The book begins with three paradoxes of Libya, Venezuela, and Congo that juxtapose the profound importance of nationalization in the global natural resource economy with its economic risks and potential costs. The chapter then previews the answer to the puzzle of operational nationalization: when faced with the choice of nationalization, weak rulers discount the long-run costs of state intervention to seize its short-term gains; by contrast, strong leaders maintain the status quo of privately run operations to ensure long-term gains from private production. Next, the chapter illustrates the relevance of nationalization in a variety of research contexts: the effects of state intervention in the market; the roles of domestic leadership and international conditions in institutional choice; the significance of this choice during state formation; and the logic of the predatory state. After briefly introducing the theory of how, why, and when different operational nationalization pathways matter for politics, the chapter concludes by outlining how the remaining chapters of the book explain and test the operational nationalization theory.

Why you care: Triggering provides experimenters with a way to improve sensitivity (statistical power) by filtering out noise created by users who could not have been impacted by the experiment. As organizational experimentation maturity improves, we see more triggered experiments being run.

This chapter connects pay to the important (and costly, from an organizational standpoint) subject of employee turnover. It opens by discussing how the level of pay relates to workers’ turnover rates. A discussion of the timing of compensation (over the course of the worker’s career or tenure with the employer) follows, the key point being that deferred compensation encourages retention. Employers might renege on deferred-pay contracts, which introduces risk for workers. The chapter covers workers’ perceptions of risk as they pertain to the timing and design of pay and to sorting effects. When pay is deferred, workers sometimes advance to a career stage in which their pay outpaces their productivity, at which time employers would like them to quit. Inducing workers to leave can be tricky, particularly given the external and internal constraints covered in Chapters 4 and 5. Sections 12.5 and 12.6 concern severance packages and buyouts, which basically involve paying workers to leave. The conditions under which such payments are offered and accepted are covered. The chapter ends with coverage of corporate raids and when a manager should match an outside offer received by an employee.

There are many tools and techniques that a data scientist is expected to know or acquire as problems arise. Often, it is hard to separate tools and techniques. One whole section of this book (four chapters) is dedicated to teaching how to use various tools, and, as we learn about them, we also pick up and practice some essential techniques. This happens for two reasons. The first one is already mentioned here – it is hard to separate tools from techniques. Regarding the second reason – since our main purpose is not necessarily to master any programming tools, we will learn about programming languages and platforms in the context of solving data problems.

This chapter presents a detailed example that applies the compensation analytics concepts developed in Chapter 6. The reader is assumed to be a compensation consultant charged with evaluating whether gender-based discrimination in pay is present in a public university system in the sciences. Section 7.1 walks through the analysis step-by-step, from formulating the business question, to acquiring and cleaning data, to analyzing the data and interpreting the results from voluminous statistical output in light of the business question. Section 7.2 covers exploratory data mining, causality, and experiments. Exploratory data mining covers situations in which the manager does not know in advance which relationships in the data will be of interest, in contrast to the example in section 7.1 in which a statistical model and specific measures could be constructed that were directly tailored to address the business question at hand. Section 7.2 covers the challenges associated with establishing causality in compensation research and how experiments can sometimes be designed to address those challenges. Randomization and some pitfalls associated with compensation experiments are also covered

This chapter teaches readers how to think about government regulations on pay. Although a lot is said about specific US laws, the primary focus is on how to think about regulation in general, so the discussion is portable across countries even where the local laws differ. Section 4.3 introduces a prescriptive mnemonic concept called the “3 Cs” of constraints: Comprehend, Circumvent, Comply. The idea is that managers first need to comprehend the constraints that impede their efforts to maximize company profit. They should then search for creative ways to circumvent those constraints (without violating ethics or the law). Finally, to the extent that they cannot circumvent the constraints, they must comply with them. The ethical issues surrounding the second of these Cs are discussed. Both anti-discrimination laws and wage-and-hour laws are discussed, including FLSA, ADA, ADEA, EPA, FMLA, and others. There is extensive discussion of floors and ceilings on both the monetary and non-monetary components of pay. An example of floors on paid time off draws on the concept of the marginal worker from Chapter 3 to show that regulations limit the variety of pay plans offered in the market.

The chapter's premise is that understanding how something works requires studying it when it’s broken. The book is about labor contracts, i.e., formal or informal agreements between employers and employees. Sometimes employers breach these contracts by failing to pay their workers. Some workers (e.g., undocumented immigrants) are particularly vulnerable to “wage theft”. The timing of the parties' exchange of work and pay, and how it relates to wage theft, is discussed. Regulatory remedies to the wage-theft problem are studied, and it is shown that such regulations can lower workers’ average pay level by reducing the risk premium that compensates workers for wage-theft risk. Other remedies are given that involve no government intervention. Employers’ passive cuts to workers' real (as opposed to nominal) pay, via the erosive role of inflation, are discussed. Wage theft is offered as an example of a compensating differential (because it is an undesirable job attribute) before that topic is introduced. Themes from the wage-theft discussion recur throughout the book (e.g., in Chapter 10, on executive compensation, there is discussion of firms reneging on CEOs’ expected bonus payments).

Why you care:  Sometimes the effect that you care to measure can take months or even years to accumulate – a long-term effect. In an online world where products and services are developed quickly and iteratively in an agile fashion, trying to measure a long-term effect is challenging. While an active area of research, understanding the key challenges and current methodology is useful if you are tackling a problem of this nature.

Why you care: In most experiment analyses, we assume that the behavior of each unit in the experiment is unaffected by variant assignment to other units. This is a plausible assumption in most practical applications. However, there are also many cases where this assumption fails.