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Three panels of a silhouetted figure increasingly covered by clouds.

Clouded Judgement

Haas researchers delve into the science of why we make the decisions we do.

Nearly every minute, we’re faced with choices. Should we focus on an upcoming project or organize for the future? Take a chance on a risky investment or play it safe? Go to the deli or try that new Thai place for lunch? For the most part, we feel in control of those decisions, having the free will to make our own choices based on what we want or need to do. Economists thought so too, expecting human beings to act rationally to choose what’s in their best interests based on the available information and their mental abilities to process it. For decades, economists preached that humans might not always choose the best option available, but they will choose a “good enough” option for themselves in the moment.

More recently, however, the burgeoning field of behavioral decision research has been calling those assumptions into question. Using a combination of economics, neuroscience, psychology, and machine learning, decision scientists have shown that we humans aren’t very rational at all when it comes to the choices we make. Errors in judgment, emotional responses, impulsiveness, and lack of perspective all skew our decision-making abilities, frequently causing us to choose poorly even when better options are available.

“Anyone who has studied the economics of decision-making will have encountered the basic concept that individuals should choose the option with the highest-expected value,” says Professor Don Moore, associate dean for academic affairs. Moore, who has become one of the leaders in the field for his work on overconfidence, has just released his second book, Decision Leadership (see sidebar, p. 18). “In real life, however, it can be complicated to calculate expected value, so we end up relying on our intuition, which is imperfect.”

Despite our lack of rationality, humans still tend to act in predictable ways that can be studied scientifically. Haas researchers are using tools from a variety of disciplines to better understand the predictably bad choices that people make—and what might be done to push them toward better outcomes. In many cases, they’ve found, there is a “right” answer that will produce a more optimal end result, if people understand how to recognize it. These are critical skills for managers: Understanding the latest decision research can help them not only make better decisions at work but also set up environments to help employees and customers make better decisions as well.

The Truth About Consequences

Headshot of Associate Professor Ellen Evers.Say you’re a doctor with two patients, but you only have resources to operate on one. Patient A has an 85% chance of surviving, but if you operate, you can increase it to 90%. Patient B has only a 20% chance of surviving, but if you operate, you’ll increase it to 30%. Whom would you choose? “If you care about saving lives, you should operate on Patient B, because you have the most chance of increasing their survival,” says Associate Professor Ellen Evers (shown left). Yet, when she and Haas PhD students Stephen Baum and William Ryan posed this question in the lab, participants overwhelmingly chose Patient A.

The reason is that people are much more apt to focus on the negative consequences of their actions rather than the positive. “If you don’t operate on Patient B and they die, you say, ‘Hey, I couldn’t have done much about that anyway,’” says Evers. “But if I don’t operate on Patient A and they die, then you think, ‘Oh man, I could have prevented their death.’” Such emotional responses are frequently undervalued by economists when it comes to decision-making, and yet they can have huge effects on the choices people make, especially when evaluating risk. “Most economic models don’t see those kinds of emotional ‘negative-values’ as true inputs,” Evers says, “but as human beings, we experience those emotions.”

A percent sign showing one smiling face and one sad face.In gambling experiments, Evers finds that people frequently pay too much for insurance to cover their losses, beyond the probability that they’ll lose. They tend to behave the same in risky hypothetical situations—for example, in deciding to buy back-up tickets to an indoor theme park in case of getting rained out of an outdoor park—paying the same whether there’s an 80%, 50%, or 20% chance of rain. “They’re so worried about feeling regret if something bad happens, they don’t consider whether the chance of something bad happening is minuscule,” says Evers. As a result, people frequently overinvest in a backup plan when there’s little chance they’ll need it, but they also underinvest in Plan B when chances are likely they will. Similarly, we overinvest in projects likely to be successful but don’t invest enough in projects that are long shots. “The more important decisions become, the worse we are at accurately considering their chances of success because we care too much,” Evers says.

Identifying regret as the cause of poor decision-making can aid leaders in helping people make better choices, she says. Have people focus on external causes of negative consequences rather than on themselves. “If people are less likely to say, ‘I am at fault for doing this,’ then their decisions become more optimal,” Evers says.

The Value of Memory

Headshot of Associate Professor Ming Hsu.Picking your favorite fast-food restaurant seems like an easy enough task. But when Associate Professor Ming Hsu (shown left) asked people to do just that, 30% of respondents picked McDonald’s. Yet half of those people changed their selection to a different favorite fast-food chain when they were later given a list to pick from. While it seems strange that people forget their favorite brand, Hsu found the same thing happened when he asked people their favorite fruit, salad dressing, and other categories.

“According to the rational economic model, if you didn’t buy something, it must be because you didn’t like it,” says Hsu, the William Halford Jr. Family Chair in Marketing. “We found that it’s possible people don’t buy things because they forgot about it.” Hsu’s research combines economics with neuroscience, scanning the brains of study participants using functional magnetic resonance imaging (fMRI) to see what’s going on when they make decisions. His lab found that when people made open-ended choices, they activated a part of the brain associated with memory, but when they chose from a list, that part of the brain remained dormant.

A foam hand reading #1 with its index finger raised and a string tied around the top of the finger.

Interestingly, Hsu’s lab didn’t see the same result for running shoes, when people chose Nike for both open-ended and multiple-choice options. “People chose McDonald’s because they couldn’t think of anything else, whereas with Nike, people

really do like Nike,” he says. Such tools can help companies better understand the value of their brands in the marketplace. In the future, Hsu plans to look at how those choices change over time. “If you’re McDonald’s or another category leader, you may be benefitting from associations that were built up 20 years ago. But if you’re not putting any brand value in the bank, then ten years from now, you may be dead. It’s important how much you’re willing to pay for a brand, but it’s also important how much it sticks in your mind.”

Attracting Attention

For decades, psychologists have been aware of a phenomenon called “anchoring.” In numeric judgments (e.g., What will Amazon’s stock price be in a year?) people often “anchor” on a starting value (e.g., today’s stock price) and tend not to adjust far enough in their final answer. Good negotiators use anchoring by offering a very high or very low opening bid to influence the outcome.

Headshot of Professor Clayton Critcher.Professor Clayton Critcher (shown right), the Joe Shoong Chair of Business, has shown that people are not only anchored by starting numbers but are also influenced by other focal values, “attractors,” that seem to draw judgments toward them.

In recent research, he found that round numbers served as attractors when people predicted, for example, airfare increases. “If airfare from L.A. to New York is $360 but has been rising, then a round number like $400 serves as a natural focal point, an ‘attractor,’” says Critcher. Asked where airfare was likely to go in the coming days, study participants estimated a relatively big upward jump. When Critcher changed the current airfare to $380, however, participants still chose numbers close to $400—forecasting a much smaller increase. “The attractor ends up shaping people’s subjective sense of what is a big or small possible change,” he says.

“It’s important how much you’re willing to pay for a brand, but it’s also important how much it sticks in your mind.”
—Assoc. Prof. Ming Hsu


Fish attracted to a hook shaped like the number three.The phenomenon could have many implications in business. In other studies, Critcher leaned on different ways investment firms construct graphs that illustrate how, say, mutual fund values have evolved. Making different incidental numbers salient on these graphs had predictable consequences for how potential retail investors thought the funds would perform.

“You are able to nudge people into interpreting trends as more or less significant depending on how you present the information,” Critcher says.

The idea can also be applied to exact social good. For example, if health officials want people to take a rise in COVID cases seriously, they could depict the upward trajectory on a chart in which the closest y-axis label is farther away. This could lead people to predict that cases are contining to increase, perhaps encouraging more precautions.

The Power of Perception

Juliana Schroeder Associate ProfessorWhen Juliana Schroeder (shown right) is searching for a new research topic, she often looks at the world around her. “Every paper starts with a puzzle,” says Schroeder, an associate professor and the Harold Furst Chair in Management Philosophy & Values. “I’m particularly interested in social inference and what people get wrong in their social judgments.” One recent study, for example, started with the observation that people often appreciate constructive criticism from others but are often reluctant to give it themselves. “It could range from being told you have a stain on your shirt to more consequential feedback between spouses,” she says. “Most of us want good feedback in our lives and aren’t getting enough of it.”

In a series of hypothetical and actual scenarios, she found that people consistently said they wanted constructive criticism when they were in the position of receiver but wouldn’t offer it when in the position of giver. In drilling down into the causes of that paradox, Schroeder found it was only partially due to anxiety about how the feedback would be perceived. In fact, the biggest impediment was a lack of realization into just how much the other person desired it. “When we intervened to cause people to think about a time when they wanted feedback, it was enough to trigger them to realize, ‘Okay, maybe I should give feedback to others as well.’”

For another group of studies, Schroeder has looked at the power of rituals in the workplace—finding that simple actions, such as how managers conduct meetings, become imbued with importance over time. “With almost every activity, you can add small physical features, making it more rigid and formal, and people will start to add meaning to it,” she says. At the same time, people tend to resist change to rituals, ostracizing those who don’t follow established formalities.

Schroeder recommends that managers think about how they construct rituals to ensure they reflect the values of the company. “It could be as simple as starting a meeting by having everyone share something they did in their personal lives, which says something quite different than asking everyone to say something about what they did at work.” But they should also think hard before changing established rituals in the workplace. “You always have the new boss who comes in and wants to change everything, and I would be careful about that,” she says. “Conveying your good intentions helps a little, but once people get used to rituals, they don’t want them changed.”

Predictably Irrational

Decision science encompasses a wide range of inquiries: how customers choose products, how we insure ourselves against risk, how we offer criticism to a co-worker, and more. Yet despite this variety, the research comes down to the same basic premise: Human beings may not be rational, but our irrationality itself is predictable.

By better understanding the misperceptions and emotions that routinely lie behind people’s decision-making processes, managers can help anticipate some of the common pitfalls that can lead to bad decisions and negative consequences. They can learn to recognize the biases that creep into their own judgments and the judgments of others and combat that with processes that rely on facts and probabilities, rather than faulty intuition or simple heuristics.

Understanding the latest decision research can help [managers] not only make better decisions…but also set up environments to help employees and customers make better decisions as well.

Good leaders can even use decision science to their advantage by setting up an environment to help people choose more wisely. Whether that means using an attractor to better frame a problem, instituting rituals to bolster company culture, or presenting “nudges” to encourage people to act in their best interest, the predictable way humans respond to choices can be harnessed as a force for positive decision-making.

By more fully understanding how and why people decide the way they do, we can all learn to make better decisions in the end.

Back to the Roots

The life cycle of a green bean plant, starting as a seedling.The alumni cultivating a nation of growers

Nikhil Arora and Alejandro Velez, both BS 09 (shown right), want consumers to know where their food comes from. Their gardening company, Back to the Roots, sells kits, seeds, and supplies for growing organic herbs, vegetables, and more, simplifying gardening so even those without a green thumb can have, well, a green thumb. From their beginnings in a dark warehouse in Oakland, California, growing mushrooms from used coffee grounds, Back to the Roots is now a national brand, with its products sold in thousands of stores, including Walmart, The Home Depot, Target, and more. But their journey wasn’t always a straight shot to growth. After 10 years of pivots, Back to the Roots is now beating brand names while connecting with the next generation of farm-to-table devotees. 

Nikhil Arora and Alejandro Velez.2009

Intrigued by a class lecture, Haas seniors Velez and Arora try cultivating mushrooms with used coffee grounds. They receive $5K in funding from UC Berkeley and by graduation launch Back to the Roots as a sustainable urban mushroom farm. Soon, they’re making DIY mushroom-growing kits for curious customers.


Though mushroom sales reach $250K a year to Whole Foods and locals, the real interest is in kits, so they refocus the company.


Velez and Arora crowdfund $500K to build an aquaponic garden kit. They quickly iterate and launch a version 2.0 after their first version is accused of copyright infringement.


Now making $4.6 million in revenue with products in 8,000 stores, Back to the Roots starts turning a profit. They reach 13,500 students with the Grow One, Give One campaign, which donates grow kits and a garden curriculum to elementary schools.


Velez and Arora launch 13 new products, including garden-in-a-can and the first U.S.-grown, all-stoneground breakfast cereal, which has just three ingredients.


The company raises $5 million in seed funding followed by a $10 million Series A round. Ready-to-grow kits and cereals reach 5,500 schools nationwide. Kits are now sold in 1,200+ stores in 800+ cities.


Back to the Roots supplies food to New York City’s 1.1 million public-school students. They also create an indoor gardening destination with The Home Depot and Whole Foods in over 2,000 stores.


With the garden business doubling year over year, Velez and Arora again refocus by selling the ready-to-eat line to Nature’s Path. They are now a gardening company. The pair deliver the commencement address to Haas undergrads (


With millions gardening during the pandemic, all major retailers triple-down on the Back to the Roots brand, which launches 92 U.S.-grown, organic seed varieties with The Home Depot.


As Back to the Roots juggles cash flow and growth with needing to order seeds two years out, they close a $15 million funding round. Walmart awards them its highest sustainability certification for upcycling waste, optimizing packaging, and using sustainable materials in manufacturing.


Consumers will spend $100M on Back to the Roots organic gardening products.

Tour de Force

Alvaro Silberstein, MBA 17, helps those with disabilities navigate the world.

Back when Alvaro Silberstein was a teenager who surfed, snowboarded, and played on Chile’s under-19 national rugby team, he sometimes imagined a scenario in which he might need a wheelchair. “I was involved in sports where those kinds of injuries happened,” says Silberstein, “so I did consider the possibility. I loved being outside in nature, and I always told myself that if I faced the kind of mobility challenges that meant I couldn’t go on big outdoor recreational adventures, I would prefer to die.”

Then the worst actually happened. When he was 18, Silberstein was struck by a drunk driver and left fully paralyzed from the chest down and partially paralyzed in his arms and hands. Since that day, he hasn’t just continued to undertake physically arduous adventures in remote locations around the world, he’s also co-founded a company, Wheel the World, that makes it possible for travelers with disabilities and their families to follow in his wheelchair tracks—and forge their own new trails. “We’re trying to change perceptions around disabilities and push the boundaries of what’s possible,” says Silberstein.

The idea for the company was born from an ambitious trek in Patagonia that Silberstein took in 2016, while still a student at Haas. His dream had always been to visit the rugged Torres del Paine National Park in Chile and traverse its iconic five-day W Trek.

“My friends and family in Chile had been there, but I assumed it was impossible for me,” says Silberstein. “But after my experience in California, where I was amazed that I could visit places like Yosemite, Big Sur, and the redwoods, I said, ‘OK, let’s figure it out.’”

Dream trip

Together with his childhood friend and Wheel the World co-founder, Camilo Navarro Bustos, Silberstein began organizing a trip and fundraising to purchase a specially adapted wheelchair built to handle rough terrain with the help of a team. That’s when the two men realized they had a unique opportunity: they could make the chair permanently available in Patagonia to other adventurers with physical limitations. “We had the chance to not only impact my life and fulfill my dream to visit Patagonia,” Silberstein says, “but to open this path to others.”

In April 2016, together with a film crew and a team of twelve—including experienced mountaineers, disabilities experts, and a physical therapist specializing in spinal cord injuries—who pushed and pulled the chair along the arduous 50-mile route, Silberstein completed the W circuit, arriving at the Mirador Base de las Torres as a national hero in Chile.

Before Silberstein even made it back to the airport, there was already an inquiry about using the adapted wheelchair for a 14-year-old boy who had refractory epilepsy and who was later able to complete the trek as well. “The real aha moment was when other disabled people reached out to say, ‘I want to do that same trip,’” says Silberstein. “That really validated our decision to start Wheel the World.”

Man operating a handcycle with three children riding along.
Silberstein in Peru.
Four scuba divers underwater.
Wheel the World scuba-diving trip in the Riviera Maya in Mexico.

Expanded purpose

Today, Wheel The World has 28 employees from 10 different countries, working across the globe from Berkeley, California, to Santiago, Chile, to Lyon, France, and beyond. Initially the focus was on guided adventure travel like Silberstein’s Torres del Paine trip, but demand from travelers with disabilities for destinations closer to home caused the company to expand its remit. “Wheel the World is the Expedia of accessible travel,” says Silberstein. “You can book a hotel in New York City, but you can also book a five-day trip to Easter Island.” Travelers book through, and the company generates revenue like any other online travel agency.

A line of people trekking through Easter Island on foot and in wheelchairs.
Wheel the world trek through Rapa Nui (the indigenous name of Easter Island) National Park.

One reason travelers with disabilities appreciate WTW is the granular detail the company provides on accommodations—not just whether a hotel or an experience is standards-compliant. “In the U.S.,” explains Silberstein, “standard ADA-compliant bed height is something like 80 centimeters, because many in the U.S. use power wheelchairs that are relatively tall. In Spain, however, a standards-compliant bed is only 40 centimeters high, because the majority of users there are in lower, manual chairs.”

That’s why WTW listings include exact measurements for bed heights and bathroom door widths, availability of ramps and elevators, hearing disability guidance, and more. The listings are developed with the help of volunteer “mappers” who take measurements and photos of hotel rooms and facilities. The detail enables travelers with disbilities and their companions to enjoy their vacations without the anxiety of unexpected access issues—in other words, to have a trip exactly like those that able-bodied travelers take for granted.

Silberstein says that hotel and tour operators are eager to work with WTW to learn how to make their properties and experiences more inviting for the disabled community. In part it’s because the market for accessible travel encompasses so much more than just the estimated 15% of the world’s population that has a disability—it also includes their travel companions as well as aging travelers who may need special accommodations. Half the customers booking travel via WTW are the able-bodied companions or family members of a traveler with a disability, Silberstein says. “We like to say that the disabled are the only minority that isn’t actually a minority.”

WTW offers a free online course around accessibility for travel professionals, enabling destinations and hotels to become a certified WTW partner. “We will achieve total inclusion when we make businesses realize that if they build customer experiences that are well-designed for people with disabilities, it’s a good opportunity for them, too,” says Silberstein.

Man in a specialized wheelchair made for trekking through rough terrain.
Silberstein during his momentous trek through Torres del Paine National Park in Chile.
Kayakers rowing next to a giant blue ice shelf in Chile.
Silberstein during his momentous trek through Torres del Paine National Park in Chile.

Sense of urgency

WTW’s pre-pandemic growth certainly reflected that market potential, with the company roaring from a record 2019 into January 2020 with a new round of funding and a long list of projects to undertake. Then came COVID, and its universal beatdown to the travel industry. “The pandemic was a disaster for the goals we had set,” says Silberstein. “So we focused on what was in our control: developing systems and technologies to accommodate our growth once the pandemic was over and building more partnerships with operators and hotel chains around the world.”

That pivot paid off. In 2021, despite continued challenges to the travel industry, WTW served five times the number of people it did in 2019. Silberstein plans to keep that momentum going. “In 2021, we impacted around 1,000 people; we want to make that 5,000 travelers by end of 2022,” he says. To do that, WTW plans to expand to 45 employees and to increase the number of “products” (i.e., WTW-accredited hotels or tours) from 600 to 9,000 within the next two years. The company recently closed a $5 million Series A funding round, including backing from the former team, which should help make those ambitious growth targets possible.

Five people on a beach, two in wheelchairs and one with a prosthetic leg.
Silberstein (left) on a beach excursion in Costa Rica.

The very success of WTW contributes to Silberstein’s sense of urgency. “We recently heard from someone whose boyfriend had both legs amputated six months earlier and who was finally feeling ready to look at travel experiences again,” he says. “She went on our platform to research accessible destinations in Denver, which we don’t cover yet. But she thanked us for leading the way, because it had been difficult to find useful resources for planning.”

Like so many stymied travelers during the past two years, Silberstein has been making plans for his own post-pandemic excursions. “I have been so focused on work for the past two years, but I really want to do a trip to Machu Picchu and the Amazon with an operator we have in Peru,” says Silberstein. “We also have an experience in Lake Titicaca in Peru, where you row in Polynesian kayaks to different small towns around the lake. I had planned to do that with my three older brothers in 2020, and we had to postpone. But now we are looking forward to completing it in 2022.”

Thinking back to the young man who believed death would be preferable to life in a wheelchair, Silberstein is philosophical. “If I could go back to my younger self,” says Silberstein, “I would tell him this: Your life will look very different from what you expect—and maybe that feels like bad news to you. But even if it takes time, you’ll be able to overcome every challenge that you’ll face.”

Second Acts

Haas alumni model versions of retirement worth saving for.

Deary Duffie, MBA 84 (shown above), doesn’t like to think of himself as retired. Instead, he’s “in renaissance.” That’s because the former human resources executive and leadership coach is cultivating a thriving post-career life in his 60s.

“‘Retirement’ didn’t quite work, because that felt like an ending,” Duffie says. “‘Renaissance’ feels like a rebirth. And I really feel that—I feel I’m tapping into things I’ve wanted to do that I didn’t get to do in my corporate world.”

For Duffie, that’s meant spending long stretches of time in Italy with his partner, studying the language and culture; leading a career-development series for a local LGBTQ+ group; and offering professional-development advice in educational settings, including UC Berkeley. He gravitated toward these second-act endeavors after journaling in response to the prompts in Michelle Obama’s companion journal to her book, Becoming. In so doing, Duffie was refining a purpose for his reborn self: “What became clear is that I like developing others,” he says.

Duffie’s desire to approach retirement as a rebirth is growing more common as life expectancies lengthen with each generation. Longer retirement periods have caused some people to rethink their golden years and possibly work part-time for extra income or just to stay engaged. What’s more, many Americans are retiring earlier, a shift the pandemic seems to have hastened. Michelle Pollak, BS 00, a private wealth advisor with Pollak and Pollak Wealth Management, says that the desire to expedite retirement is a trend she’s seen among her clients—and it’s one that can bring up new challenges.

“The period we have to save for has grown larger, not only on the back end—due to life expectancy—but also on the front end, because people don’t want to work as long as their parents did,” Pollak says. “The amount to be accumulated must be that much larger.”

Living a retirement renaissance like Duffie’s requires long-term planning and saving—even when the milestone feels laughably remote. He and the Haas alumni whose stories are included here offer inspiration as to how it can be done. In many ways, their experiences look nothing alike—their ages at the time of retirement range from 34 to 69, their careers have spanned industries and income levels, and they’re now pursuing very different passions—but they all stress the importance of planning ahead in creating the second acts they’re enjoying today.

Breaking the Golden Handcuffs

Headshot of Sam Dogen.Sam Dogen, MBA 06, knew from his first month in investment banking that he didn’t want to spend his career working 14-hour days. So starting with his first paycheck, at age 22, he squirreled away 50% of his after-tax income. He also invested his savings in dividend-paying stocks and real estate.

In 2008, the financial crisis slashed Dogen’s net worth by a painful 35%. Early the next year, he started a blog called Financial Samurai, as a way to process what was happening.

“I wanted to connect with other people who were suffering in the financial crisis,” Dogen says.

As his interest in the blog intensified, so did his desire to leave banking. But Dogen was in his early 30s, and even after saving aggressively, investing for over a decade, and amassing an annual passive income stream of about $80,000, retirement didn’t yet feel possible—at least, not until he devised the final piece to his early retirement: He negotiated his own layoff, with a severance.

“I had deferred compensation, so if I quit, I would get nothing,” Dogen explains. “That can become the golden handcuffs.” But by being laid off, Dogen found a key to his own freedom. His managers agreed, and in 2012, at the age of 34, Dogen retired and wrote a book about his experience called How to Engineer Your Layoff. He’s now a stay-at-home dad to his two children and recently published a second book, Buy This, Not That: How to Spend Your Way to Wealth and Freedom.

Though Dogen’s path to an early retirement was unconventional in many ways—and not available to many outside high-paying industries, like banking—steps along his path align closely with the advice that financial experts say apply to any retiree.

Professor Terrance Odean, the Rudd Family Foundation Chair, offers a few retirement rules of thumb: Start saving early—ideally, at least 20% of your after-tax income. If that isn’t yet possible, commit to saving half of the income from your next raise for retirement. Both he and Pollak also stress making a financial plan, which can project or help define your ideal retirement age and the savings required to comfortably achieve it.

“Whether you do it yourself or hire a financial planner, it’s important to understand the assumptions being made, why those assumptions are being made, and what could go wrong,” Odean says.

In another way, Dogen’s unconventional path can offer inspiration to people in much different situations. Greg Patterson, MBA 00, CEO of The Advisory Group, says he’s seeing an increase in clients who are widening their understanding of what retirement can look like—and when it can happen—and encourages others to think creatively about their own lives. Some of his clients, for example, are financially planning for mini-retirements lasting a year or so sprinkled throughout their careers. Patterson calls these breaks “mid-life gap years.” Some use them to recharge, connect with family, or prepare a career pivot.

“If smart planning and action now can make work optional sooner, why wait to have all of your extended free time at the end of your life, especially if you might be less mobile or have more health issues?” Patterson says.

Headshot of Art Altman.Learning What’s Next

Financial planning is not the only thing future retirees need to educate themselves about. Art Altman, MBA 94 (shown right), needed to know how to transform a lifelong hobby into a small business.

Altman earned degrees in mathematics and computer science prior to attending Haas and was one of the early practitioners of artificial intelligence in the late 1980s. In the 1990s, he became a research program manager at the Electric Power Research Institute in Palo Alto, specializing in energy derivative asset valuation and risk management as well as energy-market modeling.

“If smart planning and action now can make work optional sooner, why wait to have all of your extended free time at the end of your life, especially if you might be less mobile or have more health issues?”

—Greg Patterson, MBA 00

When Altman left EPRI in 2011, he moved to New York City. He wasn’t yet thinking of himself as retired but found no job prospects that interested him. Fortunately, he had the freedom to be picky.

“I had saved and invested money systematically,” he says. “That meant I could take my time figuring out what I wanted to do next.”

Photography had always been a hobby, and he had a knack for portrait work. In New York, Altman met the man he considered one of the world’s best headshot photographers, and he helped Altman parlay his talent into a money-making endeavor. Now, Altman’s professional headshot business thrives on word-of-mouth referrals—and he says that he, too, is thriving. He only wishes he’d begun preparing for the transition sooner.

“I might have begun to learn about small business taxes and accounting, for example, thinking ahead to whatever I might do next,” Altman says.

Claudia Cohan, MBA 83, echoes the importance of thinking ahead. After many years in environmental nonprofits—including a period as the executive director of a wildlife museum—Cohan initially scaled back to part-time when she became a parent and her husband had a stroke and needed her care. She took a job in development at UC Berkeley, where she spent the next 17 years, including ten at Berkeley Haas.

Woman standing in lush vegetation next to a tree.
Claudia Cohan, MBA 83, launched a second career as a landscape architect after retiring from her development job at UC Berkeley.

As retirement age neared, Cohan felt a growing pull to return to her earliest professional roots: She’d earned her undergraduate degree in plant science and had worked at a landscape nursery. Just before retiring, at age 66, she took a landscape architecture class at her local community college. Cohan did what Altman wishes he had: she started learning the necessary skills for her second act while nearing the end of her first.

“Two months before I retired, I took some vacation time and started the classes,” Cohan says. “I was pushing myself to make that transition.”

Since retiring, Cohan has launched her landscaping business, Shaped Scapes Design, and she now regularly works designing residential gardens, many of which are drought tolerant. And she’s just one semester away from earning her landscape architecture certificate.

“Two months before I retired, I took some vacation time and started [landscape architecture] classes. I was pushing myself to make that transition.”
—Claudia Cohan, MBA 83

Expanding Strengths

Headshot of Janet Long.Texas native Janet Long’s post-retirement life has flourished as she’s followed the strengths honed in her career into altogether new territory.

Long (shown right), MBA 77, joined HBO in 1980—before the cable TV network had been rolled out nationwide. As she climbed the ranks in the account management group, she moved to Denver then San Francisco to work with regional and national cable system groups to launch HBO. She left the company in 1991 and started a management consulting firm in California. Her clients included Apple and IBM.

In 1998, at age 50, Long closed up shop to return to Dallas to assist her ailing parents. At first, she considered it a pause rather than retirement and made regular trips back to California. Then she discovered some family history that would soon bring her home: Her parents had been managing properties across Texas that had been in the family for generations—one since 1909. She started helping, and when her parents died, the properties became her main focus.

“I really see them as physical manifestations of the family roots,” Long says.

Long joined state organizations that helped her learn about the laws and other considerations involved in property management, including the Texas Forestry Association and the Texas Land & Mineral Owners Association. She learned of the importance of such organizations in her previous roles.

“My background in the cable industry included a lot of work with state and national organizations, places where information was shared,” Long says. “I saw how powerful that was.”

More recently, she’s stepped into local government in Dallas, where she now lives in her childhood home. Long was appointed to a task force by her city council representative to help with long-term land use and zoning decisions.

“I’m very concerned that in America, we’re not doing enough to provide housing for a range of incomes,” she says.

Focusing on Passion

Headshot of Luis Montero.For Luis Montero, MBA 71 (shown left), retirement offered the chance to take the parts of his career that he most loved and transpose them onto a lifelong passion: music.

After earning his MBA at Berkeley, Montero returned to his native Chile and worked as an assistant professor of marketing at the University of Chile, the first of many teaching assignments throughout his career. In later years, Montero was appointed as a commercial attaché, representing Chile’s exporters in both the U.S. and the U.K. Montero enjoyed connecting Chileans with local importers—for instance, by organizing wine tastings and food exhibitions. He “retired” at 69, continuing to teach part-time at the university level, but Montero now had space for something both new and familiar.

“My whole life I have enjoyed a real passion for music,” he says, “but I didn’t have the chance to take formal music classes as I would have liked.” Montero began teaching a popular music class for seniors in his community. But he realized that to truly reinvent himself, he’d have to fully retire—meaning no longer teaching college courses—and focus solely on music. He now teaches a Musical Dynamics course for seniors in his Santiago neighborhood. He works to cultivate an environment where his students can connect to something new, just as he did as an attaché. If anything, Montero wishes he’d incorporated music into his life sooner.

“If there’s a cultural or professional area, beyond your career, that you think could be a passion for you, follow it,” he advises. “It will make you and others happy all your life.”

Earning it

Mitch Fong, MBA 91 (shown below), is an advocate for not following the common playbooks in deciding what a career or a retirement should look like. Instead, he’s an advocate for radical self-honesty—perhaps because he avoided it for so long.

“During my time in financial services—and I think this happens a lot—I just did the next logical thing: Try to get a promotion, try to get a raise. I never really asked, ‘What do I want to do?’”
—Mitch Fong, MBA 91

Fong emerged from business school eager to find a job that paid well. His parents—a public school teacher and Caltrans engineer—raised Fong and his brother with the expectation that they’d be self-sufficient. He took the first job he was offered, which was in financial services, and stayed in the industry for almost 25 years, though he never found it particularly fulfilling.

Man at a marine mammal center standing next to crates labeled "rescue" and giant nets.
Mitch Fong, MBA 91, at The Marine Mammal Center in Sausalito, California, where he volunteers now that he’s retired from financial services.

“During my time in financial services— and I think this happens a lot—I just did the next logical thing: Try to get a promotion, try to get a raise. I never really asked, ‘What do I want to do?’”

Eventually, Fong began to see an answer to that question: He loved adopting dogs and taking care of animals. He’d started saving early, following the example of his parents, who themselves retired in their early 50s. So when Fong was 48, he retired.

By that point, Fong had been volunteering for 10 years at The Marine Mammal Center in Sausalito, California, caring for seals and sea lions. Upon retiring, he stepped into a volunteer role in the nonprofit’s development department while continuing his work with animals. He finally feels fulfilled.

“We are the largest marine animal hospital in the world,” he says. “No one restrains and tube-feeds more elephant seals than I do. It’s a kick and a half, and I’m loving retirement.”

Fong says as liberating as it has been to pursue his passions, it has also been terrifying at times.

“Leaving work can be unsettling,” Fong says. “I’d just say, be kind to yourself. It’s okay to say ‘I have enough, and I don’t need more.’ It’s okay to sit for a whole day with a book. You earned it.”

Norman Y. Mineta, BS 53

Asian American trailblazer

Headshot of Norman Y. Mineta.

Norman Y. Mineta, a 10-term Democratic congressman from California and the first Asian American to become a federal cabinet secretary, died on May 3 at home in Edgewater, Maryland. He was 90.

Mineta, who as a child was interned with his family and thousands of other Japanese Americans during World War II, broke racial barriers for Asian Americans throughout his career. He was elected the first Japanese mayor of San Jose, California, in 1971.

Elected to Congress in 1974 and serving for nearly 21 years, he became popular with voters by supporting transportation projects and fostering public-private partnerships that created explosive growth in Silicon Valley.

His first federal cabinet position was in 2000 as secretary of commerce under President Bill Clinton. Mineta was then named secretary of transportation under President George W. Bush, the only Democratic member of the Bush cabinet.

Mineta ordered the grounding of commercial flights on 9/11, and after that day, he guided the creation of the Transportation Security Administration and fought to combat racial profiling of Middle Eastern and Muslim passengers during pre-flight screenings in the U.S.

After leaving public service, Mineta became vice chairman of global public relations firm Hill & Knowlton. In his honor, San Jose’s airport was renamed Norman Y. Mineta San Jose International Airport in 2001.

In 2007, Mineta was awarded the Presidential Medal of Freedom.


Ann Mirassou, BS 41
Dorothy Marder, BS 48
Marjorie Akselrad, BS 49
Herbert Hezlep, BS 49
Mary Knox, BS 50
Stanley Lew, BS 50, MBA 53
Philip Gold, BS 51
Edward Loftus, BS 51
William O’Hare, BS 51, MBA 52
Mary Cole, BS 52
Stewart Feldstein, BS 52
Ben Sato, BS 52
Theodore Marois, BS 53
Robert Kirkpatrick, BS 54
Douglas Egan, BS 56, MBA 57, PhD 65
Alvar Elbing, BS 56
Gary Shaffer, BS 57
Gary Bjarnson, BS 58, MBA 59
Ralph Gaarde, BS 60
Charles Sonne, BS 60
Thomas Vinzent, BS 60
Raymond Shurtz, MBA 61
William Attig, BS 62
Maryly Phillips, BS 62
Michael Traynor, BS 63
Carl Larson, BS 64, MBA 66
G Wright Morton, BS 65
Theodore Cutler, MBA 65
David Olivier, MBA 66
Robert Minnehan, PhD 67
Lonnie Horn, MBA 68
Ronald Day, BS 69, MBA 70
Ronald Himes, BS 69, MBA 70
Wayne Lovejoy, BS 70
Paul Bartlett, MBA 73
Paul Losness, MBA 73
Patrick Blum, BS 75
Brendan Ward, BS 75
Jacob Tawiah, MBA 75
Susan Wolf, MBA 77
Ellen Dauchy, MBA 79
Marian Smith, MBA 82
Barbara Novogradac, BS 84
Ernest Martinez, BS 92
Clyde Gibb, Friend
Merrill Newman, Friend
Joan Sather, Friend

Victoria Williams-Ononye, MBA 19
Senior Manager of Product Strategy, Oatly

Headshot of Victoria Williams-Ononye.Victoria Williams-Ononye’s reverence for food started early in life. “Food was the center of home and a symbol of togetherness and love,” she says. “My grandmother was a Belizean Martha Stewart, and I grew up eating my mom’s curry and fried plantain and my Jamaican sister’s boiled dumplings.” 

Early in her career, Williams-Ononye joined Radish, a Chicago startup attempting to create a healthy and sustainable version of a food-delivery service by cooking meals from scratch. But despite a promising concept, the company struggled to succeed. So in 2017, Williams-Ononye came to Haas to learn how to successfully innovate in the food space. In Will Rosenzweig’s Food Innovation Studio, she learned about the industry from the ground up. “It was thinking holistically about how the food we eat impacts personal health and the climate and overlaying that with financial drivers that affect a business,” she says.

Upon graduation, Williams-Ononye took that experience to a brand-management position with Kraft Heinz, focusing on healthier food products. Last year, she started a product-strategy position at Oatly, working to develop new products for the oat milk brand.

With Oatly’s focus on both health and environment, she feels like she’s found her fit. “One of the reasons I’m passionate about creating food products is an opportunity to spark community, comfort, and togetherness—in addition to health and sustenance,” she says. “At Oatly, sustainability is woven into the development process. I love that it’s a delicious product where people don’t have to make compromises.”

Darnell Kemp, MBA 14
Business Development & Strategic Partnerships,

Headshot of Darnell Kemp.Darnell Kemp isn’t afraid to reinvent himself. He spent the first decade of his career as an engineer then switched to venture capital, becoming co-founder and president of an online angel capital platform while pursuing his MBA. But Kemp’s real professional passion, he’s discovered, is business development. He loves it all, from handling growth strategy to identifying target markets. 

He’s currently leading business development and partnerships at, a commission-free, wholesale marketplace. “I love the diversity of the people, products, and projects and the accomplishment that follows often months of planning and negotiations,” Kemp says.

At Tundra, Kemp was introduced to the consumer packaged goods industry as he works with leading brands (like Burt’s Bees, Bounty, and Annie’s) to sell their products to smaller retailers. In just three years, he’s helped grow Tundra from a marketplace with 1,000 brands to one with over 12,000 brands and 2 million products.

Though business development is Kemp’s primary focus, he remains active in both the tech and investing worlds. He’s currently building a company that mentors Chinese national students as young as third grade to prepare them for careers in technology and finance, and he’s a member of multiple investment groups. Having an eye for the next great investment, he says, comes from his unique career path coupled with his time at Haas.

“My most valuable insights into startups came from helping build multiple early stage companies from within, initially as an engineer then later a co-founder,” says Kemp. “My Haas courses and network added a high-level perspective to my personal experience.”


Alex de Winter, MBA 09
Vice President, Danaher Equity Ventures

Headshot of Alex de Winter.The traditional startup life cycle is to seek venture capital, grow into a successful business, then exit via an IPO or acquisition. For some companies, however, that initial investment and eventual acquisition come from the same source. 

Alex de Winter first ventured into the realm of corporate venture capital as director of GE Ventures, the venerable conglomerate’s investment wing. Now, he scouts new promising companies in the healthcare industry for Danaher Equity Ventures.

“Danaher has grown largely though acquiring other companies,” de Winter says. “Some companies may be too early for us to acquire now but could potentially be interesting in the future. So we invest in them now and hope to help them grow.”

The startups get access to Danaher’s business expertise and connections, while Danaher gets a look at burgeoning technology and an opportunity to vet companies before a potential acquisition—without investing its own money in R&D.

“We get a better sense of where the market is going and which companies might be best positioned to take advantage of [healthcare’s future],” says de Winter. In its first four years, Danaher has invested in some 40 companies in the fields of bioprocessing, life sciences, and medical diagnostics.

In the past, says de Winter, corporate venture capital may not have been the first choice for startups preferring big-name firms. “But some startups are realizing today the benefits corporate VCs bring with access to their networks and help with advice and recruiting,” he says. “It goes beyond just capital.”

Daniel Winfree, MBA/JD 81
Chief Justice, Alaska Supreme Court

Man on a jet ski.Daniel Winfree takes it as a point of pride that he’s Alaska’s first native-born chief justice. “We’re a young state, and we have no law school,” he says. “Historically people come here from other places.” In fact, he’s only the third native Alaskan of some 26 justices who have ever served on the supreme court—all of them born in the territory of Alaska before statehood in 1959. 

Having grown up in America’s Last Frontier, Winfree is of hearty stock. His grandfather drove a dogsled team carrying freight to miners during the Klondike Gold Rush. Winfree himself worked as a truck driver and in construction camps for the trans-Alaska pipeline before becoming a lawyer.

But having historical context doesn’t always make him popular with Alaskans. Five years ago, the court upheld the governor’s veto of a portion of a state dividend that grants residents annual payments of up to $3,000 from oil, gas, and mineral royalties.

“I wrote the opinion that it was subject to the governor’s veto…and the dividend was half what it was supposed to be,” Winfree says. “I wasn’t particularly popular. My name is still bandied about today.”

But big decisions don’t faze Winfree. He considers his role the most rewarding of his career, which includes 25 years in private practice before being appointed to the high court in 2007. Chief justices normally serve three years, but Winfree will serve only two. By law he must retire in 2023, when he turns 70. “I’ve loved every minute of every day, even on a bad day,” he says.

Viola Sutanto, BS 97
Founder and CEO, MAIKA

Headshot of Viola Sutanto.Viola Sutanto is making a name for herself in the travel goods market—one sustainable bag at a time.

As the founder of MAIKA, she prints whimsical, hand-drawn patterns onto recycled canvas bags and home goods using eco-friendly pigment inks. She also crafts scarves from waste cotton. Her colorful bags, with easy-to-clean linings, vegan-leather trims, and price points under $100, have attracted the attention of Good Morning America, Real Simple magazine, and others and are sold in boutiques and stores worldwide.

Handbags are in Sutanto’s blood: She comes from an Indonesian family of luxury handbag distributors, but she wanted to create an affordable product.

“There should be bags—I call them tools—to help us move through the day with more ease and delight without having to worry about them as an additional, precious accessory that we have to take care of,” she says.

She launched MAIKA—which means “dancing flower” in Japanese—in 2014, initially focusing on wholesale distribution. But in 2018, she optimized her website to accommodate B2C customers as well.

 “When the pandemic hit, we had everything in place to scale,” she says. “That year, we grew our e-commerce business by 800%.”

Besides sustainability, MAIKA promotes thoughtful deeds. An organization employing adults with disabilities handles MAIKA’s fulfillment, and a portion of proceeds benefits charitable organizations.

Meanwhile, Sutanto strives to consistently communicate the idea of the “dancing flower,” which she says personifies the brand’s spirit. “It’s joyful when people hold our products in their hands,” she says. “They feel delighted.”

Bridge to China

Facilitating cross-border exchanges

Seven people of Chinese origin sitting around a table, talking.
Shuhong Ye, MBA 05 (shown right, in Cal hat), meeting with Haas students in January 2020. Ye has given generously to support Haas undergraduate, graduate, and PhD students as well as faculty.

Yunbo Liu, PhD 23, had his sights set on Berkeley Haas since his undergraduate days at Peking University studying under alumna Qiaowei Shen, PhD 08. Liu was particularly eager to work with the real estate faculty. “At Haas I have the opportunity to do research with the best people in my field,” he says. But traveling so far for school is a costly endeavor, and Liu is just grateful that funding was available to him. “The fellowship protects us so we have the freedom to focus on our work and prepare for the job market,” he says.

Now, a generous gift from Shuhong Ye, MBA 05, will support the brightest minds from China with the establishment of the China PhD Fellowship Fund.

Ye earned his Berkeley MBA while working as an engineer in Silicon Valley and says he utilized what he learned at Haas when he co-founded Dianping, China’s version of Yelp. Since then, he’s paid his gratitude forward. He was a founding board member and donor to Berkeley’s Management, Entrepreneurship, & Technology program for undergraduates. He made a large gift in support of the school’s faculty, and he regularly donates to Haas’ Big Give effort to support Dean Ann Harrison’s initiatives.

As the son of academics, Ye is keenly aware of the importance of education. “The PhD program is important to keep up our research and teaching quality,” says Ye, noting that Haas PhD fellowships average about $10,000 less than other top-tier programs. He hopes his gift will encourage others to donate to the fund.

Marketing researcher Fan Zhang, PhD 23, says that without her fellowship from Haas, moving from China to study would have been impossible. “China is still a developing country, but there are many talented candidates who have a passion for academics and research,” she says. “It would be a pity if money was the only thing stopping them from coming to Haas.”

Voting Blocks

Limiting minority voting power

A car with a sign reading "Protect Our Vote!" waits in line at a voting rights demonstration.

Since the Supreme Court struck down a key provision of the Voting Rights Act in 2013, minority voter underrepresentation has intensified—especially in places where Black, Asian, and Latino voters are on the brink of being electoral majorities, a new Berkeley Haas study has found.

The researchers found that minority voter registration and representation dropped by up to 6.3 percentage points in cities that had new freedom to change voting rules following the Shelby County v. Holder decision, which effectively lifted “preclearance” rules requiring federal approval for election changes in states and counties with a history of voter discrimination.

Underrepresentation was highest in cities where minorities account for a pivotal 55% to 60% of the voting-age population. Minority voter underregistration rates were highest at a similar spot—when levels of minority population shares were between 45% and 50%.

This pattern suggests organized and concerted efforts to limit minorities’ voting power, says co-author Professor Francesco Trebbi.

“This tells you that there is something going on here that is not just explained by minorities voting or participating less,” Trebbi says. “Something is deeply skewed in terms of the electoral playing field here, and it’s surgical.”

The findings are compelling evidence that voter disenfranchisement is not a relic of American history, but is now on the rise.

Change Artists

How cognitively diverse teams can thrive

Yellow, red, and white strips in a basket-weave pattern with a face overlaid onto it.

While groups of people from different backgrounds with different ways of thinking can excel at creativity and innovation, past research has suggested there’s a trade-off to this cognitive diversity.

“A core idea in the literature is that cognitive diversity gets in the way when a team needs to buckle down and execute, because people who think differently are apt to talk past each other,” says Professor Sameer Srivastava.

Social scientists have proposed workarounds, such as suggesting managers change the composition of teams depending on the task. Yet Srivastava and colleagues call into question the very premise that cognitive diversity is a double-edged sword. In a paper based on analysis of 800,000 messages from teams of software developers, they show that the most successful teams can vary their levels of cognitive diversity to match varying task requirements.

“Teams have a latent level of cognitive diversity based on the way individual members are wired,” says Srivastava, the Ewald T. Grether Chair in Business Administration and Public Policy. “Yet group cognition isn’t static: It emerges via interaction.”

Srivastava and his co-authors—Katharina Lix, Amir Goldberg, and Melissa Valentine, of Stanford—employed natural language processing to measure the cognitive distance between 421 members of 117 teams of freelance software developers working for, a collaboration platform.

“Each project milestone involved coordination, then ideation, then coordination again,” Srivastava says. “Teams that were able to modulate their diversity in this manner did better overall.”

Moreover, the teams that made these transitions in lockstep with one another were most successful. The researchers are now studying how to train teams to effectively manage cognitive diversity.

“You could imagine leaders who are aware of when these shifts are happening and encouraging people to be more freeform or constrained in how they are expressing themselves depending on the stage of the project,” Srivastava says.

Majority Opinions

Why so many diversity policies fail

Crinkled-paper cut-outs of heads in various shades of skin tones.

While surveys show that most Americans value diverse organizations, backlash continues over policies aimed at increasing historically underrepresented groups in higher education, corporations, and elsewhere.

A Berkeley Haas study found that white majority members, regardless of their political ideology or views on diversity, tend to think they will be harmed by policies that increase minority representation—even of win-win policies beneficial to them.

“There are a lot of people who want to get to a more just society, but when the rubber meets the road, they feel they’re going to lose something,” says Derek Brown, PhD 23, who co-authored the paper with Assistant Professor Drew Jacoby-Senghor.

The study, published in the Journal of Personality and Social Psychology, includes six experiments premised on a prestigious university announcing 50 additional MBA program slots where greater admissions weight would be given to applicants’ demonstrated commitment to diversity, equity, and inclusion.

Although the policy as described would not affect the main applicant pool and would increase the total number of available seats—mathematically increasing everyone’s chances—the non-Latino white participants (and, in one experiment, Asian participants) mistakenly believed it would decrease their chances of admission. In subsequent experiments, the researchers varied how many new seats would go to underrepresented versus majority applicants and how that would affect the program’s overall racial composition. Each time, they controlled for political ideology, racial attitudes, and views on diversity but found they had little impact on how participants saw the policies.

White participants viewed all variations of the diversity policy as decreasing their admission chances, even when it explicitly maintained the proportional status quo or worsened disparities. When the researchers removed the diversity language, white participants still saw the policy as harmful if it provided relatively equal or greater benefits to underrepresented groups. Only when the policy was framed as a “leadership” initiative unrelated to diversity and it gave greater relative benefit to the majority—thereby increasing inequality—did white participants perceive it as helping their chances.

“Majority members paid less attention to whether equal representation was achieved than to whether a status quo that benefited them was preserved,” Brown and Jacoby-Senghor concluded.

Understanding this dynamic has important implications for architects of diversity programs, the researchers say. Even in organizations that tout diversity as a core value, majority group members may see such policies as exclusionary in practice—and bias training is likely insufficient to eliminate backlash to egalitarian efforts.

All Ears

The persuasive power of headphones

A guitarist being driven on a pedal cart followed by people on bikes wearing headphones.
A concert on wheels, where live music is transmitted from the musician to the headphones of cycling guests.

Americans spend an average of four hours per day listening to audio on either headphones or speakers—but there are major differences in the psychological effects between the two media. Headphones have a more powerful impact on listeners’ perceptions, judgments, and behaviors, a new study reveals.

“Managers might encourage employees to listen to safety trainings or webinars using headphones, which may more effectively change their attitudes and behaviors, compared to listening via speakers,” says Associate Professor Juliana Schroeder, a co-author.

The findings in the research from Berkeley Haas, UC San Diego’s Rady School of Management, and UCLA’s Anderson School of Management, which are published in Organizational Behavior and Human Decision Processes, are replicated in five different studies that included both fieldwork and surveys with more than 4,000 participants.

“We find that headphones produce a phenomenon called in-head localization, which makes the speaker sound as if they’re inside your head,” says co-author On Amir, professor at the Rady School of Management. “Listeners perceive the communicator as closer—both physically and socially.” They also perceive the communicator as warmer. “They feel and behave more empathically toward them, and they are more easily persuaded by them,” he says.

Alicea Lieberman, an assistant professor at the Anderson School of Management, recommends choosing a content platform based on intended closeness. Public service announcements, for example, would be best on a program often consumed via headphones, like podcasts. “On the other hand, if a message does not require listeners to experience any feelings of closeness to the communicator, then where the message is placed (e.g., podcast vs. talk radio) would be less essential.”

Auditory media is an integral part of the workday—even more so with remote work. In 2018, $87.6 billion was spent on industry trainings, with 69% involving either virtual classroom/webcasting or video broadcasting.

Amir suggests that companies could send employees headphones to encourage their use in phone conversations, to potentially increase collaboration. “Our research proposes that it is not only what or whom people hear that influences their judgments, decisions, and behaviors but also how they hear the message,” he says.

Hot and Bothered

Insurance pricing fails to account for growing wildfire risk

Southern California houses threatened by wildfires, October 2007.

Wildfires are blazing a climate-change-driven path of destruction across California. Areas in the state scorched by wildfires increased fivefold from 1979 to 2019. The following year, the burn area more than doubled.

A team of Berkeley Haas researchers warn that despite this upward trajectory, the risks posed by wildfires are worse than we—or, at least, the insurance and mortgage markets—are willing to account for.

An analysis by Professors Nancy Wallace, the Lisle and Roslyn Payne Chair in Real Estate and Capital Markets, and Richard Stanton, the Kingsford Capital Management Chair in Business, along with two alumni suggests that financial firms whose insurance products help protect homeowners from the financial devastation of fires could soon find their own businesses financially wrecked, unless their risk models and pricing (and the government regulations overseeing both) undergo dramatic changes.

Mapping dynamic risks

Wallace and Stanton, along with Paulo Issler, MBA 98, PhD 13, director of the Haas Real Estate and Financial Markets Lab, and Carles Vergara-Alert, MFE 04, PhD 08, of Spain’s IESE Business School, teamed up with physicists from the Lawrence Berkeley National Laboratory who study the fluid dynamics of fire. They linked the physicists’ sophisticated measurement models to the comprehensive Fisher Center for Real Estate and Urban Economics’ real estate and mortgage-record data. This allowed them to forecast the risks posed by wildfires to lenders and insurers in California.

Fatigued woman on her knees painting a wall of an empty room blue.
Abigail Lopez paints the bedroom of her fire- damaged home, which survived the Camp Fire, in April 2019 in Paradise, Calif. Lopez and her boyfriend have stayed in five motels since the fire, though their home was still standing. They’ve been fighting with their insurance company, trying to get the money to have their place cleaned and restored. Photo: Paul Kitagaki Jr./Sacramento Bee/TNS/Alamy Live News.

Unlike the static maps typically used by researchers, the granular, digitized measurements developed by the LBNL physicists are based on dynamic hourly data. They incorporate the locations of thousands of California wildfires between 2000 and 2015 as well as meteorological factors: wind direction and speed, humidity levels, and temperatures. The Haas team also considered a location’s slope, elevation, and vegetative density.

The researchers found that their site-specific estimates of wildfire risk were quite different from the risk maps developed by the California Department of Insurance (CDI). This difference was most pronounced in the zones marked “zero-risk” on the state’s maps, because the researchers found that there was, indeed, some level of risk in many of those places.

They also show that neighborhoods damaged by wildfires tend to return as more gentrified versions of themselves—populated by larger and more expensive homes and residents with higher wealth than those outside the burn area. That’s because the insurance industry incentivizes bigger and more expensive rebuilds.

But the system is not sustainable.

From deterministic to probabilistic

In the past three years, there’s been a 31% increase in policy cancellations, Stanton says, and in 2020 and 2021, California insurers lost nearly two years of premia. “They can’t sustain providing insurance in this state unless there’s a policy response,” he says.

The problem, the researchers argue, is that the insurers are relying on deterministic models of wildfire risk, based on where fires have happened, rather than probabilistic models that predict fires. The insurers have no choice—the CDI requires them to price based on deterministic maps. The researchers argue that the CDI policy needs to change.

California regulators also prohibit insurers from using reinsurance margins, which is insurance to cover extreme events, in the rate structure. In recent years, insurers offering financial protection from hurricanes and earthquakes have been relying on the reinsurance market. Introducing reinsurance would likely raise customers’ premia, so the researchers propose that the solution could involve subsidies for people who can’t afford the price hikes. The new structure should also shift the current incentives.

“If insurance products really reflected the risk, it would be much more costly, and homebuyers would have a decision to make,” Wallace says. “‘Do I want this home enough to pay these premia and take this risk with my life?’ Right now, the real risk isn’t priced in accurately enough for people to understand what their exposures are.”

Power Struggles

The myth of energy independence

Close-up of gas pump showing gas prices ranging from $6.79 to $7.99.

The rapid rise in gas prices following Russia’s invasion of Ukraine renewed calls for the U.S. to become “energy independent.”

President Biden has advocated transitioning away from fossil fuels and toward more reliance on sun, wind, and other renewable sources, while some Republicans credit former President Trump with achieving “energy independence” because the U.S. became a net exporter of crude oil during his last year in office.

But what exactly is “energy independence”? Andrew Campbell, executive director of the Energy Institute at Haas, explains.

“‘Energy independence’ is a political slogan, not an economic or technical concept with a clear definition,” Campbell says. “Politicians use the term ‘energy independence’ to imply that a country is insulated from global energy markets. However, this is rarely the case.”

The recent spike in U.S. gas prices—despite robust U.S. oil production—is a case in point, Campbell says.

“If a country produces all of the energy that it consumes, does not participate in international trade in energy, does not import energy-intensive products, and does not send energy-related pollution to its neighbors or the atmosphere, then I would consider it energy independent. I don’t think any country meets that definition.” Berkeley Haas asked Campbell to elaborate.

In 2020 the U.S. exported more oil and petroleum than it imported. Was it no longer dependent on foreign oil then?

The U.S. was a net exporter that year because of a steady increase in oil production each year since 2008 as well as a decrease in demand of transportation fuels during the pandemic. However, imports of foreign oil and petroleum equaled 43% of U.S. consumption in 2020.

Why would the U.S. rely on imports if it has excess oil to sell?

The U.S. can simultaneously be a net exporter of petroleum and highly dependent on imports for a couple of reasons. One is geographic. Domestic oil production tends to occur in the middle of the U.S. and is connected to Midwest, Gulf Coast, and East Coast refineries but not to West Coast refineries, which import lots of oil from overseas. In the eastern U.S., there can be transportation bottlenecks or high transportation costs making it cheaper to buy from overseas.

Refineries are also fine-tuned to process certain types of crude oils—for example, heavier versus lighter or oils with varying sulfur contents. Getting the most appropriate types of crude oil to each refinery involves selling crude oil that U.S. refineries cannot process to foreign countries and buying the right kind of foreign crude oil.

Why did the Ukraine war spike gas prices?

The U.S. allows its producers and consumers to buy and sell oil and petroleum in global markets. This means that domestic prices, including for gasoline refined in the U.S. from oil produced in the U.S., are closely tied to global prices. One advantage of being a net exporter is that there are U.S. companies and regions profiting from high global prices. Meanwhile, many households and parts of the economy are experiencing the downside of high energy prices.

How can the U.S. insulate consumers from price spikes driven by global events?

The U.S. can begin to escape the impacts of global oil markets by moving away from oil and toward other energy sources such as electricity produced by renewable energy and, to some extent, natural gas (which is becoming increasingly global) and nuclear (which involves imported uranium).

Big Shot

Using Trump’s endorsement to boost vaccinations

Screenshot of Fox News showing Donald Trump's picture on the left and a hand holding a syringe on the right. Closed captioning of Trump's words reads: But it's a great vaccine, it's a safe vaccine.

While health officials have struggled to boost COVID-19 vaccination rates nationwide, a simple approach has proven effective at convincing some skeptics to get their shots: a video compiled from Fox News clips of former President Trump and his family urging his supporters to get vaccinated.

Researchers from Berkeley Haas, Stanford University, University of North Carolina at Chapel Hill, and North Carolina State University compiled a public service announcement from existing footage and aired it on more than 150,000 YouTube channels in more than 1,000 U.S. counties with vaccination rates below 50%. Compared with similar counties where the ad wasn’t shown, those counties recorded an additional 104,036 vaccinations.

While the researchers had no control over which channels the ad would appear on, the Google Ads’ algorithms sent it most often to Fox News’ YouTube channels, where it was attached to segments hosted by Laura Ingraham, Tucker Carlson, Sean Hannity, and other Trump supporters and vaccine skeptics. It also appeared on some neutral channels and some not supportive of Trump, including MSNBC and NBC News.

According to Professor Steven Tadelis, a co-author, the messaging was also relatively inexpensive. “Creating an intervention that effectively costs about $1 per extra vaccine is remarkably cost-effective and a small fraction of the cost of other interventions,” he says, noting that studies of U.S. state vaccine lotteries put the cost at $68 to $82 per vaccine.

However, while the ads moved some skeptics to action, they were only effective in counties with up to 70% Trump voters. The heaviest pro-Trump counties were unmoved.

YouTube channels where ads were placed

Graph showing that the ad appeared most on Fox News followed by Forbes Breaking News. The ad appeared least on CNBC.

Percent of unvaccinated Republicans expressing a “great deal of confidence” in vaccine advice from specific sources

Bar graph showing increasing confidence in Donald Trump but waning confidence in Joe Biden, Anthony Fauci, personal doctors, or the scientific community.

Geographic distribution of advertising campaign by county

Map of the United States with counties colored to show one of the following: low saturation, high saturation, control counties, or excluded counties (because of high vaccination rates, large population, or poor CDC records).


Quality Check

The unintended consequences of the JOBS Act

Forex chart on cityscape with tall buildings background multi exposure. Financial research concept.

In the decade since the 2012 Jumpstart Our Business Startups (JOBS) Act relaxed initial public offering requirements for companies with revenues under $1 billion, a growing number of them have taken advantage of the option to disclose less financial information in their IPOs.

This reduced-disclosure provision may have helped stimulate the market, but it came at a cost: lower IPO quality and more risk exposure for individual investors, concluded a new study by accounting professors Omri Even-Tov and Panos Patatoukas, with PhD candidate Young Yoon.

“The evidence shows that nearly two-thirds of the reduced-disclosure issuers underperform the market in the three years after they go public,” says Even-Tov. “While we find evidence that institutional investors have the ability to use publicly available information to avoid the worst-performing IPO stocks, individual investors tend to ignore fundamentals when investing in IPO stocks and are more exposed to the risks.”

Based on their findings, the researchers argue that the SEC should require all IPO issuers to disclose at least three years of audited financial information—up from the two years allowed under the JOBS Act.

“We recommend that regulators balance the benefits of increasing the number of IPO registrants against the costs of enabling speculative issuers to go public with reduced financial disclosures,” says Patatoukas, the L.H. Penney Chair in Accounting. “The quality of IPOs is as important, if not more so, than the quantity.”

Do Not Disturb

Creating a more reliable supply chain

A chain link with three items, each on top of a separate link: a cargo ship, a delivery truck, and a delivery person with boxes on a dolly.

Pre-pandemic, the worldwide system of getting products where they need to go seemed to be working. Goods were produced where they could be made most cheaply: A pair of shoes might be assembled in Vietnam using leather from Brazil, polyester from China, and rubber from Malaysia before being shipped to Los Angeles and trucked to a mall in Kansas City. Businesses maximized profits by keeping the workforce lean and using just-in-time inventory management.

But as the pandemic demonstrated, that efficiency meant less resiliency. Lockdowns shuttered factories amid spiked demand for goods like bicycles and convection ovens. Millions of workers left their jobs. A dearth of employees, trucks, and drivers left goods languishing at ports.

“A chain is only as strong as its weakest link,” says Assistant Professor Luyi Yang. “At pretty much every step along the way, there’s potential for disruption.”

Yet the supply chain crisis, according to Haas logistics experts, offers an opportunity to put in place a more efficient and durable system over the next five to 10 years, potentially protecting us from future disruption.

At the top of the to-do list, says Saikat Chaudhuri, faculty director of the Management, Entrepreneurship, & Technology Program, is improving efficiency, starting with upgrades at ports—such as digitizing customs operations. “Ports need to operate 24-7 and use the latest equipment to help automate loading and unloading. That’s a no-brainer,” he says. The U.S. also needs to renovate its transportation facilities to eliminate bottlenecks. Last year’s federal infrastructure deal represents a giant step in that direction.

Beyond that, businesses must think strategically about production location, staffing, and inventory. That might mean reshoring—building a semiconductor plant in Ohio instead of Taiwan—or nearshoring—setting up in Mexico instead of China. Production locations should be diversified to reduce the risk of overconcentration in any one country.

Businesses may need to boost head count and raise pay to ensure they’re ready for emergencies. The same applies to stockpiles of components and finished products. “You sometimes want to carry a little bit more inventory than might seem optimal because there can be a rainy day,” Yang stresses.

While these fixes may fuel inflation, the long-term benefit of a reliable, sustainable supply chain is economical. “It’s inevitable prices will go up as a result of these shifts,” Chaudhuri says. “But digitization and optimization of the supply chain will bring some of those costs down, which will partly offset the additional cost of doing things locally.”

How to Build Sustainable Supply Chains

Coordinated action by business and government will be necessary to prevent a future supply chain crisis of this magnitude, say Haas logistics experts Saikat Chaudhuri and Luyi Yang. Here are some solutions.

Infographic of U.S. map with six ideas for improving supply chains: Embracing efficiency, investing more heavily in infrastructure, better locating production and warehousing to be closer to end markets, enticing workers by raising pay and improving working conditions, boosting staffing and inventory to head of emergencies, and diversifying international sourcing.