Publications

This paper examines the informational role of product ratings. We build a theoretical model in which ratings can help consumers figure out how much they would enjoy the product. In our model, a high average rating indicates a high product quality…

Costly individual participation in intergroup conflict can be motivated by “in-group love”—a cooperative motivation to help the in-group, by “out-group hate”—an aggressive or competitive motivation to hurt the out-group, or both. This study…

We develop a model in which the capital of the intermediary sector plays a critical role in determining asset prices. The model is cast within a dynamic general equilibrium economy, and the role for intermediation is derived endogenously based on…

Given the pervasiveness of social media, should the board of directors pay closer attention to the information exchanged on these sites? Can this information be used to improve oversight and risk management?

Our model shows that deterioration in debt market liquidity leads to an increase in not only the liquidity premium of corporate bonds but also credit risk. The latter effect originates from firms’ debt rollover. When liquidity deterioration…

Investors value the liquidity and safety of US Treasuries. We document this by showing that changes in Treasury supply have large effects on a variety of yield spreads. As a result, Treasury yields are reduced by 73 basis points, on average, from…

Despite the popularity of social networks and technologies that intend to enhance social interaction, more Americans feel lonely now than before. This research examines how loneliness affects consumers’ responses to consensus-related social…

We measure how the bundling of television channels affects short-run welfare. We estimate an industry model of viewership, demand, pricing, bundling, and input-market bargaining using data on ratings, purchases, prices, bundles, and input costs.…

We examine the pricing of financial crash insurance during the 2007-2009 financial crisis in U.S. option markets. A large amount of aggregate tail risk is missing from the price of financial sector crash insurance during the financial crisis. The…

This paper studies the joint effect of conservatism and aggregation on the cost of equity capital and the efficiency of debt contracts. In the model, a firm’s two assets are valued at either the lower-of-cost-or-market or fair value and the…

The bullwhip effect is the amplification of demand variability along a supply chain: a company bullwhips if it purchases from suppliers more variably than it sells to customers. Such bullwhips (amplifications of demand variability) can lead to…

Study conducted by The Conference Board, NASDAQ, and the …

This study examines the sources of credit risk associated with asset securitizations and whether credit-rating agencies and the bond market differ in their assessment of this risk. Measuring credit risk using credit ratings, we find the…

We analyze shareholders’ incentives to change the leverage of a firm that has already borrowed substantially. As a result of debt overhang, shareholders have incentives to resist reductions in leverage that make the remaining debt safer. This…

The article presents a non-governmental organization (NGO) influencing environmental laws compliance in China. Focused is the nonprofit Institute of Public & Environmental Affairs (IPE) wherein it has exposed polluting factories in China that…

Some conflicts are experienced as depleting and exhausting whereas others are experienced as stimulating and invigorating. We explored the possibility that the focus of perceived threat in conflict determines whether it produces taxing…

Do movie studios inflate box office estimates that they report every Sunday? Is the pattern of this inflation consistent with the studios’ strategic incentives? Analyzing actual and estimated box office returns of major movie releases…

The sudden death of a CEO can provide insight into the quality of succession planning at a company. Why don’t more companies have a truly operational plan in place?

In 2008, the U.S. debt held by the public was $5.8 trillion. By the end of 2012, just four years later, it will likely be about double that number. The debt averaged 38.5 percent of GDP over the thirty years ending in 2008, but rose by about 10…

Entrepreneurs that were employed by successful industry incumbents prior to founding tend to confer advantages on their new organizations. We propose and then demonstrate a similar “network progeny” effect rooted in the social relationships that…