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George Mason alumnus launches AI software startup for law enforcement training

Greg Johnson — Wed, 26 Feb 2025 16:05:48 +0000

George Mason alumnus launches AI software startup for law enforcement training Greg Johnson Wed, 02/26/2025 - 11:05

In This Story

Rebecca Howick

Delivering immersive, voice-driven simulations for law enforcement through building skills, gaining real-time feedback, and preparing for real-world scenarios, Kaiden AI is a software startup co-founded by its CEO Ali Aldubaisi, BS Neuroscience ’21.

Ali Aldubaisi

Aldubaisi had begun studying neuroscience at George Mason with the intention of going to medical school. However, the distance learning forced upon by COVID led him to think outside of the box and start his first company vRealm, an online tutoring platform.

After a few years working on the project, he co-founded Kaiden AI with his vRealm partner, Ali "AJ" Aldjaei. “When we first started, we were focused on the higher education market,” he says. “We initially built the AI platform for grading and evaluation. Like most startups, you build where you initially think is the right fit, and that’s going to be the market for you.” Throughout the process of building his startup and attracting investors, he would find each day bringing surprises.

After seeing limited traction in higher education, Aldubaisi and his team built a small-scale simulation demo to test a new direction. Among the first to see it was Steve Gladis, a senior scholar at George Mason’s Center for the Advancement of Well-Being and a former FBI special agent. He immediately recognized its potential for law enforcement training and encouraged Aldubaisi to explore that path.

“We put the MVP [minimum viable product] in front of police chiefs and academy directors, and their reaction was completely different from our earlier demos,” says Aldubaisi. “That’s when we knew we had to double down.”

Now, Aldubaisi and his team partner with law enforcement agencies and regional academies to implement their simulation platform, with organizations like the Northern Virginia Criminal Justice Academy currently piloting the technology. Recently closing a $1 million pre-seed round, Kaiden AI’s investors are venture capitalists largely outside of the law enforcement space.

Even though his current work does not appear directly related to neuroscience, Aldubaisi recognizes the value of his degree. In fact, he still keeps up with neuroscience journals, seeing the relevance between that field and running his company. Developing hypotheses and constantly experimenting has helped Aldubaisi and his team refine and optimize Kaiden AI, from its initial concept in January 2024 to its current phase today.

“A lot of the concepts mirror each other,” he says. “What goes into marketing, how to understand people, how people learn.”

In 2024, Aldubaisi led the keynote discussion at the Patriot Pitch Competition, an event organized by the Center for Innovation and Entrepreneurship to support ideas and early-stage business ventures from George Mason students and recent alumni. He is now in talks with Rebecca Howick, the center’s director of operations and engagement, about getting more involved with their efforts.

“Having a center where somebody in whatever discipline that they’re studying can articulate or put together an idea or experiment on ideas is so crucial,” says Aldubaisi. He knows there are many intelligent people with brilliant ideas who may be hesitant to pursue their ventures because they don’t know how they’re going to get the funding or backing.

Having gone through that process, Aldubaisi offers crucial advice to aspiring entrepreneurs that reflects his scientific background. “Having the courage to focus on that one thing that you’re trying to prove out is probably the biggest thing,” he says. “Second thing is always look at what your idea is as an experiment, and the goal is to prove or disprove as soon as possible.”

By following these guidelines, Aldubaisi and his team have surpassed fundraising milestones and are excited to put Kaiden AI into the hands of many more law enforcement students and officers.

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At George Mason basketball game, students ran the show

Sarah Holland — Fri, 21 Feb 2025 16:16:20 +0000

At George Mason basketball game, students ran the show Sarah Holland Fri, 02/21/2025 - 11:16

Most students at Division 1 universities like George Mason can say they’ve been to at least one sport event. A sold-out football game, a baseball no-hitter, or a Cinderella run at the NCAA Final Four: these games bring the campus together and make core memories for future alumni.

Students from left: Melissa Quinteros, Cody Salenga, and Manahil Piracha. Photo provided.

But while many can say they’ve cheered in the stands, only a handful can say they’ve run the show.

In fall 2024, Donald G. Costello College of Business students had that unique opportunity, leading the marketing and management of the Ferrum vs. George Mason basketball game on November 23.

Mentored by marketing professor Niki Vlastara, assistant director of fan engagement Lily Plizga, and senior marketing and communications director of Costello College of Business Duane Bailey, five students took responsibility for various aspects of the game: from marketing ticket sales to managing check-in to developing a creative timeout game.

For Plizga, the experience was an opportunity to show students the breadth of career possibilities in sports management and marketing. “I found this career because I was a student wage worker with Athletics; I wouldn’t have known about all the opportunities here otherwise,” she said. “So for me, this experience helps showcase all the different paths available to them.”

For Vlastara, it was an opportunity to give students hands-on experience to practice theories and concepts from their coursework. “In event marketing, once the event is done, it’s done; you can’t resell. So, it’s important for the students to have that experience of having one chance to get it right and fill the seats,” Vlastara explained.

George Mason is nationally ranked for internships/co-ops and its graduates report high job success related to their career goals, which underscores its prioritization of experiential learning opportunities like this one.

“I think this experiential part of education is what students are looking for. Projects like this help them really understand where the concepts I’m teaching in class apply,” said Vlastara. “It’s very holistic.”

From left: Melissa Quinteros, Cody Salenga, Dean of Costello College of Business Ajay Vinzé, and Manahil Piracha. Photo provided.

Melissa Quinteros, a senior in Costello, said that this hands-on opportunity challenged her to improve the skills she was developing in her classes and extracurriculars. “Having interpersonal skills and collaborating on projects have always stood out as necessary skills in my marketing and business classes,” she said. “For this, I needed to take those skills and learn what worked when trying to promote an event to attendees. I had to figure out how to be brief while emphasizing what parts of the event would be most interesting to the person I’m talking to. That was a challenge, but I learned so much.”

The students, Bailey said, “jumped in with both feet and smiled the whole way.” They brought ideas not just from the classroom, but also from their own experiences: winter 2024 graduate Cody Salenga, for example, pitched the idea of the timeout game based on a game he saw at an NBA game. According to Plizga, the game was really successful.

Athletics also saw increases in their social media engagement when the students had taken over; Plizga’s data showed more comments and higher views.

“We want students to feel like they’re part of something bigger than themselves, that extends beyond graduation,” said Bailey, “We want them to invest in George Mason, and experiences like these plant that seed early.”

The team hopes to continue this collaboration next season. “Athletics and the fans were excited by the collaboration. So we hope to keep it going in the fall, maybe make it a big event each year that becomes tradition,” said Plizga. “And I hope that other departments, schools, and colleges see what we did as a baseline for opportunities in the future.”

In This Story

Mariniki (Niki) Vlastara

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Checking in to a “suite” internship with Marriott International

Sarah Holland — Wed, 15 Jan 2025 14:34:55 +0000

Checking in to a “suite” internship with Marriott International Sarah Holland Wed, 01/15/2025 - 09:34

When business major Kyle Samuel went to ��AV’s Fall 2023 Career Fair with a list of companies to speak with, he didn’t realize he would land an internship that would kickstart his career.

With a legacy connection to Marriott hotels through his father, who worked for Marriott at the property level, a chat with the Marriott representative led to securing a competitive spot as a finance HQ intern with Marriott International.

Now, in addition to completing a summer internship with Marriott, Samuel is working part-time for the hotel company and making plans to return in summer 2025 for a second internship.

Kyle Samuel (left) with Marriott founder's grandson, David Marriott. Photo provided.

Why did you choose George Mason?

There are a couple of reasons why. First, it’s close to home and within my culture we try to live with our parents even after we’re 18. So that was important to me. Affordability was a major aspect, too, because staying home saves some tuition. George Mason’s Costello College of Business is also great and well-established, especially compared to other schools in the region.

What inspired your interest in finance?

In junior year of high school, one of my uncles recommended the book Rich Dad, Poor Dad by Robert T. Kiyosaki and Sharon Lechter. And that opened my eyes to how much personal finance matters in your life. I started reading more, like The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success by William N. Thorndike, Jr., and my interest just took off from there.

How did you find out about the internship at Marriott?

Through the career fair at George Mason. I went into the fair with notes about each company I was interested in, and Marriott was on the list. I spoke with the representative, and we really connected. She told me about the internship—I didn’t know that Marriott offered internships—and she recommended that I apply.

It’s funny, whenever someone asks me about the career fair, I tell them I have a 100% track record, because I went to one fair and got an internship from it!

What did you do during your summer internship with Marriott?

Some of my major projects were conducting reviews of around 50 capital expenditure budgets from Marriott Select brands to ensure compliance and accuracy, checking the integrity and translation of data from Excel sheets to visualizations, and helping a senior manager send out revenue share allocations to select brand owners.

I also participated in a competition with the other interns where we were given a real-life business challenge that Marriott is facing, and we had to design a potential solution. So we brainstormed ideas for improving Marriott Bonvoy sign-ups among the Gen Z demographic.

One of the things I really appreciated about my internship is that I wasn’t just doing internship work that wouldn’t go anywhere once I was done: I was doing projects with impact.

How have your experiences at George Mason prepared you for your internship?

Many classes gave me the foundations I needed to succeed at my internship. BUS 210 Business I and BUS 310 Business Analytics II were really helpful because it allowed me to strengthen my Excel skills, and BUS 103 has helped improve my professional development skills.

University Career Services also played a monumental role. They helped me establish my resume, create my LinkedIn profile, and prepare for the interview with Marriott.

Kyle Samuel (right) with Anthony Capuano, current CEO of Marriott. Photo provided

What would you say is the importance of an internship?

School does prepare you for the workplace, but there’s really no substitute for actually experiencing a workplace. Understanding office culture, learning the hierarchies, networking; you can only really learn those soft skills through being in the workplace. And networking is so valuable. I’ve had a meeting with the CEO of Marriott because I was able to network with the former intern, who connected me to the right people.

Where do you hope to be in ten years?

My long-term goal is to become the CFO of Marriott. I’m minoring in real estate, so working for Marriott combines my interest in finance with my interest in real estate. I love the culture; I feel like they really put people first and work together as a team. And there’s a lot of potential for them to grow in the future.

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George Mason professor furthers impact of telemedicine in Ukraine

Jennifer Anzaldi — Tue, 14 Jan 2025 22:39:16 +0000

George Mason professor furthers impact of telemedicine in Ukraine Jennifer Anzaldi Tue, 01/14/2025 - 17:39

Ukraine’s health care system has been hit hard amid the ongoing war. Power outages, staffing shortages, and the destruction of hospitals have added up to a drastic reduction in available care for the already-vulnerable population. In a desperate attempt to bridge the gap, Ukraine’s Ministry of Health opened the country to telehealth solutions from overseas. But will these prove to be a successful substitute for at least some necessary services, or turn out to be no better than a tech Band-Aid?

Answering that question is where Mariia Petryk, assistant professor of information systems and operations management at the Costello College of Business at ��AV, comes in. In her spare time, she works as volunteer director of analytics for TeleHelp Ukraine (THU).

Mariia Petryk

Founded by a cross-disciplinary group of Stanford students shortly after the war’s inception, THU was designed to succeed where other telemedicine initiatives in crisis-affected areas have failed. The founders worked tirelessly to assemble an international volunteer network comprising medical professionals, translators, interpreters and administrative “health navigators.” Aware that medical consultations were only part of the patient journey, THU’s founders sought to address the entire continuum of care.

Petryk stresses that while the project originated at Stanford, the technical team included “people from Chicago, Boston, other California schools…some very active volunteers were in Australia, South Korea, Canada and other countries.”

Petryk, herself of Ukrainian descent, was honored to lend her data science expertise to this worthy project. As analytics director, she manages a dozen or so number-crunching volunteers who measured and documented THU’s impact upon Ukraine’s displaced population during the initiative’s first full year.

As Petryk explains, “The Russian invasion created a humanitarian crisis where a lot of people were internally displaced. And when people relocate to a new place, they don’t know where to go for health care. They also are at higher risk for many issues, including mental health problems. And they don’t know where to turn to treat chronic diseases they may have.”

THU’s primary focus during its first year was delivering much-needed services to this population of war-ravaged internal exiles.

Petryk’s analytical work gave rise to a recent case study of THU published in Journal of Global Health. The paper’s other lead author was Aditya Narayan, a Stanford medical student and THU’s director of implementation and evaluation.

Their findings describe some impressive early successes. THU facilitated more than 1,200 virtual patient appointments from May 2022 to May 2023 alone. Despite often-chaotic conditions, patient attendance rates were above 70 percent for nine of the 13 months studied. As the first year wore on, the THU team found ways to prevent no-shows—for example, employing the popular texting platform Viber to communicate with patients and assigning an individual health navigator to each patient.

Even more impressively, 96 percent of patients reported that their health complaints were at least partially resolved during their visit.

The paper argues that aspects of THU’s model could be adapted for use in other humanitarian contexts. In its initial growth phase, THU had access to advanced technological infrastructure and a wide network of medical providers, by dint of its academic origins. This implies that partnerships with academia could be critical to replicating THU’s success outside Ukraine.

Petryk remains proud of THU’s impact and her role in helping define it. “Based on actual appointments and how much that amount of care would cost at a hospital, THU delivered an estimated $1 million worth of services in its first 13 months,” she says.

Looking ahead to THU’s future, she says, “I can only wish to see this ‘start-up,’ as it were, go for the IPO.”

For more information and to explore volunteering opportunities, visit THU’s website.

In This Story

Mariia Petryk

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Get to Know Bo Galles, Costello MS in Real Estate Development Program Student Ambassador

Jennifer Anzaldi — Fri, 10 Jan 2025 17:00:40 +0000

Get to Know Bo Galles, Costello MS in Real Estate Development Program Student Ambassador Jennifer Anzaldi Fri, 01/10/2025 - 12:00

Meet Bo Galles, our Costello MS in Real Estate Development Program Student Ambassador at the Costello College of Business, who brings his experience as a retail broker at KLNB, specializing in pad sites and new construction projects. He encourages aspiring candidates to join industry organizations like NAIOP and attend networking events to build valuable connections. Bo is eager to support fellow students, so don’t hesitate to reach out with any questions about the MS in Real Estate Development program or his work in real estate!

Bo Galles

Recently, we had the opportunity to chat with Bo to learn more about his journey, and why he chose George Mason’s MS in Real Estate Development program.

Tell us about yourself
I am a retail broker with KLNB and focus on pad sites and new construction retail projects. I grew up both in Fredericksburg, Virginia, and Albuquerque, New Mexico. I live in Old Town Alexandria and am finishing my first year in the MS in Real Estate Development program.

Why did you pursue your program, and why did you choose ��AV?
I decided to pursue the MS in Real Estate Development program to learn more about the market, strengthen and grow my network, and learn more about the different disciplines that go into a real estate development.

What are the highlights of your experience in the program so far?
My highlight so far has been growing friendships with classmates. Class sizes aren’t too big, so you are able to get to know the other students very well.

What goals do you have for the future?
I would like to work on larger developments and eventually become a stakeholder.

Can you tell us an interesting fact about yourself?
I play in a cornhole league in Arlington, Virginia, and won the championship last year.

Do you have any advice for aspiring candidates for your program? 
I would join NAIOP and/or other trade organizations and attend as many events as possible.

If you’re interested in learning more about Costello's Master’s in Real Estate Development Program, register for an upcoming info session or request more information about the program.

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Does the world need a ‘universal language’ of accounting?

Jennifer Anzaldi — Tue, 07 Jan 2025 15:40:40 +0000

Does the world need a ‘universal language’ of accounting? Jennifer Anzaldi Tue, 01/07/2025 - 10:40

In This Story

David S. Koo

In the early years of the 21st century, investors had good reason to hope that a single, globally accepted accounting framework would soon emerge to unite the world’s financial markets. It seemed inevitable that the Securities and Exchange Commission (SEC) would abandon its devotion to U.S. Generally Accepted Accounting Principles (GAAP) and adopt the Esperanto-like International Financial Reporting Standards (IFRS).

Then came the financial crisis, which punctured optimism around globalization. In 2012, an SEC staff report confirmed the shift in sentiment, pointedly withholding an anticipated timeline for IFRS adoption.

David Koo

However, the dream of convergence continues, and may be slowly coming true, albeit in a low-key way. According to David Koo, assistant professor of accounting at Costello College of Business at ��AV, having two competing frameworks may even be a net benefit for cross-market comparability.

Koo's latest paper, forthcoming in The International Journal of Accounting and co-authored with John X. Jiang and Isabel Wang of Michigan State University, plumbs accounting research, industry analyses and corporate data to draw high-level conclusions about the “competition” between U.S.-GAAP and IFRS.

After 2012, some experts were concerned that the apparent snub from the SEC would dissuade undecided countries from signing onto IFRS, thereby increasing fragmentation. Yet Koo and his co-authors show that the opposite happened: Between 2011 and 2022, IFRS adoption surged from 53.3% to 76.7% among non-North American firms.

“People were concerned that IFRS’ influence would diminish if the U.S. did not adopt, but it didn’t happen,” Koo summarizes. “According to our survey, IFRS is thriving and has become the most widely used accounting standard.”

Another fear was that U.S.-GAAP and IFRS would become more distinct over time, which would hamper comparability. However, the researchers note that the SEC maintains a position on the IFRS Foundation Monitoring Board. Also, several Americans sit on the 14-member International Accounting Standards Board, the oversight body for IFRS.

Indeed, the researchers found that the discrepancies between the two frameworks peaked before 2012, according to comparisons performed over time by KPMG and PricewaterhouseCoopers.

“The accounting boards work tightly together; they have corresponded in an active way for the past 10 to 15 years,” Koo says. “It seems that they are learning from each other. They are separate—however, when they introduce new standards, they collaborate.”

Koo surmises that this sort of “managed divergence” might be preferable in some ways to universal adoption of IFRS. Because the two frameworks are seen as roughly equivalent in terms of quality, the informational benefit of switching from one to the other might not justify the transition cost.

Additionally, competing frameworks create a balance of power that might prove more sustainable over the long term than a global monopoly. “If we adopt IFRS universally, most companies would follow the same standard,” Koo says. “This widespread influence would be so huge in that case that it might cause conflict or tension about the standard-setting process. Having Independent processes can allow countries to have some autonomy, which can be beneficial.”

The researchers suggest that the same principle could apply to current efforts to develop global standards for mandatory sustainability reporting. The European Union, Asia, and North America differ greatly from one another in economic development, cultural values, etc. As a result, multinational companies doing business across these regions face a frustrating patchwork of expectations when it comes to climate and other impact-based disclosures. Here, too, some form of “managed divergence” might be the best way forward, with jurisdictions remaining separate while engaging in close collaboration.

“Companies want to have standardized expectations in terms of sustainability, but it is not easy,” Koo says. “Similar to financial reporting, the two main pillars will likely be the U.S. and EU, which both have advanced standards. Other countries will choose depending on their comfort.”

“Having two good standards in the world may be better than one.”

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“When one door closes, open another”: This Costello student is making his way in music industry

Sarah Holland — Wed, 04 Dec 2024 15:57:59 +0000

“When one door closes, open another”: This Costello student is making his way in music industry Sarah Holland Wed, 12/04/2024 - 10:57

Cody Salenga has been making music since he was a teenager. Performing under the name Steph Cody Music, he’s got a growing fanbase on Spotify and co-launched an independent record label this year. So when it came time to look for a summer internship, Salenga knew he wanted something in the music industry.

That’s how Salenga, one of Costello College of Business’ graduating business majors with a concentration in marketing, found himself running social media for Capitol Dystrikt Music in Washington, D.C.

“It combines my two passions in music and marketing,” he said, “and it’s my dream to work in the entertainment industry. The chance that one day I’ll be listening to a song on the radio, or on Apple music, and realize, ‘hey, I’ve been in the studio when they were making that song’ is really cool.”

In addition to managing social media and communications for Capital Dystrikt Music, Salenga works to build relationships between the artists and the studio to increase the studio’s presence. Building name recognition is at the core of his work, and that idea led to one of his major projects: the Graveyard Smash concert, hosted right here in the Johnson Center on Fairfax Campus on the eve of Halloween.

“I really wanted to put on a concert, so I pitched the idea of a concert sponsored by Capitol Dystrikt Music to the Student Centers using the Plaza Palooza (named after the Lollapalooza festival) as a template. And we had a great turnout,” he said. “It really just came together into a beautiful thing that I could find so much pride in.”

Photo by Evan Cantwell/Office of University Branding

Capitol Dystrikt Music saw 200% more web traffic this month than previously, which Cody attributes to the event. “Tables in the Johnson Center were filled throughout the festival,” he said. “We probably had roughly 200 attendees.”

Salenga sees strong similarities between building an album and building a marketing campaign. “You work tirelessly on something for a long time, and you want people to see it and be moved by it, whether that’s an album or a product launch,” he said. His work speaks for itself, having grown the studio’s impressions by 113,780% or 5,694 impressions within a 30-day period, and 3.1k accounts reached in that same timeframe too.

Diving into the industry hasn’t been without challenges. “It’s a tough learning curve, figuring out how marketing works in the music industry, what’s going to land well, what will produce results, and so on,” he said. “But the classes like Digital Marketing and other foundational marketing classes I’ve taken at George Mason have given me a really solid marketing foundation.”

He cites the hands-on learning experiences in his marketing electives as being particularly impactful. A simulation tracking social post-performance and SEO, for example, gave him important insights into the mechanisms of marketing that he’s applying to both his professional and personal social presence.

“When it comes to George Mason, the stereotype that I’ve heard employers have of us is that we’re hardworking and gritty, and we don’t take things for granted. That's what we bring to the table in interviews that makes us different,” he said. “So when one door closes, don’t wait for something else to open: make a new opportunity for yourself.”

Salenga, left, performs on stage at Graveyard Smash. Photo provided

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Are U.S. ‘news deserts’ hothouses of corruption?

Jennifer Anzaldi — Tue, 19 Nov 2024 16:35:27 +0000

Are U.S. ‘news deserts’ hothouses of corruption? Jennifer Anzaldi Tue, 11/19/2024 - 11:35

The March 24, 2021 edition of neighborhood newspaper Northeast News, out of Kansas City, Missouri, contained a surprise for its 9,000 subscribers. Where the front-page news should have been, there was a big, blank white space. This was no printer’s error, but a last-ditch cry for help. After 89 years in operation, Northeast News had found itself on the brink of insolvency due to the loss of key advertisers amid the COVID pandemic. The empty front page was designed to remind the community of what it would lose if its only local paper went under.

The gambit went viral, prompting a flood of online donations that is keeping the paper afloat, for now. Ironically, Northeast News owes its existence to the very force that has fueled the more general decline of local journalism in America—the internet.

Brad Greenwood

As advertiser dollars migrated to Facebook and Google, the business model that supported local newspapers for generations came to the edge of collapse. Since 2004, more than 2,500 American newspapers have ceased publication—around one-quarter of the total. Overall newspaper circulation has declined by more than half since 1990.

To be sure, digital alternatives have rushed in to fill the gap, such as citizen-journalist websites, nonprofit news organs, partisan blogs, etc. So, the question represented by the blank front page of Northeast News resonates: What do communities lose when newspapers fold that online journalism startups haven’t (so far, at least) been able to replace?

In the past, industry observers and researchers have linked community newspaper closure to diminished civic trust and political participation, among other negative effects. New research from Brad Greenwood, the Maximus Corporate Partner Professor of Business at the Costello College of Business at ��AV, builds on this discourse, finding evidence that when local papers topple, political corruption springs up in their wake.

Greenwood’s paper, coauthored by Ted Matherly of Tulane University, was published in MIS Quarterly.

The researchers focused on U.S. federal districts that lost a major daily newspaper during the years 1996 to 2019. They compared the number of corruption charges (bribery, embezzlement, fraud, etc.), defendants, and cases filed in district court before and after the newspaper closure. The results were striking: Overall, the disappearance of a newspaper delivered a 6.9% increase in charges, a 6.8% increase in the number of indicted defendants and a 7.4% increase in cases filed.

“We looked at federal charges for three reasons. First, the overwhelming amount of statutory enforcement occurs federally. Second, it gives us a uniform definition of what constitutes corruption across every domestic jurisdiction. Finally, and most importantly, federal conviction rates are over 90%,” Greenwood says. “They don’t charge people unless they have a good-faith belief they will prevail at trial.”

Moreover, post-newspaper corruption cases were more likely to go to trial as opposed to resolving in a plea deal, thus incurring greater public costs.

“In an age of misinformation, the solution is not rejecting the professional press, it is embracing it, and ensuring that well-trained and hard-working men and women have both the ability and venue to hold those in power to account."

Greenwood and Matherly also examined whether digital-era upstarts were adequate substitutes for newspapers, in terms of curtailing corruption. They tracked 352 such websites, and found they had no impact on the number of charges, defendants or cases in the districts concerned.

“While it’s hard to say precisely why we don’t see an effect from online news, there are several candidate explanations. Not only do citizen journalists lack the standing and training to tackle questions of public corruption and elevate discourse in the public square, but many of these sites aren’t even legitimate news vendors,” says Greenwood, referencing what are commonly referred to as “pink slime websites.”

Greenwood goes on to suggest that the corruption-preventing power of the defunct papers came not necessarily from journalistic acumen, but rather from the ability to elevate the actions bad actors had taken in public discourse, a process journalism researchers refer to as agenda setting.

Whatever the cause, the ramifications for society are very real. In the Northern District of Illinois alone, corruption-related cases involving more than 1,700 officials cost taxpayers a staggering $550 million per year from 1976 to 2012. The coffers of communities that lose newspapers may suffer more than most, since these cases tend to end up in expensive courtroom proceedings rather than plea deals.

Further, the study only looks at corrupt officials who got caught. Presumably, there are many more whose corruption went unpunished.

All told, these findings suggest that community newspapers should not be regarded as just another business model ill-adapted to digital disruption that should be allowed to fail. Their demise comes at significant public cost, financial and otherwise. “In an age of misinformation, the solution is not rejecting the professional press, it is embracing it, and ensuring that well-trained and hard-working men and women have both the ability and venue to hold those in power to account,” Greenwood says.

In This Story

Brad Greenwood

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When CEOs are haunted by memories of past recessions

Jennifer Anzaldi — Tue, 12 Nov 2024 19:43:41 +0000

When CEOs are haunted by memories of past recessions Jennifer Anzaldi Tue, 11/12/2024 - 14:43

In This Story

David S. Koo

The economy, we’re often reminded, is cyclical. But we all hope our careers won’t be. That means those of us who make it to the very top—CEOs, for instance—may be unduly influenced by memories of prior economic go-rounds. David Koo, assistant professor of accounting in the Donald G. Costello College of Business at ��AV, has found that memories of past recessions, triggered by recent ones, can weigh on chief executives’ decisions, literally for years.

Koo’s paper, co-authored by Isabel Wang of Michigan State University and Shuting Wu of Cal State Fullerton, is forthcoming in Management Science.

David Koo

The paper was inspired by trends in research outside the accounting field. “In the economics area, they have started looking at how executives’ memories of recessions can affect important decision-making right now,” Koo says. “We are trying to connect these emerging trends to the accounting area by focusing on pessimistic bias in their outlook of the company’s performance.”

The researchers adopted the 2008 financial crisis as a key moment for triggering veteran CEOs’ memories of prior financial downturns. They analyzed annual management earnings forecasts for U.S. public companies for the period 2002-2018, alongside the characteristics and career histories of the CEOs who issued them. “We used the first forecast of the year for each year, because on average these are more optimistic,” Koo explains. “Usually, nobody wants to say anything negative at the beginning of a year.” The final data-set comprised 3,678 earnings forecasts from 466 CEOs.

Koo and his co-authors discovered that CEOs who had previously led companies through at least one past recession issued significantly more pessimistic forecasts post-2008 than they had before the crisis. As a general rule, the more recessions a CEO had undergone in their tenure at the top, the more pessimistic their post-crisis forecasts tended to be.

The same pessimistic pattern was not evident for CEOs who had not experienced a recession before 2008. Translating their findings into economic terms, the researchers concluded that one standard deviation of the memory-triggered pessimism effect was equivalent to 0.23-0.29 percent of share price.

Further, the post-crisis pessimism did not make the forecasts more accurate. It’s safe to say, then, that the memory-triggered CEOs were, knowingly or not, displaying excessive caution and conservatism in their earnings forecasts. To be sure, anyone’s outlook can darken with age, independent of their real-world experience. So the researchers performed subsequent checks to determine whether the increased pessimism was more closely related to growing older, or to specific memories of past recessions.

“Our takeaway is, if we have two same-age CEOs, one who has experience navigating recessions as a CEO and one who does not, the first one will become more pessimistic after the crisis,” Koo says.

The more highly skilled CEOs (as measured by a widely accepted scale for managerial ability) exhibited less memory-induced pessimism, while CEOs who led more complex firms with a lot of moving parts were more prone to pessimism. “We expected that the manager-specific effect would be more significant when managers were under more demanding pressure or had more discretion,” Koo explains.

As the 2008 financial crisis itself faded into memory, seasoned CEOs gradually let go of their pessimistic bias. But it took three years, on average, for their forecasts to fully recover. We normally think of past experience as an aid to learning, but here it seems that the opposite was the case: Memories of past experiences with recessions slowed down CEOs’ post-crisis learning process.

“Prior research has found that past experiences can help people more rationally and then more wisely handle an ongoing crisis,” Koo says. “But at the same time, executives are also human beings. They may be scarred by their experiences and that can induce them to be excessively negative or pessimistic when they go through a financial crisis.”

Of course, that doesn’t mean that the veteran CEOs were less effective at guiding their firms through post-crisis recovery. Koo emphasizes that his findings do not capture whether, and how quickly, companies bounced back from the 2008 recession.

“Memory may not be the most dominant factor in our decision-making, but it still can influence executives even in their managerial decision-making,” Koo advises.

The lesson, then, is one for investors and other market players to store in their own memories for the next economic downturn: Take CEOs’ post-crisis predictions with at least a grain of salt.

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Accounting Faculty Research