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Bots increase online user engagement but stifle meaningful discussion, study shows

2025-01-29T09:00:00-05:00

John Lalor (Photo by Angela Santos/University of Notre Dame)

Last July, Meta introduced AI Studio, a tool for users of Meta platforms Facebook and Instagram to create chatbots powered by artificial intelligence (AI). The bots can be used for specific tasks such as generating captions for posts, or more generally as an “avatar” — engaging directly with platform users via messages and comments. Tools similar to AI Studio have also been rolled out for Snapchat and TikTok.

In an interview with the Financial Times in December, Meta’s vice president of product for generative AI said, “We expect these AIs to actually, over time, exist on our platforms, kind of in the same way that accounts do. … They’ll have bios and profile pictures and be able to generate and share content powered by AI on the platform.”

As AI bots become more prevalent on platforms, especially bots that are able to generate new content, there are risks that these bots will share false information and overwhelm users’ social feeds with automatically generated content.

This sparked a discussion about the role of bots on social media platforms. Although Meta removed some of its internally developed AI bots from its platforms, there are still user-created bots on the platforms. Additionally, with heavy investment in generative AI (GenAI) technologies — software programs that use AI to create content and interact conversationally with users — firms may continue to look for ways to increase user engagement on platforms through the use of AI bots.

GenAI bots are not the only bots that can interact with users. Bot accounts on platforms such as Reddit and X follow a series of pre-programmed rules to interact with users or moderate discussion.

Within Reddit communities, those bot accounts profoundly influence human-to-human interactions, according to new research from the University of Notre Dame.

Bots increase user engagement, but at the cost of deeper human-to-human interactions, according to “The Effect of Bots on Human Interaction in Online Communities,” recently published in MIS Quarterly from John Lalor, assistant professor of IT, analytics and operations, and Nicholas Berente, professor of IT, analytics and operations, both at Notre Dame’s Mendoza College of Business, along with Hani Safadi from the University of Georgia.

Nicholas Berente (Photo by Matt Cashore/University of Notre Dame)

Recent work has identified a taxonomy of bots — a system of classifying and categorizing different types of bots based on their functionalities, behaviors and operating environments.

Bots can be very simple or very advanced. At one end of the spectrum, rules-based bots perform simple tasks based on specific guidelines. For example, the WikiTextBot account on Reddit replies to posts that contain a Wikipedia link with a summary of the Wikipedia page. The bot’s automated nature allows it to see every post on Reddit via an application programming interface (API) to check each post against its hard-coded rule: “If the post includes a Wikipedia link, scrape the summary from the wiki page and post it as a reply.” These bots are called “reflexive” bots.

Other bots on Reddit moderate conversations in communities by, for example, deleting posts that contain content that goes against community guidelines based on specifically defined rules. These are known as “supervisory” bots.

“While these bots are rigid because of their rules-based nature, bots can and will become more advanced as they incorporate generative AI technologies,” said Lalor, who specializes in machine learning and natural language processing. “Therefore, it’s important to understand how the presence of these bots affects human-to-human interactions in these online communities.”

Lalor and his team analyzed a collection of Reddit communities (subreddits) that experienced increased bot activity between 2005 and 2019. They analyzed the social network structure of human-to-human conversations in the communities as bot activity increased.

The team noticed that as the presence of reflexive bots (those that generate and share content) increases, there are more connections between users. The reflexive bots post content that facilitates more opportunities for users to find novel content and engage with others. But this happens at the cost of deeper human-to-human interactions.

“While humans interacted with a wider variety of other humans, their interactions involved more single posts and fewer back-and-forth discussions,” Lalor explained. “If one user posts on Reddit, there is now a higher likelihood that a bot will reply or interject itself into the conversation instead of two human users engaging in a meaningful back-and-forth discussion.”

At the same time, the inclusion of supervisory bots coded to enforce community policies led to the diminished roles of human moderators who establish and enforce community norms.

With fewer bots, key community members would coordinate with each other and the wider community to establish and enforce norms. With automated moderation, this is less necessary, and those human members are less central to the community.

As AI technology — especially generative AI — improves, bots can be leveraged by users to create new accounts and by firms to coordinate content moderation and push higher levels of engagement on their platforms.

“It is important for firms to understand how such increased bot activity affects how humans interact with each other on these platforms,” Lalor said, “especially with regard to their mission statements — for example, Meta’s statement to ‘build the future of human connection and the technology that makes it possible.’ Firms should also think about whether bots should be considered ‘users’ and how best to present any bot accounts on the platform to human users.”

Contact: John Lalor, 574-631-5104, john.lalor@nd.edu

Simple changes to social media messaging can help persuade people to heed wildfire evacuation orders

2025-01-09T16:54:00-05:00

Alfonso Pedraza-Martinez (Photo by Barbara Johnston/University of Notre Dame)

As deadly wildfires rage in Southern California and evacuation orders expand throughout the region, disaster response organizations are charged with providing regular updates on the magnitude of destruction and resources used in response efforts.

Effective communication during disasters is critical to saving lives, but getting people to heed warnings and follow evacuation orders can sometimes prove difficult. Relief organizations’ updates can inadvertently heighten fear and reduce public compliance with safety instructions.

According to research from the University of Notre Dame, simple tweaks to social media messaging can make a huge difference in getting people to take safety mandates seriously.

Reporting the numbers of people, fire engines and helicopters being deployed to fight the fires increases public fear due to a psychological phenomenon known as negativity bias, which causes people to pay more attention to the negative implications of this information (e.g., the fire is growing). That fear can reduce compliance with safety warnings. However, listing the crew’s previous firefighting experience significantly reduces fear and improves public intention to heed warnings, according to a forthcoming study from Alfonso Pedraza-Martinez, the Greg and Patty Fox Collegiate Professor of IT, Analytics and Operations at Notre Dame’s Mendoza College of Business.

Pedraza-Martinez conducted the study, “How Operational Updates Shape Emotional and Behavioral Responses to Disasters,” along with Sebastian Villa from the University of Colorado, independent researcher Patricia Moravec, and Eunae Yoo and Lu (Lucy) Yan from Indiana University.

According to the National Emergency Communications Plan established by the Department of Homeland Security in 2008, relief organizations such as CAL FIRE (California’s Department of Forestry and Fire Protection) must provide operational updates during emergencies to keep the public informed. The messaging overwhelmingly is distributed via social media. In 2022 close to 70 percent of people in the U.S. turned to social media for information during disasters.

By analyzing response data from 27 California wildfires that happened in 2017, the team finds that CAL FIRE’s status reports as well as its information on the deployment of people and machines increased fear among social media users, discouraging them from heeding official warnings.

“CAL FIRE’s Palisades Fire Incident Update today (Jan. 9) at 4:39 a.m. read, ‘Numerous firefighting air tankers from throughout the state are flying fire suppression missions as conditions allow,’” Pedraza-Martinez noted. “Stating the following: ‘Average crew expertise is (xyz) years, with more than (xyz) fires contained’ would have helped to greatly reduce fear and increase people’s intention to heed warnings when shared on social media — an inexpensive and easily implementable intervention.”

Previously published research from Pedraza-Martinez also examined social media communications during wildfires, offering improved strategy regarding timing.

That study found user engagement increases when a disaster relief organization’s national headquarters leads the production of messaging and the organization’s local accounts follow by sharing that messaging to either a matching or a mismatching audience. The national and local channels both should target the same audiences during the early wildfire response when uncertainty is very high, but they should individualize audiences during recovery while the situation remains critical but uncertainty has decreased.

“Research aside, if you have been ordered to evacuate, do it as fast as possible,” said Pedraza-Martinez, who specializes in humanitarian operations and disaster management. “It would be tough to outrun the deadly combination of an uncontrolled wildfire and strong winds heading in your direction.”

Contact: Alfonso Pedraza-Martinez, 574-631-8734, apedraz2@nd.edu

Dockworkers reconsider strike that shut down East and Gulf Coast ports: A conversation with supply chain expert Kaitlin Wowak

2024-11-14T14:05:00-05:00

The union representing dockworkers at U.S. ports walked away from the negotiating table with port employers this week over automation concerns as the two sides face a mid-January deadline to finalize a deal and prevent the resumption of a strike.

Kaitlin Wowak is the Robert and Sara Lumpkins Associate Professor of Business Analytics at the University of Notre Dame’s Mendoza College of Business. An award-winning researcher, Wowak focuses on strategic supply chain management and disruptions, including product shortages.

Kaitlin Wowak (Photo by Barbara Johnston/University of Notre Dame

She answered some questions about the first large-scale strike in nearly 50 years from U.S. East Coast and Gulf Coast dockworkers in October, as well as what a second strike could mean for the U.S. supply chain.

Which ports are affected?

The dockworker strike affected about 36 ports in the U.S. It’s not just the number of ports affected that was concerning, it was their location that was particularly problematic. The strike affected ports from Maine to Texas, which means product flow into or out of any port along the East Coast and Gulf Coast was impacted.

How could this affect consumers?

While the dockworkers’ union walked away from negotiations with East Coast and Gulf Coast employers this week, they have until Jan. 15 to come to an agreement. If an agreement is not reached by then, the strike will resume. The good news for consumers is that this impending strike should not impact holiday shopping.

If an agreement cannot be reached by mid-January, consumers are likely to see the most immediate impact on perishable food items that are sourced outside the U.S., such as bananas, which are the most-consumed fruit in the U.S. Unfortunately, the ports that may be affected by the strike handle about 75 percent of the country’s banana imports, which means consumers could see higher prices for bananas and other perishable food products imported into the U.S. by late January, if an agreement is not reached. Given the global nature of supply chains — and the fact that over 90 percent of products entering the U.S. arrive by ship — there could be a cascading impact on numerous other consumer products from pharmaceutical drugs to apparel and toys if an agreement is not reached.

How will the strike affect retailers? Are they making contingency plans?

The good news is that retailers should not be affected too much over the holiday season. If a deal is not finalized by mid-January, the specific contingency plans for retailers depend on the products they sell. Retailers, for example, who sell shelf-stable items can place larger and more frequent orders in an effort to increase how much inventory they keep on hand and account for longer lead times. Retailers who sell perishable products have to consider other contingency plans such as moving products via air transportation rather than by cargo ship. This strategy reduces the lead time for products (thus the chance of products spoiling due to delays at ports) and enables consumers to buy perishable products in prime condition, but it significantly increases the transportation cost, which could be passed on to consumers.

Will some areas of the country be harder hit by a shortage of goods?

The entire country could be hit hard by another strike, but for different reasons. The East Coast and Gulf Coast would be hit hard as the flow of products into or out of ports along that entire coastline would cease again. The West Coast could also experience indirect effects as the strike could prompt companies to reroute their containers to ports on the West Coast, which means several things: (1) significantly higher transportation costs for companies; (2) considerably higher demand for truckers to move products needed on the East Coast, but delivered to the West Coast; and (3) a surge in demand for ports on the West Coast, resulting in long delays for cargo ships trying to unload inventory. Modern supply chains are extremely complex and interconnected, which means the cascading impact of the strike across the country could be massive.

Historically, has anything of this magnitude happened before and what effect did it have?

Two strikes in such close temporal proximity would make history — not in a good way, though. Given how critical ports are to the economy, we rarely see port strikes. The last time a strike impacted ports in the U.S. was almost 50 years ago in 1977. That strike lasted 44 days. Given that the volume of products imported and exported out of the U.S. has increased considerably since the 1970s, another strike that impacts ports in 2025 could cripple the U.S. supply chain.

How could the strike impact the economy?

If a deal is not finalized by mid-January, it is estimated that another strike could cost the economy about $4 billion per day.

Can the government intervene, and should it do so?

Everyone is hopeful that the parties involved can reach an agreement, but if the strike resumes, the government may have to intervene in order to keep the U.S. supply chain functioning.

Contact: Kaitlin Wowak, katie.wowak@nd.edu

High color complexity in social media images proves more eye-catching, increases user engagement

2024-10-30T11:38:00-04:00

Vamsi Kanuri (Photo by Matt Cashore/University of Notre Dame)

Social media has become the main stage for marketing in the digital age, and the adage “content is king” has never been more relevant.

Marketers are increasingly focused on creating social media content to capture user attention and drive engagement with content. One proven strategy to increase such engagement is using social media images. A 2021 report by the social media management software company Sprout Social found that nearly 53 percent of content marketers consider images crucial for achieving their social media goals, and approximately 70 percent of social media users prefer interacting with image-based posts over text-only content.

Despite this clear preference for social media images, there has been little research about which specific image characteristics most effectively boost user engagement and when that engagement takes place. A new study from the University of Notre Dame addresses how color complexity affects user engagement on social media.

Posts containing complex images with more varied color patterns tend to capture greater user attention and lead to increased engagement, according to lead author Vamsi Kanuri, the Viola D. Hank Associate Professor of Marketing at Notre Dame’s Mendoza College of Business. Kanuri’s findings, “Standing out from the crowd: When and why color complexity in social media images increases user engagement,” were recently published in the International Journal of Research in Marketing.

Along with Christian Hughes from Case Western Reserve University and Brady Hodges from the University of Missouri, Kanuri examined color complexity — measured as the variation in colors across pixels in an image. Images with higher color variation require more cognitive processing, hence they are perceived to be more complex than those with lower color variation.

Color complexity increases across the three images: the bottom image shows minimal color variation, the middle exhibits moderate variability, and the top image displays the highest level of complexity, with diverse colors in both the main object and its surrounding space

The significance of color in marketing is well documented, influencing everything from brand perception to purchase intentions. However, the particular role of color complexity in social media engagement had not been explored before Kanuri and his team turned their attention to it.

Using advances in computer vision algorithms to measure color complexity and the biometric eye-tracking method to study attention, this research explores whether and how varying levels of color complexity can enhance user engagement with social media images.

“We find that more complex images in a social media post tend to capture greater user attention, leading to increased engagement with those posts,” said Kanuri, who specializes in digital and multichannel marketing. “This supports the notion that higher color complexity can be beneficial.”

The team also uncovered several nuances of color complexity that marketers should consider as they work to maximize user engagement.

First, the effectiveness of color complexity varies based on several factors. For instance, posts made later in the day and those featuring longer images that take up more screen space on the viewing device tend to accentuate the effect of color complexity. This suggests the timing and visual prominence of posts influence how well images with certain color complexity can maximize engagement.

Conversely, the study found color complexity is less effective at driving user engagement when images are paired with text containing negative sentiments. This highlights the importance of the accompanying text’s tone and how it can affect the perception of even well-designed images.

“Interestingly, we also found that complex text accompanying an image in a social media post can actually strengthen the link between color complexity and user engagement, contrary to initial expectations,” Kanuri said. “This counterintuitive finding suggests more intricate textual content might encourage users to pay more attention to the images.”

The study found that using larger images with greater color complexity later in the day and accompanied by complex text containing positive sentiments leads to maximum user engagement.

For marketers and content creators, the implications are clear, Kanuri said. “Investing in the careful curation of social media images — especially those with high color complexity — can lead to better user engagement. It’s crucial to align image characteristics with other post features and to be mindful of the timing and context of social media interactions.”

Kanuri encourages marketers to integrate these insights into their content strategies and continue to learn about factors that influence how users interact with their posts. “By doing so, they can optimize their social media presence and achieve greater success in their digital marketing efforts,” he said.

Contact: Vamsi Kanuri, 574-631-2399, vkanuri@nd.edu

Law 91��Ƶ Professor Derek Muller joins CNN as contributor for 2024 presidential election

2024-10-25T14:57:00-04:00

Derek Muller being interviewed by Laura Coates Live on CNN

Nationally recognized election law scholar Derek T. Muller, a professor of law at the University of Notre Dame Law 91��Ƶ, has joined CNN as a contributor for the 2024 election cycle to provide his perspective and context to the network’s coverage of the presidential race.

Muller’s scholarship focuses on the role of states in the administration of federal elections, the constitutional contours of voting rights and election administration, the limits of judicial power in the domain of elections and the Electoral College. His recent research has examined election subversion and how courts can prevent state officials from undermining election results, and reducing election litigation, which identifies the explosion in spending in election-related litigation in the last decade and what can be done to reduce it.

“Derek’s selection by CNN as an election law contributor underscores the vital role that scholars play as public intellectuals,” said G. Marcus Cole, the Joseph A. Matson Dean and Professor of Law at Notre Dame Law 91��Ƶ. “His expertise will help illuminate the complexities of election law for the public, providing objective analysis that is essential in a time when informed discourse is more important than ever.”

Muller has been interviewed by CNN’s Laura Coates and Jim Acosta in the aftermath of eligibility decisions that kept former President Donald Trump’s name off the ballot during the 2024 presidential primaries. He was quoted by John Fritze and Marshall Cohen about how courts or Congress might handle challenges to Trump’s eligibility. And he has spoken with Tierney Sneed about potential legal issues after President Joe Biden announced he would not seek reelection.

Muller testified before the United States Senate in support of the Electoral Count Reform and Presidential Transition Improvement Act, a law that was enacted in 2022. The law reduces ambiguities in language, gives clear deadlines for resolving election disputes and makes it harder for Congress to challenge the outcome of presidential elections. Muller described how the act will work in commentary at The Conversation. The new law will play a crucial role this year when electors meet to cast their votes on December 17 and when Congress convenes to count votes on January 6, 2025.

A member of the American Law Institute, Muller is the co-reporter on a new Restatement of the Law, Election Litigation. He has published extensively, and his op-eds have appeared in the New York Times, the Wall Street Journal and the Los Angeles Times. Muller has testified before Congress and is a regular contributor at the Election Law Blog and The Conversation.

Established in 1869, Notre Dame Law 91��Ƶ is the oldest Catholic law school in the United States. The Law 91��Ƶ’s approach to legal education is informed and inspired by faith. Students are trained to view the law as a vocation in service to others, to explore the moral and ethical dimensions of the law, and to discover their unique roles in furthering the cause of justice.

Contact: Derek T. Muller, dmuller@nd.edu

Definitions of ‘church’ and ‘association of churches’ must be updated to prevent abuse of special legal protections, study argues

2024-10-14T11:00:00-04:00

Lloyd Hitoshi Mayer

In 2020, the IRS labeled the Family Research Council an association of churches, making it exempt from certain tax filing requirements and eligible for special protection from IRS audit.

This action led members of Congress to ask the Treasury secretary and the IRS commissioner for a review of organizations claiming church status.

New research highlights how the federal tax law definitions for “church” and “convention or association of churches” require revision to address multiple recent developments in the American religious landscape, including religious organizations seeking such status when Congress did not intend them to benefit from the special protections for such organizations. This research, “21st Century Churches and Federal Tax Law,” from University of Notre Dame Law 91��Ƶ Professor Lloyd Hitoshi Mayer and Loyola Marymount University Professor Ellen Aprill, was published in July in the University of Illinois Law Review.

Other new developments, including virtual participation in worship services by congregants and the increasing diversity of faith communities, are additional reasons for such a revision, Mayer and Aprill write. They also recommend a government study of compliance by all charities that are prohibited by tax law from supporting or opposing candidates to address public perceptions that churches and other charities often violate this rule.

Because the First Amendment to the Constitution protects the free exercise of religion, Congress granted “churches” and “conventions or associations of churches” special protections under federal tax law. The IRS has interpreted “church” to include houses of worship of all faiths, including synagogues, mosques and temples. And the IRS has interpreted “convention or association of churches” to include organizations with member churches from either a single denomination or multiple denominations.

As with other charities, churches and associations of churches can receive tax-deductible charitable contributions and do not pay federal income tax. These organizations are subject to various limits on their activities — including the prohibition on supporting or opposing candidates for public office — as a condition of receiving these benefits.

But unlike other tax-exempt charities, Mayer said, “Churches and associations of churches do not have to apply to the IRS for recognition of their tax-exempt status. They also do not have to file publicly available annual information returns, as do other tax-exempt nonprofits. And federal tax law protects them from audit by requiring a high-level IRS official to reasonably believe that they have violated the federal tax rules before beginning an investigation.”

To distinguish churches from other religious nonprofits, the IRS has long relied on a 14-factor test. Those factors include ecclesiastical government, formal doctrine, a distinct membership, ordained ministers, a regular congregation and religious services. The IRS does not require that all factors be present and does not give any factor controlling weight.

“In recent years, courts have become increasingly uncomfortable with the IRS’ 14-factor test because it draws heavily on the traditional characteristics of Protestant Christian churches,” Mayer said. “It therefore may be a poor fit for houses of worship of other faiths, especially given the increasing diversity of faith communities.” These courts have instead adopted an associational test that focuses on regular religious services and other gatherings of congregants.

Other recent developments have highlighted how the IRS’ approach is a poor fit for 21st-century houses of worship. Those include virtual gatherings by congregations, which ramped up during the COVID-19 pandemic, and a rising number of religious ministries seeking church or association of churches status to claim the special tax benefits these groups enjoy.

The IRS’ Family Research Council decision led members of Congress to send letters to the Treasury secretary and the IRS commissioner questioning whether it was correct and asking the IRS to review claimed church or association of churches statuses more generally. Under the IRS’ current view that associations of churches include organizations with church members from multiple denominations, Mayer and Aprill say that it appears the IRS ruling was correct.

Additionally, there has been a growing public perception that tax-exempt charities, and particularly churches, often violate the prohibition on supporting or opposing candidates.

To reflect all these developments, Mayer and Aprill recommend the IRS change its definition for churches to the associational one adopted by some courts, but modified to accommodate virtual participation in religious services. They also recommend that Congress limit associations of churches to single-denomination organizations and that the government study the extent to which tax-exempt charities, including churches, violate the prohibition on supporting or opposing candidates.

Religious organizations of all types would still enjoy tax exemptions and the ability to receive tax-deductible charitable contributions. The recommended changes would only affect certain religious organizations by requiring them to file publicly available returns with the IRS and taking away some of the protections against IRS audit..

“Limiting that eligibility to churches and single-denomination associations of churches will reduce the risk that other tax-exempt charities will seek to avoid government and public oversight for nefarious purposes while still protecting the special role that churches have in our society,” Mayer said.

Contact: Lloyd Hitoshi Mayer, 574-631-8057, lmayer@nd.edu

Firms that withdrew from Russia following Ukraine invasion earn higher consumer sentiment

2024-09-23T10:55:00-04:00

Shankar Ganesan (Photo by Matt Cashore/University of Notre Dame)

Following Russia’s 2022 invasion of Ukraine, many companies with operations in Russia withdrew from or severely curtailed their Russian operations. For example, Dell and McDonald’s ceased all operations in Russia after the invasion.

Many experts have argued that the corporate response to the Ukraine war is a striking example of stakeholder capitalism, a model where corporations are responsible for considering the interests of various stakeholders — including employees, customers, communities, governments and the environment — and not just their shareholders. In contrast, opponents of the stakeholder view argue that firms should focus on the principal shareholders.

New research from the University of Notre Dame explores the impact of such corporate actions on consumer mindset metrics.

Decisions to withdraw from Russia since its invasion of Ukraine positively impacted consumer sentiment, especially for companies with strong environmental, social and governance (ESG) reputations, according to lead author Shankar Ganesan, the Raymond W. and Kenneth G. Herrick Collegiate Professor of Marketing at Notre Dame’s Mendoza College of Business, along with Girish Mallapragada from Indiana University.

Ganesan’s research, “Navigating Geopolitical Turmoil: Corporate Responses to the War in Ukraine and Its Impact on Consumer Mindset,” is forthcoming in the Journal of Public Policy and Marketing.

The Ukraine conflict serves as an important backdrop for the examination of corporate sociopolitical activism, where companies take public stances on controversial social and political issues.

Recent expansion in Russia by SLB (a global technology company formerly named Schlumberger) provides a stark contrast to the companies that withdrew from Russia following the invasion of Ukraine.

“This ongoing situation directly relates to our research,” said Ganesan, who studies interorganizational relationships and customer relationship management. “While many companies that withdrew from Russia saw a boost in consumer sentiment, SLB’s actions may test the limits of corporate reputation and consumer mindset in geopolitical crises.

“SLB’s decision to continue and even expand operations in Russia, despite being labeled an international sponsor of war by Ukraine, presents a real-world case study of the potential long-term effects on brand reputation and consumer mindset metrics that our paper explores,” he said. “It also highlights the complex interplay between corporate decisions, geopolitical pressures and consumer expectations in today’s global business environment.”

The study looked at the impact of these decisions on three critical consumer mindset metrics: net brand buzz, brand consideration set (group of products a buyer evaluates when making a purchase decision) and purchase intent. It also analyzed how these effects are moderated by factors such as a company’s ESG reputation, the timing of its decision relative to industry peers and whether the firm operates in a business-to-business (B2B) or business-to-consumer (B2C) context.

Companies that withdrew from Russian operations experienced a notable increase in net brand buzz, reflecting positive consumer sentiment over an eight-week period following the announcement, suggesting consumers generally favor companies that take a stand against geopolitical aggression.

The positive consumer sentiment was even stronger for companies with a robust ESG reputation. These firms saw enhanced brand consideration and purchase intent, indicating that a strong ESG profile can magnify the benefits of socially responsible actions during geopolitical crises.

“Interestingly, companies that delayed their withdrawal until after their industry peers saw a greater boost in net buzz,” Ganesan said. “This indicates that while early action is valued, there are strategic advantages to carefully timing such decisions in complex geopolitical environments.”

The research also uncovered variations in consumer reactions based on whether a company operates in a B2B or B2C context, providing nuanced insights for businesses on how different markets might perceive their actions during geopolitical crises.

This study contributes to understanding the relationship between such corporate actions and consumer mindset metrics in a novel geopolitical context, providing valuable insights for managerial decision-making and public policy.

When operating in politically sensitive regions, companies should account for the diverse interests of stakeholders, invest in ESG as a form of reputational insurance, carefully time major decisions, monitor consumer metrics and tailor strategies to industry context.

Ganesan challenges policymakers to understand the complex pressures businesses face during geopolitical crises and provide clear guidance that considers the varying impacts on B2B and B2C sectors.

He said, “By understanding the intricate relationship between corporate actions, geopolitical events and consumer perceptions, businesses can navigate these challenging waters more effectively, balancing ethical imperatives with business objectives.”

Contact: Shankar Ganesan, 574-631-5925, sganesan@nd.edu

Big Tech privacy policies limit ad variety, reducing performance and revenue

2024-09-09T10:44:00-04:00

Shijie Lu

In 2020, Google began the practice of “data minimization,” or automatically deleting user data including location history and web activity after 18 months, in a bid to improve user privacy.

Such privacy-preserving policies by Google and other tech giants, especially those that reduce the retention period of consumer behavioral data, result in unintended consequences for advertisers, according to a new study from the University of Notre Dame.

The policies may limit ad variety, impacting both ad performance and revenue, according to lead author Shijie Lu, the Howard J. and Geraldine F. Korth Associate Professor of Marketing at Notre Dame’s Mendoza College of Business. Lu’s research, “Within-Category Satiation and Cross-Category Spillover in Multi-Product Advertising,” is forthcoming in the Journal of Marketing.

Along with Sha Yang from the University of Southern California and Yao (Alex) Yao from San Diego State University, Lu examined how policies designed to enhance consumer privacy affect advertising effectiveness, consumer behavior, advertiser profits and platform revenues.

The team focused on multi-product ads (MPAs), where multiple product advertisements are displayed within a single ad space.

“We found that while these privacy measures protect consumer data, they can inadvertently decrease consumer engagement and satisfaction with ads, ultimately resulting in fewer clicks and reduced ad performance,” said Lu, who specializes in online advertising and user-generated content. “This decline is largely driven by the reduction in ad variety leading to less diverse and less relevant ads displayed in MPAs due to the shorter periods of consumer data used for targeting.”

According to the study, when a platform’s privacy policy uses fewer days’ worth of behavioral history data to match users with advertisers, the result is that fewer categories such as men’s clothes, hiking equipment, basketball t-shirts and men’s shoes will appear, reducing the diversity of the ads.

Therefore, if a consumer has clicked all four of those product categories over the past 14 days, but only one of them in the past day, a policy that uses data from the past 14 days will have a greater variety of ads for them than a policy using only data from the past 24 hours. In that case, only one ad category would qualify, significantly reducing the variety of ads.

The team found the decrease in ad variety intensifies “within-category satiation,” causing consumers to lose interest in ads for similar products within the same category after repeated exposure. At the same time, it diminishes “cross-category complementarity” where exposure to ads from different product categories enhances consumer interest in both.

“These insights are critical for platforms as they strive to balance consumer privacy concerns with the need to sustain effective advertising strategies,” Lu said.

The study explored two additional policy scenarios related to ad variety.

First, it analyzed the economic impact of adjusting ad-serving policies by incorporating predicted clicks and bids (the amount of money an advertiser is willing to pay for an ad). Predicted clicks, which reflect consumer behavior influenced by ad variety, proved more advantageous than relying solely on bids in assigning ad slots. By incorporating both factors, platforms can improve ad effectiveness and increase revenue without compromising advertiser profits or consumer engagement.

Next, the researchers investigated how modifying the reservation price (minimum bid) in ad auctions influences ad variety and consumer behavior. They found that higher reservation prices reduce the number of product categories in MPAs, leading to a decrease in ad variety.

“While this approach may boost platform revenue in the short term, it has a negative impact on consumer satisfaction and advertiser profits,” Lu said. “As a result, platforms must carefully calibrate reservation prices to balance their revenue objectives with the potential effects on consumer experience and advertiser returns.”

For practitioners and stakeholders in the advertising industry, the research underscores the importance of understanding the trade-offs between privacy policies and ad effectiveness. Platforms should consider the implications of their privacy-preserving measures on ad variety and consumer engagement. While protecting consumer data is essential, it is equally important to ensure the measures don’t undermine the effectiveness of advertising strategies.

“We encourage ad platforms to use our insights to refine their ad-serving policies,” Lu said. “By finding a balance between data privacy and ad effectiveness, they can better meet consumer needs and maintain robust revenue streams. Advertisers should also be aware of how changes in data usage and ad variety can affect their bidding strategies and overall campaign performance.”

The team hopes their findings will inspire more nuanced approaches to ad-targeting policies and foster a more effective and consumer-friendly advertising environment.

Contact: Shijie Lu, 574-631-5883, slyu@nd.edu

Carter Snead testifies before US Senate Judiciary Committee

2024-06-13T12:09:39-04:00

O. Carter Snead

O. Carter Snead, the Charles E. Rice Professor of Law and director of the de Nicola Center for Ethics and Culture at the University of Notre Dame, offered expert testimony on Wednesday (June 12) before the U.S. Senate Committee on the Judiciary on “Crossing the Line: Abortion Bans and Interstate Travel for Care After Dobbs.”

One of the world’s leading experts on public bioethics — the governance of science, medicine and biotechnology in the name of ethical goods — Snead also testified March 20 before the Senate Judiciary Committee on the current legal landscape following the landmark Supreme Court decision in Dobbs v. Jackson Women’s Health Organization, which overturned Roe v. Wade.

In his remarks, Snead again noted that the Supreme Court’s decision in Dobbs restored the authority of the people to address the issue of abortion through their elected representatives, thus bringing the United States into “alignment with nations around the world, who have always addressed the issue through the political process.” He noted the majority of countries around the world “restrict elective abortion between 10 to 14 weeks of pregnancy.”

Snead offered “four suggestions for good governance in this difficult area.”

First, he stressed that to govern wisely, justly and humanely, the issue of abortion must be discussed in its full complexity — that it is not simply a variation of the health care debate (only 7 percent of OB/GYNs in private practice provide abortions), nor is it reducible simply to the values of equality or bodily autonomy of women facing serious burdens on their health and future.

Snead testified, “The issue challenges us to consider how these goods stand in relation to the life of the unborn child — a whole, living, distinct member of the human species who, if all goes well, will move herself along the trajectory of development from embryo to fetus to newborn, provided she has the necessary support and sustenance in her mother’s womb — the first place of belonging for every human being. She is not a trespassing stranger; she is the biological child of this particular mother and father.”

Snead argued that public debate is impoverished when those who support abortion rights fail to acknowledge this reality, but our discourse also suffers when pro-life officials fail to address the sometimes crushing burdens of unwanted pregnancy and parenthood.

Second, Snead urged lawmakers to be clear about their positions on the limits on elective abortion.

“There are 10,000 late-term abortions in America every year — more than six times the number of annual gun homicides for children and teens,” he stated. “At least 148 U.S. clinics provide them. Social science evidence and the statements of late-term abortion practitioners such as Warren Hern suggest that these are frequently not limited to cases involving health risks to mothers or a diagnosis of fetal abnormality.”

Third, Snead underscored the need to fairly and accurately characterize the legal landscape. He noted that every state in America allows abortion to save a mother’s life and the vast majority allow it for lesser health risks, providing factual context to recent highly publicized cases from Texas.

“Texas’ law allows abortions where in a physician’s ‘reasonable medical judgment,’ a mother has a life-threatening condition that could cause substantial bodily impairment,” he testified. “Texas just passed a bipartisan law clarifying that previable premature rupture of membranes falls under the health exception and reaffirming that treatment of ectopic pregnancy is not an ‘abortion’ under the law. There are no restrictions on miscarriage management. The Texas Supreme Court just affirmed that serious health risks need not be imminent to justify abortion and that any clinician who says so ‘is simply wrong in that legal assessment.’”

Snead noted that Texas does not authorize abortions solely because of an unborn baby’s disability or poor prognosis. The state also extended postpartum Medicaid coverage from six months to one year; allocated $165 million to support mothers, babies and families; and passed a recent maternal mental health law.

In his fourth recommendation, Snead invited committee members to reimagine the human context in which the question of abortion arises — a theme central to the de Nicola Center’s Women and Children First Initiative.

“Instead of a zero-sum conflict among strangers over the permissible use of lethal force, think of it as a crisis facing a mother and her child,” Snead said. “Then ask how we can work together across our differences to come to their aid not just during pregnancy, but throughout life’s journey.”

Snead’s research explores issues relating to abortion, neuroethics, human embryo research, assisted reproduction and end-of-life decision-making.

He is the author of “What It Means to be Human: The Case for the Body in Public Bioethics,” which was named by the Wall Street Journal as one of the “Ten Best Books of 2020.” In 2022, it was listed in the New York Times as one of “Ten Books to Understand the Abortion Debate in the United States.” Prior to joining the law faculty at Notre Dame, Snead served as general counsel to the President’s Council on Bioethics.

Smartphones negatively impact charitable giving, revealing need for nonprofits to adapt messaging

2024-06-06T09:00:00-04:00

Kristen Ferguson

Charities seeking opportunities for growth have experienced a recent surge in online giving, growing by 42 percent since 2019, according to the most recent Charitable Giving Report from the Blackbaud Institute.

Mobile giving, in particular, has gained popularity, with 28 percent of all online contributions coming from smartphones in 2021 — a percentage that has more than tripled since 2014.

Not all online giving is equal, however. New research from the University of Notre Dame reveals a “mobile giving gap,” which demonstrates that consumers are less likely to donate to charities when using smartphones than when using PCs.

“The mobile giving gap: The negative impact of smartphones on donation behavior,” recently published online by the Journal of Consumer Psychology, was authored by Kristen Ferguson, assistant professor of marketing at Notre Dame’s Mendoza College of Business, along with Stefan Hock and Kelly Herd from the University of Connecticut.

Charities have long recognized the benefits of appealing to consumers in a variety of ways, including door-to-door, direct mailers, personal phone calls and, more recently, through virtual reality. Because of the major differences in these methods, charities often adapt their appeals to align with the solicitation style.

The study shows the need to further fine-tune their strategies.

“Although charities are willing to adapt their appeals to these different channels, they have not yet recognized the importance of adapting their online appeals across device types,” Ferguson said.

Organizations typically use identical appeals across device types, according to a review of the donation pages of the Forbes Top 100 Charities.

Previous research identified a “mobile mindset,” recognizing that consumers process information and behave differently on their smartphones than when on their laptops or desktop computers.

This study looks more closely at this phenomenon, in part through a collaboration with German charity Aktion Deutschland Hilft, an alliance of German humanitarian aid agencies.

“Our research describes critical attributes of a mobile mindset, in which consumers are more self-focused and less ‘other-focused’ on their smartphones than on their PCs,” Ferguson said. “This is because they constantly have their smartphones with them and view the devices as a part of the self, so are more likely to think about themselves rather than others when using them.”

Donating requires people to focus on and empathize with others, but that can be sabotaged by smartphones inducing self-focus.

“Charities would be best served by working to induce other-focus for smartphone users,” Ferguson said. “Specifically, those appeals would highlight the fact that the main beneficiary of support is another individual or group.”

An ad highlighting others may specify that the donor can “help those less fortunate,” “help make the community a better place for everyone” or “imagine how your donation will enhance the lives of those affected by cancer.”

“When donation appeals explicitly highlight the needs of others, people using smartphones will become less focused on their own and more conscious of others’ needs, which will dissipate the mobile giving gap,” Ferguson said.

Companies, including many nonprofits, spend more than $224 billion annually on Google Ads, according to Statista. In fact, highlighting the value of this platform for nonprofits, Google Ads offers eligible nonprofits $120,000 of free Google ads per year. Since 2003, the Google Ads Grants program has provided $10 billion in free advertising to more than 115,000 nonprofits across 51 countries, according to Nonprofits Source.

Charities can better leverage this opportunity by developing ads that directly target consumers on either smartphones or PCs.

Although mobile giving may appear to be on the rise, the uptick is likely driven by increases in overall smartphone ownership, the researchers said. This study suggests charities are leaving money on the table by using a one-size-fits-all strategy for all forms of online giving.

“Charities see value in measuring mobile giving as a separate category of online giving, but they still don’t see the importance of adapting their donation appeals across device types,” Ferguson said. “Our work shows why and how to change that.”

Contact: Kristen Ferguson, 574-631-5934, Kfergus3@nd.edu

Startup financing gender gaps greater in societies where women are more empowered

2024-04-24T11:50:00-04:00

Dean Shepherd (Photo by Barbara Johnston/University of Notre Dame)

Commercial bankers provide capital to fund the operations and growth of businesses. However, as these lenders evaluate entrepreneurs who apply for loans, gender bias leads to women being denied more often than their male counterparts.

Estimates show a $1.7 trillion financing gap worldwide for small- and medium-sized enterprises owned by women.

91��Ƶ show that when women do secure business loans, the amounts tend to be smaller, have higher interest rates and require more collateral, which restricts the economic potential of women-led ventures. However, findings on the relationship between entrepreneurs’ gender and bank financing are inconsistent and reveal a need for social context.

New research from the University of Notre Dame finds, surprisingly, that gender discrimination in startup financing is magnified in societies with greater women’s empowerment.

“A Meta-Analysis of the Impact of Entrepreneurs’ Gender on their Access to Bank Finance,” forthcoming in the Journal of Business Ethics from Dean Shepherd, the Ray and Milann Siegfried Professor of Entrepreneurship at Notre Dame’s Mendoza College of Business, offers suggestions to help close the gender gap.

Co-authors of the study are Malin Malmström from Lulea University of Technology, Barbara Burkhard and Charlotta Sirén from the University of St. Gallen, and Joakim Wincent from the Hanken 91��Ƶ of Economics.

The team summarized evidence from academic studies published around the world, containing more than 1 million unique data points and spanning more than three decades. The analysis confirmed the prolonged and global bias against women in entrepreneurial bank finance.

The team found that social gender norms characterize women as incompatible with entrepreneurship. The social norms consider masculine attributes to be better associated with entrepreneurial tasks than feminine attributes, and therefore evaluators prefer male entrepreneurs over their female counterparts.

“I believe women and men are equally capable of being successful entrepreneurs,” said Shepherd, who specializes in entrepreneurship under adversity. “These obstacles are not from the women’s own making but from social norms and biases. Women face adversities men do not.”

The study provides evidence that women entrepreneurs’ business loan applications are rejected more often than those of their male counterparts; female entrepreneurs’ business loans are more costly than men’s; and there is considerable variance in these relationships, indicating the need to consider moderators.

They found two key factors that affect women in entrepreneurial financing.

“In societies dominated by a conservative rather than a liberal political ideology, women entrepreneurs receive poorer credit terms compared to men entrepreneurs because conservative ideology upholds structural gender differences in society,” Shepherd said. “And, while research has suggested that women’s empowerment in a society can help break down social gender norms to promote gender equality, we show the opposite —women’s empowerment threatens male dominance in resource distribution.”

They show that as women climb societal ladders, the perception that they are a threat increases, prompting protective responses to safeguard existing societal gender norms.

More women assuming top leadership positions in society does not mean that gender inequality in funding distribution is resolving itself. The team’s findings provide three recommendations for policymakers and financiers in navigating gender bias in entrepreneurial bank finance.

Policymakers should continually monitor conditions and develop intervention programs in bank finance, venture capital, governmental programs, incubator access and gender representation in boardrooms and other executive roles.

Societies should normalize women’s empowerment so their opportunities for advancement are not limited by existing patriarchal structures. Efforts could include organizational structures and recruitment tools to help women achieve leadership positions and support those who do.

Regulations should be established to mandate gender audits targeting biased bank lending. This can include assessing gender equality in the distribution of budgets, financial services and financing projects.

“Resistance to women’s empowerment remains within politics, culture and management,” Shepherd said. “We must first admit this before we can address and then dismantle gender inequality.”

Contact: Dean Shepherd, 574-631-0801 or dshephe1@nd.edu

Researchers develop new method to help investors predict firms’ decision-making, optimize portfolios and generate greater returns

2024-04-11T12:48:00-04:00

Top management teams at most businesses are charged with maximizing shareholder wealth, making any actions that impede this goal their sole responsibility.

However, these management teams are often pressured to skirt normal business practices in order to meet earnings thresholds. One way is through myopic marketing spending — reducing marketing as well as research and development expenses to boost earnings, which increases short-term results at the expense of long-term performance.

New research from the University of Notre Dame introduces a novel method to help investors predict myopic marketing spending up to a year in advance, giving investors ample time to optimize their portfolios and generate much better returns.

A survey of 500 global executives, conducted jointly by the nonprofit Focusing Capital on the Long Term and McKinsey, found that top management teams continually feel pressured to meet near-term earnings targets at the expense of long-term strategies. They make myopic decisions to make the firm look better. This behavior often happens prior to capital increases, initial public offerings, share repurchases and C-suite retirements.

According to McKinsey, top management teams are willing to “cut long-term growth investments by 17 percent, on average, when faced with a 15 percent decrease in revenue.” This short-term decision making has a downside. It harms stakeholders, including investors, customers and the boards of directors. It is also associated with inferior stock-market performance in the long run, due to loss of market share and delayed innovation.

Unfortunately, investors only notice narrow-minded marketing spending after the fact, through public financial statements.

Andre Martin (Photo by Matt Cashore/University of Notre Dame)

A new prediction strategy in “Can Words Speak Louder than Actions? Using Top Management Teams’ Language to Predict Myopic Marketing Spending,” forthcoming in the Journal of Marketing from lead author Andre Martin, assistant professor of marketing at Notre Dame’s Mendoza College of Business, along with Tarun Kushwaha from the University of Wisconsin, offers several advantages compared with existing methods.

Martin analyzed the language management teams use in earnings calls, specifically focusing on marketing and earnings emphasis, to predict future instances of myopic marketing spending. The study looked at 11 million sentences from nearly 25,000 quarterly earnings call transcripts of 1,197 firms between 2008 and 2019 and revealed that this approach can predict myopic marketing spending at a quarterly frequency.

“By focusing on the marketing and earnings emphasis language they use, we can forecast instances of myopic marketing spending up to a year in advance,” said Martin, a former software engineer and program manager for Xerox and defense contractor SRC Inc. who specializes in the downstream effects of firm communication. “This provides longer foresight and more frequent prediction opportunities (quarterly) than current existing prediction methods.

“We find that one standard deviation increase in earnings emphasis is associated with a 23.68 percent increase in the likelihood of future myopic marketing spending.”

The findings also showcase fiscal impact.

The researchers compared the financial returns of firms that engage in myopic marketing spending with those that do not and found that using this method to avoid investing in myopic firms yields an additional 6.44 percent in returns over four years. This translates to 1.61 percent annual abnormal returns over existing prediction methods.

“More than just financial gains, this study’s findings have profound governance implications,” Martin said. “They equip boards with an early detection tool for executive actions that could harm long-term firm value, enabling timely intervention.”

They also empower individual investors with insights into executive intentions.

This prediction tool provides stakeholders, regulators and firm competitors with valuable insights into potential top management actions. These actions could affect not only long-term firm value but also market conditions. Reducing the information barrier around executive intentions enables greater monitoring through early detection of myopic actions.

Contact: Andre Martin, 574-631-0711, amarti94@nd.edu

Suppressing boredom at work hurts future productivity, study shows

2024-03-28T09:00:00-04:00

Casher Belinda

Boredom is more common at work than in any other setting, studies show, and employees are bored at work for more than 10 hours per week on average.

Even astronauts and police officers get bored on the job. No occupation is immune.

Boredom serves an important purpose — it signals the need to stop an action and find an alternative project. But boredom becomes problematic when it’s ignored.

New research from the University of Notre Dame shows that trying to stifle boredom prolongs its effects and that alternating boring and meaningful tasks helps to prevent the effects of one boring task from spilling over to reduce productivity on others.

“Breaking Boredom: Interrupting the Residual Effect of State Boredom on Future Productivity” is forthcoming in the Journal of Applied Psychology from lead author Casher Belinda, assistant professor of management at Notre Dame’s Mendoza College of Business, along with Shimul Melwani from the University of North Carolina and Chaitali Kapadia from Florida International University.

The team sought to understand if, when and why experiencing boredom now might lead to attention and productivity deficits later. They tested these possibilities in three studies that examined the consequences of boredom on a task-to-task basis.

The first study drew on data from dual-career families working in a variety of industries. Participants responded to multiple surveys per day at different intervals, enabling the team to examine the relationships between boredom, attention and productivity over time. Follow-up studies used alternative methods to reach a broader audience and focused on how meaningful work tasks help mitigate boredom’s prolonged effects.

Belinda, who specializes in emotions, interpersonal communication and close relationships within organizations, noted that boredom is viewed as a nuisance emotion that any strong-willed employee should subdue for the sake of productivity.

He found that experiencing boredom at any one point in time leads to delayed or residual bouts of mind-wandering. Employees often try to “power through” boring tasks to make progress on their work goals, but he said that not only does this fail to prevent boredom’s negative effects, it’s also one of the most dysfunctional responses to boredom.

“Like whack-a-mole, downplaying boredom on one task results in attention and productivity deficits that bubble up during subsequent tasks,” he said. “Paradoxically, then, trying to suppress boredom gives its harmful effects a longer shelf life.”

Part of the solution lies in how work tasks are organized throughout the day. Although boring tasks can’t be avoided, effectively combating the negative effects of boredom requires careful consideration of the nature of different work tasks and how they are sequenced. Casher said it helps to work strategically, looking beyond a single boring task.

“‘Playing the long game’ will help minimize the cumulative effects of boredom over the course of the day,” Belinda explained. “Following an initial boring task, employees should turn to other meaningful tasks to help restore lost energy.”

Contact: Casher Belinda, 574-621-9629, cbelinda@nd.edu

In online business, opposites attract — and increase sales

2024-02-14T14:11:00-05:00

Yoonseock Son (Photo by Barbara Johnston/University of Notre Dame)

Considerable research has been devoted to studying gender bias in the physical workplace, especially in the fields of management and economics.

Within online platforms, however, gender biases and how they manifest have received far less attention. There are some exceptions, including operational outcomes such as hiring, performance and compensation. Largely ignored, though, is how the design of operational processes lessens or increases gender bias.

A new study from the University of Notre Dame examines how gender bias influences people-centric operations in online platforms.

“Gender Mismatch and Bias in People-Centric Operations: Evidence from a Randomized Field Experiment” is forthcoming in the Journal of Operations Management from lead author Yoonseock Son, assistant professor of information technology, analytics and operations in Notre Dame’s Mendoza College of Business. Co-authors include Kaitlin Wowak, the Robert and Sara Lumpkins Associate Professor of Business Analytics, and Corey Angst, the Jack and Joan McGraw Family Collegiate Professor of IT, Analytics and Operations, both at Notre Dame, along with Angela Choi from SungKyunKwan University in South Korea.

For seven months, the team collaborated with an online weight management platform in Asia that provides programs, products and consulting services for healthy living.

The researchers created an experimental design that linked clients and consultants in different gender combinations, and then examined how gender biases differed during their exchanges.

Kaitlin Wowak (Photo by Barbara Johnston/University of Notre Dame)

Clients could ask questions on the website’s chat feature and within 24 hours, a consultant would respond and then recommend a product. The clients would then rate their experience.

“Surprisingly, we found that clients have a better experience and spend more on products and services when there are gender mismatches,” Son said. “In other words, this happens when female clients are paired with male consultants and male clients with females.”

The team also found the effects of gender mismatches differ depending on the customer’s actions, whether they are leaving ratings, purchasing recommended products or simply browsing.

Knowing a consultant’s gender led customers to leave more and higher ratings, click on recommended products and then make purchases.

If the consultant was of the opposite gender, ratings were even higher — much more so from female clients with male consultants.

Female customers had a higher click-through rate when gender was reported, regardless of which it was, but the men only clicked more on the products if their consultants were women.

Purchase rates increased only for products recommended by the female consultants, and in these cases, the men bought significantly more than the women.

Corey Angst (Photo by Barbara Johnston/University of Notre Dame)

“Past research suggests that women’s performance may suffer with a male consultant,” Son said, “but we find women may actually outperform their male counterparts.”

The study states, “The design — or redesign — of operational processes with consideration to gender bias is important across sectors, but is particularly important in the service industry as services are people-centric and increasingly shifting toward online platforms where face-to-face interactions are largely eliminated.”

The findings, which apply to any circumstance with no face-to-face interaction, provide a new tool for managers of platform businesses such as TripAdvisor, Yelp, Uber and Lyft. With ride-hailing services, the decision to ride is made before the customer and driver meet.

Better understanding how a client’s gender influences biases toward a company’s employees can help improve customer service as well as firm performance.

Firms can look at a customer’s name and browsing history to help deduce gender, and then design more effective customer-employee matching algorithms and training programs.

“Our study can help firms to get the most from matches or leverage mismatches and maximize overall effectiveness,” Son said. “It’s a win-win situation for both the customer and the firm.”

Contact: Yoonseock Son, 574-631-1666, yson@nd.edu

Women helping women: Female mentors guide businesswomen to greater success

2024-01-25T09:00:00-05:00

There are millions of entrepreneurs in developing countries. In fact, in emerging markets, more than half of all workers — both men and women — are small-firm owners.

Many of them, unfortunately, are unable to earn a decent livelihood. And for the women, a persistent gender gap makes success even trickier.

In an effort to help improve business outcomes, governments and nonprofits each year invest billions of dollars in training programs, many of which provide mentors for the entrepreneurs. Unfortunately, female entrepreneurs frequently benefit less — or don’t benefit at all — from these programs.

A new study from the University of Notre Dame, Texas A&M, University of Chicago and London 91��Ƶ of Economics recommends a simple adjustment to the current training system to give women a better shot at success. It looked into whether the gender of the mentors plays a role and found that for the men it does not, but pairing female mentors with female entrepreneurs, or gender matching, did make a significant difference.

“Breaking the Glass Ceiling: Empowering Female Entrepreneurs through Female Mentors” is forthcoming in Marketing Science from lead author Frank Germann, the department chair and Viola D. Hank Associate Professor of Marketing at Notre Dame’s Mendoza College of Business. Co-authors of the study are Stephen Anderson from Texas A&M, Pradeep Chintagunta from the University of Chicago and Naufel Vilcassim from the London 91��Ƶ of Economics. The team collaborated with Grow Movement, a nonprofit based in London.

The study’s findings are based on a field experiment the team conducted in Kampala, Uganda, with 930 entrepreneurs, 40 percent of whom were women. The entrepreneurs were randomly matched with a female mentor, a male mentor or no mentor. Recruited by Grow Movement and based all over the world, the mentors worked for several months remotely with the entrepreneurs through videoconferencing, phone calls, texts and shared documents.

Almost all female entrepreneurs in the study worked full-time operating their businesses 6.5 days a week. Most sold directly to Ugandan consumers through retail and services and had one paid employee, on average. The businesses were about four years old, and the majority of the women were young, married mothers in their 20s with at least a high school education.

Two years later, the researchers did a follow-up survey. They learned that businesswomen in emerging markets benefit significantly more from having a female as opposed to a male mentor.

Why? The female mentors proved to be more positive and social in their interactions with the female entrepreneurs — suggesting they were more engaged. The study revealed a clear advantage for the women with female mentors who learned to build better customer relationships. For example, the businesswomen began to follow up post-purchase to ask about their customers’ experience and what could be improved.

“This really helped improve their firms’ performance,” Germann said. “Our findings show that firm sales and profits of female entrepreneurs guided by female mentors increased by, on average, 32 percent and 31 percent compared with the control group. And these estimates are even greater for high-aspiring female entrepreneurs.”

In contrast, compared with the control group, female entrepreneurs who were mentored by men did not significantly improve their sales and profits over the course of the study.

The study results point to a fairly simple, yet powerful, new policy tool.

“We have already shared our findings with several organizations, including some of our contacts at the World Bank who frequently design business support interventions delivered in emerging markets, many of which involve some kind of mentor,” Germann said. “We hope that female emerging market entrepreneurs will get paired with female mentors in the future, which, based on our findings, should help to break the glass ceiling and improve business outcomes.”

Contact: Frank Germann, 574-631-4858, fgermann@nd.edu

Examining Trump v. Anderson: A conversation with law professor Derek Muller

2024-01-24T12:34:00-05:00

Derek T. Muller

Derek T. Muller is a professor of law at the University of Notre Dame Law 91��Ƶ. As a nationally recognized election law scholar, Muller recently filed an amicus brief in support of neither party in Trump v. Anderson. The United States Supreme Court will hear oral arguments on Feb. 8 in the case that will determine whether the Colorado Supreme Court erred in its order to exclude former president Donald Trump from the 2024 presidential primary ballot. We spoke with Muller about the case and about his brief, found here.

What is Trump v. Anderson about?

A group of Colorado voters sued in state court to exclude former president Donald Trump from the Republican presidential primary ballot. They argued that Trump is barred from serving as president under Section 3 of the Fourteenth Amendment. The Colorado Supreme Court agreed with the voters and concluded that Trump was not qualified to serve as president.

What is Section 3 of the Fourteenth Amendment?

After the Civil War, the United States enacted three amendments to the United States Constitution. Among other things, those amendments famously abolished slavery and guaranteed that the right to vote could not be abridged on the basis of race. Other provisions have received less attention.

Section 3 of the Fourteenth Amendment prohibits those who previously took an oath to support the Constitution from serving in federal or state office if they engaged in insurrection against the United States. It was designed to exclude former government officials who supported the Confederacy during the Civil War from returning to government. The bar to service can be lifted by Congress if it so chooses. While the provision was routinely used in the years immediately following the Civil War, it has seen relatively little use since then.

What happened in the Colorado litigation?

A trial court held a five-day hearing, which included some witnesses who testified and some argument from attorneys. It concluded that Trump had engaged in insurrection for his speech and conduct before and during the riots on Jan. 6, 2021, at the United States Capitol during the counting of electoral votes. But it also concluded that he was not covered by the text of Section 3, because while Section 3 barred people from holding certain offices, the office of the president was not one of those covered by the text of Section 3.

On appeal to the Colorado Supreme Court, the court, by a divided 4-3 vote, concluded that Trump engaged in insurrection and that the office of the president was covered by Section 3. Therefore, Trump should not appear on the ballot in the Colorado primary. But the court paused its ruling while Trump appealed, so Trump’s name will in fact appear on the Colorado ballot. The dissenting justices in Colorado contested whether a state court had power under state law to hear this kind of claim, and they disputed whether Congress needed to pass a law enforcing Section 3 rather than leaving it to states to decide enforcement of it on their own.

What is Trump arguing in his appeal and what happens if he wins?

Trump has raised five primary issues in his brief. The bulk of his argument focuses on the precise language of Section 3 to suggest that the amendment does not apply to the presidency in the first place, something the trial court in Colorado agreed with. The section opens, “No person shall be a senator or representative in Congress, or elector of president and vice president, or hold any office, civil or military, under the United States ….” Trump argues that the exclusion of the presidency from this list means that it does not apply to presidential candidates. He bolsters this argument by arguing that the phrase “office … under the United States” is a term of art that refers to officials appointed to positions in the executive branch, not to the president himself.

Second, Trump argues he did not “engage in insurrection” under the meaning of Section 3. Third, he argues that the states and courts should defer to Congress and look to see how it has enforced Section 3 rather than devising mechanisms to implement it on their own without congressional guidance. Fourth, he claims that Section 3 applies only to those holding office, and it cannot be used to bar candidates seeking office. And finally, Trump argues that Colorado so egregiously misinterpreted state law that it violated the federal constitution.

If Trump wins on any one of these arguments, he would appear on the Colorado ballot. And if he wins on any of these first four arguments, the court’s decision would be a precedent that all other states would look to when deciding whether Trump should appear on their ballots, and Trump would win everywhere else on that basis, too. (The fifth argument is a narrow ground that would only apply to Colorado.)

What is the other side arguing?

The respondents in this case — Colorado voters — do not need to file their brief until Jan. 31, but we already have a good sense of their arguments. The voters argued that it would be absurd to exclude the office of the presidency from Section 3 when everyone else, from United States senators to county clerks, is covered by the text. They point to popular arguments around the time Section 3 was ratified in 1868 to suggest that many believed it included the presidency.

The voters also looked at Trump’s rhetoric and the crowd’s reaction to it to suggest that his words incited the crowd to action. They argued that calling a mob to interrupt the functions of government rises to the level of an “insurrection.” The voters noted that Section 3 has been enforced in other contexts after the Civil War without overt congressional approval, and that Section 3 could be used to exclude candidates who are disqualified today even if something may change about their eligibility in the future. Finally, they note that state courts interpreted state law faithfully, and any interpretation, even if in error, was not so erroneous to warrant a federal court to reverse.

How important is this case?

It’s a very big deal. A state court excluded the presumptive Republican party presidential candidate from the ballot because it found that he engaged in insurrection. This constitutional provision, which has received very little attention for 150 years, effectively prevents Trump from serving as president, or at least would complicate his path in some states in the months ahead. And it could set up a crisis in 2025 if he wins a majority of the Electoral College and Congress is faced with determining how to handle votes cast for him. Of course, we’ve also never had events like the rioting on Jan. 6, 2021, and a violent interruption of the counting of electoral votes. The case presents novel issues, and issues that will have a profound effect on the 2024 election, however the Supreme Court decides the case.

You filed an amicus brief in this case. What is that?

“Amicus curiae” comes from Latin and means “friend of the court.” Lawsuits typically involve two principal parties — the plaintiff and the defendant — who advocate their positions from the trial court through subsequent appeals. Sometimes, however, other people may want to raise arguments to a court to draw attention to legal or factual issues that they believe would help the court reach its decision. In high-profile cases before the United States Supreme Court, there may be 50 or more such briefs filed. I’m particularly grateful to my attorney who generously worked with me on a pro bono basis. Heather Hacker at the law firm Hacker Stephens LLP helped me complete and file the brief.

What’s the argument in your brief?

I have written for many years about the power of states to administer presidential elections. My brief is in support of neither party, because I am only addressing some narrow issues that could relate to all presidential elections. First, I argue that states have the power to exclude ineligible presidential candidates from the ballot, if they want to. I look back over the years at candidates who were under the age of 35 or who were not natural-born citizens excluded from the ballot. Second, I argue that states have no obligation to exclude ineligible candidates. I note that states have long permitted ineligible candidates on the ballot, if they prefer to leave the choice to the voters. I close the brief with some questions the Supreme Court should be aware of, because how it decides this case could affect other areas of election law.

How does this tie in with your research at Notre Dame?

I write a lot about the role of states in the administration of federal elections, and about the relationship between state and federal law in elections. To name a few, I’ve looked at the rules that Congress uses when counting presidential electoral votes, the sharp rise in spending on election litigation in federal and state courts, what tools courts can use to ensure that state officials do not subvert election results and the scope of state power in determining who appears on the ballot.

What are some other election law projects you’re working on?

The biggest project is a new one from the American Law Institute. Professor Lisa Marshall Manheim at the University of Washington and I will be drafting a new Restatement of the Law, Election Litigation. The goal will be to synthesize the law of elections for judges and attorneys to provide clear guidance and administrable rules when contentious election disputes arise. The project will take several years, but it should be a significant contribution to election administration in the United States.

Contact: Derek T. Muller, dmuller@nd.edu

‘Crowding out’ the competition: Study reveals surprising livestream chatting and tipping behavior

2023-11-07T13:24:00-05:00

Over the past decade, social media giants including X (formerly known as Twitter), Facebook, YouTube, Amazon and Twitch have begun offering livestreaming services, allowing users to interact with each other in real time on their computers and mobile phones.

Viewers can engage at no cost with the platform and other users by sending chats and likes, but nearly all livestreaming broadcasters now encourage viewers to send tips in the form of virtual gifts.

In a typical livestream, consumers (viewers) watch the content and decide whether and how much to tip the broadcaster in the form of virtual gifts purchased with real money.

Tips and chats are displayed on a livestream along with a viewer’s identity, so viewers are publicly recognized for those actions, but viewers who “like” a livestream are not acknowledged. Because identities and payments are publicly viewable in livestreams, understanding how they influence broadcasters’ emotional reactions and other viewers’ engagement becomes relevant and meaningful.

A new study from the University of Notre Dame examines these exchanges through a popular livestreaming platform in China.

Shijie Lu

“Crowding-Out in Content Monetization under Pay What You Want: Evidence from Live Streaming” is forthcoming in Production and Operations Management from Shijie Lu, the Howard J. and Geraldine F. Korth Associate Professor of Marketing at Notre Dame’s Mendoza College of Business.

The study looked at livestreaming of performances including dancing, singing and talk shows, for which tipping is similar to donating to a street performer.

And the payoff can be huge.

“Asian Andy,” a Twitch streamer and YouTuber with more than 1 million followers, recently earned $16,000 in tips during one of his “sleep streams.”

“Broadcasters like Asian Andy show emotional and reciprocal reactions to viewer tips through their facial expressions that reveal their level of happiness, and such facial expressions would induce more tips from the audience,” said Lu, who specializes in online advertising and user-generated content.

“Also, you would think that social pressure would promote competition and lead livestream viewers to tip and chat more,” he said. “However, we show that viewers actually avoid the competition by tipping and chatting less and leaving the stream sooner when they see more tips from others.”

This suggests a surprising crowding-out effect on viewer engagement, where rising public spending drives down or even eliminates private spending.

However, the crowding-out effect does not apply to a livestream’s number of likes, which are displayed without viewer identities.

In addition, such crowding-out effects manifest mainly in those viewers who tipped heavily before the experiment, possibly because heavy tippers care more than their counterparts about social status. These results collectively suggest that the pursuit of social status is a plausible driver of the observed crowding-out activity.

The team’s findings could help livestreaming platforms improve information design strategy. To mitigate the crowding-out effects and generate more money for platforms and broadcasters, crowded livestreams could be split into smaller, concurrent virtual sessions, which would lessen the race for social status by reducing the number of heavy tippers.

Co-authors of the study include Dai Yao from the Hong Kong Polytechnic University and Xingyu Chen from Shenzhen University.

Contact: Shijie Lu, 574-631-5883, slyu@nd.edu

Peter Easton testifies in ongoing trial of FTX founder Sam Bankman-Fried

2023-10-19T13:01:00-04:00

Peter Easton

University of Notre Dame Accountancy Professor Peter Easton on Wednesday (Oct. 18) testified in Manhattan federal court in one of the largest fraud cases in the history of the United States — the trial of disgraced FTX founder Sam Bankman-Fried, now in its third week.

Bankman-Fried, who says he never intended to defraud customers, has pleaded not guilty to two counts of fraud and five counts of conspiracy. Prosecutors say he looted billions of dollars in FTX customer funds.

Easton, who previously worked on other high profile cases including Enron, WorldCom and Parmalaat, was hired by the U.S. Department of Justice to provide a detailed analysis of the exchange of billions of dollars between FTX and its sister hedge fund, Alameda Research. He examined whether balances in actual bank accounts matched those in FTX’s internal ledgers in an effort to explain what happened to $9 billion in FTX customer funds missing in June 2022, months before the company filed for bankruptcy.

The director of the Center for Accounting Research and Education and the Notre Dame Alumni Professor of Accountancy at the Mendoza College of Business, Easton specializes in corporate valuation and financial statement analysis. He told the court, “I teach, essentially, penetrating financial statements.”

When asked if his analysis showed the use of customer funds, Easton said, “Oh yes.”

During his extensive testimony, Easton revealed the amount in Alameda Research and FTX’s accounts was far less than what was owed to customers of FTX. He found that $11.3 billion in FTX customer funds should have been held at Alameda, but only $2.3 billion were actually in its bank accounts and that Alameda used the assets for its own expenditures.

Easton said, “Customer funds were used in various ways,” including investments, political contributions, charity foundations and real estate purchases, backing prosecutors’ claims that Bankman-Fried funneled money from his FTX customers into Alameda for those purposes.

Using numerous charts and graphs he created, Easton showed that more than $400 million of customer funds were sent to hedge fund Modulo Capital. He said, “It is only customer funds. It did not come from anywhere else.”

He also traced $70 million of investor funds in real estate throughout the Bahamas, including Bankman-Fried’s luxury penthouse, and showed that millions of dollars in customer funds from FTX’s exchange was donated to a super PAC benefiting Democrats. He showed that a large sum of customer funds went to Modulo Capital through an investment made by Alameda and said FTX customers’ crypto assets were used to help repay a loan Alameda received from Genesis Capital.

The defense is set to begin presenting its case on Oct. 26 (Thursday). Bankman-Fried faces decades in prison if convicted.

New study offers improved strategy for social media communications during wildfires

2023-10-10T09:00:00-04:00

In the last 20 years, disasters have claimed more than a million lives and caused nearly $3 trillion in economic losses worldwide, according to the United Nations.

Disaster relief organizations (DROs) mobilize critical resources to help impacted communities, and they use social media to distribute information rapidly and broadly. Many DROs post content via multiple accounts within a single platform to represent both national and local levels.

Specifically examining wildfires in collaboration with the Canadian Red Cross (CRC), new research from the University of Notre Dame contradicts existing crisis communication theory that recommends DROs speak with one voice during the entirety of wildfire response operations.

Alfonso Pedraza-Martinez

“Speak with One Voice? Examining Content Coordination and Social Media Engagement During Disasters” is forthcoming in Information Systems Research from Alfonso Pedraza-Martinez, the Greg and Patty Fox Collegiate Professor of IT, Analytics and Operations at the University of Notre Dame’s Mendoza College of Business.

Social media informs victims about wildfires, but it also connects volunteers, donors and other supporters. Accounts can send coordinated messages targeting the same audience (match) or different audiences (mismatch).

According to crisis communication theory, a disaster relief organization’s communication channels should speak with one voice through multiple accounts targeting the same audience, but the team’s study recommends a more nuanced approach.

“We find the national and local levels should match audiences during the early wildfire response when uncertainty is very high, but they should mismatch audiences during recovery while the situation is still critical but uncertainty has decreased,” said Pedraza-Martinez, who specializes in humanitarian operations and disaster management. “We find that user engagement increases when the national headquarters lead the production of content and the local accounts follow either by tweeting to a matching or mismatching audience, depending on timing in the operation.”

The study reveals that engagement improves by 4.3 percent from a match only during the uncertain and urgent response phase, while a divergence of content creation decisions, or mismatch, yields 29.6 percent more engagement when uncertainty subsides during the recovery phase.

It’s been two months since the deadly fires in Maui, yet recovery efforts remain ongoing even as media coverage of the disaster has tapered off. Pedraza-Martinez said social media can fill that void, especially if handled the right way.

“In the current recovery phase, state and local social media accounts should target different audiences including donors and victims, as opposed to addressing the same audience simultaneously,” he said.

In collaboration with the CRC, the research team collected Twitter data on the 2016 Fort McMurray wildfire in Alberta, Canada. They analyzed 934 tweets from the headquarters account, which received 33,861 retweets and 34,722 likes. They also looked at 629 tweets from the Alberta account, which received 4,802 retweets and 2,862 likes.

Measuring engagement as the total number of likes, retweets, clicks and replies, the team used text analysis to identify the audience (victims or supporters) and then analyzed how audience match between accounts affected user engagement.

An example of a CRC tweet directed to victims could state, “For those who missed it last night, online registration is open. Evacuees please register here.” The study suggests that likes and replies to this tweet could have led to more disaster victims seeing the message and registering to receive help.

A CRC tweet directed to supporters may request, “Donate here to help those affected by the fires in Fort Murray,” which may have resulted in more donor aid.

The findings also apply to other types of disasters as long as social media is widely used by the public and the relief organization has national and local social media accounts used to communicate with the public. Most natural disasters fall into this category, and most of the 192 National Societies of the Red Cross and Red Crescent do as well.

“This paper would not have been possible without the collaboration of the Canadian Red Cross,” Pedraza-Martinez said. “We are grateful for their willingness to take part in our research.”

Co-authors of the study include Changseung Yoo from McGill University and Eunae Yoo and Lu (Lucy) Yan from Indiana University.

Contact: Alfonso Pedraza-Martinez, 574-631-8734, apedraz2@nd.edu

Business on the Frontlines continues work with Palestinian artisans

2023-09-20T09:00:00-04:00

Notre Dame Students And Alumni At CCF

The West Bank city of Jenin is an area plagued by violence and destruction. It is here that the University of Notre Dame’s Meyer Business on the Frontlines Program works with Palestinian women artisans to create economic opportunities for themselves and their families.

Notre Dame MBA students enrolled in Frontlines courses work in the West Bank and with communities around the world that have suffered violence, poverty and prejudice.

For the past six years, the Frontlines program at Mendoza College of Business has partnered with the nonprofit social enterprise Child’s Cup Full (CCF), which empowers talented refugee and low-income artisans in the West Bank through its two brands, Darzah, women’s ethical fashion accessories, and Zeki Learning, children’s educational toys.

Darzah and Zeki Learning employ some 40 Palestinian women as full-time and part-time artisans, including Rasha, whose family has lived in Jenin Camp for 75 years. On July 3, Israeli troops conducted a two-day military operation in the city.

Artisans (Rasha On Right End)

“Her home was destroyed in the attack, and family members of three other artisans were injured and lost their homes,” said CCF founder Janette Habashi, who created the brands. “Destroyed roads also made it difficult for the artisans to reach neighboring towns where their raw materials are sourced.”

As the destruction became clear, CCF and Frontlines increased their collaboration and support. CCF created safe havens for artisans and their families at its center and in churches in Zababdeh, which is about 6 miles from Jenin Camp.

“Lines of communication were down, and we could not connect to our artisans or their families,” Habashi said. “It took us two days to reach Rasha, and we were relieved to hear her voice, but the situation was terrible for her family.”

Kelly Rubey, assistant teaching professor for the Business on the Frontlines MBA course, visited the West Bank with a Notre Dame team in 2022. The team worked closely with Notre Dame International’s safety and security team on campus and the Jerusalem Global Gateway, who monitor these events for students, faculty and staff. The small group, including three graduate students and two alumni, was hosted by Rasha’s family.

ND Students And Artisans Shop For Materials

“They were such generous hosts, and the six of us felt so welcomed by everyone in the camp,” Rubey said.

“Working for CCF gives the artisans purpose — an opportunity to share both their culture and their skills,” she said. “There is so much dignity and empowerment in the work they do.”

Understanding the complexities of operating a business amid ongoing West Bank violence prompted students several years ago to recommend a working CCF advisory board in an effort to increase sales and opportunities. Notre Dame alumni were among the first contributors. This summer, they hired a new employee to lead those efforts.

Now in its 16th year, the Meyer Business on the Frontlines Program addresses pressing issues worldwide, including post-conflict rehabilitation, poverty, illicit economies, isolation and prejudice. Notre Dame MBA and other graduate students and faculty have worked on more than 90 projects in over 35 countries through a three-pronged approach that combines the rigor of business, the best of academia and a belief in the dignity of work for all people.

Frontlines partners with international humanitarian organizations, local nongovernmental organizations like CCF, Fortune 500 companies and religious organizations to find local solutions that create jobs or set the conditions for economic growth. It’s estimated that thousands of people now have livelihoods as a direct result of these partnerships.

“The attack on Jenin only increased our motivation to continue our work in the West Bank and served as a reminder for CCF and the advisory board of the need to create new employment opportunities,” Rubey said. “Clearly, the days of oppression and limited economic opportunity are far from over for Palestinians in the West Bank.”

Learn more about the partnership between Business on the Frontlines and Child’s Cup Full here.

Watch “Fighting to Rebuild Communities,” featuring BOTFL.