Experience Stern | Faculty & Research

Faculty Research Brief is a periodic report designed to inform the Stern community about new faculty research, new publications, awards and grants. Please send your research news to be considered for inclusion to paffairs@stern.nyu.edu.

Featured Research

"Fondness Makes the Distance Grow Shorter: Desired Locations Seem Closer Because They Seem More Vivid"

Adam Alter, Assistant Professor of Marketing and Emily Balcetis of NYU's Department of Psychology explore why people perceive desirable locations as nearer than equidistant undesirable locations.  In three studies, participants estimated their distance from a variety of locations on a university campus and in the greater New York City area.  Participants consistently perceived appealing locations to be nearer than unappealing locations that were otherwise similar and equally far away.  The authors find that people tend to conjure vivid images of places that they are particularly fond of, whereas their mental pictures of unappealing locations remain relatively vague.  They suggest that people are attracted to appealing places, not just because they are appealing, but also because they seem nearer.  Applying this research to the retail sector may yield bottom-line results, says Professor Alter.  He argues that enhancing a store’s appeal will attract customers more readily because a consumer’s positive association with that location will cause the store to feel physically nearer.  These effects can be magnified when proximity is particularly important to people.  For instance, in Manhattan, where residents are very neighborhood-focused, business owners are more likely to attract customers from farther afield if the marketplace seems more appealing, fun and exciting.

"The Pain Was Greater If It Will Happen Again"

Tom Meyvis, Associate Professor of Marketing with Jeff Galak (PhD ‘09) at Carnigie Mellon's Tepper School conducted several studies and found that people who expect an unpleasant experience to return remember it as more aversive than those who do not have that expectation.  For instance, in one study, people remember a boring task as more unpleasant when they believe that they will have to do the task again in the future.  In another study, individual runners in Central Park were asked about the difficulty of running up a hill. Some runners are asked when they were about to run up the hill, others are asked while running up the hill and a third group was asked immediately after they completed running up the hill.  Consistent with an emotion intensifying effect of anticipation, the authors found that the runners who still had all or part of the hill to look forward to, perceived the run as more aversive than those runners who just completed it.  These results indicate that, when faced with an upcoming experience, people often brace for the experience by preparing for the worst, leading them to remember their previous encounters with that experience as more aversive.  This paper was just accepted at the Journal of Experimental Psychology: General.

Orange & Purple vs. Blue & Brown: Consumer Preferences for Color Combinations is Revealed

Assistant Professor of Marketing Sam Hui, along with co-authors Xiaoyan Deng of Ohio State University’s Fisher College of Business and J. Wesley Hutchinson of the University of Pennsylvania’s Wharton School, examines consumer preferences for color combinations during a realistic product design simulation.  Participants in the study used an application called NIKEiD, which allows users to design custom athletic shoes on the NIKE website.  In their study, the authors modeled the likelihood of a consumer choosing one color pairing over another pairing, while designing their shoes, based on the distances between the colors in the CIELAB color space, which describes all of the colors visible to the human eye.  They found that (1) people de-emphasize lightness of color and focus rather on hue and saturation; (2) people generally like to combine colors that are relatively close or exactly match, with the exception of some people who highlight one signature product component by using a contrasting color; and (3) the total number of colors used in the average design was smaller than expected.  The study entitled, “Consumer Preferences for Color Combinations: An Empirical Analysis of Similarity-Based Color Relationships,” is forthcoming in the Journal of Consumer Psychology.  The authors recognize their research as an important first step toward an understanding of aesthetic color combinations in products that will appeal most to consumers.  

“Leading Aesthetically in Uncertain Times”

Matt Statler, Clinical Assistant Professor of Management and Organizations, along with Ralph Bathurst of Massey University and Brad Jackson of the University of Auckland Business School in New Zealand, describes how leaders can inspire and motivate by using skills that go beyond rational discourse and decision-making.  The authors explain that aesthetically aware leaders can both feel the suffering of the populace and understand the overarching political and economic implications during times of uncertainty and crisis.  According to the researchers, aesthetically aware leaders can employ a range of capabilities to enhance and complement more conventional approaches to problem-solving during disasters.  Examining the flawed leadership during the Hurricane Katrina crisis, the authors argue that some of the adverse effects of the disaster on the people of New Orleans could have been mitigated if leaders had engaged in aesthetically sensitive practices.  In closing, the authors suggest that artful leadership among policy makers, bankers and firms will be critical as the country navigates through the ongoing financial crisis.

Awards, Accolades and Presentations

Professor of Finance Viral Acharya received the Review of Finance Best Paper Award for 2009 (Deutsche Bank Prize in Financial Economics) for his paper, “Corporate Governance Externalities,” co-authored with Paolo Volpin.  He also received the Best Conference Paper Award from Goldman Sachs International at the 2010 European Finance Association Meetings for his paper, “The Seeds of a Crisis: A Theory of Bank Liquidity and Risk Taking over the Business Cycle,” co-authored with Hassan Naqvi.

Professor Acharya received the Curriculum Development Grant, sponsored by Deutsche Bank. This award was made in recognition of Professor Acharya’s innovative course content applied to his class, “Credit Risk,” to cover the economic crisis and regulatory issues.  He also received a grant of 10,000€ from the Scientific Committee of the Europlace Institute of Finance (EIF) for his research paper, “Measuring Systemic Risk,” co-authored with Professors Lasse Pedersen, Thomas Philippon and Matthew Richardson.

Professor Acharya was also invited to discuss the Stern faculty’s forthcoming book, Regulating Wall Street: The Dodd-Frank Act and the New Architecture of Global Finance, at the International Monetary Fund in September. 

Professor Stephen Brown, David S. Loeb Professor of Finance, was selected by the Australian Research Council (ARC) as a member of Research Evaluation Committee for the Excellence in Research Australia (ERA) initiative for 2010.  The Research Evaluation Committee, consisting of 149 internationally recognized scholars, will be evaluating every academic discipline within all Australian universities. Professor Brown will participate in this initiative as a member of the Social, Behavioural and Economic Sciences Research Evaluation Committee.

Emiliano Pagnotta, Assistant Professor of Finance and Thomas Philippon, Associate Professor of Finance were awarded a grant from the Smith Richardson Foundation to fund a new research project named "The Social Value of Financial Innovation: High-Frequency Trading in Equity Markets."