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Differentiating letter shapes accurately is a core competence for any reader. Are letter shapes as distinctive as they could be? The visual shapes of letters, contrary to the phonemes of spoken languages, lack a unified description — an…

We study debt and equity valuation when investors have private information and may exhibit differences of opinion. Our model generates several predictions that are consistent with empirical evidence but difficult to reconcile with traditional…

What if “old wine in new bottles” is actually the secret to game-­changing innovation? The authors explore what they call precedents thinking, illustrating how radical breakthroughs such as Henry Ford’s assembly line and Reed Hastings’s…

We examine if the effectiveness of business tax subsidies varies based on state disclosure laws. The prior accounting literature on government disclosure documents substantial variation in the quality of such disclosures, raising questions about…

Modern recommender systems use machine learning (ML) models to predict consumer preferences based on consumption history. Although these “black-box” models achieve impressive predictive performance, they often suffer from a lack of transparency…

Ambition, an individual trait that we show to be empirically distinct from the Big Five dimensions of personality, has been under theorized and researched as an important determinant of both career success and unethical behavior. We…

As political issues have increased in complexity, public opinion researchers increasingly ask respondents about sophisticated political topics that may require substantive knowledge and analytic skills, raising concerns about survey satisficing.…

Corporate credit lines are drawn more heavily when funding markets are more stressed. This covariance elevates expected bank funding costs. We show that credit supply is inefficiently dampened by the associated debt-overhang cost to bank…

We study the extent to which creditors shape the executive bonus plans of their financially distressed borrowers. Financial distress can exacerbate agency conflicts between creditors and borrowers as concerns with underinvestment become more…

We analyze survey data on ESG beliefs and preferences in a large panel of retail investors linked to administrative data on their investment portfolios. The survey elicits investors’ expectations of long-term ESG equity returns and asks about…

The Federal Reserve’s “balance-sheet normalization,” which reduced aggregate reserves between 2017 and September 2019, increased repo rate distortions, the severity of rate spikes, and intraday payment timing stresses, culminating with a…

The change in the cost of capital that results from a divestiture strategy can be closely approximated by a simple function of three parameters: (1) the fraction of socially conscious capital, (2) the fraction of targeted firms in the economy and…

Many studies document low rates of financial literacy and suboptimal levels of participation in financial markets. These issues are particularly acute among women. Does this reflect a self-reinforcing trap? If so, can a nudge to participate in…

Tackling administrative waste in the health care system presents a perfect opportunity for a second Trump administration that is focused on achieving efficiencies in the federal government and alleviating the pain that inflation has caused on the…

Continuous-time random matching with a large (continuum) population is widely exploited in the literature, but has not had a rigorous formulation, nor a demonstration of its key assumed properties. This paper provides the first probabilistic…

Importance: Few studies have examined the extent to which employers emphasize financial over nonfinancial criteria in measurement, reporting, and decision-making about health care benefits.

Objective: To…

We model the “feedback effect” of a firm’s stock price on investment in projects exposed to a systematic risk factor, like climate risk. The stock price reflects information about both the project’s cash flows and its discount rate. A cash-flow-…

We show that financial reporting influences consumer behavior by drawing consumer attention to announcing firms. Analyzing global positioning system (GPS) data, we document upticks in foot traffic to firms’ commercial locations immediately…

Gossip is often stereotyped as a frivolous social activity, but in fact can be a powerful tool for discouraging selfishness and cheating. In economic games, gossip induces people to act more cooperatively, presumably to avoid the cost of accruing…

Gossip is both common and consequential. People often share reputational information about others in their absence, and this ubiquitous practice powerfully shapes impressions, interactions, and relationships among senders, receivers, and the…

This paper examines a grocery retailer’s management of a premade food product. The retailer’s goal is to maximize a weighted sum of direct profit and customer welfare. Multiple items of the product are produced in batches, and immediately…