These papers are working drafts of research which often appear in final form in academic journals. The published versions may differ from the working versions provided here.
SSRN Research Paper Series
The Social Science Research Network’s Research Paper Series includes working papers produced by Stanford GSB the Rock Center.
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The Diffusion of Development
This paper studies the barriers to the diffusion of development across countries over the very long run. We find that genetic distance, a measure associated with the amount of time elapsed since two populations’ last common ancestors, bears a…
The Effect of Market Structure On Cellular Technology Adoption and Pricing
We analyze the effect of entry on the technology adoption and calling plan choices of incumbent cellular firms. Focusing on the time period from 1996, when incumbents enjoyed a duopoly market, to 1998, when they faced increased competition from…
The Impact of Feature Advertising on Customer Store Choice
A heavily used competitive tactic in the grocery business is the weekly advertising of price reductions in newspaper inserts and store fliers. Store managers commonly believe that advertisements of price reductions and loss leaders help to build…
The Influence Of Product Variety On Brand Perception And Choice
We propose that the variety a brand offers can influence brand quality perceptions, and consequently, affect brand choice, even when the available option set is held constant. Specifically, brands that offer greater variety of compatible (i.e.,…
The Red Queen, Success Bias, and Organizational Inertia
Why do successful organizations often move in new directions and then fail? We propose that this pattern is especially likely among organizations that have survived a history of competition. Such experience adapts organizations to their…
When Does Culture Matter? Effects of Personal Knowledge on the Correction of Culture-based Judgments
Four experiments demonstrate that culture-based differences in persuasion arise when information is processed in a cursory, spontaneous manner, but dissipate when one’s intuitions are supplemented by more deliberative processing. North Americans…
Accounting, Governance, and Broad-Based Stock Option Grants
We estimate the costs of broad-based stock option programs relative to cash compensation and restricted stock grants. Using detailed data on stock-option grants to middle managers, we first compute the cost of option grants under the assumption…
Accounting for Stock Options
Employee stock options differ substantially from traded options. Most expire within 90 days of the termination of employment, and are forfeited if the employee leaves before vesting. The major accounting standards boards are in agreement that…
Accrual Accounting for Performance Evaluation
This paper examines alternative accrual accounting rules from an incentive and control perspective. For a range of common production, financing and investment decisions we consider alternative asset valuation rules. The criterion for…
An Approach to the Measurement, Analysis, and Prediction of Brand Equity and its Sources
The authors propose a new approach for measuring, analyzing, and predicting a brands equity in a product market. Brand equity is defined as the incremental contribution ($) per year obtained by the brand in comparison to the underlying product (…
Asymptotically Optimal Control for an Assemble-to-Order System with Capacitated Component Production and Fixed Transport Costs
Consider a production system which rapidly assembles many different products from inventories of modular components. Customer orders for each product arrive according to a renewal process with known rate and variance. Orders are lost if not…
Co-Worker Complementarity and the Stability of Top Management Teams
We analyze changes in the composition of top management teams when a key member of the team (the CEO) departs. We find that the probability of non-CEO top manager turnover increases markedly around times of CEO turnover. Further, the magnitude of…
Collusion under Monitoring of Sales
Collusion under imperfect monitoring is explored when firms’ prices are private information and their quantities are public information; an information structure consistent with several recent price-fixing cartels such as those in lysine and…
Corporate Social Responsibility and Social Entrepreneurship
Milton Friedman argued that the social responsibility of firms is to maximize profits. This paper examines this argument for the economic environment envisioned by Friedman in which citizens can personally give to social causes and can invest in…
Cross-Ownership, Returns, and Voting in Mergers: Conflicts of Interest among Shareholders
We show that institutional shareholders of acquiring companies on average do not lose money around public merger announcements, because they also hold substantial stakes in the targets and make up for the losses from the former with the gains…
Do Switching Costs Make Markets More or Less Competitive? The Case of 800-Number Portability*
Do switching costs reduce or intensify price competition if firms charge the same price to old and new consumers? I study 800-number portability to determine whether switching costs intensify price competition under a single price regime. Before…
Essential Equilibria
The connected uniformly-hyperstable sets of a finite game are precisely the essential components of Nash equilibria.
Games with Incomplete Awareness
A new game form termed games with incomplete awareness is defined. This game form captures unawareness as to other players’ actions, as well as unawareness of the existence of some players. It also captures interactive unawareness: the awareness…
Gatekeeping
Collective choice bodies throughout the world use a diverse array of codified rules that determine who may exercise procedural rights, and in what order. This paper analyzes several two-stage decision-making models, focusing on one in which the…