Browsing by Subject "Search"

This dissertation explores the complex process of organizational change, applying a behavioral lens to understand change in processes, products, and search behaviors. Chapter 1 examines new practice adoption, exploring factors that predict the extent to which routines are adopted “as designed” within the organization. Using medical record data obtained from the hospital’s Electronic Health Record (EHR) system I develop a novel measure of the “gap” between routine “as designed” and routine “as realized.” I link this to a survey administered to the hospital’s professional staff following the adoption of a new EHR system and find that beliefs about the expected impact of the change shape fidelity of the adopted practice to its design. This relationship is more pronounced in care units with experienced professionals and less pronounced when the care unit includes departmental leadership. This research offers new insights into the determinants of routine change in organizations, in particular suggesting the beliefs held by rank-and-file members of an organization are critical in new routine adoption. Chapter 2 explores changes to products, specifically examining culling behaviors in the mobile device industry. Using a panel of quarterly mobile device sales in Germany from 2004-2009, this chapter suggests that the organization’s response to performance feedback is conditional upon the degree to which decisions are centralized. While much of the research on product exit has pointed to economic drivers or prior experience, these central finding of this chapter—that performance below aspirations decreases the rate of phase-out—suggests that firms seek local solutions when doing poorly, which is consistent with behavioral explanations of organizational action. Chapter 3 uses a novel text analysis approach to examine how the allocation of attention within organizational subunits shapes adaptation in the form of search behaviors in Motorola from 1974-1997. It develops a theory that links organizational attention to search, and the results suggest a trade-off between both attentional specialization and coupling on search scope and depth. Specifically, specialized unit attention to a more narrow set of problems increases search scope but reduces search depth; increased attentional coupling also increases search scope at the cost of depth. This novel approach and these findings help clarify extant research on the behavioral outcomes of attention allocation, which have offered mixed results.

In my first chapter, I present a model in which sellers can signal the quality of an asset both by retaining a fraction of the asset and by choosing the liquidity of the market in which they search for buyers. Although these signals may seem interchangeable, I present two settings which show they are not. In the first setting, sellers have private information regarding only asset quality, and I show that liquidity dominates retention as a signal in equilibrium. In the second setting, both asset quality and seller impatience are privately known, and I show that both retention and liquidity operate simultaneously to fully separate the two dimensions of private information. Contrary to received theory, the fully separating equilibrium of the second setting may contain regions where market liquidity is increasing in asset quality. Finally, I show that if sellers design an asset-backed security before receiving private information regarding its quality, then the optimality of standard debt is robust to the paper's various settings.

In my second chapter, I explore the question of how informative bank stress tests should be. I use Bayesian persuasion to formalize stress tests and show that regulators can reduce the likelihood of a bank run by performing tests which are only partially informative. Optimal stress tests give just enough failing grades to keep passing grades credible enough to avoid runs. The worse the state of the banking system, the more stringent stress tests must be to prevent runs. I find that optimal stress tests, by reducing the probability of runs, reduce the optimal level of banks' capital cushions. I also examine the impact of anticipated stress tests on banks' ex ante incentive to invest in risky versus safe assets.