Working Papers

We generalize the War of Attrition model to allow for N + K firms competing for N prizes. Two special cases are of particular interest. First, if firms continue to pay their full costs after dropping out (as in standard-setting context), each…

In 1990 the Federal Government included a Most Favored Customer (MFC) clause in the contract (OBRA 90) which would govern the prices paid to firms for pharmaceutical products supplied to Medicaid recipients. The firms had to give Medicaid their “…

We construct a non-cooperative dynamic model of time and surplus allocation between partners in a marriage. Partners must choose between allocating time to household public goods production or career activities, and both activities exhibit…

Part ownership of a takeover target can help a bidder win a takeover auction, often at a low price. A bidder with a “toehold” bids aggressively in a standard ascending auction because its offers are both bids for the remaining shares and asks for…

In this paper we study the effects of transaction costs on asset prices in an overlapping generations economy with a riskless and liquid bond and N risky stocks whose trading is subject to proportional costs. Quite surprisingly, the price of a…

We live in an organizational world. Most of us are born in an organization (a hospital) and our very existence is ratified by government agency that issues a certificate documenting our birth. When we die, a death certificate will be issued by…

The purpose of this study is to investigate when director interlocks affect corporate behavior, and how much influence they exert, by studying the conditions under which their influence varies. Existing theory supports the view that interlocks…

This paper derives a statistical discrimination model that includes the self selection that results when employees optimally choose which jobs to apply for. We show that in such a model important theoretical results in the statistical…

This paper examines the entry decisions of generic pharmaceutical manufacturers into markets opened by patent expiration. In particular, I examine the role of pre-expiration brand advertising to see if it deters generic entry. Other drug…

When commercial banks make loans to firms and also underwrite securities, does this hamper or enhance their role as certifiers of firm value? ¶his paper examines empirically the pricing of bank-underwritten securities as compared to investment-…

Recent research has demonstrated that, contrary to the assumption of value maximization, consumer choices are influenced by the configuration of the set of options under consideration (“context effects”). We examine whether two types of context…

In this paper we apply ideas to the specific issue of deposit mobilization. This issue is central to the debate on financial deepening. Mobilizing deposits is crucial in many developing countries. Domestic funds provide a cheap and reliable…

This paper presents an empirical analysis of the value of a coordinated market exchange mechanism. I present a model of efficient trading mechanisms under uncertainty, and develop a measure of the value of an interfirm trade agreement in the…

We analyze intraday patterns for a set of cross-listed securities in four markets: the London Stock Exchange (LSE), the NYSE, AMEX, and Nasdaq. Differences in intraday patterns are shown to extend across both geographical and structural…

Returns in emerging capital markets are very different from returns in developed markets. While most previous research has focused on average returns, we analyze the volatility of the returns in emerging equity markets. We characterize the time…

This paper examines a set of financial policies, call financial restraint, that address financial market stability and growth in an initial environment of low financial deepening. Unlike with financial repression, where the government extracts…

The performance and the effectiveness of financial institutions in an economy are an important consideration for policy makers concerned about economic growth. Growths, after all, is heavily dependent on investment, and a significant fraction of…

This paper is a response to suggestions by the GASB that academics are in a position to contribute to its standard setting process by viewing financial reporting issues in a broader context than that associated with addressing specific issues…

We model the effects of alternative coordination structures on the performance of a firm that faces uncertain demand in multiple horizontal markets. The firm’s coordination structure is jointly determined by its decision-rights structure and by…

This paper presents a theory of endogenous internal organization in a multiagent hierarchy characterized by incomplete information in which independent agents produce complements and have an opportunity to form an alliance through which they…