Publications

We study security-bid auctions in which bidders compete for an asset by bidding with securities whose payments are contingent on the asset’s realized value. In formal security-bid auctions, the seller restricts the security design to an ordered…

Investors systematically deviate from rationality when making financial decisions, yet the mechanisms responsible for these deviations have not been identified. Using event-related fMRI, we examined whether anticipatory neural activity would…

How much discretion should the monetary authority have in setting its policy? This question is analyzed in an economy with an agreed-upon social welfare function that depends on the economy’s randomly fluctuating state. The monetary authority has…

Motivated by extant finance theory predicting that insider trading crowds out private information acquisition by outsiders, we use data for 100 countries for the years 1987–2000 to study whether analyst following in a country increases following…

If managers induce employees to hold company stock in defined contribution pension plans as a form of takeover defense, then changes in state laws that enhance managerial protection should lead to a reduction in employer stock in 401(k) plans.…

We developed a mathematical model of a cows-to-consumers supply chain associated with a single milk-processing facility that is the victim of a deliberate release of botulinum toxin. Because centralized storage and processing lead to…

A unified framework is developed for representation of, and reasoning about dynamic games. A game is described by the subjective knowledge of players at hypothetical situations—the epistemic game form. Subjective knowledge—termed confidence—…

The subjective framework is used to characterize the reasoning leading to an equilibrium refinement based on sequential rationality and Nash equilibrium in dynamic games. Equilibria based on sequential rationality require different reasoning on…

In a sample of Canadian investment bank cliques from 1952 to 1990, we examined whether social similarity and cohesion reduced exits of members from these cliques; whether complementarity through differentiated roles reduced such exits; and…

We integrate a widely accepted version of the separation of ownership and control—Michael Jensen’s (1986) free cash flow theory—into a dynamic equilibrium model, and study the effect of imperfect corporate control on asset prices and investment.…

We examine how making mortality salient affects consumer choices. We develop a new theoretical framework predicting when consumer behaviors will be more (less) indulgent when mortality is salient, arguing that individuals focus more of their…

Arguing that GAAP is ill suited for estimating the future profitability of intangibles, the accounting literature (e.g., Kaplan and Norton 1996, Lev 2001) has recently proposed alternative measurement models. These models view intangibles as…

How can one predict entrepreneurship, an individual’s participation in the founding of a new organization? We propose that the organizational context of an individual either accelerates or retards the likelihood of entrepreneurship, depending on…

In the “managerial knowledge” marketplace, there is little evidence of much diffusion of ideas, innovative business models, or management practices. In organizations not implementing what they know they should be doing based on experience and…

In a model with housing collateral, the ratio of housing wealth to human wealth shifts the conditional distribution of asset prices and consumption growth.  A decrease in house prices reduces the collateral value of housing, increases…

Most people believe that they should avoid changing their answer when taking multiple-choice tests. Virtually all research on this topic, however, has suggested that this strategy is ill-founded: Most answer changes are from incorrect to correct…

Firms in emerging markets are exposed to severe financial frictions and credit constraints, that are exacerbated by the sudden stop of capital inflows. Can monetary policy offset this external credit squeeze? We show that although this may be the…

America’s high school students have higher educational aspirations than ever before, yet these aspirations are being undermined by disconnected educational systems and other barriers. These educational aspirations cut across racial and ethnic…

Drug delivery has typically focused on optimizing marketed compounds, improving their effectiveness or tolerability, and simplifying their administration. This role now includes the first biopharmaceuticals as well as more conventional drugs. As…

We analyze the behaviour of prices using a large disaggregated data set for Poland during transition from a planned to a market economy. The size of price changes and the frequency of adjustment both fall as the inflation rate declines. Price…