Economics

STANFORD GRADUATE SCHOOL OF BUSINESS—Paul Oyer backs away from using the word "luck." But nevertheless his research shows that many young MBAs who go into investment banking might just follow that career due to happenstance as much as because of a die-hard allegiance to Wall Street. And those who...
STANFORD GRADUATE SCHOOL OF BUSINESS—All dictatorships are cruel and wasteful. They deprive the populace of basic rights while enriching a small minority at the expense of rational development. Some maintain power through terror and the naked use of force applied by huge standing armies and police...
STANFORD GRADUATE SCHOOL OF BUSINESS—Overconfident CEOs who overestimate their ability to generate value within their company systematically make distorted decisions about when, how, and how much to invest in new projects according to research. Ulrike Malmendier, assistant professor of finance at...
STANFORD GRADUATE SCHOOL OF BUSINESS—Eight years ago, 55 U.S. states and territories signed a landmark settlement with the nation's four major tobacco companies. The Master Settlement Agreement forced the big tobacco companies to pay fees to the state on futures sales of cigarettes in return for...
STANFORD GRADUATE SCHOOL OF BUSINESS—What do Disney, AT&T, Exxon, and Verizon have in common? Based on economic performance and what they paid their CEOs from 1991-2002, a new academic study argues that all these firms were headed by CEOs who were paid too much. These firms, say the...
STANFORD GRADUATE SCHOOL OF BUSINESS—As more and more people are putting their money into the care of professionals, it's time to ask if the people investing your money are properly motivated—that is, if they are given incentives to make the right decisions when they construct portfolios composed...
STANFORD GRADUATE SCHOOL OF BUSINESS—Stock options have become commonplace additions to compensation packages in recent years. Yet, the experts say stock options are lousy incentive mechanisms for motivating rank-and-file employees at the largest companies to work hard. Consider, for example, an...
STANFORD GRADUATE SCHOOL OF BUSINESS—For anyone who bills or earns by the hour, the world can turn into a 24-hour clock divided not by numbers, but dollar signs. In a recent study, lawyers watching their kids play soccer admitted to mentally ticking away lost income for each minute they stood on...
STANFORD GRADUATE SCHOOL OF BUSINESS—The March 31, 2004, Financial Accountings Standards Board (FASB)proposal for expensing stock options is reigniting an already heated battle. Companies like AIG, Citigroup, Coca-Cola, General Electric, Randal are already expensing or planning to expense employee...
STANFORD GRADUATE SCHOOL OF BUSINESS—Bribery, extortion, graft, embezzlement––these are just some of the grizzly faces of corruption. In some countries, corruption is so common that it is as expected as a handshake when ordinary people or businesses deal with government officials. In a recent...

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