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1 DOUGLAS H. FRANK INSEAD Boulevard de Constance Fontainebleau Cedex France Tel. +33 (0) Fax +33 (0) ACADEMIC POSITIONS INSEAD Assistant Professor of Strategy (2006-present). NORTHWESTERN UNIVERSITY, Kellogg School of Management Lecturer, Management and Strategy ( ). Fontainebleau, France Evanston, IL RESEARCH INTERESTS Organizational and Personnel Economics Labor Economics Behavioral Economics Experimental Economics Strategy and Organization EDUCATION NORTHWESTERN UNIVERSITY Evanston, IL Ph.D. in Managerial Economics & Strategy (2006). Dissertation: Labor Markets, Firms, Institutions and Employees: Three Natural Experiments Fields of Specialization: Labor Economics, Industrial Organization, Competitive Strategy. CARNEGIE MELLON UNIVERSITY MBA with Distinction (1995). Elliott Dunlap Smith Award for top graduating student (co-recipient). INDIANA UNIVERSITY OF PENNSYLVANIA B.S. summa cum laude in chemistry and German (1989). Indiana, PA PUBLICATIONS PEER-REVIEWED As Luck Would Have It: The Effect of the Vietnam Draft Lottery on Long-Term Career Outcomes, Industrial Relations, April, Abstract: Using an original data set matching individual birthdays to Vietnam War draft lottery numbers, I study how the random lottery number assignment affects representation in a sample of top corporate executives decades after the war's end. I find that men with lottery numbers placing them at risk of induction are underrepresented among top U.S. executives in the 1990s. In contrast, I find that high draft risk is positively correlated with indicators of human capital such as earnings and speed of reaching the executive ranks. If the executives are viewed as the winners of a multistage elimination tournament that selected on productivity, these results are consistent with the hypothesis that draft risk led to a mean-reducing spread in the productivity distribution of drafteligible males.

2 Page 2 of 5 PUBLICATIONS OTHER Continental Airlines: The Go Forward Plan, INSEAD Case Study and Teaching Note. WORKING PAPERS Labor Market Institutions, Environmental Change, and Adaptation: Evidence from the Fall of the Berlin Wall Revise and Resubmit, Management Science Abstract: This paper investigates how labor market institutions mediate firms' adaptation to environmental changes. After the Berlin Wall fell, migration from East Germany was an abrupt increase in the supply of a key resource labor in the West. I study the response to this shock among manufacturing firms in the important machinery and equipment industry, one of the pillars of Germany's export-oriented economy. Firms adapted to migration by increasing employment, but not if they were affiliated with a works council an institutionalized form of employee participation. Labor market institutions had a moderating effect on patterns of outsourcing and growth, suggesting that the environmental shock, filtered through the institutions, had a heterogeneous effect on firms' competitiveness. I also find that institutions mainly collective bargaining are associated with heterogeneous changes in marketing strategies. Overall, the results show clearly that adaptive responses to this important environmental change were institutionally contingent. The Shadow of the Future in Internal and External Buyer-Supplier Relationships (with Bart Vanneste) Under Review, Organization Science Abstract: We investigate when firms are preferred over markets and vice versa. Through fieldwork on similar internal and external relationships with eight different firms, we focus on the different role of the shadow of the future. We observe that it is harder to break relationships within firms than between them. Business has to be earned externally, but is more or less guaranteed internally. This has implications for the choice between firms and markets, which we address through a formal model on the strength of the shadow of the future, i.e., the probability that a relationship will be terminated given underperformance. The model highlights a basic trade-off between providing strong incentives for the present and safeguarding the relationships for the future, and provides insight into the conditions under which one is more important than the other. These results suggest that the shadow of the future is an important driver of vertical integration by itself. Firm-Specific Human Capital and Agency Costs: Evidence From Retail Banking (with Tomasz Obloj) In preparation for submission to Organization Science Abstract: This paper explores the conflicting implications of firm-specific human capital (FSHC) for firm performance. Existing theory predicts a productivity effect that can be enhanced with strong incentives. We propose an offsetting agency effect: FSHC may facilitate more-sophisticated gaming of incentives, to the detriment of firm performance. Using a unique dataset from a multiunit retail bank, we document both effects and estimate their net impact. Managers with superior organizational knowledge (a form of FSHC) are more productive in their primary task of selling loans. However, they are also more likely to manipulate loan terms to increase incentive payouts. We introduce a novel method to estimate FSHC s net impact on performance and find that profits are 2 percentage points lower for high-fshc managers. Finally, profit losses increase more rapidly over time for high-fshc managers, indicating adverse learning. Our results suggest that FSHC can create agency costs that potentially outweigh its productive benefits. Cultural Differences in Just World Beliefs Explain Preferences for Economic Redistribution (with William W. Maddux and Klaus Wertenbroch) In preparation for submission to Management Science Abstract: Some countries (e.g., the United States) subscribe to social and economic systems that tend to reward individual performance, whereas others (e.g., France) place a stronger emphasis on social support and income equality. We posited that such cultural differences can be explained by the fact that Americans have stronger beliefs than the French that the world is fair and just; thus, Americans see high performers as deserving greater reward, whereas the French see performance as

3 Page 3 of 5 a less relevant compensation criterion. Two studies obtained support for this hypothesis. In Study 1, compared to French participants, American participants indicated a stronger preference for using performance-based metrics to determine their own individual study payment; Americans also preferred lower tax rates than French. We found that cultural differences in just-world beliefs mediated both types of effects. Study 2 experimentally manipulated just-world beliefs and replicated these effects. Implications for research and public policy are discussed. Organizational Incentives, Aspiration Levels and Firm Performance (with Tomasz Obloj) In preparation for submission to Organization Science Abstract: In this paper we build theory and provide empirical evidence linking the structure of organizational incentives, aspiration levels and organizational performance. Drawing on the Behavioral Theory of the Firm and the economic theory of incentives, we argue that the structure of organizational incentives can shape the endogenous formation of organization members aspiration levels. We also argue that responses to organizational incentives are jointly determined by boundedly rational behavioral effects and purely rational economic incentive effects. We study the daily performance of 164 units of a retail bank throughout a two-month sales tournament. Former tournament leaders units who have occupied a prize-eligible rank but have fallen out have 28 percent higher daily sales than units who have never led. This is not due to underlying productivity differences; neither is it fully attributable to the prevailing incentive structure. Rather, outlets appear to be motivated to regain a lost endowment : the contest ranking entitling them to a prize. Our results therefore demonstrate the joint influence of behavioral and incentive effects on business unit performance. The Effect of Migration on Natives' Labor Market Outcomes: Evidence from German Internal Migration after the Fall of the Berlin Wall Abstract: I study the impact of internal migration after the fall of the Berlin Wall on wages and employment in West German local labor markets. To control for the nonrandom assignment of migrants to labor markets, I propose a novel identification strategy that exploits rich administrative data on exogenous variation in labor market conditions at the migration source. I find no wage effects but positive aggregate employment effects. I find suggestive evidence that migrants helped to fill rising labor demand in basic economic sectors, with positive spillovers for the broader economy and aggregate employment. I find that the positive employment effects were quickly dissipated, consistent with theories stressing equilibrating factor flows. However, I find no robust evidence of migrant-induced native outmigration. OTHER WORK IN PROGRESS Employer Social Value and Employee Sorting: Field Experimental Evidence Does Workplace Competition Promote Unethical Behavior? Field Experimental Evidence (with John Horton) Procedural Justice and Employee Retention: Field Experimental Evidence NONACADEMIC EMPLOYMENT BAYER CORPORATION Manager, Global Transition Services (Jan.-June, 2000): Managed negotiation and implementation of lease and transition services contracts for $1 billion global acquisition. Project Manager ( ): Managed various segments of a global enterprise resource planning (ERP) software implementation. BAYER AG Leverkusen, Germany Marketing Manager, Polyurethanes Division ( ): Profit/loss responsibility for 3 lines of industrial polymers sold to the European automotive industry, with over $40 million in annual

4 Page 4 of 5 volume. BAYER CORPORATION Technical Marketing Representative ( ) Market Development Representative ( ) Technical Service Representative ( ) PRESENTATIONS AT CONFERENCES AND SEMINARS The Value Proposition of Human Capital (Ohio State), 2011 Gaming Incentive Systems: Theory and Evidence (University of Bonn), 2011 CRES Conference on the Foundations of Business Strategy (Washington U. St. Louis), 2011 Tournaments, Contests and Relative Performance Evaluation (NC State), 2011 European Economic Association, 2010 Sydney Organizational Economics Workshop, 2010 London Business School, 2010 American Economic Association, 2010 National Bureau of Economic Research Summer Institute, 2009 Society of Labor Economists, 2009 Institute for Employment Research (German Federal Employment Agency), 2008 (twice) IZA (Institute for the Study of Labor, Bonn), 2007 Université Paris I Panthéon-Sorbonne, 2007 European Economic Association, 2007 Society of Labor Economists, 2007 Alfred P. Sloan Foundation Industry Studies Conference, 2007 Harvard University, 2007 Paris School of Economics, 2007 Institute for Employment Research (German Federal Employment Agency), 2006 INSEAD, 2006 Case Western Reserve University, 2006 Vanderbilt University, 2006 University of Toronto, 2006 REFEREE Academy of Management Review, Industrial and Labor Relations Review, International Journal of Industrial Organization, Journal of the European Economic Association, Journal of Labor Economics, Management Science, Regional Studies, Review of Economics and Statistics, Scandinavian Journal of Economics CONSULTING & TRAINING Boston Consulting Group MDM Bank PricewaterhouseCoopers

5 Page 5 of 5 AFFILIATIONS American Economic Association European Economic Association Society of Labor Economists HONORS Phi Beta Kappa (1987) National Merit Scholar (1984) PERSONAL Married, 2 children Citizenship: United States Languages: English (native), German (fluent), French (fluent) Hobbies: Travel, Cycling, Triathlon