This paper addresses primarily two questions. First, when or why should a company's strategy be developed by its CEO versus by some outside analyst or other insider? Second, how does strategy, properly defined, interact with vision (in the sense of a strong belief) about various decisions? In...

What makes a decision strategic? When is strategy most important? This paper studies the structure and value of strategy (in its everyday sense), starting from a (functional) definition of strategy as ‘the smallest set of (core) choices to optimally guide the other choices.' This definition...

This paper derives two mechanisms through which Bayesian-rational individuals with differing priors will tend to be relatively overconfident about their estimates and predictions, in the sense of overestimating the precision of these estimates. The intuition behind one mechanism is slightly...

When a CEO tries to formulate 'a strategy', what is she looking for? What exactly is 'a strategy', why does it matter, and what are its properties?This paper defines an explicitly formulated 'strategy' as the 'smallest set of choices and decisions sufficient to guide all other choices and...

This paper develops an economic theory of the costs and benefits of corporate culture - in the sense of shared beliefs and values - in order to study the effects of ‘culture clash' in mergers and acquisitions. I first use a simple analytical framework to show that shared beliefs lead to more...

This paper analyzes how shared beliefs and preferences (or values) cause the emergence of social norms; why people may enforce norms that go against their own beliefs and preferences/values; and how this may cause a disconnect to develop between the organization's norms and its underlying...

This paper studies a principal's trade-off between using persuasion versus using interpersonal authority to get the agent to 'do the right thing' from the principal's perspective (when the principal and agent openly disagree on the right course of action). It shows that persuasion and authority...