Andrea Prat

Richard Paul Richman Professor of Business, Columbia Business School
Professor of Economics, Department of Economics

New Papers: What Happens When a Firm Changes Its Relational Contract?

A relational contract is a long-term understanding between a firm and its employees that describes how employees should behave and how the firm will reward the expected behavior. How can a firm change its relational contract and what happens when it tries to? We analyze a large US company, which is transitioning to Lean Management. The study involves randomizing the timing of the Lean rollout across different sites.

This short article discusses the experimental design and some preliminary results. This working paper shows that the change in relational contract affects the way employees respond to the introduction of a new management practice (ranking drivers according to their performance).

Mentioned in the Wall Street Journal and the Atlantic Monthly.

Posted: June 21, 2015

New Paper: Central Bank Transparency and Computational Linguistics

How transparent should central bank deliberations be? We combine latent Dirichlet allocation and career concerns theory to understand whether increased disclosure at the Fed led to more informed decision-making.

The word cloud below represents one of the 50 deliberation topics we identify. My coauthor Stephen Hansen has an excellent hands-on tutorial on topic modeling for economists.

Policy summary: Vox EU. Why this matters for the Bank of England and the ECB: The Conversation. Full text: CEPR Discussion Paper 9994. See also coverage on The Economist.

Posted: October 25, 2014

New Paper: Managerial Attention and Worker Engagement

When is a management system credible? Employees are more productive if they believe their efforts are monitored and rewarded. We analyze the dynamic game between the workforce and the management and we show that it can give rise to persistent productivity differences between otherwise similar firms.

Full text: CEPR Discussion Paper 10035.

Posted: October 23, 2014

New Paper: Measuring Media Power

I develop a way of measuring how much media groups can influence electoral outcomes. According to the index, the four most powerful media companies in the US are television-based conglomerates. The high index values I find reflect the fact that most voters receive their news from a small number of news sources.

Informal policy discussion: Vox EU. Full text: CEPR Discussion Paper 10094.

Posted: August 25, 2014

New Paper: Time Use of Family CEOs and Professional CEOs

Do family CEOs behave differently than professional CEOs? And does it matter for firm performance? We tackle this issue by analyzing the behavior of over 1100 CEOs in six countries.

See a summary in Ideas at Work and a discussion in the Wall Street Journal. This study is part of the Executive Time Use Project. Full text available as NBER WP 19722.

Posted: May 25, 2014

New Article: The Political Economy of Housing Supply

Real estate prices increase when housing supply is artificially restricted. We identify a vicious circle between house prices and zoning laws, and suggests policies that would make housing more affordable.

Full text: AEJ Micro

Posted: March 15, 2014

More Papers