BOSTON— Harvard Business School doctoral student Rohan Kekre has won the prestigious 2015 Martin Award, according to Harvard Business School.
Kekre’s research characterizes the role of unemployment insurance (UI) as a stabilization instrument in macroeconomic policy. Theoretically, he studies the effect of UI on employment, output, and welfare in a general equilibrium model of business cycle fluctuations. Because of interactions between UI and aggregate demand, an increase in UI generosity can raise employment and output.
In a recession, when monetary policy cannot stabilize the economy on its own, optimal generosity thus exceeds its steady-state level. Quantitatively, Kekre finds that the unprecedented extension of benefit generosity in the United States from 2008 to 2013 had large, positive effects on employment and welfare operating through these channels. His research provides broader guidance on how policy makers can use social insurance and cash transfer programs – major parts of government budgets in advanced economies – in the stabilization of business cycle fluctuations, Harvard Business School said.
The Harvard Business School Doctoral Programs and their faculty chair, David Scharfstein, the School’s Edmund Cogswell Converse Professor of Finance and Banking, also announced three recipients of the 2015 Wyss Awards for Excellence in Doctoral Research as well as three winners of the Martin Awards for Excellence in Business Economics. The prizes are presented each year based on excellence in innovative dissertation research.
The 2015 Wyss Award winners are:
Tami Kim (DBA candidate in marketing)
Kim’s research investigates implicit social contracts – the set of practices that individuals expect others to follow in the absence of explicit promises. These contracts are omnipresent in our daily lives. Consumers purchasing goods and services have certain standards and expectations, for example, and when companies fail to meet them, disappointed customers want sellers to compensate them somehow, perhaps with a coupon or free item. In addition, people also think about how they are expected to behave in their roles as friends or colleagues. And they also have an understanding of what desirable civic behaviors mean and expect the government to treat them fairly. Using both field and lab experiments, Kim focuses on how such contracts develop and how violations of such contracts influence interpersonal as well as consumer-firm relationships.
Juan Ma (DBA, strategy)
Emerging markets are characterized by a lack of a developed business infrastructure, including data research firms, credit card systems, and quality certification agencies that enable efficient business operations. Ma’s research focuses on underdeveloped business infrastructure as the primary exploitable business opportunity in emerging markets. She examines how mechanisms that are used to mitigate these market imperfections (specifically, information intermediaries such as the ISO 9000 quality certification system in underdeveloped product, labor, and capital markets) have implications on firm performance and behavior. Her findings suggest that well-received solutions to market failures are often not working as intended in these markets, since the functioning of these solutions relies so strongly on the supporting infrastructure.
Patricia Satterstrom (DBA, management)
Satterstrom’s research explores how teams can give voice to the voiceless, enabling team members to collaborate despite power imbalances due to professional and demographic differences. In a 31-month field study, she examines the microprocesses – the day-to-day behaviors and interactions – that challenged traditional power structures to improve collaboration in teams. In the lab, Satterstrom studies the influence of multicultural experience and diversity on team members’ interactions and performance as well as the factors that influence perceptions of team success. She is interested in understanding and testing the multifaceted and complex underpinnings of teams, power, and collaboration.
The 2015 Martin Award Winners are:
Rohan Kekre (Ph.D., business economics)
Kekre’s research characterizes the role of unemployment insurance (UI) as a stabilization instrument in macroeconomic policy. Theoretically, he studies the effect of UI on employment, output, and welfare in a general equilibrium model of business cycle fluctuations. Because of interactions between UI and aggregate demand, an increase in UI generosity can raise employment and output. In a recession, when monetary policy cannot stabilize the economy on its own, optimal generosity thus exceeds its steady-state level. Quantitatively, Kekre finds that the unprecedented extension of benefit generosity in the United States from 2008 to 2013 had large, positive effects on employment and welfare operating through these channels. His research provides broader guidance on how policy makers can use social insurance and cash transfer programs – major parts of government budgets in advanced economies – in the stabilization of business cycle fluctuations.
Benjamin Lockwood (Ph.D., business economics)
Lockwood’s research studies optimal policy design in settings where people are not perfectly rational and shows how the resulting insights can help us understand and improve existing policies. Among the most well-studied behavioral biases is present bias – the common tendency to overestimate upfront costs relative to delayed benefits – which is responsible for mistakes as varied as undersaving for retirement and exercising too little. Lockwood studies the implications of present bias for labor supply decisions, which often require upfront effort such as searching for a job in exchange for delayed benefits. A key policy implication is that it may be optimal to subsidize work with the negative marginal tax rates that pay workers for every dollar earned – akin to the Earned Income Tax Credit (EITC) in the United States. Although such policies are widespread and enjoy broad bipartisan support, they are generally rejected by standard optimal tax models, which instead favor a guaranteed minimum income and high positive marginal tax rates. Lockwood’s research suggests that the EITC may be warranted after all, playing a valuable role in helping to overcome behavioral biases.
Filippo Mezzanotti (Ph.D., business economics)
Mezzanotti’s research examines how corporate policies such as innovation or investment decisions are affected by the institutional and macroeconomic environment in which firms operate. In one paper, he analyzes how patent litigation can have a negative effect on companies’ innovation. Specifically, in the context of the 2006 landmark U.S. Supreme Court decision in eBay v. MercExchange, Mezzanotti shows that improvements in the quality of patent enforcement can have sizable positive impacts on innovation. In other papers, through analyses of the European sovereign debt crisis, the Great Depression, and the Civil War he explains how frictions in financial intermediation can have real effects on the economy. These works highlight the importance of a well-functioning banking sector in limiting the propagation of financial shock to businesses and helping the economy recover from disasters.
The Wyss Awards are named in honor of Hansjörg Wyss (MBA 1965), who established the Hansjörg Wyss Endowment for Doctoral Education in 2004. The Wyss Endowment supports a broad range of efforts to strengthen the HBS Doctoral Programs, including fellowships and stipends for doctoral students, increased support for field research, new doctoral course development, teaching skills training, and the renovation of doctoral facilities on campus.
The Roger Martin Fund for Doctoral Research was established in 2006 through the generosity of Roger Martin (MBA 1981), former dean of the Rotman School of Management at the University of Toronto. The fund was created in memory of HBS professor John Lintner, a world-renowned expert in finance and one of Martin’s mentors.
Harvard Business School grants the Doctorate in Business Administration (DBA) in five areas of study: accounting and management, marketing, management, strategy, and technology and operations management. It also offers Ph.D. programs in collaboration with the Harvard Graduate School of Arts and Sciences in business economics, health policy management, and organizational behavior. At any given time, approximately 130 HBS doctoral students are completing course work or working on their dissertations at the School.