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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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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…
Growing Church Organizations in Diverse U.S. Communities 1890 - 1906
We examine the classic question of how religious diversity in a community affects church membership in a period of high growth and social change. Culling the literature, we develop hypotheses about five possible mechanisms underlying a diversity-…
Impossibility of Collusion under Imperfect Monitoring with Flexible Production
We show that it is impossible to achieve collusion in a duopoly when (1) goods are homogenous and firms compete in quantities, (2) new, imperfect information arrives continuously, without sudden events and (3) firms are able to respond to this…
In Defense of Consciousness: The Role of Conscious and Unconscious Inputs in Consumer Choice
Although the argument that unconscious inputs are often key determinants of consumer decision making is compelling, it may be overstated, particularly with respect to consumer choice. A comparison of the role of conscious inputs (e.g., the…
Internal Corporate Venturing Cycles: A Nagging Strategic Leadership Challenge
Thirty years of systematic study reveal that many major corporations experience a strange cyclicality in their internal corporate venturing (ICV) activity: Periods of intense activity are followed by periods of shutting down such activities only…
Internet Advertising and the Generalized Second Price Auction: Selling Billions of Dollars Worth of Keywords
We investigate the “generalized second price” auction (GSP), a new mechanism which is used by search engines to sell online advertising that most Internet users encounter daily. GSP is tailored to its unique environment, and neither the mechanism…
Investment under Uncertainty and Time-Inconsistent Preferences
The real options framework has been used extensively to analyze the timing of investment under uncertainty. While standard real options models assume that agents possess a constant rate of time preference, there is substantial evidence that…
Justification of Stable Equilibria
Two assumptions are used to justify selection of equilibria in stable sets. One assumption requires that a selected set is invariant to addition of redundant strategies. The other is a strong version of backward induction. Backward induction is…