Monthly Archives: May 2026

How Financial Shocks Travel Through Production Chains

A new study published in the May 2026 issue of the American Economic Review offers fresh insight into how financial and production networks interact during periods of economic stress. Conducted by an international team of researchers, the study examines how supply chain relationships between firms combine with financial ties to banks to shape the spread of economic shocks throughout the wider economy.

The researchers developed a framework that brings together two critical features of modern economies: the network of production relationships linking firms to suppliers and customers, and the network of financial relationships connecting firms to banks. While these systems are often analysed separately, the study shows that understanding their interaction is essential for explaining how financial disturbances spread beyond the banking sector.

The findings suggest that the combined effects of production and financial networks significantly magnify the impact of banking shocks. Rather than remaining confined to directly affected firms, disruptions can spread across interconnected supply chains, intensifying economic instability. According to the researchers, failing to account for this interaction may lead to a substantial underestimation of systemic risk and the broader consequences of financial crises.

“We show that when borrowing from banks becomes more difficult and expensive during a financial crisis, the impact does not stop at the directly affected firms — it propagates through supply chains,” said Kenan Huremovic, one of the study’s authors. “Bank shocks ripple through the production network, travelling both downstream to customers and upstream to suppliers. We find that these network effects amplify the impact of bank shocks on GDP by nearly 50%.”

The study also found that disruptions affecting distant suppliers and customers can be just as important as shocks hitting firms’ immediate business partners. This highlights how deeply interconnected modern economies have become, with financial strain capable of travelling through multiple layers of production networks before ultimately affecting economic growth and stability.

The researchers argue that many traditional macroeconomic models may underestimate vulnerability during financial crises because they fail to capture the interaction between production and financial linkages. They suggest that policymakers should adopt more integrated approaches to financial regulation and economic stabilisation that take these interconnected networks into account. “Understanding economic crises, and designing effective policies to prevent and respond to them, requires thinking in terms of interconnected networks rather than isolated firms and banks,” Huremovic said.

More information: Kenan Huremović et al, Production and Financial Networks in Interplay, American Economic Review. DOI: 10.1257/aer.20201088

Journal information: American Economic Review Provided by IMT School for Advanced Studies Lucca

Reading the Room Is the First Step to Leading Change

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When Ted Lasso stepped in as coach of struggling AFC Richmond in the hit television series Ted Lasso, he brought an upbeat, hands-on leadership style that inspired a team desperate for change. New research suggests that this kind of leadership can indeed boost motivation and performance — but only when employees already believe change is necessary. If people are content with the way things are, the same approach may fail or even create resistance.

The study was led by David Harrison, associate dean for research and Charles and Elizabeth Prothro Regents Distinguished University Chair in Business Administration at the University of Texas at Austin McCombs School of Business. Harrison and his colleagues found that new leaders are far more likely than existing leaders to influence organisational change. Still, success depends heavily on whether their leadership style matches what employees feel the organisation needs.

“Leaders who come into a position with their own agenda or prior style will only succeed if that style happens to be a fit with the top manager behaviors the employees want to see,” Harrison said. According to the researchers, employees are much more attentive to new leaders because leadership transitions naturally create uncertainty and expectation. Staff members look to incoming leaders for signals about priorities, behaviours, and future direction in ways they typically do not with long-standing leaders.

To examine this dynamic, the researchers studied leadership changes in 112 elementary schools across the United States between 2014 and 2017. Half of the schools replaced their principals during the study period, while the other half retained their existing principals. The schools were carefully matched according to factors such as size, age, district characteristics, and local income levels. Teachers completed surveys before and after leadership transitions, rating their agreement with the principal’s vision, their own level of engagement, and whether they believed change was needed within the school.

The findings revealed that teachers who felt dissatisfied with existing conditions were far more receptive to a new principal’s coaching-oriented leadership style. In schools where teachers already believed improvement was necessary, the incoming leader’s active involvement and encouragement aligned with staff expectations. “In that condition, the leader’s style matched the teachers’ relative dissatisfaction with the status quo,” Harrison explained. By contrast, when teachers were generally satisfied with the existing environment, intensive coaching and intervention were more likely to be seen as disruptive or unnecessary.

The researchers then examined whether these attitudes translated into measurable outcomes. They tracked school-level standardised test scores over the following two years and found significant improvements in schools where the new principal’s leadership style matched teachers’ appetite for change. Harrison said the results were striking because improving public school test scores is notoriously difficult without major increases in funding or resources. “I was gobsmacked,” he said. “This wholesale change was in top leadership instead.”

The study concludes that successful organisational change depends on a delicate combination of factors: a leader’s newcomer status, employees’ readiness for change, and the leader’s day-to-day coaching behaviour. While leadership research often celebrates grand visions and inspirational speeches, Harrison argues that in workplaces where leaders interact directly with employees, practical coaching matters far more. Employees may feel energised when guidance is welcomed, but frustrated when it feels intrusive. “Coaching doesn’t always work,” Harrison said. “Sometimes it is unwanted and interferes with employee effort. But other times, it helps to light a motivational fire.”

More information: Katherine Klein et al, For Good and for Bad: The Distinctive Effects of Successors’ Leadership Behavior on Collective Engagement and Organizational Performance, Journal of Applied Psychology. DOI: 10.1037/apl0001359

Journal information: Journal of Applied Psychology Provided by University of Texas at Austin

Study Suggests Low-Performing Organisations Rely More on Outside Sources of Knowledge

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People working in low-performing organisations are more likely to seek ideas, expertise, and new practices from outside their own workplace, according to a new study examining how organisations respond to performance feedback. In contrast, high-performing organisations are more likely to rely on internal collaboration and existing routines when solving problems or improving performance. The findings suggest that organisational success or failure shapes where people search for knowledge, with struggling organisations looking outward for innovation while stronger performers focus inward on refinement and stability.

The research was led by Taek Kyu Kim from the University of Exeter and tested these ideas using data from public schools in New York City. Researchers analysed how schools reacted to academic performance feedback and whether this influenced collaboration patterns among teachers. The study found that schools receiving lower performance grades were significantly more likely to encourage staff to collaborate with teachers from other schools. By comparison, schools with stronger performance ratings focused more heavily on collaboration within their own institutions and showed less interest in seeking expertise across organisational boundaries.

The researchers examined participation in the Learning Partners Program, a collaboration initiative that grouped between five and seven schools into networks so educators could learn from exemplary schools with recognised strengths in particular areas. These areas included specialised support for students with disabilities and other teaching practices linked to improved academic outcomes. The analysis showed that schools with lower performance ratings were much more likely to participate in the programme, demonstrating a willingness to search beyond their own organisations for solutions to performance challenges.

According to Dr Kim, the findings reveal that organisational search patterns are shaped by performance signals rather than by a universal tendency to solve problems internally. Teachers in lower-performing schools reported greater opportunities to work productively with colleagues from other schools, while teachers in higher-performing schools experienced stronger collaboration within their own institutions. The study argues that low-performing organisations may benefit more from directly pursuing outside knowledge instead of relying first on local problem-solving approaches that could consume valuable time and resources without generating meaningful innovation.

The research also challenges the common assumption that organisations should always begin by looking internally before searching elsewhere for solutions. For organisations already struggling with poor performance, the researchers argue that local search may reinforce ineffective routines and delay necessary change. Looking outside organisational boundaries, however, may expose staff and managers to new ideas, practices, and strategies that are more capable of addressing persistent performance problems. The study suggests this outward search can be especially valuable in organisations that are more open to risk-taking and experimentation.

At the same time, the researchers note that high-performing organisations may become vulnerable to what is known as a “competency trap”. Positive performance feedback can reinforce confidence in existing routines, narrowing attention towards internal operations and reducing awareness of external changes. While this inward focus can create efficiency and stability, it may also make successful organisations less adaptable over time. The study concludes that performance feedback acts as a powerful mechanism directing managerial attention, pushing struggling organisations to search outward for improvement while encouraging successful organisations to deepen reliance on established internal practices.

More information: Taek Kyu Kim et al, Beyond problemistic search: a contingency perspective on organizational response to performance feedback, Public Management Review. DOI: 10.1080/14719037.2026.2645327

Journal information: Public Management Review Provided by University of Exeter

Higher Board Interpersonal Diversity Correlates with Reduced Tax Avoidance Practices

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New research analysing two decades of corporate data suggests that greater board interpersonal diversity is associated with lower levels of aggressive tax avoidance. The findings indicate that diversity among board members can strengthen oversight and introduce a broader range of perspectives into corporate decision-making, highlighting the importance of appointing directors from varied genetic and interpersonal backgrounds.

Eric Boahen and his co-authors examined thousands of UK-listed firms between 1999 and 2019 using a broader measure of diversity designed to capture differences in background, communication styles, interpersonal behaviour and approaches to problem-solving among board members. The researchers then compared this diversity measure with levels of corporate tax avoidance across companies.

Across multiple statistical models and robustness checks, the results remained consistent: firms with more interpersonally diverse boards tended to engage in less aggressive tax avoidance. Published in the International Journal of Finance & Economics, the study suggests that boards with wider-ranging perspectives are less likely to rely on shared assumptions when making strategic decisions.

The researchers argue that interpersonal diversity encourages greater discussion, questioning and scrutiny of management decisions, including those related to tax planning. As a result, aggressive or questionable tax strategies may be more likely to face challenge and resistance. Board interpersonal diversity may include differences in how people communicate, assess risk, solve problems and draw on their personal and professional experiences.

The study, which was co-authored with academics from Birkbeck Business School and University of Greenwich, also found that although companies may continue to use accounting techniques to manage profits, interpersonal diversity on boards may help limit excessive tax avoidance overall. The findings suggest that diverse boards can contribute to stronger governance and more balanced decision-making processes.

“Tax decisions often involve judgement and risk,” said Dr Boahen. “While we do not claim a direct causal relationship, our findings show that boards made up of people with different perspectives and ways of thinking are better equipped to challenge management and strengthen oversight. This can lead to more responsible tax behaviour.” The researchers say the findings have important implications for policymakers and businesses, suggesting that board composition is not only a matter of representation but also a practical tool for improving corporate governance and accountability.

More information: Eric Boahen et al, Mitigating Tax Avoidance: The Role of Board Interpersonal Diversity in the United Kingdom, International Journal of Finance & Economics. DOI: 10.1002/ijfe.70213

Journal information: International Journal of Finance & Economics Provided by University of East London

When Profit Misleads: Research Highlights Environmental Trade-Offs Behind Corporate Performance

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Companies praised for strong financial performance may not be as efficient as they appear once their environmental impact is considered, according to new research from the University of Surrey. The study, published in the European Journal of Operational Research, found that businesses generating high revenues can still perform poorly when factors such as carbon emissions and energy use are included in assessments of corporate efficiency.

To better capture this broader picture, researchers developed a new way of measuring “sustainable corporate efficiency.” Instead of focusing solely on traditional financial indicators, the approach also incorporates environmental measures, including greenhouse gas emissions, energy consumption and revenues generated from environmentally friendly products and services. The goal was to determine how effectively companies create value while minimising environmental harm.

Dr Menelaos Tasiou, co-author of the study and Senior Lecturer in Finance at the University of Surrey, said businesses have traditionally been judged by how efficiently they convert resources into profits. Still, that perspective changes when environmental costs are taken into account. He explained that true efficiency means generating revenue while reducing the environmental damage associated with production, adding that profitability alone can hide how wasteful a company may actually be.

The research analysed more than 2,800 publicly listed companies across 61 countries between 2010 and 2022, creating one of the largest international datasets examining both financial and environmental performance together. Researchers combined corporate financial records aligned with the green economy — defined as low carbon, resource efficient and socially inclusive — with environmental disclosures such as energy use and greenhouse gas emissions. They then applied a machine learning method known as Convexified Efficiency Analysis Trees (CEAT) to estimate how efficiently companies convert resources into revenue while limiting pollution.

Unlike conventional approaches, the method recognises that production generates both desirable outputs, such as profits, and undesirable ones, such as emissions. This allowed researchers to compare companies on how successfully they balance financial returns with environmental responsibility. The findings revealed only a moderate relationship between financial efficiency and environmental efficiency, suggesting that companies performing well financially are not necessarily managing their environmental impact effectively. Significant differences also emerged across industries and countries, with high-emission sectors such as manufacturing and energy often lagging behind firms that were better able to reduce carbon intensity while maintaining revenue.

The researchers say the findings could help investors, regulators and policymakers identify businesses that are genuinely prepared for a low-carbon economy. The study also highlighted the importance of management quality, finding that companies with stronger leadership teams were more likely to balance profitability with environmental responsibility. As governments intensify efforts to reach net-zero targets and investors place greater scrutiny on sustainability performance, the researchers warn that companies failing to integrate environmental considerations into their operations risk losing their competitive edge in the years ahead.

More information: Chrysovalantis Gaganis et al, Beyond profit: Rethinking corporate efficiency frameworks through a sustainability lens, European Journal of Operational Research. DOI: 10.1016/j.ejor.2026.02.019

Journal information: European Journal of Operational Research Provided by University of Surrey

Study Shows Immigrants Continue to Face Significant Employment Hurdles

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Immigrant workers play a vital role in industries across Canada and around the world, from agriculture and healthcare to technology and finance. Yet despite bringing valuable knowledge, skills and experience, many immigrants continue to face significant employment hurdles when trying to establish careers in a new country. A new study by researchers from the UBC Sauder School of Business examines why immigrants often struggle to have their qualifications recognized — and how employers, policymakers and immigrants themselves can help bridge that gap.

In the paper, researchers Snehal Hora, Emily Campion, Sima Sajjadiani and Diana Lee reviewed decades of academic literature on first-generation adult immigrants and their workplace experiences. Using advanced machine learning models, the team analyzed more than 13,000 research papers published between 1888 and 2022. The technology helped narrow the papers to about 5,000 highly relevant studies before identifying major themes across the research. The team eventually focused on 833 papers covering 32 employment-related topics, including hiring discrimination, skill transferability and workplace integration.

The researchers found that one of the biggest challenges immigrants face is translating their human capital — including education, credentials and professional experience — into forms that employers recognize and trust. Degrees, licences and certificates earned abroad are often undervalued because employers may not be familiar with institutions outside their own countries. Immigrants can also struggle with unfamiliar workplace norms, from resume formats to interview expectations, which may unintentionally create barriers during hiring processes. As a result, many highly skilled immigrants end up underemployed or working in positions far below their qualifications, limiting income, career growth and wellbeing while also depriving organizations of valuable talent.

The study found that immigrants who adapt their resumes and professional presentations to align with local expectations can improve their chances of securing jobs that better match their qualifications. According to Dr. Campion, reframing skills and experiences in ways recruiters can easily understand helps legitimize immigrants’ expertise in the eyes of employers. The researchers argue that organizations can also make meaningful improvements by focusing hiring assessments on core competencies rather than assumptions tied to unfamiliar credentials or communication styles. Better systems for recognizing foreign education and professional certifications could help address labour shortages in critical sectors such as healthcare while allowing immigrants to contribute more fully to their new communities.

The research also highlights the important role of social networks in shaping employment outcomes. Immigrants often rely on connections within their own cultural or immigrant communities to find work quickly. Still, those networks may not always provide access to opportunities that match their education or skills. Building broader professional relationships outside familiar social circles can improve access to higher-quality employment and career advancement, particularly for immigrants intending to settle permanently. The researchers note that immigrants’ long-term intentions can also change depending on their experiences: people who initially planned to stay temporarily may decide to remain if they feel welcomed and valued. In contrast, others who hoped to build permanent lives may choose to leave if barriers persist.

The researchers say governments, employers and institutions already have many of the tools needed to create clearer pathways for immigrant workers, but meaningful change requires commitment and resources. At a time when anti-immigrant rhetoric has become increasingly visible in parts of the world, the team warns that countries risk harming their own economies if they fail to recognize the value immigrants bring. Immigrants contribute expertise, innovation, cultural knowledge and international connections that strengthen industries and communities alike. The researchers argue that improving how immigrant talent is recognized and supported is not only beneficial for newcomers themselves, but also essential for countries competing globally for skilled workers and long-term economic growth.

More information: Snehal Hora et al, Translating human capital amid varying intentions to stay: An integrative conceptual review of the immigrant employment attainment process, Applied Psychology. DOI: 10.1037/apl0001343

Journal information: Applied Psychology Provided by University of British Columbia

Vaccine-Hesitant Americans More Receptive to ‘Freedom Framing’ Than Mandates, New Study Suggests

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Researchers at the University of Houston are applying ideas from marketing science to public health, suggesting that the way vaccines are described may influence whether people are willing to receive them. Their work focuses on vaccine hesitancy in the United States. It explores whether public health messaging could be more effective if it better reflects the values and concerns of different groups of people.

During the height of the COVID-19 pandemic, vaccine hesitancy in the U.S. reached nearly 30%, according to one study. Concerns ranged from lack of confidence in the vaccines to complacency and distrust of public health recommendations. Marketing professors Parthasarathy Krishnamurthy and Ye Hu from the C. T. Bauer College of Business believed many public health campaigns shared a common weakness: they often relied on broad messaging aimed at the general public rather than addressing the different perspectives and motivations of individuals.

Krishnamurthy said vaccination can be viewed as a behavioural challenge linked to marketplace decision-making. He explained that people are not uniform in their beliefs, opinions, or past experiences with vaccines, and that one of the central principles of marketing is recognising that different people respond differently to the same message. According to the researchers, campaigns that fail to consider these differences may miss opportunities to connect with vaccine-hesitant individuals.

In research published in the medical journal JAMA Network, the researchers examined how different descriptions of vaccination influenced people’s reactions. Their survey-based experiment involved more than 900 Americans who were asked to evaluate hypothetical vaccine options. The vaccine descriptions emphasised different themes, including complying with government recommendations, protecting others through social responsibility, and preserving personal autonomy, which the researchers described as “freedom framing.”

The findings showed that reactions depended largely on participants’ level of concern about vaccines. Among people with low levels of concern, the framing of the message did not make a significant difference. However, among participants with higher levels of concern, willingness to vaccinate increased when vaccines were described as supporting personal autonomy and individual choice. The difference was about six percentage points compared with other forms of messaging.

The researchers emphasised that scientific evidence about vaccines remains important, but they also argued that communication strategies can shape public responses. Krishnamurthy noted that some people prioritise protecting their health, while others place greater importance on personal freedom and autonomy. These values do not always align, and ignoring them may affect vaccine acceptance. While the current study relied on survey responses, the researchers say the next step will involve behavioural studies to determine whether “freedom framing” can increase actual vaccination rates in real-world settings.

More information: Parthasarathy Krishnamurthy et al, COVID-19 Vaccine Framing and Acceptance Among Adults Who Are Vaccine Hesitant, JAMA Network Open. DOI: 10.1001/jamanetworkopen.2026.4114

Journal information: JAMA Network Open Provided by University of Houston

Brexit Unleashed Economic Uncertainty Across Britain and Europe

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Brexit triggered widespread financial volatility across European markets, revealing how deeply interconnected the continent’s financial systems had become, according to new research from the University of Surrey. Using more than two decades of stock market data from across the European Union, Surrey researchers found that Brexit-related political events significantly intensified volatility spillovers between European financial markets. Political announcements, negotiations and leadership changes throughout the Brexit process repeatedly sparked financial reactions that spread across the EU.

The researchers argue that Brexit was not a single economic shock but an extended period of uncertainty. Major political milestones — from the 2016 referendum result to parliamentary votes and trade negotiations — continually reshaped investor expectations and transmitted new signals through European financial markets. The study suggests that the prolonged political process surrounding Brexit created repeated waves of instability that influenced investor confidence and market behaviour across Europe.

The analysis also showed that larger financial markets tended to transmit volatility to smaller ones during periods of heightened uncertainty. France emerged as the most persistent source of volatility spillovers across the EU throughout the Brexit period. At the same time, the UK acted as a major transmitter during the early stages of negotiations. Smaller markets, including Ireland, Portugal and Spain, were among those most affected by the turbulence generated during key Brexit developments.

To examine how these shocks travelled through the financial system, the Surrey team analysed daily market data from EU countries between 2000 and 2021. The researchers combined advanced volatility modelling techniques with a newly developed “Brexit intensity” index designed to track around 500 political and economic developments linked to Brexit. Each event was weighted according to the scale of financial market reactions, including movements in stock returns, exchange rates and market volatility indicators.

Vasileios Pappas, lead author of the study, explained that Brexit represented a prolonged sequence of political shocks that financial markets in both the UK and continental Europe had to absorb in real time. The research demonstrated that major political announcements and leadership shifts repeatedly sent signals through European markets, extending uncertainty far beyond Britain and reinforcing the cross-border nature of financial risk.

The findings also suggest that Brexit weakened financial integration across Europe. Following the 2016 referendum, volatility transmission between EU markets declined sharply, indicating that markets increasingly reacted more independently as political uncertainty intensified. Dr Pappas noted that financial markets remain closely interconnected across borders, meaning uncertainty in one country rarely stays contained. The study concludes that understanding how financial shocks spread through interconnected markets could help policymakers and institutions better anticipate risks and strengthen financial stability during future political crises.

More information: Marwan Izzeldin et al, Brexit and Its Impact on EU Financial Markets, International Journal of Finance & Economics. DOI: 10.1002/ijfe.70149

Journal information: International Journal of Finance & Economics Provided by University of Surrey

The Impact of Gasoline Prices on Electric Vehicle Usage

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Rising gasoline prices may play an important role in shaping how drivers use plug-in hybrid vehicles. A recent study published in the Journal of the Association of Environmental and Resource Economists examined the relationship between fuel costs and hybrid vehicle behaviour, finding that drivers are more likely to rely on electric charging when gasoline prices increase. The study, titled “Fueling Electrification: The Impact of Gas Prices on Hybrid Car Usage,” was conducted by Laura Grigolon, Eunseong Park, and Kevin Remmy. Their findings highlight how fuel price fluctuations can influence not only vehicle purchasing decisions but also the day-to-day environmental performance of hybrid cars.

The authors note that plug-in hybrid vehicles have become increasingly popular in many countries as governments and consumers seek ways to reduce greenhouse gas emissions and address climate change. Public policies in several regions have encouraged this transition through financial incentives such as purchase rebates, tax credits, and subsidies designed to make hybrid and electric vehicles more affordable. These measures have helped accelerate adoption rates and support broader climate goals. However, while governments often provide incentives for purchasing hybrid vehicles, fewer policies focus on how these vehicles are actually used after they are bought. As a result, many drivers may not fully utilise the electric capabilities of their vehicles.

To better understand hybrid driving behaviour, the researchers analysed detailed micro-level data collected from Spritmonitor, a German application that allows drivers to record fuel consumption, mileage, and charging habits. Their analysis revealed that, on average, only about 32% of the total driving distance in plug-in hybrid vehicles was completed using electric power. Although electricity is frequently less expensive than gasoline, many drivers still depend heavily on the gasoline-powered internal combustion engine. The researchers suggest that this pattern may be explained by what they describe as a “hassle cost” associated with charging. Factors such as locating charging stations, waiting for batteries to recharge, or remembering to plug in the vehicle may discourage drivers from consistently using electric mode.

The study found that changes in fuel prices can significantly alter this behaviour. When gasoline prices rise, drivers appear more willing to overcome the inconvenience associated with charging and make greater use of electric power. According to the authors, a 10% increase in fuel prices was associated with an increase of roughly 1.5 percentage points in electric-mode driving. While this change may appear modest, it represents an important behavioural response that can have broader environmental implications when applied across large numbers of vehicles. The findings suggest that fuel prices can indirectly encourage cleaner transportation practices by motivating drivers to reduce gasoline consumption and rely more heavily on electricity.

These results are particularly important because plug-in hybrid vehicles are often promoted as environmentally friendly alternatives to traditional gasoline-powered cars. However, the environmental benefits of hybrids depend heavily on how they are used in practice. If drivers rarely charge their vehicles and primarily rely on gasoline engines, the expected reductions in emissions may not fully materialise. The authors therefore argue that policymakers and researchers should pay closer attention not only to vehicle adoption rates, but also to actual usage patterns. Understanding how economic factors such as fuel prices influence charging behaviour may help governments design more effective transportation and environmental policies as societies continue working to reduce emissions and transition toward cleaner energy systems.

More information: Laura Grigolon et al, Fueling Electrification: The Impact of Gas Prices on Hybrid Car Usage, Journal of the Association of Environmental and Resource Economists. DOI: 10.1086/739663

Journal information: Journal of the Association of Environmental and Resource Economists Provided by University of Chicago Press Journals

Lack of Information Fuels Misinformation

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Capturing public attention has become essential for communicating science, but making scientific content engaging can come at a cost. Information designed to attract clicks, shares or views is often simplified, leaving out details that help readers fully understand what a study actually found. As a result, people may walk away with inaccurate impressions even when the information they read is technically correct. The challenge is not necessarily the spread of falsehoods, but the loss of context and nuance that can shape public understanding in misleading ways.

That tension is at the centre of new research led by Marta Serra-Garcia from the University of California, San Diego Rady School of Management. Published in the American Economic Review, the study explored how incentives in today’s online attention economy influence the communication of scientific findings and what readers ultimately learn from them. Serra-Garcia’s research suggests that misinformation does not always stem from deliberate deception. In many cases, incomplete information alone can lead readers to draw inaccurate conclusions.

Importantly, the study found that summaries designed to attract attention were not more likely to contain factual errors. Instead, they tended to provide less information overall, particularly about research methods, sample sizes and study limitations. According to Serra-Garcia, the issue is more complicated than simply dismissing attention-grabbing content as “clickbait.” Engaging headlines and summaries can encourage curiosity and motivate people to learn about science. However, the same techniques that increase engagement can also unintentionally contribute to misunderstandings when essential details are omitted.

One example highlighted in the study involved research showing that a compound in broccoli reduced cancer cell growth in mice. Removing the phrase “in mice” dramatically changes how readers may interpret the finding, making it appear more directly applicable to human health than the evidence supports. Serra-Garcia noted that adding those two words is simple. Yet, even small additions that reduce excitement or certainty may lower the likelihood that people will click on or share the content. The research suggests that these seemingly minor omissions can significantly influence public interpretation of scientific results.

To examine these effects, Serra-Garcia conducted a large, multi-stage experimental study involving freelance writers and thousands of participants. In the first stage, 149 freelance writers produced nearly 600 summaries of real scientific studies on topics including cancer, vaccines, sleep and climate change. Writers received different instructions depending on the experimental condition. Some were asked to prioritise accurate communication, while others were encouraged to write summaries that would attract attention and generate clicks or shares online.

In the second stage, more than 3,700 participants read the summaries under varying conditions, including whether they had the opportunity to click through for additional information. The findings were consistent across experiments. Attention-driven summaries were generally shorter, easier to read and more engaging, but they also contained fewer important details. Readers who relied only on the summaries demonstrated lower levels of understanding, with knowledge scores dropping by approximately six to seven percentage points. They were also more likely to make incorrect assumptions, such as believing findings applied directly to humans or represented firm medical recommendations. Even when participants had access to additional information, most chose not to seek it out, reflecting broader patterns observed on social media where users frequently share articles without reading beyond headlines or summaries.

The same pattern emerged when the writing process involved artificial intelligence rather than humans. When a large language model was instructed to maximise attention and engagement, it also produced summaries with less detail and context. This suggests the problem is driven less by individual writers and more by the incentives built into digital communication systems that reward attention above completeness. For Serra-Garcia, the findings raise an important question for scientists, journalists and institutions alike: how can scientific information remain engaging and accessible without sacrificing the details necessary for readers to understand the full picture accurately?

More information: Marta Serra-Garcia, The Attention-Information Trade-Off, American Economic Review. DOI: 10.1257/aer.20240850

Journal information: American Economic Review Provided by University of California – San Diego

Social Media Gambling Promotions Reach Men Far More Frequently Than Women

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Gambling companies are reaching young men—the group most likely to experience problem gambling—on social media at more than twice the rate of women, according to a new study. The findings point to a striking imbalance in who sees gambling promotions online, raising concerns about how digital advertising may be amplifying risks among already vulnerable populations.

Researchers led by the University of Cambridge analysed 411 advertisements from 88 licensed gambling operators in Ireland. They found that young men were reached 2.3 times more often than women across Meta platforms, including Facebook and Instagram, even when adverts were not explicitly targeted by gender. Adults aged 25 to 34 were the most exposed group, accounting for over a third of all unique accounts reached—more than 6.2 million impressions. The results were published in the Journal of Behavioral Addictions.

To carry out the study, the researchers used the Meta Ad Library, which provides data on who sees advertisements under the Digital Services Act. This regulation requires major online platforms operating in EU countries to disclose advertising activity and demographic reach, offering new opportunities to examine how marketing is distributed across different groups.

The findings come as Ireland introduces stricter controls under the Gambling Regulation Act 2024, which took effect in March 2025. The law restricts most social media gambling advertising unless users actively opt in to receive it. However, gambling promotion remains widespread in the United Kingdom and across much of Europe. It has expanded rapidly in the United States, fuelled in part by platforms such as Polymarket and Kalshi.

Lead author Elena Petrovskaya noted that relatively few adverts directly targeted men, yet they still disproportionately reached young male audiences. This suggests that platform dynamics—such as algorithmic delivery or engagement patterns—may be driving exposure towards those already at higher risk. Previous studies have shown that greater exposure to gambling advertising is associated with more favourable attitudes, increased participation, and a higher likelihood of harm, with evidence pointing to a “dose–response” effect.

The scale of exposure identified in the study is substantial. One advert from Betfair reached more than 1.32 million unique accounts, roughly a quarter of Ireland’s population. Across all adverts analysed, 12.6 million men were reached compared with 5.4 million women, and no adverts targeted women exclusively. Co-author Deirdre Leahy said the findings establish an important baseline for evaluating the impact of new regulations, while also highlighting the need for greater transparency and accountability in how potentially harmful products are marketed online.

More information: Elena Petrovskaya et al, Gambling adverts on social media reach 2.3 times more men than women: Using the Meta Ad library to assess gambling advertising in Ireland, Journal of Behavioral Addictions. DOI: 10.1556/2006.2025.00484

Journal information: Journal of Behavioral Addictions Provided by University of Cambridge

Expanded Cyber Disclosure Draws Limited Investor Response

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Companies in the United States are reporting on cybersecurity in greater detail than before, yet financial markets appear largely unmoved. A new study by the University of Vaasa and Aalto University finds that mandatory cybersecurity disclosure requirements have not triggered meaningful responses from investors or stock analysts. While firms are providing more information, the anticipated external impact on market behaviour has not materialised, suggesting that the most immediate effects are occurring within organisations rather than in the broader financial system.

The study examines the early outcomes of new disclosure rules introduced in 2023 by the U.S. Securities and Exchange Commission. These rules require publicly listed companies to include more detailed information in their annual reports about cybersecurity governance, risk management, and oversight. Analysing 3,440 Form 10-K filings from 2024, the researchers assessed how companies responded during the first full year of implementation, focusing on the newly introduced Item 1C disclosure section.

The findings show that companies did not simply shift existing language into a new section. Instead, many produced genuinely new and more structured descriptions of their cybersecurity practices. Firms were required to articulate their governance frameworks and clarify responsibilities in a way that had not been necessary before. This indicates that the regulation prompted real changes in how organisations document and communicate cybersecurity internally, rather than resulting in superficial compliance.

However, the extent and quality of these disclosures varied widely across companies. Differences could only be partially explained by factors such as company size, financial performance, or the type of auditor involved. Notably, whether a firm had previously experienced cyber incidents or operated in a highly digital environment did not strongly influence disclosure quality. This suggests that companies still retain considerable discretion in deciding how much and what kind of information to share.

Despite the increase in reporting, there was little evidence of a corresponding shift in market behaviour. Stock prices did not show consistent reactions, analysts did not significantly expand their discussion of cybersecurity issues, and investor attention to annual reports remained largely unchanged. This is somewhat unexpected given the widely recognised risks associated with cyber incidents, which can disrupt operations, expose sensitive data, and lead to substantial financial losses. The findings imply that investors may not yet be incorporating governance-level cybersecurity information into their valuation decisions.

Interviews conducted as part of the study suggest that the primary benefits of mandatory disclosure are being realised within firms themselves. The requirement has encouraged organisations to formalise and document their cybersecurity structures, processes, and decision-making practices more systematically. This internal focus aligns differently with regulatory approaches in other regions. In Europe, for example, frameworks such as the NIS2 Directive place greater emphasis on risk management responsibilities and internal accountability rather than on disclosures aimed directly at investors, highlighting a contrast in how cybersecurity governance is prioritised across jurisdictions.

More information: Elina Haapamäki et al, Mandatory cybersecurity disclosure: Early evidence from 10-K reports, International Journal of Accounting Information Systems. DOI: 10.1016/j.accinf.2026.100775

Journal information: International Journal of Accounting Information Systems Provided by University of Vaasa