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Markets Are Becoming More Concentrated— And, Arguably, Less

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Markets Are Becoming More Concentrated— And, Arguably, Less RESEARCH-DRIVEN INSIGHTS ON BUSINESS, POLICY, AND MARKETS WINTER 2019/20 DOES AMERICA HAVE AN ANTITRUST Plus: A better way to calculate PROBLEM? hospital rankings Markets are becoming more concentrated— How to manage and, arguably, less competitive a global team “The challenges of cleaning a bathroom are varied, unexpected, and fascinating.” Page 74 n 2016, American voters’ anger was insurance companies, and, of course, SHOULD WE directed toward the Washington elite, public health. Yet Booth’s Dan Adelman has I with cries to “drain the swamp.” identifi ed a signifi cant fl aw in the federal In 2020, the electorate’s frustrations system used to rate hospitals: a hospital BREAK UP seem likely to be channeled toward the can improve in all areas and yet still see technology behemoths of Silicon Valley, its rating drop. Adelman also proposes a AMAZON, with calls to “break them up.” solution to the ratings problem (page 24). “Today’s big tech companies have This issue is full of other research that too much power—too much power over points to ways to potentially improve FACEBOOK, our economy, our society, and our public policy, such as restructuring democracy,” Elizabeth Warren, the vocational training in secondary school AND GOOGLE? Democratic presidential hopeful, argued (page 15) and understanding who benefi ts in March 2019. the most from attending community Meanwhile President Donald Trump colleges (page 21). There are also insights reckons that Amazon—a company headed from fi ndings that use historical data, illus- by his bête noire Jeff Bezos, who also trating why policies such as the Trump owns the Washington Post—has a “huge administration’s ban on visitors from antitr ust problem.” Trump has praised some majority-Muslim countries could the European Union for dishing out adversely aff ect US companies (page 13). multibillion-dollar fi nes to companies With so much policy-relevant research, such as Google. you might feel moved to clip articles Our cover story on the revival of from this issue and send them to your antitrust (page 28) notes that while it may elected representatives. Even better, visit make political sense to pledge to take on our website (just google “Chicago Booth the tech giants, policy makers need to Review”) and share the articles, videos, understand how these tech conglomerates and interactive charts you fi nd there. are formed before deciding whether to We’d love to hear from you about confront them—and how to do so. The anything you fi nd in this issue or on policy teams working for Trump, Warren, our website. Do you think the big and other politicians should familiarize tech fi rms should be broken up? Add themselves with the related research of your voice to the conversation on this Chicago Booth’s Brent Neiman, Chad important debate. Syverson, Thomas Wollmann, and Luigi Zingales, to create informed proposals Hal Weitzman that might have the desired outcome. Executive director, Intellectual Capital Editor-in-chief, Chicago Booth Review Using data to improve health [email protected] care and education Hospital rankings are critical for medical Emily Lambert facilities, health-care professionals, and Director, Intellectual Capital patients. The rating a hospital receives Editor, Chicago Booth Review aff ects its reputation, its negotiations with [email protected] Editor-in-chief Multimedia Chris Gash Chana R. Schoenberger Hal Weitzman producer Dee Gill Jeff Sciortino Editor Josh Stunkel Howard R. Gold Bob Simison Emily Lambert Video producer Dwyer Gunn Rebecca Stropoli Deputy editor Ray Zane Glen Gyssler Vanessa Sumo Jeff Cockrell Contributors Edmon de Haro Pete Ryan Data editor Áine Doris John Kenzie Alex Verkhivker Chuck Burke Peter Arkle Ben Kirchner Brian Wallheimer Social media Martin Leon Barreto Michael Maiello Alice G. Walton editor Boggy Michael Meier Faculty advisory Blake Goble Michael Byers Robin I. Mordfi n committee Copy chief Matt Chase Muti John R. Birge Molly Heim Andrew Clark Sam Peet Lubos Pastor Designer Martin Daks Alex Pine Jane L. Risen Nicole Dudka John Devolle Pete Ryan Review.ChicagoBooth.edu COVER ILLUSTRATION BY EDMON DE HARO Winter 2019/20 Chicago Booth Review 1 DEPARTMENTS 1 Editors’ letter 4 Feedback 94 The Equation DATAPOINTS COVERSTORY 9 Demand for niche 18 Chad Syverson on 28 DOES AMERICA HAVE AN products is growing keeping markets ANTITRUST PROBLEM? 11 No shareholder competitive primacy, less 19 When saying ‘I’m sorry’ Markets are becoming accountability and ‘thank you’ makes 11 Multinational a big diff erence more concentrated—and, companies help 20 How to nudge arguably, less competitive spread recessions consumers to pay off 12 Executive surveys credit-card debt By Jeff Cockrell forecast business 21 Are plastic straws a outcomes leading indicator? 13 The real cost of 21 Community college discrimination: A pays off for some FEATURES case study from students—not all Nazi Germany 22 A manipulation 36 Secrets of wait loss 13 To fi nd an honest index could prevent As life moves faster, everyone’s patience is stockbroker, check derivatives fraud wearing thin. Who gets to the head of the out the auditor 23 Why repeat experiences line quickest? 14 Why do some are underrated By Chana R. Schoenberger companies ignore 23 Experts are often bad at 44 Why central banks need to change new technology? predicting test results their message 15 Can employers change 24 A problem with hospital Interest-rate regulation includes accounting gender norms? ratings—and how to fi x it for an unreceptive public 15 How Norway reduced 25 What’s driving By Dee Gill the earnings gap universities to use 52 The Junk-Food Monster 16 How (in)accurate is more adjunct faculty A way to inspire high schoolers to eat healthier machine learning? 26 When rich folks move By Boggy 17 Whistle-blowers act out downtown, inequality of a sense of morality gets worse Page 1 7 14 28 36 Featured Faculty Raghuram G. Rajan, the Katherine Dusak Luigi Zingales, the Robert C. McCormack Miller Distinguished Service Professor of Distinguished Service Professor of Finance, is the author, most recently, of Entrepreneurship and Finance and the Charles The Third Pillar: How Markets and the State M. Harper Faculty Fellow, joined Chicago Leave the Community Behind. From 2013 Booth in 1992. A past president of the American to 2016, Rajan was the governor of the Finance Association, coauthor with Raghuram Reserve Bank of India. A member of the G. Rajan of Saving Capitalism from the Capitalists, Group of Thirty, a consortium of fi nan- and author of A Capitalism for the People, he ciers and academics, he currently teaches currently directs Booth’s Stigler Center for the a course on international corporate Study of the Economy and the State and fi nance at Booth. (Page 14) cohosts the podcast Capitalisn’t. (Page 28) 2 Chicago Booth Review Winter 2019/20 FOOTNOTES 57 Should sustainability 84 Has unconventional disclosures be monetary policy run standardized? its course? By Hans B. Christensen From the Asian Monetary and Christian Leuz Policy Forum 61 The Fed can’t fi ght a 86 In whose trade war interests should By John H. Cochrane business operate? 62 Startups, forget about The IGM Poll the technology 88 How should you manage By Michael D. Alter a global team? 66 Innovation: What’s The Big Question diversity got to do 91 Why the government with it? shouldn’t intervene By Waverly Deutsch in strikes 71 The questions that will George P. Shultz shape the future of capitalism By John Paul Rollert 74 What I learned from watching people clean By Arthur Middlebrooks 78 Four skills you need to scale a business By Ram Shivakumar 66 94 Amy Ward, the Rothman Family Waverly Deutsch, clinical professor at Professor of Operations Management, Chicago Booth and the Polsky Director of the is interested in promoting effi ciency UChicago Global Entrepreneurs Network, in the service industry—including at teaches the Global New Venture Challenge airlines, hospitals, call centers, and class and is a coach for the annual New online marketplaces. Her research Venture Challenge. Her research focuses addresses the challenges of designing on the execution issues entrepreneurs face and implementing policies that respond as they grow their businesses—especially to the randomness and variability in marketing, sales, operations, and team customer arrival and processing times. building—and is featured in a regular (Page 36) column in Chicago Booth Review. (Page 66) FACULTY ILLUSTRATIONS BY JOHN KENZIE BY ILLUSTRATIONS FACULTY GLEN GYSSLER BY ILLUSTRATION PHOTO Winter 2019/20 Chicago Booth Review 3 Find the articles to which CAN ENTREPRENEURSHIP NO LOVE LOST FOR GE these comments refer at EXIST IN CHINA? Review.ChicagoBooth.edu. Three strategy lessons from GE’s decline (Fall 2019) Don’t underestimate China’s entrepreneurs—steal them (Fall 2019) After GE bought the company my wife worked at, it shipped all the JOIN THE Of course they have built up a jobs to India and laid everyone off. Have coterie of science researchers of CONVERSATION boycotted GE since and won’t shed a tear meaningful strength. They have obviously if it goes under. Subscribe to our weekly used our universities and research insti- —Jim Senecal email newsletter at tutions to jump-start their efforts over Review.ChicagoBooth.edu, the years. And of course, the government GE’s never spent time and effort and follow us on social media: supports their version of entrepreneurs building its consumer brand. Ever Twitter with focused investments in areas of rush out to buy a GE refrigerator? Yea. I @chicagoboothrev government priority. But do they allow the didn’t think so. freedom of entrepreneurial choice found Facebook —Brad Szollose @chicagoboothrev in the United States and elsewhere in the free world? Not really.
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