Working Papers

These papers are working drafts of research which often appear in final form in academic journals. The published versions may differ from the working versions provided here.

Eduardo Davila, Benjamin Hébert
September 2019

We study optimal corporate taxation when firms are financially constrained. We describe a corporate taxation principle: taxes should be levied on unconstrained firms, which value resources inside the firm less than constrained firms. Under complete...

Jess Benhabib, Jesse Perla, Christopher Tonetti
September 2019

We study how innovation and technology diffusion interact to endogenously determine the shape of the productivity distribution and generate aggregate growth. We model firms that choose to innovate, adopt technology, or produce with their existing...

Lisa De Simone, Ken Klassen, Jeri Seidman
September 2019

*/

Do firms balance tax and operating considerations when making investment decisions? We investigate whether income-shifting aggressiveness affects new investments and predict firms that aggressively shift income will choose affiliate-level investments driven...

Susan Athey, Guido W. Imbens, Jonas Metzger, Evan Munro
September 2019

Researchers often use artificial data to assess the performance of new econometric methods. In many cases the data generating processes used in these Monte Carlo studies do not resemble real data sets and instead reflect...

Katherine Casey, Abou Bakarr Kamara, Niccolo Meriggi
August 29, 2019

Are ordinary citizens or political party leaders better positioned to select candidates?  While the direct vote primary system in the United States lets citizens choose, it is exceptional, as the vast majority of democracies rely...

Daniela Saban, Gabriel Weintraub
August 13, 2019

Part of thesis finalist of 2015 INFORMS George Dantzig Dissertation Award. Second place 2015 M&SOM Student Paper Competition

Problem definition: We consider the problem faced by a procurement agency that runs an auctiontype mechanism to...

Darrell Duffie, Samuel Antill
August 1, 2019

In our modeled setting, we show that the now-common practice of size discovery detracts from overall Financial market efficiency. A continually operating exchange uses double auctions to discover prices and clear markets. At each of...

Hanno Lustig, Arvind Krishnamurthy
August 1, 2019

The U.S. dollar exchange rate clears the global market for dollar-denominated safe assets. We find that shifts in the demand and supply of safe dollar assets are important drivers of variation in the dollar exchange...

Charles M. C. Lee, Christina Zhu
August 2019

We use trade-level data to examine the role of actively managed funds (AMFs) in earnings news dissemination.   AMFs trade 170 percent more on earnings announcement (EA) days than on non-EA days.  Abnormal AMF participation is...

Charles A. O’Reilly, Bernadette Doerr
August 2019

Organizational researchers have become increasingly concerned with the potentially destructive consequences of narcissistic leadership. Evidence indicates that grandiose narcissists both aspire to and frequently achieve leadership roles in organizations. However, because narcissists are principally motivated...

Charles M. C. Lee, Yanruo Wang, Qinlin Zhong
August 2019

We develop a Loan Portfolio Risk (LPR) variable that measures time-varying volatility in default risk for a portfolio of bank loans.  An Equity-to-LPR ratio (ELPR) is incrementally important in predicting bank failure up to five...

Charles I. Jones, Christopher Tonetti
August 2019

Data is nonrival: a person’s location history, medical records, and driving data can be used by any number of firms simultaneously. Nonrivalry leads to increasing returns and implies an important role for market structure and...

Antonio Coppola, Matteo Maggiori, Brent Neiman, Jesse Schreger
August 2019

Cross-border capital flows are often opaque. Global firms commonly finance themselves through foreign subsidiaries, including shell companies in tax havens, making it difficult to observe the true economic linkages between investors and borrowers around the...

Julien Clement
August 2019

This study builds a theory of collective sensemaking in the face of environmental change. Our arguments build upon a well-known observation about the division of labor, which typically turns organizations into “nearly decomposable” systems of...

Jonathan Johannemann, Vitor Hadad, Susan Athey, Stefan Wager
August 2019

Many learning algorithms require categorical data to be transformed into real vectors before it can be used as input. Often, categorical variables are encoded as one-hot (or dummy) vectors. However, this mode of representation can...

Anat R. Admati, Martin F. Hellwig
August 2019

The debate on banking regulation has been dominated by flawed and misleading claims. The title of our book The Bankers New Clothes: What’s Wrong with Banking and What to Do About It (Princeton University Press,...

Charles A. O’Reilly, Jennifer Chatman, Bernadette Doerr
August 2019

Research has shown that organizational culture can affect firm performance and that a leader’s personality can affect organizational culture. We examine how a leader’s level of narcissism affects two fundamental aspects of organizational culture -...

Paulo Somaini
July 9, 2019

This paper provides a positive identification result for first-price procurement models with asymmetric bidders, statistically dependent private signals,
and interdependent costs. When bidders are risk neutral, the model’s payoff-relevant primitives are: (i) the joint...

David M. Kreps, Walter Schachermayer
July 2019

We examine Kreps’ (2019) conjecture that optimal expected utility in the classic Black–Scholes–Merton (BSM) economy is the limit of optimal expected utility for a sequence of discrete-time economies that “approach” the BSM economy in a natural...