Author: Jill Young Miller

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About Jill Young Miller

As research translator for WashU Olin Business School, my job is to highlight professors’ research by “translating” their work into stories. Before coming to Olin, I was a communications specialist at WashU’s Brown School. My background is mostly in newspapers including as a journalist for Missouri Lawyers Media, the Atlanta Journal-Constitution, The Washington Post and the Sun-Sentinel in South Florida. Also, I am the reigning Olin Cornhole Champion.


Riots that resulted in anywhere from 10 to 1,000-plus deaths in their hometowns ultimately influenced lending decisions among hundreds of loan managers in India — and the effect endured for decades, a new study reveals. The research shows a country’s ethnic fissures can create crevasses in its road to economic progress.

Those are the findings by WashU Olin’s Janis Skrastins and three other researchers, who analyzed the lending decisions of about 1,800 Hindu loan managers at a large, public sector Indian bank.

Janis Skrastins

More than 250 of those loan managers had experienced fatal Hindu-Muslim riots in their hometowns when they were children. Later, as grown men, those loan managers favored lending to Hindu borrowers over Muslim borrowers.

“The most important takeaway is that your early childhood experiences of ethnic conflict can have long-lasting effects,” said Skrastins, assistant professor of finance. And the experiences “can actually lead to misallocation of resources even in the longer term.”

The researchers’ paper, “Experience of Communal Conflicts and Inter-group Lending,”  provides microeconomic evidence on the link between inter-group frictions and economic transactions. It is forthcoming in the Journal of Political Economy.

Muslim borrowers less likely to default

The loan managers’ favoritism persisted even as the loans they made to Muslims were less likely to default, the research revealed.

“What’s very, very important is the money or the profit that the officers expect to make on one Muslim borrower is going to be higher than on a Hindu,” Skrastins said.

“So that means they’re just giving money as a favor to some of their own group,” and creating disadvantages for another.

The researchers also discovered that loan managers’ bias persisted throughout their careers, suggesting “the economic costs of ethnic conflict are long-lasting, potentially spanning across generations,” Skrastins said.

The paper documents the lifelong consequences of racially divisive personal experiences in childhood, rather than shorter-term increases in in-group favoritism as a result of current events. The authors say that, to their knowledge, this is the first research on the topic.

Lending decisions over seven years

Skrastins, Raymond Fisman of Boston University, and Arkodipta Sarkar and Vikrant Vig, both of the London Business School, analyzed loan managers’ lending decisions from 1999 to 2006.

In tandem, they used a database of Hindu-Muslim riots from 1950 to 1995, along with each loan manager’s year and city of birth. With that information, they could infer whether ethnic riots erupted in a loan officer’s hometown during his childhood.

All men in the sample were born after 1950 and joined the bank no later than 1995.

The researchers measured riot exposure based on riot deaths in the loan managers’ hometowns from the year they were born to when they joined the bank. Generally, new loan managers at the bank are in their early 20s. Since the bank forbids any loan manager from working in his hometown, they necessarily leave their birthplace when they join the bank.

Because the bank requires loan managers and borrowers to list their religion, the researchers also had access to that information.

‘Riot-exposure’ defined

In their main results — which used local riot deaths of 10 or more people to define “riot exposure” — they found this: The presence of a riot-exposed loan manager was associated with 4 percentage points higher lending to Hindu borrowers relative to all other borrowers.

They also found that the presence of a riot-exposed loan manager was associated with a 2.5 percentage point increase in defaults by Hindu borrowers relative to Muslim borrowers.

The researchers also examined lending decisions as a function of when the loan manager was first exposed to Hindu-Muslim violence. Riot exposure before he was 10 years old was “the most important determinant of later lending decisions,” they found.

In their final analysis, the researchers examined loan managers’ decisions tied to the 2002 Gujarat riots, which left more than 1,000 people dead.

They found that lending to Muslims declined by 8 percentage points with the arrival of a branch manager who had been stationed in Gujarat at the time of the riots.

At cross-purposes with themselves

In some ways, the loan managers shoot themselves in the foot by shunning Muslim borrowers.

Loan managers in Indian state banks have incentives to perform well, the researchers note. Some rewards are promotions to higher grades with higher compensation — or better postings. Loan managers may be dispatched to places with better perks such as better schools, larger houses, the use of a car, or control over a larger portfolio.

If a loan manager is performing poorly, he risks being sent to places with weak infrastructures and lousy schools. Basically, when a loan officer plays favorites in lending that worsens his repayment rates, he hurts himself, the researchers point out.

Photo illustration by Olin Creative Director Katie Wools.




Seethu Seetharaman and Stuart Bunderson teamed up on the March 26-27 workshop on values-based, data-driven decision-making.

In a dramatic shift, America’s top CEOs last week said companies have a responsibility to society at large.

“This is a huge statement from one of the most influential groups in American business,” said Stuart Bunderson, Olin’s director of the Bauer Leadership Center and the George & Carol Bauer Professor of Organizational Ethics & Governance.

On August 19, the Business Roundtable issued an open letter titled “Statement on the Purpose of a Corporation.” One of the most powerful lobbies in the United States, the group represents American industry and includes the CEOs of companies from American Express and Apple to World Wide Technologies and Walmart.

The one-page declaration, with 181 signatures, ends as follows: “Each of our stakeholders is essential. We commit to deliver value to all of them, for the future success of our companies, our communities and our country.”

Said Bunderson, “This statement really says something powerful about opening the door for those CEOs who want to think more broadly about the purpose of the enterprise.”

The Business Roundtable’s shift dovetails nicely with one of Olin’s key strategic pillars: values-based, data-driven decision-making. Bunderson and Seethu Seetharaman are teaching a new, related course at the school.

The Business Roundtable’s previous statement of purpose espoused economist Milton Friedman’s decades-old theory that a company’s only obligation is to maximize value for its shareholders.

The new statement says something very different, Bunderson noted in an interview last week. “It suggests that organizations should be thinking about all of their stakeholders, not just shareholders, but also their suppliers, their customers, the communities in which they work,” he said.

‘The very first class they take’

This summer, Bunderson and Seetharaman taught values-based, data-driven decision-making to Olin’s nearly 100 first-year MBA students as the students launched their global immersion.

“This is the very first class they take,” Bunderson said. “We want to imprint them with this identity as values-based, data-driven decision-makers.”

First-year MBA student Hannah Levin said that before the students left St. Louis for Washington, DC, then Barcelona, Beijing and Shanghai, they spent a week “deep diving into what it means to make a decision balancing values and data.”

Hanna Levin

They reflected on what mattered to them individually, as a cohort and as an Olin community, she said.

“Starting our Olin experience with this course allowed us to gain an understanding of what brought each of us here and gave us the opportunity to challenge one another to think critically about our actions,” she said. What they learned “carried through our coursework and conversations for the rest of the summer.” 

In January, Bunderson and Seetharaman will teach the course to part-time MBA students. Seetharaman is director of Olin’s Center for Analytics and Business Insights and the W. Patrick McGinnis Professor of Marketing.

“We need corporate leaders who can make decisions that incorporate a thoughtful consideration of both values and data,” Bunderson said.

“If leaders only attend to the data, they’ll make decisions that ignore key individual, organizational or societal priorities. If leaders only attend to values, they’ll make decisions that don’t fully consider business constraints and opportunities. You need both.”

File photo: Seethu Seetharaman, left, and Stuart Bunderson team up in a March 2019 workshop on values-based, data-driven decision-making.




The president of an energy company was not a believer in a business entity being able to have a higher organizational purpose … until he saw it work for others. So he went back to his company and launched the initiative. It all started with a video that described the higher purpose of the company.

The company’s new video showed its people — from truck drivers to corporate officers — and described how their daily work affected the everyday life and well-being of their community, at every level.

The first workers to watch the video stood and applauded. The video captured the company’s new statement of purpose: “We serve with our energy, the lifeblood of communities and the engine of progress.”

Anjan Thakor

Businesses can have a higher purpose. More than that, they should, finds research by WashU Olin’s Anjan Thakor and the University of Michigan’s Robert E. Quinn.

An organization of higher purpose is a social system in which the greater good has been envisioned, articulated and authenticated, they write in their just-released book “The Economics of Higher Purpose: Eight Counterintuitive Steps for Creating a Purpose-Driven Organization.”

Published August 20, the book expands on the authors’ 2018 Harvard Business Review article.  For that piece, they interviewed more than 35 CEOs and other leaders over two years. And they talked with many more for the book.

“The Economics of Higher Purpose,” from Berrett-Koehler Publishers, is organized into two parts. The first examines theories that govern organizational behavior. The second shifts from theory to practice: It offers eight steps drawn from the authors’ research and interviews with leaders of higher-purpose organizations.

Practical implications

“The steps are to help leaders discover their organizations’ purpose and imbue the organization with it”, said Thakor, the John E. Simon Professor of Finance, director of the PhD Program, and director of the WFA Center for Finance and Accounting Research at Olin.

Purpose has practical implications for a company’s financial health and competitiveness, Thakor and Quinn report. People who find meaning in their work give it their energy and dedication. They grow rather than stagnate. They do more, and they do it better.

“We like to emphasize that a higher purpose is something that transcends your usual business goals, but it also intersects with those goals,” Thakor said.

“The higher purpose becomes the arbiter of all business decisions,” he said. “It has to become the lens through which every decision is viewed.”

Like all organizations, an organization of higher purpose is a cauldron of conflict. Yet people find meaning in their work and in their relationships despite the conflicts, Thakor said. They share a vision and are fully engaged.

In an organization of higher purpose, people interact with one another with respect and engage in constructive confrontation. Trust is continually repaired, and conversations are authentic. The people have a win-win mentality, and positive peer pressure emerges to support high levels of collaboration, the authors discovered. Leadership not only flows from the top down, but it also emerges from the bottom up. Employees believe they work in an organization of excellence.

The paradox

As a consequence of adopting a higher purpose, the organization often makes short-term economic sacrifices but benefits from long-term economic gains.

“The paradox of organizational higher purpose is that it actually does improve financial and economic performance but only if you don’t do it primarily for that reason,” Thakor said. If purpose is undertaken solely for economic gain, it loses authenticity and credibility, and fails to produce positive economic outcomes.

Perhaps the most important finding of the authors’ research is the importance of the authenticity. If the purpose is just a PR gimmick, like a slogan printed on posters and plastered on walls, employees will see right through it, Thakor said. “Everybody will look at it and say, ‘OK. Fine.’

“That’s very different from what we’re talking about,” he said. “This is about values you truly believe in and practice.”

Thakor and Quinn have been scholars of higher-purpose firms for a long time, and they set out to write the definitive book on it. They examined the theories that govern organizational behavior, some of which also are formally articulated in economics.

“We believe these conventional assumptions of economics are valid but incomplete,” Thakor said. “We offer a new logic that transcends the conventional assumptions and includes them.”

They show that higher purpose helps to resolve the classic principal-agent problem at the heart of microeconomics. They also explain why numerous books and articles on higher purpose have failed to gain traction in the workplace.

From theory to practice

How to bring this theory to practice? Here are eight counterintuitive guidelines, which are drawn from their research and interviews with leaders of higher-purpose organization:

  • Envision a purpose-driven organization
  • Discover the purpose
  • Meet the need for authenticity
  • Turn the higher purpose into a constant arbiter of all business decisions
  • Stimulate learning
  • Turn mid-level managers into purpose-driven leaders
  • Connect the people to the purpose
  • Unleash the positive energizers

“Although a higher purpose does not guarantee economic benefits, we have seen impressive results in many organizations,” Thakor said. “Our study and other research suggest positive results, both in operating financial performance and performance measurement.”

So purpose is not just a lofty ideal. It has practical implications for a company’s financial health and competitiveness, according to the book. Allowing people to find meaning in their work means they can grow, do more, do better. Tap into that employee empowerment, and you can transform an entire organization.

This article is partially excerpted from the book “The Economics of Higher Purpose.”




Medicare Part D is a rock star in the policy world. The prescription drug plan is considered a role model for publicly financed, privately provided social insurance programs. 

The idea: Leverage competition to provide high-quality services at low costs to consumers and to the government. Doing so requires the government to subsidize costs. Yet how efficient is Part D’s design for setting those subsidies?

Stephen P. Ryan

In a new study, WashU Olin’s Stephen P. Ryan and co-researchers discovered something they say surprised them: Part D’s setup actually inhibits insurers from seeking higher subsidies from the government. It keeps subsidies in check by virtue of the way it’s designed, although that may have been a happy accident.

More on that in a bit.

The researchers first set out to understand how the market works.

“What is the interaction between the rules of the subsidy mechanism, insurer behavior and consumer demand?” asked Ryan, professor of economics. “That’s basically the triangle that we were interested in.”

A quick primer

Medicare is a public health insurance program covering elderly and disabled people. Most people become eligible when they turn 65 and are automatically enrolled in insurance for inpatient and outpatient services. If they decide they want coverage for prescription costs not included in their plan, they can buy a policy under Part D.

Or they can opt out of traditional Medicare and switch to a private Medicare Advantage (MA) plan for bundled coverage—including prescriptions. MA plans are privately run, publicly financed alternatives to government-run Medicare.

The government launched Part D in 2006. Medicare contracts with private firms to sell the coverage, and it regulates and subsidizes those firms. To get the coverage, which is optional, beneficiaries must buy a policy.

Part D is a rapidly growing market that accounts for about one-fifth of federal spending on Medicare, or about $100 billion a year. Consumers bear a fraction of the cost, about 15 percent, because of premium subsidies and risk-equalization programs. 

Works like a voucher, despite ‘convoluted structure’

The researchers chose Medicare Part D as their laboratory for a couple of reasons. It has clear rules that allowed them to model a variety of experimental scenarios for insurance firms. Plus, it has strong data on potential customers and the choices available to them. 

Through testing different structures, they learned that “the present program, despite its convoluted structure, actually works very much like a flat voucher program,” Ryan said. 

Vouchers often perform better than proportional subsidies. That’s mostly because they preserve some elasticity of demand while still allowing policymakers to sort between prescription drug plans, Ryan and his co-researchers report. 

Demand elasticity is important because it helps firms model potential change in demand due to changes in the price of a good, the effect of changes in prices of other goods, and many other market factors. If the demand for a good is more elastic, in response to changes in other economic factors, companies must use caution when raising prices.

This, in turn, leads insurance firms who sell Part D plans to keep their bids competitive, minimizing the cost to taxpayers. 

Broad implications

The researchers’ findings have broad implications for the design of privately provisioned, publicly subsidized social insurance programs. Traditionally, the US government has provided social insurance programs directly to Americans. But in the past 20 years, efforts have accelerated to move such programs to private markets.

Part D’s design “mutes,” or inhibits, insurers’ efforts to get higher government subsidies because of the complex way it ties together prices for numerous, distinct parts of the program into one “subsidy mechanism.” (That mechanism sets the public funding to private insurance firms.)

“The current mechanism actually did a pretty good job,” Ryan said.“But it is probably not entirely by design, as the subsidy could have been too high or low relative to optimal. It turns out that a combination of all the forces come together to produce something actually not too far from an optimal voucher. It was surprising when we computed that.”

The researchers also learned that insurers’ competition for low-income enrollees kept incentives low for insurers to seek higher subsidies. In addition, tying the subsidy to prices in the related Medicare Advantage prescription drug market—where premiums are typically zero—also kept subsidies stable.

Consumer demand depends on high subsidies

High government subsidies “almost exclusively” drive consumer demand for prescription drug program plans, according to Ryan and co-researchers Francesco Decarolis of Bocconi University and Maria Polyakova of Stanford University School of Medicine.

“Consumers have very low willingness to pay for unsubsidized plans, driven by the availability of close substitutes,” they report. 

In fact, they found that Part D “is efficient only if we account for the fact that the government would likely subsidize the same consumers outside of the (Part D prescription) program as well.” 

The researchers report their findings in “Subsidy design in privately-provided social insurance: Lessons from Medicare Part D,” forthcoming in the Journal of Political Economy.

The research paper provides new evidence that contributes to the emerging academic and policy discussion of the subsidy mechanism. 

“This helps us inform policymakers when they’re thinking about setting up these kinds of subsidy mechanisms in other areas,” Ryan said. 




A consultant inflates his hours so he’ll be paid more. Will his dishonesty later affect whether he’ll be able to tell when his client is pleased or upset? 

Ashley Hardin

In a word, yes, according to a newly published paper by four researchers, including WashU Olin’s Ashley E. Hardin.

Dishonest deeds diminish a person’s ability to read others’ emotions, or “interpersonal cognition,” the research found.

And here’s one of the other big findings: The consequences snowball. One dishonest act can set in motion even more dishonesty.

“It can be a vicious cycle,” said Hardin, assistant professor of organizational behavior. “Sometimes people will tell a white lie and think it’s not a big deal. But a decision to be dishonest in one moment will have implications for how you interact with people subsequently.” 

Repercussions in the workplace

It’s no surprise that liars and cheaters can hurt the workplace, as well.

“Given the rise of group work in organizations, there’s a heightened awareness of the importance of understanding others’ emotions,” said Hardin, assistant professor of organizational behavior. Also, a person’s ability to read emotions is crucial in negotiations and in building relationships. 

Dishonesty has repercussions beyond harming trust and one’s reputation if others become aware of it, according to “The interpersonal costs of dishonesty: How dishonest behavior reduces individuals’ ability to read others’ emotions,” in the Journal of Experimental Psychology: General.

Lying and cheating is “not only is financially costly (e.g., in the case of stealing from a company or increasing the risk of costly lawsuits) but also can harm interpersonal relationships through a particular channel: individuals’ ability to detect others’ emotions,” even when those others are not the victims of the wrongdoing.

Eight studies involving 1,500+ adults

Hardin’s areas of expertise are organizational behavior, team development and negotiation. She conducted the research with Julia J. Lee, of the University of Michigan, Bidhan Parmar, of the University of Virginia, and Francesca Gino, of Harvard University.

In all, the researchers conducted eight studies involving more than 1,500 adults to gauge lying and cheating in various scenarios. The findings support the following:

  • A connection exists between dishonest behavior and one’s ability to accurately read and empathize with others’ emotions.
  • Bad actors are less likely than others to define themselves in terms of close relationships, for example as a sister or a mentor.
  • Dishonest behavior leads to damage downstream; the first transgression is a catalyst to dehumanize others and perform even more dishonest acts. 
  • People who are more socially attuned are less likely to behave dishonestly.

“When individuals are lacking their physiological capacity for social sensitivity, they may be more susceptible to the social distancing effects of engaging in dishonest behavior,” the researchers write.

‘Dynamic tension’

The findings fundamentally challenge views that lump morality and empathy into a single construct, Hardin said. Social psychology research has long argued that empathy is a moral sentiment that triggers prosocial behavior. But empathy toward others can also lead employees to cross ethical boundaries.

Consider a 2010 study by WashU Olin’s Lamar Pierce and Gino, of Harvard. The research was in the context of vehicle emissions. Employees helped customers with standard vehicles, as opposed to luxury cars, by illegally passing the cars on emissions tests. The results suggested that empathy toward others with a similar economic status can motivate dishonest behavior. Basically, the findings highlighted the importance of social context in ethical decision-making.

“Our work adds to this dynamic tension between dishonesty and empathy by showing … that one’s empathic accuracy can be affected by the specific psychological state produced by one’s dishonest behavior,” Hardin and her co-researchers write.