imports in key product categories, showed the study by U of T economists Garth Frazer and Johannes Van Biesebroeck. Apparel saw the biggest boost, with a four-fold increase in imports of products in one of the highest duty categories. The AGOA also brought more foreign investment to eligible sectors. Click to read the paper.	Prof. Garth Frazer
Cabbies show how to work out business diversification pitfalls - December 2008 Even the humble taxi cab can teach business strategists a thing or two about the ways companies respond to corporate diversification. An award-winning study co-published by the Rotman School of Management shows that U.S. taxi companies responded to their industry’s diversification in the 1990s by increasing their level of owner-operated vehicles -- limiting the potential tensions that could crop up among drivers and dispatchers as a result of a different competitive landscape. “It’s not a very well-documented industry,” said co-author Prof. Timothy Simcoe. “I talked to a million cabbies – every time I got off a plane. It’s kind of a fun way to do research.” Click to read the paper.	Prof. Timothy Simcoe
Moderate pay great for job performance, study suggests. - November 2008 Employers hoping to get the best out of employees with huge performance contingent payments may actually be helping them to do worse, suggests a new paper published by a team of researchers in behavioral economics from several universities. “If the payments are too high, they may backfire,” says paper co-author Nina Mazar, a marketing professor at the Rotman School of Management. “I don’t think people realize that there is a threshold.” Experiments conducted in India and the United States showed that participants doing tasks requiring creative thinking, problem-solving or memory skills improved their performance when financial incentives were increased to moderate levels. But once the incentives went beyond a certain threshold, they “choked” and did not perform as well. Click here to read the paper.	Prof. Nina Mazar
Low R & D, labour mobility restrictions holding back China’s knowledge economy - October 2008 Despite China’s priority to “build a creative country,” the nation is still far from becoming a knowledge economy, says a recent paper published by The Martin Prosperity Institute at the University of Toronto’s Rotman School of Management. “The Chinese have been very successful in attracting low-wage kinds of manufacturing production … and that has made China a very strong economy,” said Charlotta Mellander, one of the paper’s three co-researchers and research director at the Prosperity Institute of Scandinavia. “But this could become even stronger if they managed to take advantage of the talent they’ve got.” Mellander collaborated on the paper with Prof. Richard Florida, director of The Martin Prosperity Institute at the Rotman School, and Haifeng Qian, a PhD. student at George Mason University. Previous research in developed countries has found that a region’s economic productivity often depends on the level of technological innovation and the area’s ability to attract a pool of well-educated and highly-skilled people. The most innovative firms also make major investments in research and development. Click to read the paper.	Prof. Richard Florida
Cold and Lonely: Does Social Exclusion Literally Feel Cold? - October 2008 When we hear somebody described as “frosty” or “cold”, we automatically picture a person who is unfriendly and antisocial. There are numerous examples in our daily language of metaphors which make a connection between cold temperatures and emotions such as loneliness, despair and sadness. We are taught at a young age that metaphors are meant to be descriptive and are not supposed to be taken literally. However, recent studies suggest that these metaphors are more than just fancy literary devices and that there is a psychological basis for linking cold with feelings of social isolation. Psychologists Chen-Bo Zhong and Geoffrey Leonardelli from the Rotman School of Management wanted to test the idea that social isolation might generate a physical feeling of coldness. Click to read the paper.	Prof. Chen-Bo Zhong Prof. Geoffrey Leonardelli
National pride turning developing country firms into a seller’s dream, suggests new study - September 2008 Firms in developing countries are not only spending more to buy companies in the developed world, they’ve got patriotic motivations for paying premium prices, says a new paper. The conclusions are based on a detailed examination of media reports where national pride considerations are mentioned. One example is the 2007 purchase by Indian steelmaker Tata, of Corus, which Tata chairman Ratan Tata called “a moment of great fulfillment for India,” although a newspaper article said Tata had “paid too much.” One investigation in the study found that in a sample of 3,806 firms, companies in developing countries bid 16% higher than companies in developed countries. A separate investigation found that companies in developing countries, which displayed indicators of national pride, bid almost twice as high for firms in developed countries as companies that did not show signs of national pride. "At first glance the results appear to reflect irrationality on the part of the bidders,” said study co-author Ole-Kristian Hope, the Deloitte Professor of Accounting at the University of Toronto’s Rotman School of Management. Click to read the paper .	Prof. Ole Kristian Hope
Study Finds Fee Disclosure Policy Needed For Defined Contribution Pension Plans. - September 2008 A research paper from the Rotman International Centre for Pension Management finds that a standardized international policy on fee disclosure would help pension plan participants become better informed consumers of Defined Contribution (DC) plan investment and administrative services. Each year participants in DC pension plans around the world pay billions of dollars in fees. “Many people do not understand how large an effect an apparently small difference in fees can make on account balances at retirement,” say report authors John Turner and Hazel Witte. “Greater fee disclosure should be accompanied by great information on how to interpret the importance of fees.” Taking into account the insights from behavioral economics, the study, “Fee Disclosure to Pension Participants: Establishing Minimum Requirements” proposes a standardized fee disclosure model which is used to assess the effectiveness of current disclosure requirements in Australia, Canada, Chile, Sweden, the United Kingdom, and the United States. Click to read the paper.	ICPM
Non-compete clauses can help drive growth when timing is right - August 2008 Contracts that limit employees from taking what they’ve learned at a company and profiting from it elsewhere may actually help industries in their infancy, says a new paper from two researchers at the Rotman School of Management. But once the industry has grown, those same non-compete clauses can hamper further growth by putting the brakes on labour mobility, an important growth driver. The conclusions come in a paper by April Franco and Matthew Mitchell. The husband-and-wife team wanted to understand why the highly-successful technology region known as Massachusetts’ Route 128 was gradually eclipsed by Silicon Valley during the 1970s and 1980s. The northeastern region had laws that helped enforce non-compete clauses, while California did not. Using a theoretical model, the researchers found that non-compete clauses initially helped the northeastern region because the protection they provided encouraged companies to invent new ideas in an arena that did not yet have many. Click here to read the paper.	Prof. April Franco Prof. Matthew Mitchell
Study Finds Evidence of Significant Front-Running - July 2008 As reported in an article on July 22 in The Wall Street Journal, evidence of significant front-running has been found by a new study by Professor Hai Lu of the Rotman School of Management. In Do Short Sellers Front-Run Insider Sales?, Lu and co-author Mozaffar Khan of MIT’s Sloan School of Management found significant increases in short sales immediately prior to large insider sales, which is consistent with information leakage and front-running. Front-running, which is trading in advance of a large trade in order to profit from the price movement that usually follows the large trade, can happen when people are tipped off about an impending large sale. A brokerage employee might tip off a favored client like a large hedge fund or a brokerage might trade on its own prior to executing a client’s large trade. Both scenarios are illegal, as the trades are not based on public information.  Click here to read the paper.	Prof. Hai Lu
Americans Expect Business Leaders to be White, and White Leaders to Succeed. July 2008 Despite decades of progress for minorities in corporate settings,  Americans still expect business leaders to be white, and they judge white leaders as more effective than their minority counterparts. This is according to research published in the July issue of the Journal of Applied Psychology. The research team, led by Ashleigh Shelby Rosette of the Fuqua School of Business and including Rotman Professor Geoffrey Leonardelli, conducted a series of experiments to determine whether race still affects people’s judgments of leader effectiveness and leader potential. “Over time, people develop implicit beliefs about the traits and behaviors of leaders and this combination of characteristics evolves into a standard called a ‘leader prototype,’” Rosette said. Previous research has shown leaders who are viewed as compatible or consistent with the prototype are evaluated more favorably than leaders who are less compatible with these sets of beliefs, even when the leaders’ performance is identical. Traditionally, research in this area has focused on leadership traits, such as intelligence, goal-orientation and charisma, or behaviors such as acting in a decisive manner. However, the researchers sought to explore whether race, specifically “being white,” was an attribute of people’s leadership prototype.  Click here to read the paper.	Prof. Geoffrey Leonardelli
Frequent flyer programs help airfares gain altitude, says new study - April 2008 Loyalty has its rewards. But a recent study shows that it has its costs too, with frequent flyer programs driving airfares at key hub airports up by about 5%. The cost of more expensive tickets, such as business fares, are pushed even higher, by about 9%. “With deregulation of the airline industry in the U.S. in 1978 and in Canada shortly after, people expected to see airfares drop. Yet, at some airports, airfares remained fairly high,” said the study’s author, Mara Lederman, a professor of strategic management at the Rotman School of Management. Click here to read the paper.	Prof. Mara Lederman
Benefits all around - not just losses - when top-notch inventors emigrate, says new study - March 2008 Engineers, scientists and other inventors who head to new jobs in other countries create a host of economic side-benefits not only for their new organization but also for their new country -- and the organization they left behind.  That’s because the resulting expansion of these innovators’ social and professional networks brings new know-how and ideas flowing to their current organization and even back to the one they’ve left behind, as they stay in touch with old colleagues. Eventually this process broadens the knowledge base in the inventor’s new country as well. These findings are contained in a study by Alexander Oettl, a PhD student, and Ajay Agrawal, Peter Munk Professor of Entrepreneurship, both at the University of Toronto’s Rotman School of Management. Click here to read the paper.	Prof. Ajay Agrawal
China’s collectivist work ethic changing, suggests new study from Rotman - February 2008 China’s economic juggernaut may be forcing a change in attitudes around what makes a good worker, says a study by two researchers at Rotman School of Management.  The study compared how Chinese and Canadian managers defined and ranked different job performance attributes. While the researchers expected Chinese managers to put more weight on collectivist work habits, such as being cooperative, the managers instead put more importance on getting jobs done and favoured individualistic job performance qualities even more than Canadian managers. “We zoned in on China because previous research suggested that Chinese tend to differ from Canadian in work-related values and behaviour,” says Prof. Maria Rotundo, who wrote the paper with her colleague, Jia Lin Xie. But, Prof. Rotundo adds, “China is growing at such a huge pace and there is so much pressure that right now the focus is on getting the task done.” The study looked at responses from Chinese managers and professionals attending executive MBA programs at two Chinese universities. The participants were asked to identify what they saw as counterproductive work behaviours and, in a separate test, rate their importance in a job evaluation against other factors such as task completion. The study found Chinese managers put more weight on task completion than even on negative behaviours such as absenteeism or defrauding the company, although these behaviours were still important.	Prof. Maria Rotundo Prof. Jia Lin Xie
Relaxed disclosure rules lead to empire-building and lower profits, shows study from UofT’s Rotman School of Management - January 2008 Managers put shareholder value first, right? Only when they know someone is watching, says a new study. That’s because managers, left unchecked by disclosure rules, tend to make self-interested decisions, such as aggressive sales expansion, that stretch a company thin and lead to reduced profits and firm value. Accounting disclosures, on the other hand, help shareholders and boards of directors to more closely compare and evaluate managers’ decisions to a company’s performance. The study looked at about 500 American multinationals in the wake of the 1998 adoption of the U.S. Statement of Financial Accounting Standards No. 131 (SFAS 131). That standard eliminates the long-standing requirement that multinationals disclose earnings for its geographic operations (e.g., net income in Mexico or net income in East Asia). The standard is also in use under other names in other countries, including Canada. Some 74% of the companies studied chose not to disclose their geographic earnings. Within four years after SFAS 131 came into effect, those companies, relative to firms that continued to disclose geographic earnings, had a significant increase in foreign sales growth and foreign fixed asset growth (i.e., “foreign empire building”) but a significant decrease in foreign profit margin, overall firm value, and stock returns. Click to read the paper.	Prof. Ole Kristian Hope
Location of Business by Women Entrepreneurs Leads to Lost Economic Opportunities - January 2008 Greater family responsibilities and feeling shut out of “the old boys’ club” can lead women entrepreneurs to locate their businesses away from a city’s economic hub and closer to home, a recent paper has found. But this phenomenon also leads to a type of business segregation similar to housing patterns for blacks and whites, resulting in lost economic opportunity. The decision to run a business closer to home because a woman wants to spend more time with her children is a reasonable choice most would defend. To locate closer to home because of exclusion from business networks "is a negative segregation process that makes the whole country poorer,” says co-author William Strange, a professor of real estate and economics at the Rotman School of Management. Click to read the paper	Prof. William Strange

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Give bargaining a chance, suggests high-stakes poker study - November 2007 Negotiating a settlement instead of continuing the fight is a known way to reduce costs and increase gains in a variety of areas such as litigation and labour conflicts. But a study of high-stakes, online poker tournaments shows that even when conditions are ripe for deal-making and all parties can walk away with substantial winnings, the tendency is to continue to battle it out in a winner-takes-all fashion. “People aren’t making as many deals as they could that would be beneficial to them. Perhaps they are overly optimistic,” says David Goldreich, a finance professor at the Rotman School of Management who conducted the study with his colleague, Lukasz Pomorski, also a finance professor at the Rotman School. Click for more.	Prof. David Goldreich Prof. Lukasz Pomorski
Humanizing products isn’t always enough - November 2007 Giving products human traits so consumers can relate with them and ultimately find them appealing is a marketing trick that has been around for a long time. Product spokespeople like Tony the Tiger, Mr. Clean, and the Michelin Tire Man are all examples.  Marketers also often try to give human personalities to products they are selling, by making them ‘dependable’, ‘caring’ or even ‘aggressive’ at times. “The underlying assumption has been that when you anthropomorphize a product, it must lead to a more positive evaluation by consumers, otherwise why would you bother?” says Pankaj Aggarwal, a professor at the Rotman School of Management at the University of Toronto. But the study’s closer examination of what happens when consumers see humanized products shows “it’s not always good to anthropomorphize.” Click for more…	Prof. Pankaj Aggarwal
Greenest Companies Disclose the Most - October 2007 Trying to figure out which companies will have the biggest environmental liabilities down the road? Check out what they’re saying about their environmental practices. A new study by four business researchers says the best environmental performers are those that give out the most information about their practices in their environmental and social responsibility reports. The researchers looked at environmental and social responsibility reports for 191 companies from the top five most polluting industries in the U.S. for 2003. Using a specialized scoring system, companies deemed to be good environmental performers through such things as toxic emissions and treatment of toxic waste scored above industry norms for voluntary disclosure of their environmental efforts. Poor performers scored below industry norms. Click for more…	Prof. Gordon Richardson
Hourly Wage-Earners Less Likely to Volunteer - October 2007 If time is money, then people directly paid for their time are less willing to give it up for free, a new study shows. Workers paid by the hour are less likely to do volunteer work outside of their jobs, says a paper by researchers Sanford DeVoe of the Rotman School and Jeffrey Pfeffer of the Stanford Graduate School of Business. That’s because the way they are paid conditions them to think about time in money terms. The researchers found that hourly-waged workers in the U.S. spent an average of 36% less time volunteering than workers on salary. They also found even salaried workers became less willing to volunteer their time once they had calculated how much they were being paid by the hour. Click for more ...	Prof. Sanford DeVoe
Lower Trade Barriers Improve Productivity - September 2007 A recent study on Canada’s free trade experience suggests that eliminating more trade barriers inside and outside Canada could lead to big leaps in Canadian productivity, which in turn would allow Canada to better fund its social programs. The study by economics researchers Daniel Trefler and Alla Lileeva, found that Canadian companies with low productivity levels before the Canada-U.S. Free Trade Agreement (FTA) made significant productivity gains once the FTA came into effect in 1989. Click for more...	Prof. Daniel Trefler
Researchers Use Math to Cut Waiting Times - September 2007 Waiting. Nobody likes it yet we’ve all experienced it, whether it’s in the hospital emergency room or waiting for that urgently needed cup of java down the street. Believe it or not, facility planners care about this too. Their dilemma is how to balance costs for building facilities with minimizing the amount of time people have to wait for a service they have traveled to get. “You can see it almost any night you go to a hospital emergency – some are going to be overflowing, some are going to be very relaxed,” says Prof. Dmitry Krass, one of three authors of a recent paper on the problem at the Rotman School of Management at the University of Toronto. “Some of it is due to changes in demand but some of it is due to the fact that facilities are not planned properly.” Click for more...	Prof. Dmitry Krass
Report Suggests More Modest Role for the International Monetary Fund - August 2007 As the International Monetary Fund seeks to redefine itself, it should reconsider its quest to reassert its financial influence and recognize that a more modest, focused role is its best opportunity to find global relevance and reestablish credibility going forward, says a new paper from the University of Toronto’s Rotman School of Management. The paper, The IMF: Victim of Its Own Success or Institutional Failure, by Paul Masson, an adjunct professor of economics and research fellow at the Rotman School, surveys the history of the Fund and argues that in an age where highly mobile private capital holds sway and where the IMF is regarded with suspicion in some countries it is time for the agency to ‘do better what it does best’ – provide the world with reliable data and more candid assessments as well as fewer conditions on its short-term loans. Click for more...	Prof. Paul Masson
The Hidden Cost of China Sourcing. New Study Provides Strategies on How to Profit from Supply Chain Bottlenecks - July 2007 For the past decade hundreds of North American and European businesses have ridden the Chinese sourcing wave, taking advantage of huge cost savings from China’s supply of low cost labour. But nothing is permanent and sourcing from China is starting to show its vulnerabilities. The problem is not on the factory floor in China but rests with the supply chain which is supposed to get components to assembly plants and finished goods to retail outlets on time. The failure to do so can have a significant impact on operating margins as success depends on having what is selling in stock at the right time. But a new study says that companies that manage the growing supply-chain problems with creative solutions will gain a profit from this challenge. Click for more...

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