Working Papers

The G-8 Multilateral Debt Relief Initiative (MDRI) is the next step of the Highly Indebted Poor Countries Initiative (HIPC). There are two reasons why the MDRI is unlikely to help poor countries. First, the amount of money at stake is trivial.…

Abstract not available.

This note revisits the identification theorems of B. Brown (1983) and Roehrig (1988). We describe an error in the proofs of the main identification theorems in these papers, and provide an important counterexample to the theorems on the…

We discuss the case of a monopolist of a base good in the presence of a complementary good provided either by it or by another firm. We assess and calibrate the extent of the influence of the profits from the base good that is created by the…

We apply Mertens’ definition of stability for a game in strategic form to a game in extensive form with perfect recall. We prove that if payoffs are generic then the outcomes of stable sets of equilibria defined via homological essentiality by…

Despite its importance, voting in the elections of corporate boards of directors remains relatively unexplored in the empirical literature. We construct a comprehensive dataset of 3,204,890 mutual fund votes in director elections that took place…

This paper studies the barriers to the diffusion of development across countries over the very long run. We find that genetic distance, a measure associated with the amount of time elapsed since two populations’ last common ancestors, bears a…

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…

We analyze changes in the composition of top management teams when a key member of the team (the CEO) departs. We find that the probability of non-CEO top manager turnover increases markedly around times of CEO turnover. Further, the magnitude of…

Collusion under imperfect monitoring is explored when firms’ prices are private information and their quantities are public information; an information structure consistent with several recent price-fixing cartels such as those in lysine and…

We show that institutional shareholders of acquiring companies on average do not lose money around public merger announcements, because they also hold substantial stakes in the targets and make up for the losses from the former with the gains…

Do switching costs reduce or intensify price competition if firms charge the same price to old and new consumers? I study 800-number portability to determine whether switching costs intensify price competition under a single price regime. Before…

A new game form termed games with incomplete awareness is defined. This game form captures unawareness as to other players’ actions, as well as unawareness of the existence of some players. It also captures interactive unawareness: the awareness…

We show that it is impossible to achieve collusion in a duopoly when (1) goods are homogenous and firms compete in quantities, (2) new, imperfect information arrives continuously, without sudden events and (3) firms are able to respond to this…

We investigate the “generalized second price” auction (GSP), a new mechanism which is used by search engines to sell online advertising that most Internet users encounter daily. GSP is tailored to its unique environment, and neither the mechanism…

Two assumptions are used to justify selection of equilibria in stable sets. One assumption requires that a selected set is invariant to addition of redundant strategies. The other is a strong version of backward induction. Backward induction is…

The 1964 Securities Acts Amendments extended the mandatory disclosure requirements that had applied to listed firms since 1934 to large firms traded Over-the-Counter (OTC). We find several pieces of evidence indicating that investors valued these…

We study a dynamic duopoly model with differentiated products and network externalities. New consumers appear each period and the value of the product depends on the size of the network in the current and in the previous period, for example due…

This paper describes ways that the definition of an equilibrium among players strategies in a game can be sharpened by invoking additional criteria derived from decision theory. Refinements of John Nashs 1950 definition aim primarily to…

A decision maker needs to schedule several activities that take uncertain time to complete and are only valuable together. Some activities are bound to be finished earlier than others, thus incurring waiting costs. We show how to schedule…