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Consumer Spending Falls — And Vulnerable Families Take the Biggest Hit

ilseu — Wed, 21 Jan 2026 22:52:39 +0000

Consumer Spending Falls — And Vulnerable Families Take the Biggest Hit ilseu Wed, 01/21/2026 - 14:52 More News Carla Fried | UCLA Anderson Review January 21, 2026

Given that two-thirds of the U.S. economy is driven by consumer spending, policymakers have a clear incentive to consider the impact of any proposed tax changes on household spending.

While individual tax rates are an obvious concern, a working paper suggests that consumers are hurt when corporate tax rates are increased.

University of California-Riverside’s Eric Allen, UCLA Anderson’s Henry Friedman and Chinese University of Hong Kong’s Yiyuan Wang and Yuqing Zhou studied the impact of state-level changes in corporate income taxes between 2004 and 2019 on household consumption. They estimate that every percentage point increase in a state’s corporate tax rate was associated with a 0.5% decrease in consumer spending. The decline in spending emerges in the year the tax rate rises, and the research finds the hit to spending persists in subsequent years.

Past research has established that when corporate tax rates rise, businesses often react by raising prices, cutting wages — especially for lower-wage workers — and reducing investment, which can lead to less job growth. This research offers evidence on how those corporate responses to a higher tax rate may impact consumer spending.

Notably, the authors found no trickle-down benefit to consumers when corporate tax rates are lowered. The researchers observed no significant change (increase) in household or statewide consumption when corporate tax rates fall, suggesting companies may keep the savings rather than passing them on to workers or consumers through higher wages or lower prices. To the extent any savings from lower tax rates are shared, the researchers suggest it may be with investors, via increased stock buybacks or dividend payouts.

Less-Advantaged Hit Hardest

The researchers tracked household shopping behavior using data from NielsenIQ’s Consumer Panel, which has detailed spending data on between 40,000 and 60,000 U.S. households each year. The study ended in 2019 to avoid the economic distortions of the COVID-19 years. On average, a household spent $7,790 annually on consumer products tracked by NielsenIQ — things like groceries, household goods and personal care items, but not housing, transportation, education, health care or other services. The researchers combined this household spending analysis with state-level consumption and tax revenue data.

During the 15-year study period eight states raised their corporate income tax rate and there were more than 70 reductions in corporate tax rates among multiple states. The researchers used household spending data from states with no changes in corporate tax rates as their control groups when analyzing spending patterns in states that raised or lowered their corporate tax rate.

While the average impact of a 1 percentage point increase in a corporate tax rate was a 0.5% decline in household spending, the impact was harsher for families that lacked savings to absorb higher prices and/or reduced wages, or that didn’t have the academic credentials to seek out a better job (or negotiate a better salary).The researchers observe that:

When corporate taxes increased by 1 percentage point, households headed by parents without college degrees reduced spending by an additional 0.7% compared with college-educated households.
Nonwhite households cut consumption by an extra 1.1% compared with white households facing the same tax increase.
Families with limited financial cushions — measured by how much of their budget goes to necessities like food — reduced their spending by an additional 0.5% compared with families with more financial flexibility

This adds a new variable — rising corporate tax rates — driving economic inequality, as less advantaged households must cut back more significantly than better-off households.

States Feel Pain, Too

The economic consequences of higher corporate taxes ripple beyond individual households. The research shows that a 1 percentage point corporate tax increase is associated with a 0.2% decline in total state-level consumption, and, interestingly, a 0.23 percentage point reduction in a state’s net migration rate. That suggests that as businesses react to higher tax rates by potentially raising prices and/or lowering wages, it not only impacts the state’s finances — tax revenues fall, which eventually may reduce public services — but it seems to also reduce job opportunities given the weaker net in-migration.

The impacts identified by this research complicate how states can best generate needed revenue to deliver services. While corporate tax increases may seem like a politically safer way to raise revenue without directly hitting consumers, the evidence shows these taxes do hurt household spending — and hit vulnerable families hardest.

About the Research
Allen, E.J., Friedman, H.L., Wang, Y., & Zhou, Y. (2025). Corporate Income Tax Rates and Household Consumption.

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This article originally appeared in UCLA Anderson Review: anderson-review.ucla.edu/the-hidden-cost-of-raising-corporate-taxes

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Slower Company Acquisition Pace Can Boost Corporate Values

cfabi002 — Tue, 09 Dec 2025 00:11:12 +0000

Slower Company Acquisition Pace Can Boost Corporate Values cfabi002 Mon, 12/08/2025 - 16:11 More News December 08, 2025

Jerayr “John” Haleblian

In the dog-eat-dog world of corporate acquisitions, taking more time between deals may yield more profitable outcomes.

That’s the finding of a comprehensive study co-authored by Jerayr “John” Haleblian, a professor of management in UC Riverside’s School of Business.

Published in the Journal of Business Research, the study examined how the timing between successive acquisitions—what researchers call “experience schedules”—affects company performance, measured by changes in stock value following the deals.

Challenging longstanding assumptions, Haleblian and his co-authors found that companies spacing out their acquisitions with longer intervals are rewarded by investors with higher stock values.

“Our findings suggest that gradually increasing the time between acquisitions can better position firms to learn and improve from each experience and thus get the most out of each buyout,” said Haleblian, who is one of UCR’s Anderson Presidential Chairs in Business.

The study’s findings run counter to previous research that favored even acquisition pacing as the most profitable strategy.

Acquisitions can boost a company’s profitability by adding talent, equipment, property, market share—or any combination of those. But Haleblian said it takes time to properly absorb and integrate these new assets into the corporate structure and culture.

The research team analyzed more than 5,100 acquisitions made by companies in the S&P 1500 over 20 years, from 1992 to 2012. They found that companies that steadily increased the time between acquisitions outperformed those that rushed into deals with shorter intervals.

Slower pacing allows top executives to better absorb lessons from earlier deals, Haleblian explained. The additional time helps integrate new employees and assets more effectively and gives managers a chance to refine internal processes. The study described this as a way to reduce the risk of “acquisition indigestion,” where rapid deal-making overwhelms a company’s ability to integrate new operations.

Extending the time between acquisitions also fosters organizational stability, giving leaders space to build the structures, rules, and routines that best support the newly acquired resources.

To gain real-world insights, the research team interviewed 17 senior executives involved in acquisitions across the chemical, energy, and technology sectors.

“If you have fewer deals and more time in between, you can really focus on extracting the value out of that, and it’s less of a strain on the running organization,” one executive said.

The message for acquisition managers is clear: slowing down may lead to greater long-term success, the authors found. Rather than racing from one deal to the next, companies could benefit from adopting a more deliberate, reflective pace as they build acquisition experience.

The study is titled “Experience Schedules: Unpacking Experience Accumulation and Its Consequences.” The co-authors include Christopher Bingham of the Kenan-Flagler Business School at the University of North Carolina at Chapel Hill; Kalin D. Kolev of the College of Business Administration at Marquette University; and Koen Heimeriks of the University of Warwick Business School.

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Shopping for Two is Stressful

ilseu — Wed, 03 Dec 2025 19:51:45 +0000

Shopping for Two is Stressful ilseu Wed, 12/03/2025 - 11:51 More News David Danelski (david.danelski@ucr.edu) | UCR News December 03, 2025

Professor Meg Campbell

For many of us, any kind of shopping is stressful enough. The anxiety, however, really kicks in when you must purchase something you’re going to share with another person.

Such are the findings of a UC Riverside School of Business study published in the Journal of Marketing Research that compared consumer anxiety levels stemming from different shopping circumstances.

Shopping for goods or services that you will share is significantly more stressful than shopping for yourself or for something to be given to another person, explained study co-author Margaret Campbell, an associate dean & department chair, professor of marketing, and Anderson Presidential Chair in Business.

Purchases for sharing may include selecting an Airbnb or a hotel for a family getaway, the restaurant for a romantic date, the snacks for a book club meeting, or even the kind of beer to be consumed with friends during the big game.

“You feel more responsible when you’re making these sorts of decisions and you feel less confident about your ability to do a good job with it, so you worry about getting it wrong when there is a strong desire to make both of you happy,” said Campbell, an expert on consumer psychology who holds the Anderson Presidential Chair in Business at UCR.

The research, titled “The Decision-Making Process and Impact of Individual Decisions for Joint Consumption,” broke new ground in the field of consumer psychology.

Most previous studies on purchase decision-making have been done through an economic lens of self-interest, such as a desire to get the best quality for the best price, with a focus on choosing for oneself. Campbell’s research went a different direction by probing consumer concerns about how certain purchases may impact their co-consumers and their relationships.

Campbell teamed up with her former graduate student, Sharaya Jones, an assistant professor of marketing at George Mason University in Virginia, and first author of the study. They probed three kinds of purchasing decisions: those made solely for oneself, those made for others (e.g., gifts), and those for shared use.

The study involved more than 2,000 participants who ranked their levels of anxiety after they considered various purchasing scenarios or made choices for solo or joint consumption. Among other situations, the participants had to choose healthy drinks for meetings, snacks for movies, wine for a friend’s promotion party, and more complex decisions, such as picking activities to do while traveling.

The results showed that purchasing goods or services to be shared generates significantly more anxiety—especially when the decision-maker doesn’t know the other person’s preferences or expects them to be different than their own. The increased stress did not appear to be related to the difficulty of the decision.

“What’s fascinating is that the anxiety doesn’t stem from the choice being harder—it’s not about decision difficulty,” Campbell said. “It’s about the added emotional weight of responsibility.”

But knowing more about others’ preferences reduced the stress and increased confidence, the results showed—except when a consumer learned that those they would share with had different preferences from their own.

“People felt better about the choice when they weren’t guessing,” Campbell said, “except if they knew they couldn’t please everyone.”

The study offers strategies on how consumers can cope. One way is to learn as much as possible about others’ preferences.

Also, if the person doing the shopping asks about your preference, it is best to give the shopper a thoughtful answer. Answers like “Get whatever you want” or “I don’t care” just add to the shopper’s anxiety and may even damage the relationship between the two people because such answers fail to ease the shopper’s burden, Campbell said.

Shoppers in a bind, however, can alleviate their fear of making a faux pas by choosing popular or consensus options or by choosing multiple options from which others can pick. If you’re unsure what your friend will enjoy, you may opt for the top-rated film or a top-reviewed restaurant on Yelp.

Assortment packs of similar products are safer bets when shopping for things to be shared. (Photo/Frito Lay)

By understanding this, marketers can also ease the anxiety.

When promoting products likely to be used jointly, like party snacks, streaming services, or group outings, marketers can highlight popularity or consensus to reassure shoppers. Retailers can promote what the researchers call “assortment packages,” such as six kinds of crackers for a dip packaged in the same box. For the football fan responsible for making that halftime beer run, the 12-pack offering two each of six different varieties feels like a safer bet.

Ultimately, the research reframes a significant aspect of consumer decision-making as not just an economic act but a social one. And understanding the psychological dynamics of shared consumption, Campbell said, helps explain not just what we buy, but what it says about our relationships.

“When you’re choosing something to share—like food or a movie—it’s not just a financial transaction,” Campbell said. “It becomes a social decision because you’re trying to accommodate someone else’s preferences and avoid disappointing them as well as getting something you will enjoy as well.”

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The Value of Explaining the “Why” Behind Tough Concepts

ilseu — Tue, 02 Dec 2025 22:31:46 +0000

The Value of Explaining the “Why” Behind Tough Concepts ilseu Tue, 12/02/2025 - 14:31 More News December 02, 2025

Her academic journey was “deeply shaped by a strong foundation in mathematics,” says Professor Elodie Adida Goodman. “I was always interested in how mathematical models could be used to solve real-world problems.”

Today, she is a professor of operations and supply chain management at UCR School of Business, and she is right where she wants to be. “I didn’t know I wanted to teach or pursue research until the end of my own academic studies. At that point, I had the opportunity to apply for both academic and industry positions,” says Goodman, who earned an M.S. in engineering at École Centrale Paris and a Ph.D. in operations research at the Massachusetts Institute of Technology.

“I ultimately chose academia, thinking I could always return to industry if I didn’t enjoy being a professor.”

Turns out, as a professor, she loves the intellectual freedom research offers. “I can create my own research agenda, tackle problems that excite me, and collaborate with brilliant colleagues,” she says. “Teaching allows me to make a broad, lasting impact by shaping the next generation of thinkers and practitioners. Sharing knowledge that I find both fascinating and essential to the world of business is incredibly rewarding.”

Her students acknowledged Goodman’s enthusiasm and investment in the classroom as they voted to honor her with the 2019 Golden Apple Award for Teaching Excellence, which annually recognizes the best overall experience in learning, engagement, teaching style, and innovative teaching methods.

In addition to her own prolific research, Goodman serves as associate editor at Manufacturing & Service Operations Management, Management Science, and Production and Operations Management scholarly journals. “These roles allow me to stay at the forefront of the field and engage with cutting-edge research,” she says. “They also provide me with a unique opportunity to contribute to the academic community by shaping the direction of scholarly discourse in operations management.”

In July 2025, Goodman was appointed the first Logistics Team Presidential Chair in Supply Chain Management at the UCR School of Business. “This century, AI, robotics, and automation will transform transportation and manufacturing the way mechanization transformed farming last century: Entire professions will disappear; new ones will emerge, and only the bold will lead,” says James Lin, CEO of UNIS Fulfillment and Transportation, who endowed the chair.

“Creating the Logistics Team Chair—and putting Elodie Goodman in it—is our way of saying we’re not waiting for that future. We’re building it, and we intend to lead it.”

Goodman appreciates the opportunity. “This honor motivates me to continue pushing the boundaries of my research and explore new avenues of inquiry that can have a real-world impact,” she says.

“This endowed chair also allows me to mentor the next generation of scholars and practitioners more effectively, and I hope to use this platform to inspire more students to pursue research and contribute to the academic community.”

In celebration of this honor, UCR Business asked Goodman to share some of her experiences and expertise:

Why are you interested in operations and supply chain management, and what makes it important to consumers?

Operations and supply chain management is integral to virtually every business sector, from manufacturing to health care. The field focuses on optimizing systems, improving decision-making, and enhancing efficiency, which ultimately benefits society as a whole.

I think many people, especially in today’s world, only truly become aware of the importance of operations when disruptions occur, such as during the pandemic. The reality is operations and supply chain management are the backbone of business strategy—it touches everything, from ensuring that products get to customers on time to designing systems that reduce waste and improve sustainability. As industries continue to globalize and innovate, this field will only grow in importance.

You expressed how much you enjoy being in the classroom. How would you describe your teaching style?

I believe in a hands-on, active learning approach. In my classroom, students don’t just absorb content passively—they engage with it, apply it, and question it. I emphasize understanding the “why” behind the concepts, as opposed to rote memorization.

This is especially important in subjects like statistics, where students can easily get bogged down in formulas. By using business-relevant examples and real-world data, I make sure that students see the practical value of what they are learning.

What do you tell students as they consider studying operations and supply chain management?

My main piece of advice is to build a strong foundation in quantitative subjects—whether it is statistics, optimization, or data analysis. These skills are invaluable not just in academia but in the job market as well.

Operations and supply chain management is an ever-evolving field that increasingly relies on data-driven decision-making, so having a solid grasp on quantitative methods will give you a competitive edge.

You joined the UCR School of Business in 2012. What has impressed you about the school? What do you find the most satisfying, and what is the most challenging?

I am consistently impressed with the dedication of students, staff, and faculty. UCR students are exceptionally motivated and eager to learn, and I find their drive incredibly inspiring. The faculty and staff are also deeply committed to supporting one another, which fosters a collaborative and positive academic environment.

The most satisfying aspect of working at UCR is seeing the growth and success of my students—knowing that I’ve contributed, even in a small way, to their personal and professional development.

On the flip side, the most challenging aspect is navigating the balance between research, teaching, and service, especially as I strive to contribute to the university, the academic community, and the broader business world.

Being in Southern California also offers a vibrant setting for both personal and professional growth. The region’s diversity, dynamic industries, and strong ties to global business networks creates a rich backdrop for academic work.

What is your current research?

My research is primarily on health care payment systems, which is an area that has become increasingly important as the industry grapples with rising costs and accessibility issues. I’m particularly interested in how different payment models impact the incentives for pharmaceutical companies, health care providers, and patients. My work in this area aims to inform policies that can improve both the affordability and quality of health care, while still providing enough incentive for innovation in drug development.

What do you do to balance your career outside of work?

My four kids keep me on my toes! There’s never a dull moment with a full house, and I find that spending time with them offers the perfect balance to my career. Sometimes, it’s a day at the beach, going on a hike, or simply enjoying a meal together. Family time helps me recharge and maintain perspective. It’s important to stay grounded, and for me, my family is the best way to do that.

Professor Goodman (centre, wearing a pink blouse) and the UCR Business Operations and Supply Chain area hosted a mini-conference featuring guest presenters from four other leading universities

Bonus: Research to Read

Two papers published in Management Science by Goodman explore innovative pricing models for pharmaceuticals, which she says is a highly relevant and accessible topic for a wide range of readers:

“Outcome-Based Pricing for New Pharmaceuticals via Rebates,” 2021

“Indication-Based Pricing for Multi-Indication Drugs,” 2024

“Incentivizing Drug Rediscovery: Exclusivity Extension and Priority Review for Repurposed Therapeutics” is a 2025 working paper by Goodman and co-author Fernanda Bravo. “This paper investigates policy tools to incentivize finding new uses for existing drugs,” says Goodman.

“The general theme of my research is the need for reforms to make health care more affordable and effective by better aligning incentives among the main players.

“This is a topic that resonates with students, business leaders, and even the general public, especially as health care costs continue to rise.”

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Study Finds Moral Costs in Over-pricing for Essentials

ilseu — Tue, 04 Nov 2025 22:21:48 +0000

Study Finds Moral Costs in Over-pricing for Essentials ilseu Tue, 11/04/2025 - 14:21 More News David Danelski (david.danelski@ucr.edu) | UCR News November 05, 2025

When companies hike prices on essentials like food, medicine, or medical devices, the financial rewards may be immediate—but the reputational damage may linger and ultimately cost more in the long run.

Margaret "Meg" C. Campbell

That’s the finding of a study led by UC Riverside School of Business professor Margaret C. Campbell. Consumers, the research shows, judge prices for essential goods and services not just through the lens of supply and demand, but also through their sense of morality.

“If companies are perceived as taking advantage of vulnerable people—like the elderly or the uninsured—they may make short-term profits but suffer long-term damage to their brand,” said Campbell, an associate dean, chair of the marketing department, and Anderson Presidential Chair.

“People stop wanting to do business with companies they see as acting unfairly,” she said.

The study, however, also found this moral judgment doesn’t apply to goods and services seen as non-essential for consumers. If not being able to afford the product doesn’t cause harm, fairness isn’t a real concern.

Published in the Journal of Consumer Research, Campbell’s study introduces what she and her co-authors call the “moral harm model of price fairness.” Drawing on eight controlled experiments with more than 3,000 participants, the researchers examined how people perceive price fairness not just economically, but ethically.

Their findings suggest a simple price tag can provoke complex reactions—especially when the product is important for consumer well-being.

“We found that consumers perceive harm when prices restrict access to a necessary product,” Campbell said. “And when people perceive harm, they judge the pricing as immoral—even if the price follows basic supply and demand.”

For instance, a high price on hearing aids can be seen as far more unfair than a similar price on diamond earrings. The difference? Hearing aids are often necessary for basic functioning and social connection, whereas forgoing jewelry doesn’t cause harm.

To quantify the hidden costs of high prices for essential products or to vulnerable consumers, the research team developed a novel metric called “inferred harm.” This measure captures the psychological and welfare loss consumers infer from a price perceived as unfair.

The study also found that consumers perceive unfairness not just in price hikes, but in static pricing when production costs fall. Companies were often seen as acting immorally by failing to lower prices when they could.

In one experiment, participants were told about prices for eyeglasses. When they learned that a firm providing glasses kept the same prices when their costs decreased, many participants thought this pricing was unfair.

“People think it is unfair to keep the same price when costs decrease for products like eyeglasses that are important for consumer well-being because the firm could afford to charge a lower price,” Campbell said.

A follow-up experiment found that participants perceived the optometry firm’s decision to keep prices the same—despite reduced production costs—as even more harmful when the firm served financially vulnerable customers in a low-income community.

Another experiment placed participants in the role of retailers and found they were willing to lower prices for more vulnerable customers, even at the expense of their own profits. In yet another experiment, participants judged it fair to offer lower prices specifically to vulnerable groups—such as through senior citizen discounts—even when that meant charging higher prices to other consumers, including themselves.

The researchers argue that moral perceptions of pricing can lead to serious consequences, including reputational harm, reduced customer loyalty, and even government intervention. In some cases, legislation has been proposed in response to prices perceived as excessively high for essential goods.

“There’s a real risk for companies that ignore this,” she said. “Beyond losing customers, they may also invite regulatory scrutiny.”

Interestingly, the research also found that lowering prices on harmful or addictive goods—such as alcohol or tobacco—can backfire if seen as encouraging overuse in vulnerable communities.

“Promoting high-alcohol beverages in low-income neighborhoods doesn’t come across as generous,” Campbell said. “It comes across as harmful.”

Campbell said real-world controversies partly inspired the research—such as the pricing of insulin, hearing aids, and the EpiPen, a medical device used to treat life-threatening allergic reactions. The pharmaceutical company Mylan (now part of Viatris Inc.) sparked national outrage in 2016 when it raised the price of a two-pack of EpiPens from $100 to $600.

That backlash led to congressional hearings, lawsuits, and hundreds of millions of dollars in settlements. Mylan later released a generic version at a much lower cost to quell the controversy.

Titled “Painful prices: the moral harm model of price fairness,” the study was co-authored by Justin Pomerance of the University of New Hampshire and Erin Percival Carter of the University of Maine.

So, what should companies take away from this?

“If your customers feel you’re harming people—or failing to help them when you could—they’ll turn away,” Campbell said. “Fairness is about more than numbers. It’s about values.”

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Header image: A woman discerns prices at a grocery store (Getty Images)

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Margaret Campbell

Private Equity Takes Airports to New Heights

ilseu — Mon, 13 Oct 2025 23:52:15 +0000

Private Equity Takes Airports to New Heights ilseu Mon, 10/13/2025 - 16:52 More News David Danelski (david.danelski@ucr.edu) | UCR News October 13, 2025

Hyeik Kim

A comprehensive study spanning two decades and four continents found that private equity ownership significantly boosts airport performance, while other forms of privatization often fall flat.

The study, conducted by UC Riverside School of Business assistant professor Hyeik Kim in collaboration with researchers at three other universities, examined ownership transitions at more than 2,400 airports across 217 countries. It found that when private equity firms take over airport operations, travelers benefit from greater efficiency, more flights, and better service.

Private equity ownership differs from other forms of private ownership, such as airports run by an individual, family, or company. It occurs when investors pool their money to acquire an airport, improve it, and then sell it after a set period, often five, seven, or 10 years.

“Private equity partners have an incentive to make a profit, so they invest in expanding terminals, attracting more flights to and from more destinations, and bringing in better vendors for food and other traveler services,” Kim said.

Under private equity ownership, airports experienced dramatic operational gains. After a private acquisition, passenger traffic surged by an average of 87%, and flights increased significantly. The average number of passengers per flight—a key measure of efficiency—jumped by 21%.

Interestingly, the study’s findings run contrary to other business acquisitions, in which new owners often cut staffing and customer service to increase profits. In fact, private equity-owned airports were less likely to cut staff or services, more likely to win customer satisfaction awards, and saw fewer flight cancellations.

Private equity firms also brought in more savvy management practices, such as charging airlines higher fees to use runways at peak times of day and offering discounts for off-peak hours, Kim said. For example, a coveted 9 a.m. takeoff would cost more than a late-night “red-eye” departure at 11:50 p.m.

Private equity-owned airports thrived in competitive markets. When a rival airport was nearby, private equity firms were more likely to invest and innovate to win over airlines and travelers. These improvements often expanded the overall airport market rather than simply shifting traffic between locations.

The study’s findings come at a time when governments worldwide are increasingly turning to the private sector to finance and manage public infrastructure. Since the 1980s, more than 400 airports have been privatized, including many through long-term leases or outright sales.

A British Airways flight takes off as a Virgin Atlantic aeroplane waits at Terminal 3 of Heathrow Airport in 2020 in London, England.

Because airports in the United States and China are mostly government-owned for security reasons, they served as a control group and a basis for comparing different kinds of private ownership, Kim said.

To reach their conclusions, the researchers built a robust panel dataset of airport performance metrics spanning 1996 to 2019. They used a difference-in-differences methodology, a common technique in economics that compares changes over time between a treated group and a control group.

The benefits of private equity ownership were most pronounced in countries with strong governance and low corruption. In contrast, airports sold to non-private equity firms in high-corruption countries often stagnated or performed worse.

The distinction appears to lie in incentives and oversight. Private equity firms often have reputations to uphold with global investors and face compliance requirements such as the U.S. Foreign Corrupt Practices Act. Airports with other forms of ownership, particularly in poorly regulated environments, may lack such constraints.

The study, titled “All Clear for Takeoff: Evidence from Airports on the Effects of Infrastructure Privatization,” was published by the National Bureau of Economic Research. In addition to Kim, the authors are Sabrina T. Howell of Harvard Business School, Yeejin Jang of the University of New South Wales, and Michael S. Weisbach of Ohio State University.

The researchers caution against overgeneralizing their results. Airports are unique in their economic and regulatory importance and face intense scrutiny—factors that may make them operate better under private equity ownership than other public-serving facilities, such as schools and hospitals.

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Header photo: Travelers queue for customer care service at Barajas Airport on April 28, 2025 in Madrid, Spain. (Photo by Pablo Blazquez Dominguez/Getty Images)

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Nostalgia is an Asset in Company Acquisitions

cfabi002 — Wed, 20 Aug 2025 21:23:02 +0000

Nostalgia is an Asset in Company Acquisitions cfabi002 Wed, 08/20/2025 - 14:23 More News David Danelski (david.danelski@ucr.edu) | UCR News August 20, 2025

Boris Maciejovsky and Jerayr Haleblian

When companies are acquired, conventional wisdom suggests that employee nostalgia for their pre-buyout days is a problem to be eliminated so workers can more quickly adapt to the new owners’ ways of doing business.

A new study published in the journal Strategic Organization led by UC Riverside School of Business professors Boris Maciejovsky and Jerayr Haleblian suggests this thinking is wrong—especially when the new owners want to retain the most talented, productive, and informed workers.

Nostalgia, they found, serves as a comforting and stabilizing force during takeover periods, when employees feel vulnerable, fear losing their jobs, status, or advancement opportunities, and are thus inclined to send out résumés.

“Rather than viewing nostalgia as living in the past, we demonstrate how it serves as a bridge between employees’ pre-acquisition identity and their post-acquisition reality,” explained Haleblian, the business school’s Anderson Presidential Chair in Business. “This temporal bridging is crucial for maintaining organizational commitment during transitions.”

Drawing from psychology research in emotion regulation, social identity, narrative identity, and attachment theories, the study shows nostalgia isn’t mere sentimentality—it’s a powerful tool that helps preserve identity and meaning during disruptive times, said Maciejovsky, an associate professor of management.

“We challenge the prevailing view that nostalgic emotions are maladaptive responses to change,” Maciejovsky said. “Our research shows that nostalgia can transform negative reactions into positive outcomes, thereby mitigating the talent loss that often jeopardizes acquisition success.”

For employees, nostalgia is often triggered by the upheaval of a corporate acquisition that replaces familiar leadership with unfamiliar faces. By understanding these emotions, the authors argue, managers can see that longing for the past is not resistance but a desire to preserve meaning and identity.

The implications are significant in today’s business climate, where acquisitions of startup companies to gain talent and innovations are commonplace—especially in the tech sector, where the strategy is called “acqui-hiring.” Yet retention is poor: in the U.S., 47% of key employees leave within the first year of an acquisition, and 75% within three years, creating a human capital gap that can reduce company value by 10–15%, according to Mentorloop.com.

The study provides practical guidance for managers, outlining two main approaches to support employees during acquisitions. The first involves identity-preserving interventions, such as maintaining familiar company symbols like names, logos, workspaces, and practices. It also includes honoring historical narratives that connect current practices to valued traditions, while ensuring that the missions of the acquiring and acquired companies remain carefully aligned.

The second approach centers on relationship-focused interventions, which emphasize building strong connections among employees through team-building activities, heritage celebrations, and shared experiences that foster a sense of social connection.

“Companies like American Airlines have successfully used heritage celebrations, featuring paint schemes from acquired airlines like TWA, to honor predecessor companies while facilitating integration,” Maciejovsky said. “These aren’t just feel-good gestures—they’re strategic interventions that tap into nostalgia’s regulatory benefits.”

The study emphasizes tailoring nostalgia interventions to different employee categories. Workers with knowledge critical to a company’s value benefit most from identity-based interventions, while “cultural carriers” can help bridge old and new organizational cultures through relationship-focused strategies.

The study, titled “How Nostalgia Facilitates Post-Acquisition Target Employee Retention: An Agenda for Future Research,” was co-authored with Tim Wildschut and Constantine Sedikides of the University of Southampton, UK.

The authors call for future research to test the limits of nostalgia in organizational change, how buyouts differently affect the acquirer and target employees, and how nostalgia impacts other life changes.

“Transparency about change is important, but so is understanding how emotions like nostalgia can be strategically managed,” Maciejovsky said. “Like any powerful tool, nostalgia can have unintended consequences if we don’t use it wisely—but when applied thoughtfully, it can transform acquisition challenges into retention advantages.”

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UCR Scholar Reimagines Student Engagement

ilseu — Tue, 08 Jul 2025 21:21:04 +0000

UCR Scholar Reimagines Student Engagement ilseu Tue, 07/08/2025 - 14:21 More News David Danelski (david.danelski@ucr.edu) | UCR News July 07, 2025

Prof. Kyle Ingram

One way to really learn a topic is to try to master it well enough to explain it to others.

Kyle Ingram, an assistant professor of teaching in the School of Business at UC Riverside, takes this strategy to new heights with a college teaching method he developed called “Carry the Class.” It empowers students by having them lead class discussions, explain reading assignments, or contribute critical perspectives, among other leadership roles.

The results go well beyond student presenters mastering a particular concept. Ingram found that involving students in instruction changed classroom dynamics by fostering a sense of ownership and encouraging more meaningful social interactions among students and faculty.

What’s more, the instruction is structured in ways that allow all students to be heard, validated, and valued—creating a sense of community and shared purpose, Ingram has found. These methods are detailed in a paper titled “Carry the Class: A Strategic Approach to Designing Engagement Around Student Needs,” published in the journal Management Teaching Review.

Ingram’s approach is rooted in a methodology that blends theory, reflective practice, and attention to equity. He draws not only on established scholarship but also on patterns he’s observed firsthand over years of teaching and course redesign.

For example, he noticed years ago that small groups of students often helped teach the class—though unintentionally. They’re the ones who speak up regularly, keep discussions moving, and answer the instructor’s questions. While these discussions are helpful, the social dynamic is inequitable. The students who stay silent may be doing so because they are new to college, managing outside responsibilities, or unsure if they’re welcome in the conversation. Many who opt out do so not out of apathy but because of caution.

“The students who are struggling the most are often the ones whose silence is interpreted as disengagement,” he said.

Students engaging in Kyle Ingram's class

His student-centered model strives to address the dynamic, diverse, and often different needs of undergraduates. Classes can be structured for equity by identifying which students tend to carry the burden of classroom engagement—and then redistributing that load thoughtfully to all students.

“When instructors know which students are most likely to carry the class, they can decide whether to support them or reduce their load,” Ingram explained. “When instructors know who is least likely to engage, they can design ways to activate that group.”

Professors using the Carry the Class method assign each student specific dates to lead class discussions, using a shared spreadsheet so all students can see who is responsible for which segment of the course content. Students receive clear instructions that outline expectations for their facilitation, which is limited to roughly one-fourth of the class time. The professor helps prepare the students by providing readings, discussion prompts, and examples of effective facilitation. Each student is expected to critically analyze the material, identify key themes, and guide a class discussion that promotes peer interaction and critical thinking.

During the discussion, the professor observes and evaluates student performance using a detailed rubric, offering feedback to support improvement. Weekly support and check-ins are offered to ensure preparedness and uphold the reciprocal nature of the method. Ultimately, Ingram’s work points to a profound shift in how we view student success.

“Students oftentimes don’t have the opportunity to say exactly what they want,” Ingram said. “Carry the Class gives them ownership of their contribution.

“They are also coming out of it with a good feeling and gaining some skills that aren’t really part of the class, like public speaking. It’s such a simple way to instill a skill that will aid in their career path, regardless of what they’re studying.”

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Is It Good To Know How Much Your Co-workers Make?

cfabi002 — Tue, 08 Apr 2025 18:52:31 +0000

Is It Good To Know How Much Your Co-workers Make? cfabi002 Tue, 04/08/2025 - 11:52 More News David Danelski (david.danelski@ucr.edu) | UCR News April 07, 2025

Associate Professor of Management Boris Maciejovsky

Many companies keep employee pay shrouded in secrecy while other employers make such information known to their workers. So, what are the impacts of compensation transparency?

A study led by UC Riverside School of Business professor Boris Maciejovsky published in the Journal of Business Ethics found that revealing employee pay unexpectedly influences workplace dynamics in ways never demonstrated before.

When employees learn how their pay stacks up against their peers, their feelings of entitlement—and the salary they believe they deserve—can rise or fall depending on how close they are to the top of performance ranking lists, the study found.

Those with top performance rankings felt entitled to significantly higher compensation than those ranked lower, even when comparing themselves to peers with similar rankings, and were more likely to demand significant raises.

Conversely, those at the bottom of the rankings felt more demoralized and were less likely to ask for a raise, and sometimes felt they didn’t deserve one at all. They thus may have little incentive to do better or collaborate with their co-workers.

The study raises ethical questions about how performance measurement systems might impact employee motivation, collaboration, and perceptions of fairness--especially for those not at the top of the rankings.

"Organizations should carefully consider the type of information shared with employees, as the appropriateness of this information may depend on the employees' relative performance," Maciejovsky said.

Maciejovsky, an associate professor of management, and his coauthors conducted four experiments exploring a phenomenon they call "standard-based entitlement." They demonstrated that an employee's position in company rankings significantly influences how much they feel entitled to compensation they believe they deserve.

Top rankings spur a sense of entitlement to demand more compensation, while lower rankings dampen such a sense of entitlement. These findings have important implications as organizations increasingly adopt pay transparency policies. While transparency aims to promote fairness and reduce inequities, it may create unexpected consequences by reinforcing status differences between high and low performers which impeded teamwork and collaboration, Maciejovsky said.

The research challenges the assumption that transparency always leads to better outcomes in fairness and morale. Instead, it highlights a complex interplay between social comparison and individual perceptions of worth. Employees, the study found, don’t simply respond to how much others make—but rather, how close they are to being the top performer. That nearness to a high-status benchmark, not just the numbers, drives feelings of deservingness.

In one experiment, participants were asked to imagine applying for a new job after learning their performance rank in a previous company. Those told they ranked third out of 500 asked for significantly more than those ranked in the middle or at the bottom—despite receiving identical information about a peer’s salary offer.

Another experiment found that feelings of entitlement acted as the psychological link between rank and requested pay. Those closer to the top felt more deserving, and this translated directly into higher salary demands.

The study’s findings are timely, as more states—including California—enact “right-to-know” laws requiring pay disclosures in job postings. Meanwhile, websites like Glassdoor and Levels.fyi make salary information easier than ever to access.

The study’s title is “Standard-Based Entitlement: How Relative Performance Disclosure Affects Pay Requests.” In addition to Maciejovsky, its authors are Gunyawee Teekathananont of the Imperial College London; Patricia Chen of the University of Texas at Austin; and Stephen M. Garcia of UC Davis.

The researchers emphasize that transparency still has value. It can uncover unfair disparities and help reduce systemic biases. But their findings suggest that employers should also invest in supporting a workplace culture that values growth and contribution across all levels—not just those near the top.

“Transparency is a powerful tool,” Maciejovsky said. “But like any tool, it can have unintended consequences if we don’t use it wisely.”

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Method Predicts Optimal Prices in Uncertain Times

ilseu — Tue, 07 Jan 2025 17:26:29 +0000

Method Predicts Optimal Prices in Uncertain Times ilseu Tue, 01/07/2025 - 09:26 More News David Danelski | UCR News January 03, 2025

Setting the right price for goods or services is essential for just about any business. Prices that are too low can reduce profits. Prices that are too high can drive away customers and lead to losses.

Artificial intelligence (AI) deep learning models can help businesses find the elusive sweet spot by extrapolating prices from historical sales data, which generally show that sales go down as prices go up. But these predictions become unreliable when circumstances differ from the time the source data was generated, such as when the COVID-19 pandemic disrupted manufacturing supply chains and drastically altered consumer demands.

Mingyu “Max” Joo and Hai Che

In a recent study, UC Riverside School of Business professors Mingyu “Max” Joo and Hai Che and their collaborators from Baruch College and Ohio State University have solved this problem by developing a deep learning model that considers both historical sales data and the economic theory of demand. Economic theory of demand accounts for factors such as income levels, consumer preferences, and consumption patterns under various circumstances such as holidays or extreme events like pandemics and natural disasters.

Such a combination allows AI to quantify the unpredictable aspects of how prices affect consumer behavior during unprecedented circumstances, explained Joo, an associate professor of marketing.

“With the help of economic theory, we could better identify demand fluctuations driven by external factors, like a pandemic or holiday fever, versus pure price responses,” Joo said. “This differentiation is crucial for making more reliable predictions.”

For example, traveler demands for hotel rooms are higher during the peak summer months despite higher rates. A standard AI model may mis-predict that higher prices are associated only with higher demands. However, the higher demands are driven by better weather or work schedule constraints, and consumers’ affordability limitations and sense of price fairness will still limit how much they are willing to pay. Such factors are difficult to gauge during uncertain times, Joo said.

The new model bridges a gap between standard AI models and the real-world complexities that businesses face when setting prices, particularly in unprecedented scenarios such as economic shocks and extreme price fluctuations.

To validate their model, the researchers analyzed pre- and post-COVID-19 retail data for breakfast cereals, which had a sales surge during the beginning of the pandemic, but later returned to a pattern of historic sales declines. They compared their new model combining economic theory with standard deep learning and log-linear models and evaluated their ability to predict demand changes as prices fluctuated beyond historical ranges.

The results were compelling. While standard models performed well with data within the known range, their predictions deviated when confronted with post-pandemic price levels. The researchers’ model, however, retained high accuracy, demonstrating a substantial improvement over other methods by reducing generalization errors by up to 50% in some cases. Such errors occur when a model trained on a specific dataset does not perfectly capture the underlying patterns or relationships that hold in different contexts.

“The pandemic was a perfect stress test for our model,” Joo said. “The price and demand patterns during COVID-19 differed significantly from any prior period. This was exactly the type of scenario where typical AI models would struggle to produce accurate forecasts.”

While most AI models that rely heavily on past price data falter when circumstances change, the new model’s ability to utilize economic theory gave it an edge, Joo said.

“We’re combining the best of both worlds—advanced AI techniques and established economic principles—to create a system that’s both intelligent and adaptable,” Joo said. “The future of AI in business isn’t just about exploiting more data; it’s also about leveraging human knowledge from various domains to build smarter, more reliable tools.”

The model is detailed in a paper titled “Theory-Regularized Deep Learning for Demand-Curve Estimation and Prediction.” In addition to Joo and Che, the authors are Chul Kim of the Zicklin School of Business at Baruch College, CUNY; and Dong Soo Kim of the Fisher College of Business at Ohio State University.

It was presented last year at the Proceedings of the IEEE International Conference on AI for Business in Laguna Hills.

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