Professor Busse’s research focuses on market structure and competition, with particular interest in pricing and price discrimination. She has studied these issues in a variety of industries, including cellular telephones, airlines, coal, and natural gas. Her recent work has focused on the automobile industry, investigating both promotional strategies and environmental issues associated with cars and car purchasing behavior.
Voting History
| Statement | Response |
|---|---|
| Digital platform companies like Uber and Netflix have lost their first-mover advantage. Disagree | “Being a first mover doesn’t always convey a first-mover advantage. The greatest chance of a first-mover advantage arises for platforms that have a strong network (or positive feedback) effect. This is stronger for some digital platforms than others. For example, a platform like Uber, which matches drivers and riders, probably has a pretty strong network effect: The drivers want to be where the most riders are, and the riders want to be where the most drivers are. But a platform like Netflix, which distributes digital content, probably has a less-strong feedback effect. Maybe the platform that has more viewers makes better recommendations, but for the most part, if I’ve found a show on Netflix that I like, it doesn’t matter much to me how many other viewers have done the same.” |
| The use of generative AI will restore competition in search. Agree | “There are two possible meanings of “restore competition.” One is, “Will generative AI lead to multiple search platforms that compete with each other toe-to-toe on an ongoing basis?” The other is, “Will generative AI lead to competition over who will be the new dominant search platform?” The answers depend on whether there is a positive feedback effect in generative AI-based search, as there is in conventional search algorithms. If it continues to be the case that a search platform that gets more use develops better algorithms and becomes a better search platform, leading to more use, then there is likely to be an intense period of initial competition, but the end result will be a single dominant search platform. Long-run competition will occur only if there are no positive-feedback effects.” |
| New salary transparency laws will cause companies to increase bonus pay and other nonreportable perks as a share of total compensation. Neither agree nor disagree | “Whether this will cause more pay to shift to bonuses depends on the tension between two forces. First, how valuable is it to the employer to pay people in the same positions substantially different amounts? For some employers and job categories, this may have big incentive or retention effects; for others, it might not. Second, how cumbersome will it be to the employer to create bonus pay? This is not just a question of HR systems but of whether there are observable outcomes that employers can (legally!) use as the basis for paying different people different amounts. It also depends on how willing employees are to accept the risk of having a lot of their compensation in a discretionary bonus. (A “guaranteed bonus” sounds like a dodge around the law, as I'm sure companies would realize.)” |
| Charging for user verification will lead to increased user engagement and trust on Twitter. Strongly disagree | “In the previous regime, user verification signaled two things. One, that Twitter had verified that a user really was who they claimed to be, and two, that the user was a person of enough significance that it was worthwhile for Twitter to do so. Charging for user verification signals that the user is willing to pay $8 per month to claim that they are who they say they are. This should undermine trust rather than increase it, which is likely to decrease rather than increase user engagement.” |
| Corporate investments in diversity, equity, and inclusion should be expected to generate a monetary return on investment. Neither agree nor disagree | “There are two motivations for investments in DEI — motives that need not conflict with nor invalidate each other. One reason for investing in DEI is as an act of civic, social, or (some would say) moral values. A second reason for investing in DEI is to improve the monetary return of the company. Companies that are most likely to see a monetary return are those that pursue these investments in a purposeful way, with a specific idea of how to use a more diverse workforce and more equitable treatment of employees to increase the performance of their particular business. Not only is this more likely to increase monetary returns, but a more purposeful approach is also more likely to create an inclusive environment — one in which diverse employees all know their contributions are valued.” |
| The era of dominance for Tesla in the EV market is coming to an end. Agree | “Tesla’s market share dominance in the EV market is almost certainly coming to an end. Consumers will want a variety of different kinds of vehicles. As other car companies bring out broader lineups of vehicles, in accordance both with their own stated goals and California’s mandate, consumers will have the choice of, and will choose, more and more vehicles that aren’t Teslas. Whether Tesla will continue to have technological dominance remains to be seen. Tesla has been an innovator in many ways in the EV space, and this may be a role they will continue to maintain, even if their vehicles don’t dominate the market share.” |
| Online education and specialized degrees will supplant the traditional two-year full-time MBA. Strongly disagree | “The pandemic prompted a lot of experimentation in virtual interaction and content delivery, revealing both possibilities and limits. I think we learned that the best MBA education — both learning and other aspects, including developing leadership and communication skills, forming a network, and learning to interact in a diverse community — is best accomplished in person. While there doubtless will be growth in online and specialized programs, I expect that the great majority of students who qualify for and can access a first-rate two-year MBA education will continue to choose it.” |
| Socially responsible mutual funds are more of a marketing tool than a solution to environmental and social problems. Agree | “Companies need stronger incentives to reduce their climate impacts than they have had so far. Investor pressure could be one such incentive. Institutional investors have recently promised to increase their scrutiny of climate risk exposure. (How well they can do this will depend both on the resources they actually put to it and on the transparency of reporting systems. Both are currently lacking.) But investor pressure alone won’t be enough to solve environmental problems. If companies only respond (or are only pressured to respond) enough to protect their own profits, they won’t be considering the costs to others of their actions — climate impacts especially. The problem won’t be solved until a carbon price or similar policy forces companies to internalize all the costs of their choices.” |
| Relaxing the rules around physical presence in the office will improve employee productivity and firm performance. Neither agree nor disagree | “Relaxing rules around physical presence will probably increase employee happiness. It is less clear if it will increase productivity and firm performance. This depends a lot on the firm and on how employees work most productively together. Firms where productivity — particularly creativity, innovation, and problem-solving — happen most effectively when it is easy for employees to have impromptu conversations and when they can reach out to each other informally will suffer most from having employees remain remote.” |
| The COVID-19 pandemic has permanently changed how companies should think about business strategy. Disagree | “The COVID-19 pandemic permanently changed at least some aspects of how companies should think about business strategy. One example is the robustness, flexibility, and responsiveness of supply chains. Another is remote versus in-office work and business travel versus virtual meetings. But for most businesses, the fundamental question of how the business creates and captures value will not have changed. There may be exceptions in some industries (travel?, healthcare?), but I would expect that the goods and services that customers will want, and the attributes that they will care about, will in most cases return post-pandemic to what they were before. Some companies may need to change aspects of their operations, but I don’t think most companies should overhaul their fundamental strategy.” |
| The COVID-19 pandemic will lead companies to relocate infrastructure and employees away from dense urban locations. Neither agree nor disagree | “There is a lot of heterogeneity among companies in how important physical infrastructure is, in whether workers have to be on-site, and in how valuable it is to be in an urban area. Google, in a very dense urban area, can send its workers home and still be quite productive. Meanwhile, there is a large COVID-19 outbreak in a meatpacking plant in South Dakota, in a town of fewer than 200,000 people.” |
| In the wake of recent climate-related disasters and related events, such as the bankruptcy of PG&E, corporations are now planning for the increased operational risks and potential liabilities caused by climate change. Agree | “Companies are considering not only increased operational risks and potential liabilities, but also more fundamental changes to their strategies. However, this is not universal. There is a lot of variation among companies in how substantially they have responded to climate-related changes to their current and future business environments.” |
| U.S. regulations have been rolled back in a number of areas, including emissions standards and clean water. Companies will decide to voluntarily adhere to rules that closely resemble the original standards. Disagree | “Firms don’t generally do things voluntarily that are costly for them. In many cases, market competition keeps firms from unilaterally undertaking costly environmental protections, even if they wanted to. Sometimes, as with fuel economy, firms themselves benefit from adopting something that is good for society also. In general, though, firms need to have rules that constrain everyone the same.” |
|
The Business Roundtable’s new Statement on the Purpose of a Corporation indicates a shift away from shareholder value maximization as the sole purpose of the corporation and toward a broader view of value creation. This shift will have material impact on the well-being of U.S. workers. Neither agree nor disagree |
“A true broadening of the objectives of firms would improve the well-being of workers. But it remains to be seen how many of the CEOs who signed the statement are truly committed to making such changes, and also how many of them will find they are able to — given pressures from inside the firm, pressures from financial markets, and their own career ambitions.” |
| In the next decade, we will see the first sustainably profitable private commercial activities in space. Neither agree nor disagree | “The bigger question is not whether there can be privately profitable commercial activity in space, but whether sufficiently foresighted policy will exist to keep those activities from creating an orbiting tragedy of the commons. Space junk is already a threat in key orbits, and without effective regulation or cooperation, it is likely to become a bigger problem.” |
| A hard Brexit will have a significant negative impact on many businesses, even if they do not have a U.K. or European presence. Agree | “As we have seen recently in the U.S., an abrupt change in the terms of trade can have rippling effects that can be hard to predict. It is easy to guess which firms will be affected most directly, but the full path of adjustment is much harder to predict.” |
| In the absence of a carbon tax, industry self-regulation can help mitigate the worst fallout from climate change. Strongly disagree | “Past examples of industries who collectively undertook actions that were costly to themselves purely for the benefit of society are pretty scarce. Firms will do things that are profit opportunities or that are required of them. The sheer magnitude of adaptation that is necessary to prevent climate change will only happen if regulations force firms and consumers to do what they wouldn’t otherwise do.” |
| Amazon’s new $15 per hour minimum wage will force other companies to follow suit. Disagree | “It may well be that other companies will also be increasing their minimum wages, but if so, it is more likely because of a tight labor market than it is a direct, causal response to Amazon’s decision to do so.” |
| Restrictions on skilled immigration will cause US firms to to shift more operations overseas. Did not answer | |
| Uber has to develop self-driving cars in the next 10 years in order to remain viable. Strongly disagree | “It may be that Uber will need to be using self-driving cars 10 years from now in order to remain viable, but it seems very unlikely that Uber will need to develop those cars itself.” |