The role of social proximity in professional CEO appointments: Evidence from caste/religion‐based hiring of CEOs in India

Research Summary: The role of homophily in CEO appointments at the largest corporations is an important subject in corporate governance. This subject is particularly important in a country like India where a multitude of religions, castes, and communities form its social fabric. We test for the role of homophily in professional CEO appointments in India by empirically examining the preference for same caste/religion CEOs by the largest firms. Using a unique dataset, assembled by detailed identification of castes/religions from family names and counterfactuals obtained through the Coarsened Exact Matching technique, we find that caste/religion plays a crucial role in CEO selection as a source of information (positive discrimination). The evidence is not consistent with its use to pursue taste‐based preferences (negative discrimination). Managerial Summary: We test for the role of homophily in the appointments of CEOs in India by empirically examining the preference for same caste/religion CEOs by the largest firms. We find that caste/religion plays an important role in CEO selection, i.e., as a form of information or “positive discrimination.” The evidence is not consistent with its use to pursue taste‐based preferences or “negative discrimination.”     

Design for synergy with brand or price information

Customers' preference for the hedonic benefits (e.g., aesthetics) and utilitarian benefits (e.g., functionality) offered by a product varies depending on the context—buying versus selling, and choice versus willingness‐to‐pay. However, a customer's preference formation could involve brand information or price information in addition to the benefits offered by the product. It is unclear how the consideration of brand or price information influences customers' relative preference for hedonic and utilitarian product benefits. Does this information alter preference in favor of a product that offers greater utilitarian or greater hedonic benefits, and why? The results show that (1) hedonic (utilitarian) attributes have a significantly stronger influence on consumer preference when accompanied by a strong (weak) versus a weak (strong) brand; and (2) in the presence of price information, hedonic attributes have a dominant influence on consumer preference compared to in the absence of price information. The article concludes with a discussion of the theoretical contributions and managerial implications of design for synergy with brand or price information. © 2010 Wiley Periodicals, Inc.     

Statistical inferences accounting for human behavior

While giving subjective responses, a small fraction of respondents overstate or understate their true status. The extent of over (or under) evaluation and the proportions of such respondents differs from population to population. These biases alter the significance level and power of the commonly used tests. In this paper the authors determine the effects of these biases on the commonly used Z test, F test of Anova, and χ² test for testing the equality of multinominal distributions.This paper was presented in the International Conference in Recent Advances in Survey Sampling, in honor of Professor J.N.K. Rao, held at Ottawa in July, 2002.     

A heuristic analysis of highly fractionated 2n factorial experiments

Fractional factorial experiments are very useful in identifying active factors and the conventional method of analysis may not always detect these active factors. Box and Meyer (1993) provided a Bayesian method to compute the posterior probability that a factor is active. Their method does not indicate whether main effects or interactions are active. Following their approach in a non-Bayesian way, we will present a heuristic analysis which determines the active main effects and small order interactions in any 2ⁿ fractional factorial design. It may be noted that the method given by Box and Meyer has greater flexibility and wider applicability over the method given in this paper; however, our method is a simpler alternative for 2ⁿ experiments that determines active main effects and small order interactions. No SimplePara     

Real options in divestment alternatives

This paper examines the implications of real options theory for both the decision to divest a business unit and the mode of divestment. It is shown that the decision to divest a business unit and the decision to engage in staged modes of divestment are both sensitive to uncertainty, consistent with a real options logic. However, in the face of uncertainty, the results suggest that staged forms of governance create real options that are of lesser value as compared to simply not divesting a business unit and also as compared to completely divesting a business unit. Thus, this study shows that firms have real options of varied value to choose from in the context of divestments. Copyright © 2014 John Wiley & Sons, Ltd.