Working Papers

We suggest a test for discovering whether a potential expert is informed of the distribution of a stochastic process. In a non-Bayesian non-parametric setting, the expert is asked to make a prediction which is tested against a single realization…

Many firms issue stock options to all employees. We consider three potential economic justifications for this practice: providing incentives to employees, inducing employees to sort, and helping firms retain employees. We gather data on firms’…

The compromise effect denotes the finding that brands gain share when they become the intermediate rather than an extreme option in a choice set (Simonson 1989). Despite the robustness and importance of this phenomenon, choice modelers have…

We investigate the relation between two market anomalies to provide insights into analysts role as information intermediaries. Prior research finds that accruals and analyst earnings forecast revisions predict future returns. We find that the…

When purchasing products, consumers often need to decide on the highest price they are willing to pay (WTP) and, when selling products, on the lowest price they are willing to accept (WTA). In this research, we contrast the determinants of WTP…

Over the past thirty years changes in divorce law have significantly increased access to divorce. The different timing of divorce law reform across states provides a useful quasi-experiment with which to examine the effects of this change. We…

Three things happen when emerging economies open their stock markets to foreign investors. First, the aggregate dividend yield falls by 240 basis points. Second, the growth rate of the capital stock increases by an average of 1.1 percentage…

Bekaert, Harvey and Lundblad (BHL) are to be congratulated for producing another paper on equity market liberalizations in emerging markets, and it is a pleasure to discuss their work. Yet, there are three reasons why I may not be an impartial…

Interest groups seek to influence economic activity through public and private politics. Public politics takes place in the arenas of public institutions, whereas private politics takes place outside public institutions often in the arena of…

In an integration of just world and system justification theories, it was hypothesized that exposure to complementary representations of the poor as happier and more honest than the rich would satisfy the justice motive and lead to an increase in…

How do rational firms respond to consumer biases? In this paper, we analyze the profit-maximizing contract design of firms if consumers have time-inconsistent preferences and are partially naive about it. We consider markets for two types of…

In a preliminary study with 279 MBAs from two European and three North American business schools we find that reputation-related attributes of caring about employees, environmental sustainability, community/ stakeholder relations, and ethical…

The stock market appreciates by an average of 60 percent in real dollar terms when countries announce debt relief agreements under the Brady Plan. In contrast, there is no significant increase in market value for a control group of countries that…

We study the electricity consumption of San Diego-area households following a series of price changes and related events during California’s energy crisis in 2000-01. The analysis uses a five-year panel of disaggregate billing and weather data…

This paper is an empirical assessment of the comparative efficiency of governance structures in an environment marked by high uncertainty. We analyze the short-term impact of retail deregulation on the productive efficiency of electric utilities…

Over the past decade, marketers have been challenged by proponents of individual marketing (e.g., one-to-one marketing, mass customization, personalization) to shift from a focus on market segments to making individually customized offers.…

Application of the Coase Theorem to marital bargaining suggests that shifting from a consent divorce regime to no-fault unilateral divorce laws should not affect divorce rates. Each iteration of the empirical literature examining the evolution of…

Analyzing 50 years of inflation expectations data from several sources, we document substantial disagreement among both consumers and professional economists about expected future inflation. Moreover, this disagreement shows substantial variation…

Contrary to the predictions of standard economic theory, capital market liberalization has been a mixed blessing for many countries. Liberalization of debt inflows exposes economies to the risk of crises stemming from sudden changes in investor…

Social science theories can become self-fulfilling because they shape institutional designs and management practices as well as social norms and expectations about behavior, thereby creating the behavior they predict. Social theories also…