Publications

The current research presents a new type of social context effect on attitude certainty. It is proposed that when people receive persuasive messages, they appraise their attitudes not only in terms of whether they are shared or not shared by…

For three years after the typical developing country opens its stock market to inflows of foreign capital, the average annual growth rate of the real wage in the manufacturing sector increases by a factor of seven. No such increase occurs in a…

For fossil fuel power plants to be built in the future, carbon capture and storage (CCS) technologies offer the potential for significant reductions in CO₂ emissions. We examine the break-even value for CCS adoptions, that is, the critical value…

This paper presents a theory of common agency lobbying in which policy-interested lobbies can first influence the choice of a governing coalition and then influence the legislative bargaining over policies. Equilibria can involve active lobbying…

Using firm-level data from 44 countries, the authors investigate the relation between corruption and international corporate values. The analysis shows that firms from more corrupt countries trade at significantly lower market multiples. The…

We analyze a national sample of Americans with respect to their debt literacy, financial experiences, and their judgments about the extent of their indebtedness. Debt literacy is a component of broader financial understanding that measures…

We analyze the design and renegotiation of covenants in debt contracts as a specific example of the contractual assignment of property rights under asymmetric information. Specifically, we consider a setting where managers are better informed…

Efficient allocation of a stochastic stream of financial income is characterized by an explicit stochastic differential equation for the case that each agent has stationary preferences and the probability law of the stochastic process is known.…

We examine the question of how competition between governments within metropolitan areas affects economic growth outcomes. Using data on metropolitan statistical areas (MSAs) in the United States, we find that the number of county governments is…

How do social movements affect decisions within corporations, such as the commercialization of new technologies? We suggest that the effect of movement activism is conditioned by the internal polity and therefore varies across organizations. This…

New product launches are often accompanied by extensive marketing communication campaigns. Firms’ allocation decisions for these marketing communication expenditures have two dimensions—across consumers and over time. This allocation problem is…

Any climate change agreement ought to be negotiated and updated later on, as we learn more about the costs and benefits of abatements. Anticipating such negotiations, countries may distort domestic decisions (regarding R&D and adaptation, for…

We derive the optimal labor contract for a levered firm in an economy with perfectly competitive capital and labor markets. Employees become entrenched under this contract and so face large human costs of bankruptcy. The firm’s optimal capital…

This paper studies information aggregation in dynamic markets with a finite number of partially informed strategic traders. It shows that for a broad class of securities, information in such markets always gets aggregated. Trading takes place in…