Working Papers

We study the sources of match-specific value at large American law firms by analyzing how graduates of law schools group into law firms. We measure the degree to which lawyers from certain schools concentrate within firms and then analyze how…

The recession of 2007-09 witnessed high rates of unemployment that have been slow to recede. This has led many to conclude that structural changes have occurred in the labor market and that the economy will not return to the low rates of…

How and by how much do supervisors enhance worker productivity? Using a company-based data set on the productivity of technology-based services workers, supervisor effects are estimated and found to be large. Replacing a boss who is in the…

We study a dynamic model of earnings quality and earnings management in which firms take into account both long- and short-term considerations when reporting earnings. In addition to providing predictions about time series properties of earnings…

We propose a redesign of sovereign Credit Default Swaps (CDS). Under our proposal, a notional CDS position of €100 can be settled by the delivery of whatever package of instruments a sovereign gives in exchange for legacy bonds with a face value…

We examine the pricing of financial crash insurance during the 2007-2009 financial crisis in U.S. option markets. A large amount of aggregate tail risk is missing from the price of financial sector crash insurance during the financial crisis. The…

This paper studies the joint effect of conservatism and aggregation on the cost of equity capital and the efficiency of debt contracts. In the model, a firm’s two assets are valued at either the lower-of-cost-or-market or fair value and the…

We analyze shareholders’ incentives to change the leverage of a firm that has already borrowed substantially. As a result of debt overhang, shareholders have incentives to resist reductions in leverage that make the remaining debt safer. This…

We use variation in wind speeds at surfing locations in Switzerland as exogenous shifters of users’ propensity to post content about their surfing activity onto an online social network. We exploit this variation to test whether users online…

This submission discusses implications for the quality and safety of financial markets of proposed rules implementing the market-making provisions of section 13 of the Bank Holding Company Act, commonly known as the “Volcker Rule.” The proposed…

We measure the repo funding extended by money market funds (MMF) and securities lenders to the shadow banking system, including quantities, haircuts, and repo rates by type of underlying collateral. We find that repo played only a small role in…

When do people feel as if they are rich in time? Not often, research and daily experience suggest. However, three experiments showed that participants who felt awe, relative to other emotions, felt they had more time available (Experiments 1, 3)…

Firm disclosures often reach only a portion of investors, which results in information asymmetry among investors, and therefore lower market liquidity. This issue is particularly salient for firms that are not highly visible, as they tend not to…

Governments are beginning to mandate that firms disclose information about social and environmental impacts in their supply chains (e.g., regarding conflict minerals and greenhouse gas emissions). This paper shows…

New empirical models of consumer demand that incorporate social preferences, observational learning, word-of-mouth or network effects have the feature that the adoption of others in the reference group - the installed-base - has a causal effect…

Many have argued that financial statements created under an accounting model that measures financial instruments at fair value would not fairly represent a banks business model. In this study we examine whether financial statements using fair…

We provide a tool to model and solve strategic situations where players’ perceptions are limited, in the sense that they may only be aware of, or model, some of the aspects of the strategic situations at hand, as well as situations where players…

Fixed statutes and regulations often have variable consequences over time. If left unattended, such drift can severely erode the performance of government as an institution of representation. To better understand the mechanics of policy-making in…

Four pure types of legislative organization are characterized as data generating processes for commonly used measures of preferences or, in the spatial vernacular, ideal points. The types of legislative organization are differentiated by their…

We study a dynamic strategic model of voluntary disclosure of multiple pieces of information. Such situations are prevalent in real life, e.g., in corporate disclosure environments that are characterized by information asymmetry between the firm…