Working Papers

This paper addresses the question of what one can learn from observing cross-sectional and time series variations in the volatility of prices in an arbitrage-free securities market. We introduce the notions of stochastic derivatives, marginal…

An analysis of the information model is presented to challenge the assertions that the information model and the notion of correlated equilibrium are consequences of the subjectivist, Bayesian view of uncertainty.

The purpose of this paper is to analyze the observed similarity of agents’ decisions. In what follows we will distinguish between clustering, which is the observation that agents’ decisions tend to be very similar, and herding, which is the…

We provide new evidence regarding the degree of integration between the markets for stocks, future and options prior to and during the October 1987 market crash. Where previous analyses have resulted in recommendations for the implementation of…

Concurrent engineering can reduce the time required to develop new products. In contrast to the conventional approach, in which the product design is (nearly) completed before it is “thrown over the wall” to process design group, concurrent…

Recent research on organizational impression management has emphasized that leaders are held responsible not only for managing an organization’s actions, they are also expected to explain and make sense of those actions. When events occur that…

Since the publication of The American Voter (Campbell et al. 1960), most analyses of electoral behavior have focused upon three factors: party identification, issues and candidate attributes. According to the Michigan model, voters have long-…

This paper examines how public disclosure affects private information acquisition activity in a market economy. We analyze a setting where traders with short-term investment horizons are allowed to trade on their private information prior to a…

A non-equilibrium model of rational strategic behavior that can be viewed as a refinement of (normal form) rationalizability is developed for both normal form and extensive form games. The resulting solution concept, called a tau-theory, allows…

This article analyzes renegotiation in an agency model where a principal observes a noisy signal about the agent’s effort before the renegotiation. This signal is not verifiable by an outsider or is not contractible in the initial contract.…

Abstract not available.

Theorists disagree sharply about the likelihood and consequences of organizational change. This paper suggests that when viewed dynamically, change can be both adaptive and disruptive. Similarily, the same forces that make organizations inert…

Strategic management theorists face a dilemma in choosing methods for studying strategy formulation and strategic decision making. The choice of a research method involves inherent trade-offs of generalizability, control, and realism. This paper…

This paper explores the significance of status processes for generating and reproducing hierarchy among producers in a market. A producer’s status is defined as the degree to which market participants perceive the quality of its product to be…

This paper examines the differences in an internal auditor’s (a firm’s ) equilibrium testing strategy when employees have different abilities to steal from line items. I constrast two models. In the strategic employee model there are two…

We examine the assumption of the probabilistic independence of consideration of different brands in the marketplace for a market with substantial product differentiation. Our hypothesis is that probabilistic independence may not hold in such a…

Organizations have different competitive abilities. Theory predicts that this variation will follow a general pattern: whether through learning or selection, older organizations — on average — will have greater competitive strength.…

Abstract not available.

We establish conditions under which cooperative strategies will stabilize in conflict situations modelled as tournaments of iterated Prisoner’s Dilemma (IPD) games. Our results resolve the controversy over the issue of stability of cooperative…

The advantages of collective action by organizations are discussed often, but no attention has been paid to the possiblilty that engaging in collective action can make organizations less viable. In this paper, I explain that a liability of…