Working Papers

The relation between aggregate earnings and aggregate returns is complex and not fully understood. For example, in contrast to firm-level relations, prior literature finds aggregate earnings changes and aggregate stock returns are negatively…

About 10% of US employees now regularly work from home (WFH), but there are concerns this can lead to “shirking from home.” We report the results of a WFH experiment at CTrip, a 16,000- employee, NASDAQ-listed Chinese travel agency. Call center…

I build a model of balance sheet recessions where financial frictions are derived from a moral hazard problem. I show that TFP shocks are amplified through a balance sheet channel only if the private action of the agent exposes him to aggregate…

Supplementing the discussion in our book The Bankers’ New Clothes: What’s Wrong with Banking and What to Do about It, this paper examines the plausibility and relevance of claims in banking theory that fragility in bank funding is useful…

We contend that buyers received false information about the true quality of assets in contractual disclosures by intermediaries during the sale of mortgages in the $2 trillion non-agency market. We construct two measures of misrepresentation of…

We survey the theoretical and empirical literature on decentralization within firms. We first discuss how the concept of incomplete contracts shapes our views about the organization of decision-making within firms. We then overview the empirical…

The financial crisis of 2007–09 has spurred significant ongoing changes in the “pipes and valves” through which cash and risk flow through the center of our financial system. These include adjustments to the forms of lender-of-last-…

We define the class of two-player zero-sum games with payoffs having mild discontinuities, which in applications typically stem from how ties are resolved. For games in this class we establish sufficient conditions for existence of a value of the…

We study a dynamic market with asymmetric information that creates the lemons problem. We compare efficiency of the market under different assumptions about the timing of trade. We identify positive and negative aspects of dynamic trading,…

This paper aims to understand the impact of temporal spacing between ad exposures on the likelihood of a consumer purchasing the advertised product. I create an individual-level data set with exogenous variation in the spacing and intensity of…

Random graph generation is an important tool for studying large complex networks and recently has been extensively used by biologists, computer scientists, economists, electrical engineers, and mathematical sociologists. Despite many remarkable…

Across six field and laboratory experiments, participants given a concretely-framed prosocial goal (e.g., making someone smile, increasing recycling) felt happier after performing a goal-directed act of kindness than did those who were assigned a…

We consider a non-stationary variant of a sequential stochastic optimization problem, where the underlying cost functions may change along the horizon. We propose a measure, termed variation budget, that controls the extent of said change,…

Organizational ambidexterity refers to the ability of an organization to both explore and exploit to compete in mature technologies and markets where efficiency, control, and incremental improvement are prized and to also compete in new…

When subjects interact in continuous time, their ability to cooperate may dramatically increase. In an experiment, we study the impact of different time horizons on cooperation in (quasi) continuous time prisoner’s dilemmas. We find that…

To ensure that individual actors take certain actions, community enforcement may be required. This can present a rules-versus-discretion dilemma: It can become impossible to employ discretion based on information that is not widely held, because…

Competition for seats in elite U.S. graduate school programs has intensified

dramatically over the past 40 years. In this paper, we study the market for

young attorneys to illuminate the role that elite graduate programs play in…

We propose that category membership can operate as a collective market signal for quality when low-quality producers face higher costs of gaining membership. The strength of membership as a collective signal increases with the distinctiveness, or…

Understanding the mechanisms by which political advertising affects voters is crucial for evaluating the welfare effects of campaign finance and election regulation. This paper develops a method to distinguish between two alternative mechanisms…