Publications

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…

Can dysfunction in neural systems subserving emotion lead, under certain circumstances, to more advantageous decisions? To answer this question, we investigated how individuals with substance dependence (ISD), patients with stable focal lesions…

Using a hazard model, we examine secular changes in the ability of financial statement data to predict bankruptcy from 1962 to 2002. We identify three trends in financial reporting that could influence predictive ability with respect to…

This paper provides a model of investment timing by managers in a decentralized firm in the presence of agency conflicts and information asymmetries. When investment decisions are delegated to managers, contracts must be designed to provide…

The increasing number of consumer goods and services offered in recent years suggests that product-line extensions have become a favored strategy of product managers. A larger assortment, it is often argued, keeps customers loyal and allows firms…

Researchers have recently begun to use the tools of neuroscience to examine the social psychological responses associated with race. This article serves as a review of the developing literature in this area. It advances the argument that…

In 2001, 1.458 million American families filed for bankruptcy. To investigate medical contributors to bankruptcy, we surveyed 1,771 personal bankruptcy filers in five federal courts and subsequently completed in-depth interviews with 931 of them…

Reprinted in J. Pencavel, ed.The Economics of Worker Cooperatives, Edward Elgar, 2013.

Reprinted in D.…

Much of the empirical research on competitive reactions describes how or why rivals react to a firm’s past actions, but stops short of examining whether managers attempt to predict such reactions, which we call strategic competitive reasoning. In…

We study a one-sided offers bargaining game in which the buyer has private information about the value of the object and the seller has private information about his beliefs about the buyer’s valuation. We show that this uncertainty about…

We estimate the costs of broad-based stock option programs relative to cash compensation and restricted stock grants. Using detailed data on stock-option grants to middle managers, we first compute the cost of option grants under the assumption…

Discrete choice models of aggregate demand, such as the random coefficients logit, can handle large differentiated products categories parsimoniously while still providing flexible substitution patterns. However, the discrete choice assumption…

Employee stock options differ substantially from traded options. Most expire within 90 days of the termination of employment, and are forfeited if the employee leaves before vesting. The major accounting standards boards are in agreement that…

As public companies begin their new fiscal years, they are implementing a new and controversial Financial Accounting Standards Board (FASB, 2004) proposal for expensing stock options. Applied to 2003 and 2004, this rule would have slashed…

This paper examines alternative accrual accounting rules from an incentive and control perspective. For a range of common production, financing and investment decisions we consider alternative asset valuation rules. The criterion for…