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
June 3, 2017

We argue, from an extensive literature review, that in the vast majority of research settings, biases in alternative expected-return proxies (ERPs) are irrelevant. Therefore, in most settings, the choice between alternative ERPs should be based...

Jonathan B. Berk, Jules H. van Binsbergen
June 1, 2017

We study a market for a skill that is in short supply and high demand, where the presence of charlatans (professionals who sell a service that they do not deliver on) is an equilibrium outcome....

Donnel A. Briley, Melanie Rudd, Jennifer Aaker
June 2017

Forthcoming in Journal of Consumer Research 

Research shows that optimism can positively impact health, but when and why people feel optimistic when confronting health challenges is less clear. Findings from six studies show...

Andres Elberg, Pedro M. Gardete, Rosario Macera, Carlos Noton
June 2017

This paper investigates the dynamic effects of price promotions in a retail setting through the use of a large-scale field experiment which involved varying the promotion depths of 170 products across 17 categories in 10...

C. Christine Fair, Patrick Kuhn, Neil Malhotra, Jacob Shapiro
May 31, 2017

How natural disasters affect politics in developing countries is an important question, given the fragility of fledgling democratic institutions in some of these countries as well as likely increased exposure to natural disasters over time...

Dmitry Orlov, Pavel Zryumov, Andrzej Skrzypacz
May 30, 2017

We study the design of macro-prudential stress tests and capital requirements. The tests provide information about correlation in banks portfolios. The regulator chooses contingent capital requirements that create a liquidity buffer in case of a...

Anat R. Admati, Peter M. DeMarzo, Martin F. Hellwig, Paul Pfleiderer
May 26, 2017

Forthcoming in Journal of Finance

Firms’ inability to commit to future funding choices has profound consequences for capital structure dynamics. With debt in place, shareholders pervasively resist leverage reductions no matter how much such reductions...

Alexander V. Hirsch, Ken Shotts
May 25, 2017

We analyze a model of policymaking in which only one actor, e.g., a bureaucratic agency or a well-funded interest group, has the capacity to develop high-quality policy proposals. By virtue of her skills, this actor...

Ian D. Gow, David F. Larcker, Brian Tayan
May 25, 2017

CEO succession at many companies occurs in a black box. Shareholders are not privy to boardroom discussions prior to the announcement of a CEO departure, and press releases announcing the change contain boilerplate language that...

Andrea L. Eisdeldt, Hanno Lustig, Lei Zhang
May 23, 2017

We develop a dynamic equilibrium model of complex asset markets with endogenous entry and exit in which the investment technology of investors with more expertise is subject to less asset-specific risk. The joint equilibrium distribution...

Elizabeth Blankespoor, Ed deHaan, Christina Zhu
May 10, 2017

Accepted at Review of Accounting Studies

In 2014, the Associated Press (AP) began using algorithms to write media articles about firms’ earnings announcements. These “robo-journalism” articles synthesize information from firms’ press releases, analyst...

Mary-Hunter McDonnell, Sarah A. Soule, Brayden King
May 7, 2017

Scholars agree that the tenor of a firms’ past interactions with contentious activists - which represent a strong signal of the openness of a firm’s opportunity structures - impacts the likelihood that the firm will...

Pedro M. Gardete, Yakov Bart
May 2017

We consider a persuasion setting in which an agent tries to elicit a desired action from a receiver by means of a compelling argument. In order to understand which arguments may indeed be compelling, the...

Evan J. Soltas, David Broockman
April 29, 2017

We exploit a natural experiment to plausibly identify taste-based racial and ethnic discrimination in elections. In Illinois Republican presidential primaries, voters vote for delegate candidates bound to particular presidential candidates. Delegate candidates’ names signal their...

Mary E. Barth, Kurt H. Gee, Doron Isreali, Ron Kasznik
April 27, 2017

We address whether firms manage stock prices in anticipation of share issuances. A literature in finance attributes negative returns following share issuances to market timing, whereas studies in accounting interpret similar return patterns as evidence...

Kirk Bansak, Jens Hainmueller, Daniel J. Hopkins, Teppei Yamamoto
April 26, 2017

Recent years have seen a renaissance of conjoint survey designs within social science. To date, however, researchers have lacked guidance on how many attributes they can include within conjoint profiles before survey satisficing leads to...

Hanno Lustig, Ralph S.J. Koijen, Stijn Van Nieuwerburgh
April 24, 2017

We show that bond factors, which predict future U.S. economic activity at business cycle horizons, are priced in the cross-section of U.S. stock returns. High book-to-market stocks have larger exposures to these bond factors than...

Douglas Ahler, David Broockman
April 24, 2017

Many argue for political reforms intended to resolve apparent disjunctures between politicians’ ideologically polarized policy positions and citizens less-polarized policy preferences. Here we show such apparent disjunctures can arise even when politicians represent their constituencies...

Barney Hartman-Glaser, Hanno Lustig, Mindy X. Zhang
April 22, 2017

Although the aggregate capital share for U.S. firms has increased, the firm-level capital share has decreased on average. The divergence is due to the largest firms. While these mega-firms now produce a larger output share,...

Gregory J. Martin, Ali Yurukoglu
April 5, 2017

Forthcoming in American Economic Review

We measure the persuasive effects of slanted news and tastes for like-minded news, exploiting cable channel positions as exogenous shifters of cable news viewership. Channel positions do not correlate with...