Topic: Buying the Verdict: Firm Strategic Advertising Response to Corporate Litigation
Speaker: Lauren H. Cohen, L.E. Simmons Chaired Professor of Business Administration
Date: March 18 (Monday)
Time: 10:00-11:30am
Location: Building 4 Room 102
Language: English
Abstract:
We document evidence that firms systematically increase specialized, locally targeted advertising following the firm being taken to trial in that given location - precisely following initiation of the suit. In particular, we use legal actions brought against publicly traded firms over the 20 year sample period that progress to trial from 1995-2014. In terms of magnitude, the increase is sizable: targeted local advertising increases by 23% (t=4.39) following the suit. Moreover, firms concentrate these strategic increases in locations where the return on their advertising dollars are largest: in smaller, more concentrated advertising markets where fewer competitor firms are advertising. They focus their advertisement spikes specifically toward jury trials, and in fact specifically toward the most likely jury pool. Lastly, we document that these advertising spikes are associated with verdicts, increasing the probability of a favorable outcome.
About the speaker:
Lauren Cohen is the L.E. Simmons Professor in the Finance & Entrepreneurial Management Units at the Harvard Business School and a Research Associate at the National Bureau of Economic Research. He is an Editor of the Review of Financial Studies, along with being a past Editor of Management Science, and serving on the editorial board of the Review of Asset Pricing Studies. He teaches in the MBA Program, Executive Education Program, Doctoral Program, and Special Custom Programs at the Harvard Business School, including being a Chair of the Executive Education Program in Family Office Wealth Management, and the Chair of the HarvardX-VPAL FinTech Program.
His award-winning research has been published in the top journals in Finance and Economics. It is also frequently profiled in various media outlets including The Wall Street Journal, The New York Times, The Washington Post, The Economist, and Forbes. It has been recognized by numerous National Science Foundation (NSF) Awards, including a National Science Foundation Early Career Development (CAREER) Award for his research agenda on Relationships in Finance. He was named a 2008 Pensions & Investments “Cutting Edge Academic,” a Top 40 Under 40 Business School Professor in 2017 by Poets & Quants, and a top teacher at Harvard by CNBC.
In addition to his academic work, Dr. Cohen frequently advises government organizations in the US and abroad, as well as consulting with top hedge funds in the industry, and serving as an expert witness in numerous investment- and insurance-related litigation cases. He has testified before the United States Congress on the impacts of government spending on the private sector, and has been awarded the Jack Treynor Prize for superior work in the field of investment management and financial markets.
Dr. Cohen received a PhD in finance and an MBA from the University of Chicago in 2005. He earned dual undergraduate degrees from the University of Pennsylvania - a BSE from the Wharton School and a BA in economics from the College of Arts & Sciences in 2001. He has also served on the advisory board of Oppenheimer Funds, Cake Financial (acquired by E*Trade) and Quadriserv, Inc. (acquired by EquiLend Holdings - an industry consortium comprised of Goldman Sachs, Morgan Stanley, Credit Suisse, Bank of America, UBS, JPMorgan, Northern Trust, Blackrock and State Street).
Dr. Cohen currently resides in Belmont, MA with his wife - Dr. Nicole Cohen - and their five children.
