Working Papers

We examine the link between corporate governance, managerial incentives, and corporate tax avoidance. Similar to other investment opportunities that involve risky expected cash flows, unresolved agency problems may lead managers to engage in more…

Many lament that weak accountability and poor governance impede economic development in Africa. Politicians rely on ethnic allegiances that deliver the vote irrespective of performance, dampening electoral incentives. Giving voters…

Statistical default models, widely used to assess default risk, fail to account for a change in the relations between different variables resulting from an underlying change in agent behavior. We demonstrate this phenomenon using data on…

Which budgetary institutions result in efficient provision of public goods? We analyze a model with two parties bargaining over the allocation to a public good each period. Parties place different values on the public good, and these…

Yes, it did. We use exogenous variation in banks’ incentives to conform to the standards of the Community Reinvestment Act (CRA) around regulatory exam dates to trace out the effect of the CRA on lending activity. Our empirical strategy compares…

Older wealthholders spend down assets slowly. To study this pattern, the paper introduces health-dependent utility into a model in which different preferences for bequests, expenditures when in need of long-term care (LTC), and ordinary…

Research across disciplines presumes that market categories will have strong boundaries. Categories without well-defined boundaries typically are not useful so are expected to fade away. We suggest many contexts contain lenient market…

This project explores whether and how corporations become more receptive to social activist challenges over time. Drawing from social movement theory, we suggest a dynamic process through which contentious interactions lead to increased…

Recent Medicare legislation has been directed at improving patient care quality by stopping reimbursement of hospital-acquired conditions (HACs). However, this policy may be undermined if some providers respond by upcoding, a practice…

We show that the vast majority of low-income high achievers do not apply to any selective college. This is despite the fact that selective institutions typically cost them less, owing to generous financial aid, than the two-year and nonselective…

A central counterparty (CCP) is a financial market utility that lowers counterparty default risk on specified financial contracts by acting as a buyer to every seller, and as a seller to every buyer. When at risk of failure, a CCP could be…

An emergent theme in the study of organizations is the broad differences in managerial practice and performance across firms. We develop an explanation for these phenomena that turns on the complexity of the environments that firms…

This paper analyzes the economic incidence of sustained changes in federal government spending at the local level. We use a new identification strategy to isolate geographical variation in formula-based federal spending and develop three sets of…

Many empirical studies use Fuzzy Regression Discontinuity (FRD) designs to identify treatment effects when the receipt of treatment is potentially correlated to outcomes. Existing FRD methods identify the local average treatment effect (LATE) on…

The policy choices of governments are frequently durable. From the building of bridges to the creation of social programs, investments in public infrastructure typically last well beyond a single electoral cycle. In this paper we…

Motivated by polar extremes of monopartisanship and nonpartisanship in existing literature on parties in legislatures, we introduce and analyze a more moderate theory of competitive partisan lawmaking. The distinguishing feature of competitive…

Consumers often feel pressed for time, but why? This research provides a novel answer to this question: subjective perceptions of goal conflict. We show that beyond the number of goals competing for their time, perceived conflict between goals…

We find strong empirical support for the risk-shifting mechanism to account for the puzzling negative relation between idiosyncratic volatility and future stock returns documented by Ang, Hodrick, Xing, and Zhang (2006). First, equity holders…

I study the efficiency of three prominent accounting rules in a delegated bidding setting where bidders’ incentives are tied to both accounting income and economic surplus. Trade efficiency is maximized (minimized) by the value-in-use method (…

This study finds that more conservative earnings have lower information content in that higher conditional conservatism decreases the speed with which equity investor disagreement and uncertainty resolve at earnings announcements. We find that a…