Working Papers

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…

Capital regulation is critical to address distortions and externalities from intense conflicts of interest in banking and from the failure of markets to counter incentives for recklessness. The approaches to capital regulation in Basel III and…

The prevalence and widespread usage of email has given businesses a direct and cost effective way of providing consumers with targeted discount offers. While these discounts are expected to increase the demand for the promoted products, are they…

Using ethnographic, experimental and survey data from an Indian handicraft cluster, this paper studies the conditions under which individuals who identify with their work prioritize financial rewards in their economic decisions. I argue that the…

The U.S. is one of the few countries in the world that delivers its food assistance mainly via transoceanic shipments of commodity-based in-kind food. This approach is more costly and less timely than cash-based assistance, which…

Researchers in accounting, corporate finance, economics, and law regularly evaluate the impact of corporate governance provisions on firm performance and managerial actions. Many of these studies rely on publicly available governance summaries…

Over the past 30 years, venture capital has become a dominant force in the financing of innovative American companies. From Google to Intel to FedEx, companies supported by venture capital have profoundly changed the U.S. economy. Despite…

Empirical work on asset prices suggests that pricing kernels have to be almost perfectly correlated across countries. If they are not, real exchange rates are too smooth to be consistent with high Sharpe ratios in asset markets. However, the…

Exchange rates strongly co-vary against their base currency. We uncover a gravity equation in this factor structure: the key determinant of a country’s exchange rate beta on the common base factor is the country’s distance from the base country.…

The extreme fragility of the financial system that gives rise to systemic risk and crises is rooted in the incentives of people within this system and the failure of regulation to counter these incentives. The same forces that increase systemic…