Selected Publications
Can It Clean Up Your Inbox? Evidence from South Korean Anti-spam Legislation
( Ju, Jaehyeon | Cho, Daegon | Lee, Jae Kyu | Ahn, Jae-Hyeon )PRODUCTION AND OPERATIONS MANAGEMENT2021-08
Abstract
Although spam email messages have been the primary source of cybercrime since the early Internet era, there is no quick fix to this problem. Governments have established anti?spam legislation, but surprisingly, there has been no measurement of policy impact. This study aims to fill the gap by utilizing a quasi?experimental setting in South Korea, where the anti?spam policy was substantially amended in November 2014. A significant change was in the default setting, switching from an opt?out to an opt?in scheme, which required that commercial email senders obtain recipients’ prior consent. Also, the law notably escalated the deterrent penalties for perpetrators. To empirically examine the policy effectiveness, we use a large?scale data set of 5.61 billion spam emails originating from over 38,000 spammers in 226 countries during twenty months in 2014?2015. Our findings suggest that the amended policy adopting the opt?in scheme decreased the volume of spam originating from Korea by 16.1%. The expected economic gain from the increased productivity of recipients is 7.649 million USD per year. This paper contributes to the literature by highlighting that a well?designed policy can lower cybersecurity incidents that threaten organizations, operations, and individuals. Our finding also provides important implications for policymakers and managers in designing effective policies with data?driven evidence.
Repairing a Cracked Mirror: The Heterogeneous Effect of Personalized Digital Nudges Driven by Misperception
( Jung, Miyeon | Cho, Daegon | Shin, Euncheol )PRODUCTION AND OPERATIONS MANAGEMENT2021-08
Abstract
Our study aims to deepen the understanding of personalized digital nudges by evaluating their effects on energy?saving behavior. We conducted a field experiment with a leading smart metering company in South Korea to investigate whether customers save more energy when a personalized goal and feedback are provided, and how the impacts of nudges vary according to the types of misperception. Specifically, we focused on the behavior of customers who underestimate or overestimate their past electricity usage compared to their actual consumption. We merged daily energy consumption with a pre?experiment survey for the customers. We found that goal?setting and feedback mechanisms have a markedly different impact on each type of misperception. Underestimating customers reduced energy consumption only under the “goal setting with feedback treatment”. Conversely, overestimating customers reduced energy consumption even under the “goal setting without feedback” condition. The underlying mechanism is suggested as updating biased beliefs towards goal achievement. Overall, the results demonstrate that personalized nudges lead to heterogeneous behavioral responses and that service providers and policymakers can use these signals to enrich their planning of behavioral nudges.
Policy Uncertainty and Accounting Quality
( El Ghoul, Sadok | Guedhami, Omrane | Kim, Yongtae | Yoon, Hyo Jin )ACCOUNTING REVIEW2021-07
Abstract
Using data from 19 countries over the 1990-2015 period, we examine how economic policy uncertainty (EPU) affects accounting quality. We find that accounting quality, measured based on Nikolaev's (2018) model, increases during periods of high policy uncertainty. This relation is confirmed by the negative association between EPU and performance-adjusted discretionary accruals in a multivariate setting, and it extends to various alternative measures of earnings properties. We also find that the positive relation between EPU and accounting quality is more pronounced for government-dependent firms and firms with higher political risk. Additional analyses based on institutional investors' trading behavior, media freedom, and press circulation suggest that market participants' attention is a mechanism through which EPU affects accounting quality. Further, we find evidence that high accounting quality can mitigate the negative effects of EPU on corporate investment and valuation.
Arbitrage Portfolios
( Kim, Soohun | Korajczyk, Robert A | Neuhierl, Andreas )REVIEW OF FINANCIAL STUDIES2021-06
Abstract
We propose a new methodology for forming arbitrage portfolios that utilizes the information contained in firm characteristics for both abnormal returns and factor loadings. The methodology gives maximal weight to risk-based interpretations of characteristics’ predictive power before any attribution is made to abnormal returns. We apply the methodology to simulated economies and to a large panel of U.S. stock returns. The methodology works well in our simulation and when applied to stocks. Empirically, we find the arbitrage portfolio has (statistically and economically) significant alphas relative to several popular asset pricing models and annualized Sharpe ratios ranging from 1.31 to 1.66.
The Deterrent Effect of Ride-Sharing on Sexual Assault and Investigation of Situational Contingencies
( Park, Jiyong | Pang, Min-Seok | Kim, Junetae | Lee, Byungtae )INFORMATION SYSTEMS RESEARCH2021-06
Abstract
Sexual assault is one of the most repellant and costly crimes, which inflicts irrecoverable harms on victims and society. This study examines the effect of information technology (IT)-enabled ride-sharing platforms on sexual assaults. Drawing upon routine activity theory from the criminology literature, we posit that ride-sharing can reduce a passenger's risk of being a suitable target of sexual assault by providing a more reliable and timely transportation option for traveling to a safer place. By exploiting the nationwide quasi-experimental setting of Uber's city-by-city roilouts in the United States during 2005-2017, we demonstrate that Uber's entry into a city is negatively associated with the number of rape incidents. To zoom into the effects of ride-sharing at a more granular level, we employ precinct-hour-level data on Uber pickups and rape occurrences in New York City in 2015 and conduct spatiotemporal analyses. Our results from the spatiotemporal analyses corroborate those of the quasi-experiment and further reveal situational contingencies in the deterrent effect of ride-sharing. Specifically, ride-sharing contributes to a more significant reduction in the likelihood of rape occurrences in neighborhoods with limited transportation accessibility, and ride-sharing is more effective in deterring sexual crime in riskier circumstances, such as around alcohol-serving places on weekend nights or when the probability of crime occurrences increases. This study sheds new light on the potential of IT-enabled platforms to improve social well-being beyond their economic contributions and offers a new theoretical insight on the distinct role of digital platforms in public safety.
