All Else Equal: Making Better Decisions

All Else Equal is on Spring Break this week, so we’re revisiting one of our most popular episodes dealing with the question: How does one become a CEO? We’ll be back with new episodes in two weeks. 

A lot has been written and said about CEOs and their compensation, but who are they really and how did they get there? According to the data, what are the most likely paths to become one? In this episode, hosts and finance professors Jonathan Berk and Jules van Binsbergen are joined by Dirk Jenter, Professor of Finance at the London School of Economics, for a fascinating discussion of CEOs, including the surprising truths about who rises to the rank of CEO and from where, as well as exploring the issue of CEO pay, and how it could be justified. 

 

Find All Else Equal on the web:  
https://lauder.wharton.upenn.edu/allelse/

All Else Equal: Making Better Decisions Podcast is a production of the UPenn Wharton Lauder Institute through University FM.

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Whether it be in politics, public health, or corporate finance, why are people more likely to interpret facts or data in a way that fits their preconceived notions about the world as opposed to searching for the fundamental truth?  
A new paper from the Harvard Business School called, Sharing Models to Interpret Data (by Joshua Schwartzstein and Adi Sunderam)
studies the propensity for people to adopt interpretations to data based on their community’s beliefs, and why this can lead to less accurate conclusions. Hosts and finance professors Jonathan Berk and Jules van Binsbergen are joined by the paper’s co-author  Adi Sunderam, who is a professor of corporate finance at Harvard Business School, a research associate at the National Bureau of Economic Research, and a co-editor of the Journal of Finance. 
The conversation covers the complexity of Bayesian updating and how the process is improperly deployed in today’s thinking, not only in corporate decision-making but also on a sociological level. They also discuss Sunderam’s model for explaining how people interpret data, why people are more likely to fall into group-belief dynamics, and if there are any interventions that would lead to better decision-making.  
Read Adi Sunderam and Joshua Schwartzstein’s paper: Sharing Models to Interpret Data  
Find All Else Equal on the web:  
https://lauder.wharton.upenn.edu/allelse/
 
All Else Equal: Making Better Decisions Podcast is a production of the UPenn Wharton Lauder Institute through University FM. 

Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

In the rapid-moving world of delegated money management, it is important to recognize the differences in how mutual funds and alternative assets operate. When it comes to alternatives, how do these funds wind up with strong incentive contracts for the money managers as opposed to flat fee contracts more commonly seen in mutual funds? Why do managers of alternatives cap their fund sizes when it could potentially lead to lower fees?
On this episode, hosts and finance professors Jonathan Berk and Jules van Binsbergen examine the key differences between mutual funds and alternatives, by unpacking research in a new paper co-authored by Berk.
The conversation covers performance fees, persistent alpha, limits on capital, and the key liquidity distinction between mutual funds and alternatives.
 
Read “A  Unified Theory of Delegated Capital Management” by Jonathan Berk and Peter DeMarzo here: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=6019667
 
Find All Else Equal on the web: 
https://lauder.wharton.upenn.edu/allelse/
All Else Equal: Making Better Decisions Podcast is a production of the UPenn Wharton Lauder Institute through University FM.

Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

When the pandemic hit in 2020, working from home skyrocketed. Six years later, many companies have returned to in-person work, but hybrid models are still the dominant structure. So with WFH here to stay in some form, what’s the proper balance? And what are we at risk of losing in the long term with less in-office interaction?
Nick Bloom is an economics professor at Stanford University and one of the first researchers to take a serious look at the work from home phenomenon. He joins hosts and finance professors Jonathan Berk and Jules van Binsbergen to discuss his research into why working from home has outlasted COVID precautions, its impact on employee performance, the surprising effects its had on birthrates, and his recommendation to companies on striking the perfect balance with a hybrid structure. 
 
Find All Else Equal on the web: 
https://lauder.wharton.upenn.edu/allelse/
All Else Equal: Making Better Decisions Podcast is a production of the UPenn Wharton Lauder Institute through University FM.

Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

In the final part of this two-part interview, Steven Pinker, an experimental psychologist and Harvard professor, again joins hosts and finance professors Jonathan Berk and Jules van Binsbergen to discuss his new book When Everyone Knows That Everyone Knows: Common Knowledge and the Mysteries of Money, Power, and Everyday Life.
In this episode, Jonathan and Jules break down more revelatory examples from Steven’s book that demonstrate how common knowledge is a first order explanatory variable for how humans behave. They also explore the role common knowledge plays in financial markets, particularly when it comes to speculative trading, and examine common knowledge in an academic freedom sense, highlighting the delicate balance between promoting open debate and safeguarding societal norms. 
 
Find All Else Equal on the web: 
https://lauder.wharton.upenn.edu/allelse/
All Else Equal: Making Better Decisions Podcast is a production of the UPenn Wharton Lauder Institute through University FM.

Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.