Ravi Dhar talks to Gazette.net on Increase in Outfitting Children in Designer Clothes
Many adult designers are now creating lines exclusively for children.  Moms who choose to carry designer bags, drive expensive cars, and dress themselves in high-end clothing are increasingly making the same statement with their children’s wardrobes. Miniature Juicy tracksuits sell for $98, a patterned toddler’s pique jacket goes for $182, and jeans that could pass for doll clothing sell for almost $100.  Ravi Dhar told the Gazette that designer children’s clothing has been present for a while, especially overseas. ‘‘This idea of designer clothes for kids of course you see in Europe and the bigger cities in this country,” he said. ‘‘It’s sort of like the fancy food people buy for their pets. It’s not because the dogs want fancy food necessarily, but they think, ‘If I were a dog, what would I want to eat?’ The same goes for children’s clothing.” Dhar said he also sees this market creating an additional benefit for the designers. ‘‘From a designer’s viewpoint, it’s a nice way to introduce them to the brand early on in life,” he said. ‘‘We know that what people get used to and like when they’re kids will follow them over time.”

Ravi Dhar Discusses "Lipstick Theory with the Hartfort Courant
Research firms are reporting that while consumers are scaling back on bigger-ticket purchases in the face of rising food and gas prices, they're driving a spike in sales for "vice" items such as candy, beer, ice cream, lustrous lipstick and other beauty products. "A lot of people go to these vices as a way to relieve stress. And these things are relatively small indulgences that a majority of people can still afford," says Ravi Dhar. "So, as a result, you get this counterintuitive effect; not only are sales more resilient, but some of these things might show small increases."  It's called the "lipstick theory" — a notion put forward by Leonard Lauder, chairman of Estée Lauder Cos. Maybe women couldn't spend several hundred dollars on a new handbag, but they could make themselves feel just as good with an inexpensive new lipstick. "There are many, such shocks we have to our well-being, when we're stressed, all the mental resources we have to exercise self-control are depleted, says Dhar."  A busy employee might be able to resist a plate of cookies all day at work but once home and mentally exhausted is able to polish off a whole bag of cookies in a frenzy of stress. "These are vice consumptions that make you feel better right away, as opposed to eating an apple or something more healthy," says Dhar. "And these might be more resilient to the economy — the vice foods over the virtue foods."

Nathan Novemsky's Research Cited in Scientific American

In the article "Touch Choices: How making Decisions Tires Your Brain" by On Amir writes about a growing body of research that focuses on our ability to use a mental trait known as executive function. When you focus on a specific task for an extended period of time or choose to eat a salad instead of a piece of cake, you are flexing your executive function muscles. Both thought processes require conscious effort-you have to resist the temptation to let your mind wander or to indulge in the sweet dessert. It turns out, that use of executive function draws upon a single resource of limited capacity in the brain. When this resource is exhausted by one activity, our mental capacity may be severely hindered in another, seemingly unrelated activity.  Why is making a determination so taxing? Evidence implicates two important components: commitment and tradeoff resolution. In other words, you have to make a transition from thinking about options to actually following through on a decision. This switch, according to Vohs, requires executive resources. In a parallel investigation, YCCI Fellow, Nathan Novemsky and his colleagues suggest that the mere act of resolving tradeoffs may be depleting. For example, in one study, the scientists show that people who had to rate the attractiveness of different options were much less depleted than those who had to actually make choices between the very same options.

Ravi Dhar: On the Menu, Coffee and Pie Charts

"Please Don't Hate Us," reads the sign about price hikes at a Papaya King hot dog outlet in New York. With food prices up 6.3% so far this year, shopkeepers and restaurateurs are tacking up posters and pie charts to show that soaring commodity prices (and, in some cases, a faltering dollar) are to blame. At the Bedford Cheese Shop in Brooklyn, N.Y., a page of graphs taped to the door tracks the rising cost of milk and other commodities. "Unless you know why prices are going up, you're going to think we're just jerks," says co-owner Charlotte Kamin. In Providence, Nick's on Broadway has posted a list of economic reasons for the restaurant's pricier "bottomless" cup of coffee ($3, up from $2). Such signs are a good idea, says Ravi Dhar. Gas prices are in the news, he says. Food inflation is "not as obvious a story."

Daylian Cain: Everyone's a Little Bit Biased

Daylian Cain contributed the commentary “Everyone’s a Little Bit Biased (Even Physicians)” with Allan Detsky, MD to the Journal of the American Medical Association (JAMA). The piece was prompted by the policies and guidelines surrounding potential conflicts of interest that are being developed by medical schools and professional associations. While some physicians believe that their training as scientists and their devotion to professionalism makes them immune to external influences that might bias their opinions, the authors argue that succumbing to a conflict of interest is more likely to result from unintentional bias. “Conflicts of interest are problematic, not only because they are widespread but also because most people incorrectly think that succumbing to them is due to intentional corruption, a problem for only a few bad apples,” they wrote.

Will Goetzmann: Lawsuits Spurred by Credit Crisis Would Hurt U.S. Competitiveness

Will Goetzmann was quoted in an article in the Sydney Morning Herald about how many homeowners in Detroit are struggling to meet their mortgages, leading to foreclosure. Commenting on the falling U.S. housing market and credit crisis, Goetzmann raised concerns about American financial institutions. “The fear to me would be that American financial institutions will never entirely recover their quality. If this crisis leads to a series of class action lawsuits that attack financial institutions and undermines the long-term viability of U.S. investment banks, that could really hurt the competitiveness of the U.S.”

Ed Kaplan Presents Suicide bombing Prevention Research at CIA

Ed Kaplan presented his research on the tactical prevention of suicide bombings in Israel at CIA Headquarters in Langley, VA to analysts from the Office of the National Director of Intelligence (ONDI) and the National Counter Terrorism Center (NCTC) on June 12. Kaplan also participated in the annual meeting of the Naval Studies Board at the U.S. Southern Command Headquarters (SOUTHCOMM) in Miami on June 23-24. He was interviewed in Business New Haven regarding the three-year research partnership between Yale SOM and the Technion-Israel Institute of Technology to study homeland security and counterterrorism. Kaplan is the lead investigator for Yale. Reports about the partnership also appeared in the New Haven Register, Terror Response Technology Report, Israel21c, AACSB eNewsline, and DefenseDaily.com, among other outlets.

Joe Simmons Study Links Initials to Success

Joseph Simmons’ study “Moniker Maladies: When Names Sabotage Success” with Leif Nelson (UC San Diego) was cited on Wales Online. The authors found that the phenomenon known as the “name-letter effect,” an unconscious preference for our own names and initials, can have negative consequences. For example, baseball players whose names begin with K strike out more often and students with names that begin with C or D earn lower GPAs than those whose names begin with A or B.

Ravi Dhar Notes that Reducing Shoppers' Guilt Encourages Greater Spending

Ravi Dhar commented in the AP on SmartTown Alliance, a network of small businesses aimed at preventing shoppers from traveling to bigger cities to make purchases. Dhar noted that customers are likelier to spend money if they know part of their purchase is going to a charitable cause. "Anything that can reduce the guilt helps," he said. "Consumers aren't consciously aware of this, but we've found that it works."

Jiwoong Shin and K. Sudhir Indentify When to Reward or Punish Customers

Professors Shin and Sudhir contributed an article to the May/June marketing issue of Mexican publication Expansion. The authors discussed their recent study, which identifies when it is profitable for a firm to offer better prices to its current customers or to its competitors' customers.

Ravi Dhar Participates at the 2008 World Retail Awards in Barcelona, Spain

On April 10, 2008, ten winners were chosen representing the best in the retailing business and the global industry's outstanding creativity and innovation was again recognised in a truly international setting. The World Retail Awards attracted more entries from more countries around the world with even more retailers bench marking their best work on a global platform. Ravi Dhar, a member of the Grand Jury, met on April 8th during the World Retail Congress to decide on the winners for 2008. On April 10th the winners were announced live at the gala dinner and Awards ceremony held at the prestigious Palau Nacional. To see other members of the Grand Jury, click here.

Of Frog Wines and Frowning Watches: Semantic Priming, Perceptual Fluency, and Brand Evaluation

The April 2008 issue of Journal of Consumer Research will feature the above article written by YCCI Center Director Ravi Dhar, Aparna A. Labroo from the University of Chicago, and Norbert Schwarz of the University of Michigan. Market research firm AC Nielsen reports that nearly 1 in 5 of the table-wine brands introduced in the last 3 years features an animal on the label, which is contrary to branding theory. Brand theory proposes that logos should be associated with the product.  "To our knowledge, this is the first experimental demonstration of the beneficial effects of unique visual identifiers that are not meaningfully related to the nature of the product”, according to the authors.  The researchers also said that consumers have an easier time processing images when they are already "primed", if they have already thought about the image earlier in an unrelated context or if they already associate the logo with something in their personal lives.

Ravi Dhar's paper on Optimism featured on EurekAlert.org

People are generally optimistic, believing they’ll do better in the future than they’ve done in the past. This time around, I’ll actually use that gym membership or I’m sticking to the diet this time. However, a new study in the Journal of Consumer Research by Ravi Dhar, and Ying Zhang and Ayelet Fishbach of University of Chicago, reveals that this “optimism bias” can lead us to make immediate choices that go against our long-term goals. They found that when people think about the goal in terms of progress, they are more likely to make a detrimental decision – such as eating an unhealthy snack. However, when people focus on commitment to a goal, they are more likely to choose an action consistent with its attainment.

Jiwoong Shin discusses Best Buy's sales tactics with Money magazine

Jiwoong Shin helped decode Best Buy’s profit-maximization tactics in a Money magazine article. Shin explained the reasoning behind the tendency of salespeople to immediately and persistently inquire about one’s family and children, noting that Best Buy employees are encouraged to weed out big spenders from bargain-hunters.

Ravi Dhar talks to the Philadelphia Inquirer on why more and more retailers are opening on Thanksgiving Day

The Friday after Thanksgiving has traditionally been the start of the holiday shopping season.  Lately, Comp USA and other stores have begun enticing bargain hunters by opening as early as 9 p.m. on Thanksgiving. Some other stores, such as the ones at the Rockvale Outlets in Lancaster, open Thursday at midnight.  Professor Ravi Dhar told the Inquirer, "Shopping is, basically, a big part of people's lifestyle. Every holiday that's celebrated, we celebrate through a purchase or shopping. It's almost like an automatic, unconcious connection that people have between holidays and shopping."

Ravi Dhar comments to the Examiner about the growing importance of "Cyber Monday"

"Cyber Monday", the Monday after Thanksgiving, is becoming a big time for retailers to offer special promotions on the Internet for early shoppers looking to get an advantage. While Black Friday has long been the critical day for stores offering discounts to snag early holiday shoppers, online retailers have been increasingly focused on “Cyber Monday” as the key time to capture those customers.  Professor Dhar told the Examiner, "while "Cyber Monday" doesn’t have the same name recognition as Black Friday, more are becoming aware of it as a potential time for deals because of online marketing e-mails and advertisements". "One of the trends obviously in the last five years is how many different products people buy online, even luxury products,” Dhar said.

Joe Simmons talks to USA Today about his research that suggests a persons name can negatively undermine their goals.

Along with psychologists in marketing from the University of California, San Diego, their research shows an unconscious influence of names, say a preference for our own names and initials -- the "name-letter effect" -- can have some negative consequences. Students whose names begin with C or D get lower grades than those whose names begin with A or B; major league baseball players whose first or last names began with K (the strikeout-signifying letter) are significantly more likely to strike out. Assistant professors Leif Nelson of UCSD and Joseph Simmons of Yale conducted five studies over five years using information from thousands of individuals: 6,398 baseball players (377 had K as either a first or last initial); 15,000 MBA students; 294 undergraduate students; 170 law schools with more than 390,000 lawyers; and 284 participants in their laboratory experiment. 

The study did find that those with initials of A or B don't perform any better, though. Another study of law school admissions found lesser-rated schools had a smaller proportion of lawyers with name initials A and B. The researchers say the effect is definitely more than coincidence but is small nevertheless. "I know plenty of Chrises and Davids who have done very well in school," Simmons says. Listen to NPR interview.

Ravi Dhar comments to the Financial Post about TD Bank wooing young clients via Facebook

Toronto-Dominion Bank has created a chat group on popular social networking Web site Facebook, joining a lineup of banks approaching young people where they hang out and attempting to reel them in as customers before they make major purchases such as homes and cars.  Billing itself as the first Canadian financial institution to reach Canadian students "on their own turf" through Facebook, the bank launched TD Money Lounge, a group for student financial management. The idea is to help students adjust to the financial demands of living outside their parents' homes. Professor Dhar told the Financial Post, “all marketers are trying to find new ways to reach and engage with the younger demographics as well as create relevance for their products and services.  Any kind of targeted service or feature to gain relevance is a plus and shows creativity on the part of an industry that often is not known for creating customized services."

Dina Mayzlin speaks with WNPR on "The Future of Advertising"

HARTFORD, CT (2007-08-01) "Some new ad methods are digitally innovative--like mining your emails for information on products you might want to buy. Or, creating short "viral" videos that do more than just waste time at work, they softly sell their products, too. Other methods, like word-of-mouth advertising, are new takes on "old school" techniques. Today, we're going to look at the future world of advertising, the scary world of behavioral marketing, and we'll ask the experts how to create a "buzz." " Listen to Podcast

Ravi Dhar speaks to the Hartford Courant about the significance of the “umbrella” at the Traveler’s Championship

In an article “Under the Umbrella” in the Hartford Courant, Professor Ravi Dhar commented on the effectiveness of the Traveler’s umbrella.  Travelers' iconic image is a brilliant visualization of what an insurance company offers its customer - coverage for that unforeseen rainy day. But for anyone who grew up in Greater Hartford, the image represents more than simply a corporate resident.  The umbrella, first used in advertising by Travelers in 1870, has been something of a symbol for a city defined by the insurance industry. With the arrival of the Travelers Championship, the umbrella will be the symbol of Hartford's professional golf event.  Professor Dhar told the Courant , “Just because of the history of insurance in this region, the umbrella logo clearly has even more recognition and more positive emotion to people in the area. So in a sense, it's a good fit.  Logos are a shortcut to communicate what the brand promises.  Having a logo that is visual, it's easy to see from a distance and it helps people get a quick sense of the company. When a logo is sort of iconic, people sort of transfer the good feeling they have for the logo. It becomes interchangeable, in a sense."

Ravi Dhar talks to Hartford Courant about AT&T’s new efforts to sell TV service in Connecticut

AT&T, the telecommunications giant with the world-famous brand name and long tradition of mass marketing, is using a variety of small-time selling strategies, such as wine-and-cheese parties, movie nights in local theaters,  and ice cream trucks, to pitch its new TV service face-to-face, one neighborhood at a time.  AT&T launched U-verse in a few towns in CT around New Year's. Since then, it has expanded the service to parts of 17 municipalities.  U-verse uses telephone lines to deliver ESPN, HBO and hundreds of other video channels. In TV commercials, AT&T markets itself as a provider of telephone, Internet, cell phone and television services, but so far the ads don't focus on the U-verse name. Meeting with customers face-to-face is especially important with technical products because the experience, and how it fits into someone's life, is what sells the service. Professor Dhar told the Courant, “A ‘viral,’ or street-level approach only goes so far, and the strategy may not be a good fit for AT&T's new service. The approach tends to work best for an edgy product that's completely different from what's currently available.”  He further stated that he believes AT&T's micro-marketing is a way to test and refine the technology before selling it widely.

Ravi Dhar discusses the “Psychology of Comfort” with Stores Magazine

Fitting rooms are fast becoming inviting spaces with larger changing and waiting areas furnished with plump sofas, fresh-cut flowers, art and entertainment. The challenge of converting a browser into a buyer is nothing new for retailers, who have tended to focus on two techniques: an attractive assortment and letting the customer try on merchandise. Adding comfort and ease to the latter can play a significant role in the decision to purchase.  Professor Dhar told the magazine, “How you feel about the fitting room influences how you feel about the clothes, even if subconsciously. A room that looks dirty, cluttered and unattractive or is uncomfortable could be enough to break the impulse to buy.  The pleasantness of it gets transferred and puts the customers in a good mood,” he says. “Anything that gets them to spend more time in the fitting room – comfort, a place to sit down, plenty of garment hooks, another chair for friends – helps drive the sale.”

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Dina Mayzlin Discusses How Praising Rivals Blogs Makes Your Own a Destination Site

In an article published on InformationWeek.com Dina Mayzlin discussed how to build an audience for your blog. "From the consumer's perspective, linking increases the attractiveness of the blogosphere since links enable readers to locate information," said Professor Mayzlin.  She cited the value of posting one-way links to competitors even though there's a chance readers might be lost to the linked blog.  "Impressing readers is a big issue for bloggers," said Mayzlin. "Advertisers typically place a lot of value on blogs that produce original content and have a high number of incoming links, but we found that the number of outgoing links may also provide useful information on blog quality."

Ravi Dhar's Comments on the Increase on Fractional Ownership in Luxury Resorts

In an article published in Fortune about how the range of asset-sharing othewise known as time-shareing has exploded. Fractional ownership dates back to 1960s time-shares, but NetJets sparked the high-end trend when it began selling shares of planes in 1986. Then luxury resorts got into the act. Now the range of asset-sharing arrangements aimed at the well-heeled has exploded to include not only vineyards but golf, handbags, jewelry, yachts, and autos. The buyers are called "partsumers". "Thirty years ago people had fewer things, which created a lot of attachment and value," says Ravi Dhar. "Now, with the proliferation of options, there's less commitment, and it's 'I'll use it for one year and move on to the next thing.'"

Will Goetzmann and Ravi Dhar's Paper on Real Estate Investing is Named One of the Best 50 Papers Published in 2006

The paper "Institutional Perspectives on Real Estate Investing: The Role of Risk and Uncertainty” by Ravi Dhar and Will Goetzmann that appeared in Journal of Portfolio Management was selected as one of the fifty best articles published in 2006 in management by Emerald Management Reviews. The paper was selected from 15,000 articles reviewed in 2006.

Ravi Dhar's Discusses the Psychology behind Real Estate Pricing to the New York Times

In an article published in the New York Times about how the asking price of a home is rarely a straightforward reflection of it's value, the author writes that many brokers counsel clients to price homes just under a break point to catapult their listing to the top of an online search.  Professor Dhar told the Times "the higher up you show in the search engines, the better off you seem.  The firt few options you see are a reference point, a starting point, and all of the advantages of that apartment loom larger."  Regarding price cutting Dhar further suggested some anxiety could be warranted.  He explained, "If we start getting a good deal on something we always think, 'Is there something wrong there?'  It makes you look at the apartment through a more critical eye and notice the deficiencies.  On the other hand, if you give people a reason why you're dropping a price, then psychologically buyers interpret it differently."

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Ravi Dhar Comments on the "Steak and Sizzle" Boost to The Travelers Marketing Power

The Hartford Courant reported that the red umbrella, a sorely missed icon in Hartford, CT otherwise known as "Insurance City", is coming home.  The St. Paul Travelers Cos. Inc. announced that it will buy back the renowned logo from its former parent, Citigroup, a triumph for Hartford that is expected to boost the insurer's marketing power. Ravi Dhar told The Courant that he believes the umbrella ranks in the top quartile of best-recognized American logos. The umbrella connotes protection for any figurative rainy day and could help sales, but "they still have to have products and services attuned to their customers' needs," said Professor Dhar.  He likened the situation to steak and sizzle: "The steak is the products and services and the sizzle is the marketing," and the two must go together.

Ravi Dhar Discusses Health and Wellness Trend in Food Companies

In an article in Canada's Financial Post, Ravi Dhar commented on Mars Inc.'s decision not to target advertisments for its products to children under the age of twelve. "Part of this is companies trying to fend off potential legislative action, making health and wellness a bring trend among food companies right now," said Professor Dhar.  He further stated that companies have problems creating a healthy image by simply adding healthy alternatives, because much of their portfolio isn't.  So what they end up doing is crating a positive buzz around their porducts by doing something like shifting their advertising policy.  "It's more about the PR," he said.

Ravi Dhar Comments on Why Consumers Choose Vice over Virtue

In an article on the website www.thewisemarketer.com, Ravi Dhar was interviewed about the choices consumers make when they are shopping.  His research in "Where There Is a Way, Is There a Will?  The Effect of Future Choices on Self-Control", found that people are more likely to choose a tempting option over a more beneficial long-run option. Knowing that a choice is one in a series rather than an isolated decision allows people to optimistically believe that they will choose a virtue in the future. In other words, the choices people actually make in the future are not usually consistent with the virtuous choices they thought they would make. And that means it's often easier to market a luxury item if there's a reasonable opportunity for virtue later on.

Ravi Dhar Explains Why the Fashion Elite Turn to "Stealth Wealth"

In an article in The Boston Globe, Ravi Dhar discussed how the cachet of owning a luxury brand no longer comes from the designer's signature logos.  It is more about being able to identify the designer by their details.  "Wearing designer logos has always been less about personal style than it is about letting other people know that you belong to an elite group", said Professor Ravi Dhar.  Counterfeit versions of luxury goods are more accessible, therefore, the truly fashion elite do not need labels or logos to showcase their style and wealth.  Professor Dhar said that this doesn't lessen the drive for luxury status, "it's stealth wealth.  It's showing off by not showing off."

Anil Menon Named Texas A&M Distinguished Doctoral Alumni

The Mays Business School at Texas A&M University honored Dr. Anil Menon, vice president of marketing and strategy for IBM Systems and Technology Group, as one of the school's  Distinguished Doctoral Alumni on Thursday, October 5, 2006. Dr. Menon is a member of the Advisory Board of the Yale Center for Customer Insights. The 2006 awards are the school's first awards for its PhD graduates.

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Ravi Dhar Comments on the Challenges Facing Internet Retailer, Fair Indigo

In an article in the New York Times, regarding the newly opened online store, Fair Indigo, which hopes to sell fair-trade apparel, Ravi Dhar discussed the challenges Fair Indigo faces aiming for mass-market appeal to consumers who want to buy upscale clothing at prices they would pay in other stores, but without the guilt.   "Fair Indigo's concept would appeal to consumers who like visible products that let consumers communicate to others the type of person they are," said Professor Ravi Dhar, but cautions Fair Indigo on this being a mass-market phenomenon.  He told the NYT's, "if marketing costs are higher, it leaves less money for building a brand and introducing new designs".  Professor Dhar also told the NYT's that "some of these costs could be offset by word-of-mouth and other forms of buzz".

Dina Mayzlin Comments on the Commercial Power of HeadOn

In an article in USA Today, Professor Dina Mayzlin commented on the success of the popular HeadOn commercial.  The spot shows a woman rubbing what appears to be a glue stick on her forehead.  A bright yellow arrow points to the application area, and an announcer annoyingly repeats three times "HeadOn.  Apply directly to the forehead."  Professor Mayzlin told USA Today that "Part of the charm is that is it so crude.  The ad stands out in its repetitiveness.  It's intriguing and breaks through the clutter."   The ad has become a pop culture phenomenon with parodies appearing on websites and music videos.

Ravi Dhar Comments on the Increasing Global Presence of Luxury Goods

In an article in TODAY, based out of Singapore, Ravi Dhar discussed how luxury brands are increasingly catering to the tastes of growing markets such as China and India.  "As nations become wealthier, the popularity of luxury goods is increasing," said Professor Ravi Dhar.  Luxury brands such as LVMH, Prada, Polo Ralph Lauren, and Armani are expanding their operations in these regions.  Professor Dhar also told TODAY that "changing demographics are a key indicator of consumer trends and the success of companies would hinge on how effectively they dovetail their marketing strategies to suit these evolving consumer trends".

Dina Mayzlin Featured Academic on new Website Launched by The Word of Mouth Marketing Association

The Word of Mouth Marketing Association (WOMMA) has launched the first site devoted solely to the field of word of mouth (WOM) research. Featuring a new blog and email newsletter, the WOM Research site is the definitive resource for both marketers and academics seeking the latest information on word of mouth measurement and metrics. The site features new content designed to introduce WOM research to a wider audience. The WOM Research blog will feature Dina Mayzlin as one of the leading academics and market research experts to provide original contributions.

Ravi Dhar Comments on Nike's Presence at the World Cup

In an article on the presence of footwear giants Addidas and Nike at the World Cup games in Germany, Ravi Dhar told the Financial Post that Nike's sponsorship strategy will probably play well in Western countries, but "may be less effective in some of the other cultures."   Adidas commands the biggest share of the global market for soccer footwear, but Nike is sponsoring eight World Cup teams, including the United States, Brazil, Portugal, Mexico, Croatia, South Korea and Australia, compared to the six who will be sporting Adidas gear.

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James Choi's Research on Why People Often Choose Portfolios with the Highest Fees Featured in the New York Times

James Choi's study, conducted with David Laibson of Harvard and Brigitte Madrian of Wharton "Why Does the Law of One Price Fail? An Experiment on Index Mutual Funds",  which was featured in The New York Times, examines the demand for high-fee mutual funds.  Their findings suggest that many investors do not realize that fund fees are important for making investment decisions and are swayed by prospectus information.  "Our research adds to the growing body of evidence that shows the average investor is not well equipped to manage their investment allocaitons," said Professor Choi.

Will Goetzmann Comments of Limitations of Modern Portfolio Theory

Will Goetzmann commented on the statistical limitations of Modern Portfolio Theory in Investment Adviser. “As you increase the number of securities, you increase the numbers of correlations you must estimate, and you must estimate them correctly to obtain the right answer. In fact, with more than 1500 stocks on the New York Stock Exchange, one is certain to find correlations that are widely inaccurate. Unfortunately, Markowitz’s Model Portfolio Theory does not deal well with incorrect inputs.”

Judy Chevalier and Dina Mayzlin’s Word of Mouth Research Featured in the Financial Times

Judy Chevalier and Dina Mayzlin’s study “The Effect of Word of Mouth on Sales: Online Book Reviews” was cited in the Financial Times Weekend Magazine. “A couple of hard-working researchers at the Yale School of Management, Judith Chevalier and Dina Mayzlin, have combined the ranking with the reviews to work out whether reviews do indeed boost sales….It turns out that reviews do make a difference, especially bad ones.”

Ed Kaplan and Stan Garstka Bet on March Madness

Ed Kaplan and Stan Garstka offered their advice for winning the March Madness office pool in Kiplinger’s Personal Finance. Included in their tips: “Go backward. Instead of beginning with the opening round, start by picking the teams you think will reach the Final Four and set the matchups for those games. This steers you toward teams strong enough to follow up on early victories against easy opponents.”

Ravi Dhar Comments on MBA's in India's Booming Economy

In an article on the booming Indian economy and growing interest from MBAs, Ravi Dhar told The Economics Times of India: “I would definitely recommend a summer stint in India to get their feet wet if they have aspirations to work in that part of the world. Also, these days marketing decisions require a global mindset and the best way to develop this is by emerging themselves in that culture.”

Erica Dawson Explains the Power of Job Titles on Wall Street

Erica Dawson explained the power of job titles, particularly the Managing Director title on Wall Street, in Bloomberg News. “You have power from the title. With a growing sense of their own importance, people also may become ruder, use expansive gestures and take the last cookie on the plate,” she said. The article ran in outlets including the National Post.

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Judy Chevalier Comments on Rising Textbook Prices

Judy Chevalier discussed rising college textbook prices in the Yale Daily News. Chevalier, who has researched the college textbook market, said that mergers in the publishing industry may be a factor in recent price increases. “Some markets where there were four or five or six competitors now have two or three.”

Judy Chevalier and Shyam Sunder Profiled as Yale’s “Resident Freakonomists”
As a take-off of the bestselling book Freakonomics by Steven Levitt, the Yale Economic Review profiled Yale’s “resident Freakonomists” including Judy Chevalier and Shyam Sunder. The article highlighted their research including Chevalier’s study of the college textbook market and Sunder’s research into e-mail postage as a means of reducing spam.

Ravi Dhar Comments on the Adidas-Reebok Merger and the Challenge it Poses to Nike

Ravi Dhar spoke to the Associate Press regarding the recent merger of Adidas and Reebok.  The acquisition could lead to a more serious competitive environment than the industry has been exposed to in the last five years.  Although both brands are highly successful in Europe, the same is not true in the United States. Dhar told the AP, "Nike has a tremendous amount of brand awareness and brand strength, but Adidas has a very strong history, too. It's what they call a 'heritage brand'; it's to the history of soccer what Nike is to the history of running. The acquisition of Reebok could allow Adidas to divide and conquer the two major market segments for athletic shoes and clothing, style and performance.  Reebok could focus on the style segment while Adidas could focus more on performance shoes and equipment to expand its market share with a broader offering of products.  Where Adidas might have trouble getting retail shelf space because they sell less in the United States, now they can ride Reebok's coattails.”

Will Goetzmann: Death of Defined Benefit Plans Would Shut Individuals Out of Alternative Assets
Will Goetzmann was one of several experts to comment on what impact the demise of defined benefit plans would have on various asset classes in Pensions & Investments. Goetzmann discussed alternative assets. He said, “Can individual savers in defined contribution plans access those [alternative classes]? The answer is ‘absolutely not.’” Goetzmann and Geert Rouwenhorst’s book The Origins of Value was reviewed in the Times Higher Education Supplement. The reviewer wrote, “If it achieves nothing else, this remarkable book gives us an invaluable historical perspective on a terrifying age of financial revolution.”

Ravi Dhar Speaks to CNN Money on the Backlash from Christian Groups

Ravi Dhar spoke to CNN Money regarding retailers being politically correct in their use of banners and such portraying “Holiday” items versus using the term “Christmas”.  He told CNN the irony is that retailers have invited this scrutiny by associating themselves so closely with a religious holiday.  “In Biblical times, holidays weren’t celebrated with sales.  Marketers have trained us to expect a commercial Christmas.  They invented the idea of having Santa sitting outside malls.  Now it’s come back to haunt them.”

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Dina Mayzlin Remarks to VNU Network (UK) Regarding Her Study with Judy Chevalier on On-Line Book Reviews

Dina Mayzlin commented on the effects of consumer reviews on online book sales which concluded that peer content has an impact on consumers' purchases.  "Our results show that customers behave as if the fit between customer and book is improved by using reviews to screen purchase.

Since Amazon has a lot of reviewing activity, and its reviews are on average quite positive and lengthy, we can speculate that the total number of books sold at Amazon is higher than it would have been without the customer review feature. " said Professor Mayzlin.

Ravi Dhar Comments on Americans Hot Pursuit of Luxury Goods

Ravi Dhar talked to the International Herald Tribune regarding how luxury goods are being defined in new ways and that their definition evolves constantly with ever-shifting demographics, socioeconomics and the geopolitical climate. Dhar mention that watches, often further up the price scale, have gained importance as a symbol of luxury, notably in the United States, compared to Europe where watches have been a traditional form of luxury.  "You can't drive your Porsche into the boardroom, but you can distinguish yourself with a watch," said Dhar.

Ravi Dhar: Benefits of Stock Splits

Ravi Dhar was quoted in Bloomberg regarding the benefits of stock splits and his research that shows how both investors and companies benefit from stock splits. Individual investors perceive stocks with triple-digit prices as expensive and pay less attention than professional investors do to share price relative to earnings. Dhar said “there's an assumption that it's generally reflective of future positive news and stock splits are a communication of that to the marketplace. We ran focus groups and people said they buy stocks after the split because you can get them cheaper. It's purely psychological.”

Ravi Dhar Comments on “Black Friday” Shopping Frenzy
Ravi Dhar discussed the start of the holiday shopping season in USA Today. Commenting on why the day after Thanksgiving, known as “Black Friday,” is a trigger for consumers to begin shopping Dhar said, “Shopping becomes how we celebrate holidays. People now do it almost non-consciously.” Dhar’s study “The Licensing Effect” was cited in the Hartford Courant

Judy Chevalier Textbook Study Featured in The New Yorker
Judy Chevalier’s study of the college textbook market with Austan Goolsbee was featured in a New Yorker article on the economics of textbook publishing. “…Economists Austan Goolsbee and Judith Cheavlier, in a study of more than a thousand colleges, found that the year before a textbook is revised, new-book sales drop sharply. That’s because a textbook in its final year is significantly less valuable, since you won’t be able to resell it.”

Barry Nalebuff: Conventional Retirement Savings Wisdom is “Too Tame”
In their latest Forbes Why Not? column, Barry Nalebuff and Ian Ayres argue that conventional retirement savings advice—starting off heavily invested in stocks at age 25 and working down to a bond-heavily portfolio by 65--is a bad strategy. Instead, they suggest investors should take a lesson from homeownership and mortgage their retirement. “Retirement programs should allow people to take out retirement mortgages to buy more stock when they are young. Just as home mortgages become less leveraged over time, so would the retirement investment mortgages.”

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Barry Nalebuff Comments on Work of Nobel Laureates in The New York Times
Barry Nalebuff was cited in a New York Times “All Consuming” column on the work of Robert J. Aumann and Thomas C. Schelling, winners of the Nobel Prize in Economics. The article focused on Schelling’s work in understanding conflict and cooperation, particularly the more mundane applications of his demonstration that “a party can strengthen its position by overtly worsening its own options.” For example, Bank of America will round customer’s purchases to the next dollar and deposit the extra money into a savings account. “As Barry Nalebuff, a game theorist at Yale, says, these are tricks that limit options and back people into doing what they really want to do but are afraid they will not.” The whynot.net forum created by Nalebuff and Ayres was cited in Advertising Age, and Nalebuff’s “Co-opetition” was referenced in American Theater.

Judy Chevalier Comments on Price Gouging in The New York Times
Judy Chevalier was quoted in a New York Times story on the “well-placed greed” of pricing gouging in the wake of Hurricane Katrina. The higher prices for goods like lumber that have resulted from higher demand can have the benefit of deterring non-essential uses until prices drop again, making more material available for those who need it most.

Ravi Dhar: Thoughts of Charity Fuel Self-Indulgence
Ravi Dhar's study, "Licensing Effect in Consumer Choice" was featured in the New Haven Register. The study found that consumers who act or feel altruistic are more likely to subsequently splurge on luxury goods. "It [the charitable act] removes the guild that you get from being self-indulgent," he said.

Ed Kaplan: Sensors Unlikely to Reduce Suicide Bomber Casualties
Ed Kaplan’s study on the effectiveness of using sensors to detect suicide bombers was featured in OR/MS Today. The study, “Operational Effectiveness of Suicide-Bomber-Detector Schemes,” with Moshe Kress (Naval Postgraduate School), was published in PNAS. “As Kaplan and Kress note in their paper, existing explosives-detection technologies allow, in principle, for the detection of pedestrian suicide bombers, although such sensors are not yet sufficiently affordable and reliable to justify widespread deployment.”

James Choi’s 401(k) Research Featured in San Francisco Chronicle
James Choi’s study of worker participation rates in 401(k) programs was featured in the San Francisco Chronicle article “Passing up the easy money.” “The study found that roughly half of employees who could get a company match in their 401(k) plan with no strings attached were failing to take advantage of this ‘instantaneous windfall.’”

Ravi Dhar Comments on Consumers Who Help Shape Marketing Campaigns in the NYT
Ravi Dhar discussed companies that are increasingly turning to customers to help shape marketing campaigns in The New York Times (7/1/5). Crest, for example, has asked customers to vote online for new toothpaste flavors. “A study at the Yale Center for Customer Insights found that people who are told that a product is popular will buy it over a competing product. ‘Customers say, Hey, if everyone liked it, it must be good,’ Mr. Dhar said. ‘It shifts people’s preferences.’”

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Barry Nalebuff’s Creative Thinking on Crime Noted in the NYT

The New York Times (6/28/05) editorial “To Catch a Thief” by Nicholas D. Kristof highlighted Barry Nalebuff and Ian Ayres’ ideas for encouraging people to use LoJack. The antitheft device has been shown to reduce overall car theft, so everyone, not just LoJack users, benefit. Devices like the Club merely shift theft to next, unprotected vehicle. Kristof wrote that their proposed measures, such as offering insurance discounts to LoJack users, are “an illustration of the kind of creative thinking we need more of….If we tackled crime as comprehensively and wonkishly as we do pollution or auto safety, we’d all be better off.”

Keith Chen’s Capuchin Monkey Research Featured in The Economist
Keith Chen’s capuchin monkey research was featured in The Economist (6/25/05) and Health News Digest (6/27). The research shows that the monkeys, who were taught to use money, display the same loss-aversion as humans. The findings suggest that the trait may have a long evolutionary history.

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