Experience Faculty & Research

Excerpt from the Financial Times -- "Dunning and Kruger set tests of grammar, logic and even having a sense of humour to a group of undergraduates. Then they asked them how they stacked up to others in the group. Was their grasp of logic and grammar better or worse than average? Were they better able than other students to distinguish funny from unfunny jokes?" Read more

Dean Peter Henry served as chair on the opening day of the Federal Reserve Bank of Kansas City’s annual Economic Policy Symposium in Jackson Hole, Wyoming August 25-27. Professor Laura Veldkamp also participated as a discussant, leading the conversation on “The Structure of Central Bank Balance Sheets.” Read more

As the 2016 US presidential election nears, debates on the future of domestic and foreign policies are increasing. Stern faculty offer expert commentary on the presidential race and the potential impact its outcome may have on the US economy, trade, the financial industry and politics.
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Excerpt from the Financial Times -- "Using auction data and game theory, the authors came to the conclusion that full pre-auction information sharing between dealers and investors would raise $4.8bn more revenue for the US Treasury each year than a fully closed bidding mechanism where no information is shared. The paper comes from New York Fed economists Nina Boyarchenko and David Lucca, along with NYU professor Laura Veldkamp." Read more

Excerpt from the Financial Times -- "In theory, the blockchain technology could improve the efficiency of the market, but if there is no entry, this would simply increase the rents of incumbents. A restricted blockchain could in fact be used by incumbents to deter entry and stifle innovation." Read more

Excerpt from the Financial Times -- "The report’s authors — ZEW’s Sascha Steffen, NYU Stern’s Viral Acharya and University of Lausanne’s Diane Pierre — argue that the tests dramatically underestimate the actual capital shortfall at the banks, which they say could be as high as €900bn based on a market measure of capital." Read more

Excerpt from The Boston Globe -- "According to business-school professors at New York University and Stanford University, self-reliance earns women respect — as it’s a positive trait typically associated with men — and without undermining women’s reputation for being team players, and without the fallout from being bossy. In an analysis of 360-degree employee feedback, self-reliance was associated with better leadership ratings for women, but not for men, even controlling for age, self-esteem, dominance, and feeling in control of one’s fate." Read more

Excerpt from The Washington Post -- "...A 2013 experiment found that young people looked more favorably upon older adults who 'act their age' by listening to Frank Sinatra over the Black Eyed Peas, or by being more generous with their money. One of the researchers, Michael North, an assistant professor at New York University’s Stern School of Business, says younger people tend to resent it when older workers don’t 'get out of the way' and retire." Read more

Excerpt from MIT Sloan Management Review -- "In the discussion about why incumbent firms fail to adopt radical technologies — which has been an ongoing research topic and the subject of many popular and academic books — this has been a fundamental question: Are these firms unwilling to do it, or are they unable to do it? What we show in this paper is that they’re certainly able to do it, and they’re typically very successful when they do it, on average." Read more

Excerpt from The Wall Street Journal -- "Prof. Acharya’s analysis calculates banks’ leverage ratios, or equity as a share of total assets, based on their current stock-market valuations. 'When a bank’s market value of equity is approaching zero, it doesn’t matter what the book value of a bank’s equity is compared to what investors believe it actually is; Lehman’s was positive when it collapsed,' Prof. Acharya said in an interview." Read more

• Biography: Professor Viral Acharya
• Department: Economics

Excerpt from Bloomberg View -- "Instead of assuming that people are perfectly rational, he theorizes that they have limited attention -- what psychologist Herbert Simon called 'bounded rationality.' When interest rates or gross domestic product change, people in Gabaix’s model don't quite realize that things are different. Even more importantly, they’re short-sighted -- they don’t think as much about the probability of a recession happening 10 years from now as they do about one occurring in the next six months." Read more

• Biography: Professor Xavier Gabaix
• Department: Finance

Excerpt from The Economist -- "Mr Spence’s flagship contribution was a 1973 paper called 'Job Market Signalling' that looked at the labour market. Employers may struggle to tell which job candidates are best. Mr Spence showed that top workers might signal their talents to firms by collecting gongs, like college degrees." Read more

• Biography: Professor Michael Spence
• Department: Economics

Excerpt from Fast Company -- "In one experiment led by psychologists David Dunning and Justin Kruger, participants were asked to rate their abilities and offered a monetary reward if they were able to assess themselves accurately. In spite of that motivator, though, people still overestimated their skill level considerably. Try as we might, it appears many of us assume we're more competent than we are simply because we aren't aware of what we don't know. Even unintentionally, our own ignorance compounds." Read more

• Biography: Professor Justin Kruger
• Department: Marketing

Excerpt from Bloomberg View -- "One of Adolf Hitler’s many blunders was to kick smart people out of his country. His hatred of Jews led him to expel a large number of Germany's most accomplished scientists, many of whom went to the U.S. What was a bane to Hitler’s reich was a boon to the U.S. Economists Petra Moser, Alessandra Voena, and Fabian Waldinger estimate that patenting increased by an average of 31 percent in scientific fields dominated by Jewish refugees. And of course everyone knows the story of how Jewish scientists were crucial to the U.S. atomic-bomb program." Read more

• Biography: Professor Petra Moser
• Department: Economics

Excerpt from Forbes -- "In a recent paper, Thomas Philippon from New York University finds the annual cost of financial intermediation in the U.S., which is roughly 2%, is the same now as it was in the late nineteenth century. This leads him to conclude that the US finance industry has showed no efficiency gains at all over 130 years." Read more

• Biography: Professor Thomas Philippon
• Department: Finance

Excerpt from The Economist -- "Shlomo Angel of New York University has studied seven African cities in detail: Accra, Addis Ababa, Arusha, Ibadan, Johannesburg, Lagos and Luanda. He calculates that only 16% of the land in new residential areas developed since 1990 has been set aside for roads—about half as much as planners think necessary. And 44% of those roads are less than four metres wide." Read more

• Biography: Shlomo Angel
• Department: Urbanization Project

Excerpt from the Financial Times -- "There is no more devastating verdict on the performance of the finance industry than the one that emerges from research by Thomas Philippon, professor of finance at New York University. Using data going back to the late 19th century, he found that the US financial sector generated no increase in productivity at all over 130 years." Read more

• Biography: Professor Thomas Philippon
• Department: Finance

On June 23, Britain opened its polls for a referendum on whether to leave the European Union. Stern faculty offer expert commentary on this historic vote, also known as “Brexit,” and its possible impact on the British economy, business investments and global trade.
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Excerpt from the Harvard Business Review -- "On average, those who underrated their skills were above average in their overall coaching effectiveness (reaching the 57th percentile). Those who had overrated themselves, however, were significantly below average, reaching only the 32nd percentile. ... incompetent people fail to recognize their own deficiencies and don’t recognize the skill in others. The lower an individual is on any scale of measurement, the more out-of-touch they tend to become." Read more

• Biography: Professor Justin Kruger
• Department: Marketing

Excerpt from Fast Company -- "The executive pay bump in favor of women was recently explored by NYU Stern professor Lisa Leslie. An extensive study of high-potential female professionals at Fortune 500 companies, found that 8% of female leaders earned more than their male counterparts. Leslie believes this is driven by corporate diversity initiatives that value the contributions of their under-represented female cohort. And we know that the tech industry has been working hard to correct its lack of diversity for several years now." Read more

Excerpt from Strategy + Business -- "...when people believe others are better off, they want things they think those other people don’t have. However, when the items are less available because their peers already have them, it diminishes the ability for these items to offset the relative imbalance in resources, and the effect goes away." Read more

• Biography: Professor Adam Alter
• Department: Marketing

Excerpt from the Financial Times -- "The personality and talent of bank executives is more important in shaping the risk taking of the institutions they work for than pay, bonuses or education, an analysis of more than 1,500 top US bankers has found." Read more

• Biography: Professor Anthony Saunders
• Department: Finance

Excerpt from The Economist -- "In a paper published earlier this year, Mr Simonoff and his colleagues found that while shows that received positive reviews in USA Today and the Daily News tended to survive longer on Broadway, reviews in the New York Times has no statistically-significant effect." Read more

• Biography: Professor Jeffrey Simonoff
• Department: IOMS

Excerpt from The Economist -- "Financial titans might splutter into their champagne at Mr Philippon’s finding, and point to the reduction in trading spreads or even the rise of firms like Vanguard. But it is the cost to the end-user that is the key. Mr Philippon’s data suggest that money saved in one area has been offset by new charges elsewhere." Read more

• Biography: Professor Thomas Philippon
• Department: Finance

Excerpt from On Being -- "Happiness comes from ... getting the right kind of relationship between yourself and others, yourself and your work — and that’s broadly defined, just some sort of productive activity — and yourself and something larger than yourself. To really flourish, you need to feel that you are part of something big, or something that will leave a mark, that will do something. And I hear this from my students constantly. Everybody’s looking for how can they leave a mark? Help somebody? Be part of something bigger? And so, given our evolutionary history, and the weird modern way we’re living, we can still have fantastically satisfying lives. We just have to work at it harder than people might have a few generations ago." Read more

• Biography: Professor Jonathan Haidt
• Department: Business & Society Program

Excerpt from the National Post -- "A seminal contribution of the New York University economist Paul Romer — who came to economics from physics — was to recognize that 'more output' was the wrong way to think about economic growth. Instead of producing more stuff, economic growth consists of re-arranging the stuff that is already there in ways that we value more. New technology is best seen as the creation of new 'recipes,' and there’s no obvious limit to human ingenuity in coming up with more of those." Read more

• Biography: Professor Paul Romer
• Department: Economics

Excerpt from CityLab -- "For respondents who report that they regularly talk to their friends about whether property is a good investment, we find a strong relationship between their friends’ house price experiences and their own assessment whether property in their own zip code is a good investment." Read more

• Biography: Professors Theresa Kuchler & Johannes Stroebel
• Department: Finance

Excerpt from The Wall Street Journal -- "Academics have previously found a more significant two-day effect [of hedge fund investments on stocks], but that is for fast-moving day traders, not investors. Over a month, a study a few years ago by Stephen Brown of New York’s Stern School of Business and Christopher Schwarz of the University of California found no impact from 1999 to 2008." Read more

• Biography: Professor Emeritus Stephen Brown
• Department: Finance

Excerpt from Harvard Business Review -- "Our findings document a pay premium for high-potential women that is driven by the widespread adoption of organizational diversity goals. Although diversity is a strategic goal in many organizations, women remain severely underrepresented in executive positions. As a result, executive women offer significant value to these organizations and receive a pay premium relative to executive men. We find that the female premium applies to all high-potential women in companies with diversity goals — both those who have already reached the executive ranks and those deemed likely to do so in the future." Read more

• Biography: Professor Lisa Leslie
• Department: Management and Organizations

Excerpt from The New York Times -- "Three economists, Pierre-Olivier Gourinchas, Thomas Philippon and Dimitri Vayanos, examined the history of Greece’s debt boom and bust in a new paper. They contend that in terms of money borrowed and economic output lost, the Greek crisis has far exceeded even the classic emerging market busts in Latin America and Asia — many of which were resolved via various forms of debt restructuring. As a result, they conclude, the very thought that Greece can pay its way out of this mess without having its debt reduced in some way is fantasy." Read more

• Biography: Professor Thomas Philippon
• Department: Finance

Excerpt from Diabetes News Journal -- "Melissa A. Schilling, a strategy and innovation expert at the NYU Stern School of Business, conducted a large-scale literature review of published studies on the association between diabetes and Alzheimer’s disease. Despite conflicting reports, Schilling was able to find evidence linking insulin, insulin-degrading enzyme (IDE), and Alzheimer’s, suggesting that avoiding excess insulin, while supporting IDE robust levels, might be key approaches to prevent and lessen the impact of Alzheimer’s disease."
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• Biography: Professor Melissa Schilling
• Department: Management and Organizations

Excerpt from The Wall Street Journal -- "And last month, two New York University real-estate professors, Jeanne Calderon and Gary Friedland, released a report that listed 27 major projects that have sought a total of $5.4 billion in EB-5 financing, including multiple large Manhattan-based developers like Tishman Speyer and Harry Macklowe. Nineteen are in New York or Miami, and these projects all come in addition to a similar-sized list the professors compiled last May." Read more

• Biography: Professor Jeanne Calderon
• Department: Business and Society Program

Excerpt from Financial Times -- "'The jobs coming through the alumni channel are perceived as having significantly better growth potential,' [Greenberg] says, linking this preoccupation with longterm cash flow to the net present value calculations that are a staple of MBA courses. 'They are willing to take less today for a job that has better prospects in the long run.'" Read more

• Biography: Professor Jason Greenberg
• Department: Management and Organizations

Excerpt from The New York Times -- "Discrimination is also pervasive in the white-collar world. Researchers found that white state legislators, Democrats and Republicans alike, were less likely to respond to a constituent letter signed with a stereotypically black name. Even at universities, emails sent to professors from stereotypically black names asking for a chance to discuss research possibilities received fewer responses." Read more

• Biography: Professor Dolly Chugh
• Department: Management and Organizations

Excerpt from The Wall Street Journal -- "... a recent study by Jonathan Haidt of New York University showed that 96% of social psychologists identify as left of center, 3.7% as centrist/moderate and only 0.03% as right of center." Read more

• Biography: Professor Jonathan Haidt
• Department: Business & Society Program