Working Papers

These papers are working drafts of research which often appear in final form in academic journals. The published versions may differ from the working versions provided here.

Charles M. C. Lee, Eric C. So, Charles C. Y. Wang
December 30, 2019

We introduce a parsimonious framework for choosing among alternative expected-return proxies (ERPs) when estimating treatment effects. By comparing ERPs’ measurement-error variances in the cross-section and time series, we provide new evidence on the relative performance...

Ilya A. Strebulaev, Will Gornall
December 2, 2019

We develop a valuation model for venture capital–backed companies and apply it to 135 US unicorns, that is, private companies with reported valuations above $1 billion. We value unicorns using financial terms from legal filings...

Darrell Duffie
December 1, 2019

For globally systemically important banks (G-SIBs) with U.S. headquarters, we find large postLehman reductions in market-implied probabilities of government bailout, along with big increases in debt financing costs for these banks after controlling for insolvency...

Jung Ho Choi
December 2019

Pay for non-performance is among the most prominent arguments of executive rent extraction, especially Bertrand and Mullainathan’s (2001) pay for luck. We revisit their finding over the last two decades, 1997 through 2016. Pay for...

Rebecca Lester, Lisa De Simone, Aneesh Raghunandan
November 6, 2019

*/

We examine the association between thousands of state and local firm-specific tax subsidies and business activity in the surrounding county, measured as the number of employees, aggregate wages, per capita employment,...

Jung Ho Choi, Brandon Gipper, Sara Malik
November 2019

We examine whether financial reporting quality influences employee turnover and wages using employer-employee matched data in the U.S. We find that low financial reporting quality is associated with high employee turnover risk, so workers demand...

Susan Athey, Guido W. Imbens, Mohsen Bayati
November 2019

Experimentation has become an increasingly prevalent tool for guiding policy choices, firm decisions, and product innovation. A common hurdle in designing experiments is the lack of statistical power. In this paper, we study optimal multi-period...

Jeffrey Pfeffer
November 2019

Forty-five years ago, power as a topic was mostly absent from management textbooks and courses, including executive education teaching, in the fields of business and public administration. This was the case notwithstanding the fact that...

Bar Light, Gabriel Weintraub
October 26, 2019

The standard solution concept for stochastic games is Markov perfect equilibrium (MPE); however, its computation becomes intractable as the number of players increases. Instead, we consider mean field equilibrium (MFE) that has been popularized in...

Benjamin Hébert, Michael Woodford
October 21, 2019

Decisions take time, and the time taken to reach a decision is likely to be informative about the cost of more precise judgments. We formalize this insight in the context of a dynamic rational inattention...

Mark J. Garmaise, Yaron Levi, Hanno Lustig
October 17, 2019

We show that household consumption displays excess sensitivity to salient macro-economic news. When the announced local unemployment rate reaches a 12-month maximum, local consumers in that area reduce discretionary spending by 2% relative to consumers...

Yuichi Yamamoto, Takuo Sugaya
October 15, 2019

We study repeated games in which players learn the unknown state of the world by observing a sequence of noisy private signals. We find that for generic signal distributions, the folk theorem obtains using ex-post...

Zhengyang Jiang, Hanno Lustig, Stijn Van Nieuwerburgh, Mindy Z. Xiaolan
October 10, 2019

The market value of outstanding government debt reflects the expected present discounted value of current and future primary surpluses. When the discount rate is consistent with the term structure of interest rates and equity prices...

Joshua D. Rauh, Ryan Shyu
October 8, 2019

Drawing on the universe of California income tax filings and the variation imposed by a 2012 tax increase of up to 3 percentage points for high-income households, we present new findings about the effects of...

Charles M. C. Lee, Yuanyu Qu, Tao Shen
October 2019

We study firms that go public through reverse mergers (RMs) versus initial public offerings (IPOs) in China. Using a manually assembled data set, we show...

Brandon Gipper, Luzi Hail, Christian Leuz
October 2019

We provide the first partner tenure and mandatory rotation analysis for a large cross-section of U.S. publicly listed firms over an extended period. We analyze the effects on audit quality as well as on audit...

Anqi Li, Davin Raiha, Ken Shotts
October 2019

We develop a model of electoral accountability in the presence of mainstream and alternative media outlets. In addition to standard high and low competence types, the incumbent may be an aspiring autocrat, who controls the...

Eesha Sharma, Stephanie M. Tully, Cynthia Cryder
October 2019

The current research introduces the concept of psychological ownership of money, the notion that consumers perceive money in differing degrees as their own. We suggest that this concept is particularly important in the realm of...

Lisa De Simone, Marcel Olbert
October 2019

*/

We investigate the effects of mandatory private Country-by-Country (CbC) disclosure to European tax authorities on economic activity. Using rich data on the operations of multinational firms, we exploit the threshold-based application...

Sebastian Di Tella, Robert Hall
October 2019