Working Papers

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…

We study the identification and estimation of Gorman-Lancaster style hedonic models of demand for differentiated products for the case when one product characteristic is not observed. Our identification and estimation strategy is a two-step…

This paper uses detailed weekly data on sales of hardcover fiction books to evaluate the impact of the New York Times bestseller list on sales and product variety. In order to circumvent the obvious problem of simultaneity of sales and bestseller…

We develop a new approach to measuring changes in consumer welfare due to changes in the price of owner-occupied housing. In our approach, an agents welfare adjustment is defined as the transfer required to keep expected discounted utility…

Which of the democratic checks and balancesopposition parties, the judiciary, a free pressis the most critical? Peru has the full set of democratic institutions. In the 1990s, the secret-police chief Montesinos systematically undermined them all…

We confront the two opposing views of capital account liberalization in developing countries with a new firm-level dataset on investment, stock prices, and sales. In the three-year period following liberalizations, the growth rate of the typical…

Using Monte Carlo simulations, this paper evaluates the bias properties of common estimators used in growth regressions derived from the Solow model. We explicitly allow for measurement error in the right-hand side variables, as well as country-…

Financial instability is a major problem for the worlds middle-income developing countries. Barry Eichengreens proposal for dealing with the problem treats currency mismatchesthe fact that developing countries borrow in dollars instead of their…

This paper (a) provides a framework for quantifying any economys flexibility, and (b) reviews the evidence on New Zealand firms birth, growth and death. The data indicate that, by and large, the labour market and the financial market are doing…