Simon Johnson and Jonathan Gruber to discuss their new book “Jump-Starting America” live, April 4, 11:30 am, ET

MIT Sloan Professor Simon Johnson

MIT Professor of Economics, Jonathan Gruber

Our latest installment of the MIT Sloan Experts Series includes a live conversation with Simon Johnson and Jonathan Gruber, co-authors of the new bookJump-Starting America: How Breakthrough Science Can Revive Economic Growth and the American DreamThe authors make a powerful and compelling case for how smart public investment in science and technology is the key to achieving a second golden age for the U.S. economy.

Johnson is the co-author of the bestsellers, 13 Bankers and White House Burning. Gruber served as a technical consultant to the Obama Administration and worked with both the Administration and Congress to help craft the Patient Protection and Affordable Care Act.

Erik BrynjolfssonMIT Professor and co-author of Machine, Platform, Crowd: Harnessing our Digital Future, among others, also appears on the program to discuss how America can regain its innovation mojo.

You will be able to view the live show by bookmarking this site and tuning in April 4 at 11:30 am ET. 

The trouble with cybersecurity management – Mohammad S. Jalali

Mohammad Jalali, MIT Sloan Research Scientist

From MIT Sloan Management Review. 

Cybersecurity is becoming top of mind for customers and organizations, as highly publicized data breaches and cyberattacks at large corporations have revealed just how much damage a hacker can do by accessing or manipulating an organization’s systems. In addition to the immediate financial and operational consequences, a breached business often faces class-action lawsuits, regulatory fines, damage to its reputation, and a string of other ramifications.

Consider Yahoo. In April 2018, the company agreed to pay a $35 million fine for failing to report a 2014 data breach in which hackers stole personal information from hundreds of millions of user accounts. A month prior, a judge had ruled that the victims of the data breach had the right to sue Yahoo for negligence and breach of contract for not disclosing its systems’ security weaknesses.

Yahoo is not alone; a startling number of companies have faced public relations disasters surrounding security breaches in the past few years. On the one hand, the trend makes sense; cyberattacks are becoming more common than ever as hackers become more adept at penetrating systems. On the other hand, it doesn’t make sense, because while those carrying out cyberattacks are gaining more tools, so are the specialists who defend against them. Cybersecurity practices can — and need to — be better.

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Even a few bots can shift public opinion in big ways – Tauhid Zaman

MIT Sloan Associate Professor Tauhid Zaman

From The Conversation

Nearly two-thirds of the social media bots with political activity on Twitter before the 2016 U.S. presidential election supported Donald Trump. But all those Trump bots were far less effective at shifting people’s opinions than the smaller proportion of bots backing Hillary Clinton. As my recent research shows, a small number of highly active bots can significantly change people’s political opinions. The main factor was not how many bots there were – but rather, how many tweets each set of bots issued.

My work focuses on military and national security aspects of social networks, so naturally I was intrigued by concerns that bots might affect the outcome of the upcoming 2018 midterm elections. I began investigating what exactly bots did in 2016. There was plenty of rhetoric– but only one basic factual principle: If information warfare efforts using bots had succeeded, then voters’ opinions would have shifted.

I wanted to measure how much bots were – or weren’t – responsible for changes in humans’ political views. I had to find a way to identify social media bots and evaluate their activity. Then I needed to measure the opinions of social media users. Lastly, I had to find a way to estimate what those people’s opinions would have been if the bots had never existed.

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The Fix for Misleading ‘CEO Pay Ratios’ – Robert Pozen and Kashif Qadeer

MIT Sloan Senior Lecturer Robert Pozen

MIT Sloan Senior Lecturer Robert Pozen

MIT Sloan MBA ’18, Kashif Qadeer

From The Wall Street Journal

In the coming weeks, many public companies in the U.S. will disclose for the first time their “pay ratios”—the CEO’s compensation divided by the median employee’s. The requirement to provide this ratio was included in the Dodd-Frank Act of 2010. But comparing the figures among different companies—and particularly different industries—will hardly be a straightforward task.

The consulting firm Equilar estimates that the pay ratio will be two or three times as high for retailers as for drug, financial or tech companies. But the reason isn’t soaring CEO pay in the retail industry. For one thing, midlevel retail workers simply make less, on average, than their peers in pharma, finance and tech, which skews the ratio.

Another issue is that 31% of retail employees work part-time, compared with 17% for the rest of American employees. When computing the CEO pay ratio, the Securities and Exchange Commission prohibits companies from adjusting part-time earnings to “annualize” them—to show what these employees would have earned if working full-time. The SEC also bars companies from counting several part-time employees as a single full-time equivalent. Because of this, having many employees who work only a few days each week drags down the median.

To understand how much this might overstate the pay ratio, we examined data for a midsize retail company that operates about 1,200 stores, primarily in the U.S. The company had more than 25,000 employees in 2017. Almost half worked less than 30 hours a week. The median pay of these part-timers (without annualizing) was less than $6,000 a year. By contrast, the median pay of full-time employees who worked for the whole year was approximately $30,000. Read More »

Micro-entrepreneurs making an impact in less developed communities – John Roberts

John Roberts, MIT Sloan Visiting Professor

From Entrepreneur Magazine

One might well ask, “What do micro-entrepreneurs in urban and slum neighborhoods across Cape Town, South Africa have to learn from the elite business schools of the world?  It turns out that the answer to this question is: “Plenty.”

I recently had the honour of being Chairman of Judges of the prestigious Gary Lilien Practice Prize given by the INFORMS Society for Marketing Science, in conjunction with the Marketing Science Institute and the European Marketing Academy. The award winning study proves that the tools of marketing science can make a major positive impact in helping to grow disadvantaged economies like the ones in Cape Town.

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