Publications

We contend that buyers received false information about the true quality of assets in contractual disclosures by intermediaries during the sale of mortgages in the $2 trillion non-agency market. We construct two measures of misrepresentation of…

Individuals have different concerns before and after they become relatively certain about a goal’s attainability; hence, we propose that the presence of alternative means of goal attainment will have a distinctive impact on motivation, depending…

Proxy advisory firms are independent, for-profit consulting companies that provide voting recommendations to individual and institutional investors. Research shows that these firms have significant influence on voting outcomes. Given this…

This paper develops a model to explain the widely used investment mandates in the institutional asset management industry based on two insights: first, giving a manager more investment flexibility weakens the link between fund performance and his…

A long-standing question is whether differences in management practices across firms can explain differences in productivity, especially in developing countries where these spreads appear particularly large. To investigate this, we ran a…

New empirical models of consumer demand that incorporate social effects seek to measure the causal effect of past adopter’s behavior—the “installed-base”—on current adoption behavior. Identifying such causal effects is challenging due to several…

We survey the theoretical and empirical literature on decentralization within firms. We first discuss how the concept of incomplete contracts shapes our views about the organization of decision-making within firms. We then overview the empirical…

We present the puzzling evidence that, from 1962 to 2009, an average 10.2% of large public nonfinancial US firms have zero debt and almost 22% have less than 5% book leverage ratio. Zero-leverage behavior is a persistent phenomenon. Dividend-…

We introduce an alternative perspective on the study of consumer judgment and decision making, which is based on the notion that judgment and choice problems consist of comparisons that decision makers might select. Our new perspective proposes…

Social scientists use the term diffusion to refer to the spread or flow of an innovation across actors in a social system. When we speak of diffusion of social movements, we mean that some element of a social movement (e.g. tactic, frame…

Firm-specific information can affect expected returns if it affects investor uncertainty about risk-factor loadings. We show that a stock’s expected return is decreasing in factor-loading uncertainty, controlling for the average level of its…

We present a preliminary study on the relations between personality types and user preferences in multiple entertainment domains, namely movies, TV shows, music, and books. We analyze a total of 53,226 Facebook user profiles composed of both…

The financial crisis of 2007–09 has spurred significant ongoing changes in the “pipes and valves” through which cash and risk flow through the center of our financial system. These include adjustments to the forms of lender-of-last-…

To ensure that individual actors take certain actions, community enforcement may be required. This can present a rules-versus-discretion dilemma: it can become impossible to employ discretion based on information that is not widely held,…

Language in social media reveals a lot about people’s personality and mood as they discuss the activities and relationships that constitute their everyday lives. Although social media are widely studied, researchers in computational linguistics…

The failure to align the incentives of self-interested groups in favor of beneficial reform is often considered a major cause of civil conflict and persistent underdevelopment around the world. However, much less is known about strategies that…

I survey a literature on auctions with contingent payments, that is auctions in which payments are allowed to depend on an ex-post verifiable variable, such as revenues in oil lease auctions. Based on DeMarzo et al. (2005), I describe a partial…

We study dynamic bargaining with private information and a deadline. As commitment power disappears, there is a clear “deadline effect.” That is, trade takes place smoothly before the deadline and with an atom right at the deadline. Prices,…

Estimation of discrete games of complete information, which have been applied to a variety of contexts such as market entry, technology adoption and peer effects, is challenging due to the presence of multiple equilibria. In this paper, we take a…