Working Papers

In a large-scale field experiment, we demonstrate that advertising can serve as a signal that enhances consumers’ evaluations of advertised goods. We implement the experiment on a mobile search platform that provides listings and reviews for an…

What makes an asset a “safe asset”? We study a model where two countries each issue sovereign bonds to satisfy investors’ safe asset demands. The countries differ in the float of their bonds and their resources/fundamentals available to rollover…

We consider a problem where an uninformed principal makes a timing decision interacting with an informed but biased agent. Because time is irreversible, the direction of the bias crucially affects the agent’s ability to credibly communicate…

This paper explores the implications of asymmetric information and learning in banking. We hypothesize that banks acquire private information about borrower quality, not just when screening the initial loan, but while monitoring the loan’s…

U.S. government bonds are considered to be the world’s safe store of value, especially during periods of economic turmoil such as the events of 2008. But what makes U.S. government bonds “safe assets?” We highlight coordination among investors,…

A theory of money needs a proper place for financial intermediaries. Intermediaries create inside money and their ability to take risks determines the money multiplier. In downturns, intermediaries shrink their lending activity and fire-sell…

This paper conceptualizes HP’s history of becoming between 1939 and 2015 in terms of an integral process overview encompassing seven distinct epochs and associated corporate transformations, and discusses the differential contributions of…

This paper shows how the study of the integral process of HP’s becoming and the differential contributions of successive CEOs to that process can be combined to create an evolutionary framework of the role of strategic leadership in corporate…

A statistical theory of overconfidence is proposed and applied to the issue of occupational choice. Individuals who can choose whether to engage in an activity or not must estimate their performance. The estimates have error and that error has…

We show that analyst coverage proxies contain information about expected returns.  We decompose analyst coverage into abnormal and expected components using a simple characteristic-based model and show that firms with abnormally high analyst…

A Nordstrom customer in the mid 70s walked into the Fairbanks, Alaska store and asked to “return” two worn snow tires. An awkward moment! Nordstrom, which evolved from a shoe store to a department store, never sold tires (although another company…

Motivated by the recent opening of a public stool bank that enables fecal microbiota transplantation for the treatment of Clostridium difficile infection, we develop and optimize a mathematical model that tracks the flow of stools from donation…

We present the results of a large field experiment on setting reserve prices in auctions for online advertisements, guided by the theory of optimal auction design suitably adapted to the sponsored search setting. Consistent with the theory,…

We study trading behavior and the properties of prices in informationally complex markets. Our model is based on the single-period version of the linear-normal framework of Kyle (1985). We allow for essentially arbitrary correlations among the…

In knowledge-based economies, many businesses enterprises defy traditional industry boundaries. In this study, we evaluate six “big data” approaches to peer firm identifications and show that some, but not all, “wisdom-of-crowd” techniques…

Two heterogeneous agents exert effort over time to complete a project and collectively decide its scope. A larger scope requires greater cumulative effort and delivers higher benefits upon completion. To study the scope under collective choice,…

We present a laboratory experiment to study the formation of dynamic coalitions in a bargaining setting where the current status quo policy is determined by the policy implemented in the previous period. Our main experimental treatment is the…

In this paper, we develop new methods for estimating average treatment effects in observational studies, focusing on settings with more than two treatment levels under unconfoundedness given pre-treatment variables. We emphasize subclassification…

How do people adapt to organizational culture and what are the consequences for their outcomes in the organization? These fundamental questions about culture have previously been examined using self-report measures, which are subject to reporting…

We estimate and test a model of voluntary disclosure in which a manager’s information set is uncertain (Dye 1985; Jung and Kwon 1988). In this model, a manager makes his disclosure decision to maximize the market price, but sometimes, for…