The interplay between social motivation, social experience, and developmental neural specialization for social perception

From birth, infants preferentially attend to human motion, which allows them to learn to interpret other peoples’ facial expressions and mental states. Evidence from adults shows that selectivity of the amygdala and the posterior superior temporal sulcus (pSTS) to biological motion correlates with social network size. Social motivation—one’s desire to orient to the social world, to seek and find reward in social interaction, and to maintain social relationships—may also contribute to neural specialization for biological motion and to social network characteristics. The current study aimed to determine whether neural selectivity for biological motion relates to social network characteristics, and to gain preliminary evidence as to whether social motivation plays a role in this relation. Findings suggest that neural selectivity for biological motion in the pSTS is positively related to social network size in middle childhood and that this relation is moderated by social motivation.

Industry Linkages and Audit Firms' Industry Portfolio Choice: Evidence from Product Language

Audit firms are organized along industry lines and industry specialization is a prominent feature of the audit market. Yet, we know little about how audit firms make their industry portfolio decisions, i.e., how audit firms decide which set of industries to specialize in. In this study, I examine how the linkages between industries in the product space affect audit firms’ industry portfolio choice. Using text-based product space measures to capture these industry linkages, I find that both Big 4 and small audit firms tend to specialize in industry-pairs that 1) are close to each other in the product space (i.e., have more similar product language) and 2) have a greater number of “between-industries” in the product space (i.e., have a greater number of industries with product language that is similar to both industries in the pair). Consistent with the basic tradeoff between specialization and coordination, these results suggest that specializing in industries that have more similar product language and more linkages to other industries in the product space allow audit firms greater flexibility to transfer industry-specific expertise across industries as well as greater mobility in the product space, hence enhancing its competitive advantage. Additional analysis using the collapse of Arthur Andersen as an exogenous supply shock in the audit market finds consistent results. Taken together, the findings suggest that industry linkages in the product space play an important role in shaping the audit market structure.