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Endogeneity and Empirical Accounting Research
The discussion reinforces and expands on some of the fundamental issues about endogeneity raised by Chenhall and Moers (European Accounting Review, this issue, pp. 173–195). We focus on the econometric problems researchers encounter when…
Inferring the Popularity of an Opinion from its Familiarity: A Repetitive Voice Can Sound Like a Chorus
Despite the importance of doing so, people do not always correctly estimate the distribution of opinions within their group. One important mechanism underlying such misjudgments is people’s tendency to infer that a familiar opinion is a prevalent…
Is There an Insider Advantage in Getting Tenure?
What Does Performance in Graduate School Predict? Graduate Economics Education and Student Outcomes
Economists devote considerable effort to graduate student education but have conducted relatively little research on the determinants of student performance or placement in the job market. Do graduate students who do well in core…
Assimilation and contrast in persuasion: The effects of source credibility in multiple message situations.
The present research explores a contextual perspective on persuasion in multiple message situations. It is proposed that when people receive persuasive messages, the effects of those messages are influenced by other messages to which people…
Economics and Social Psychology: Brief Flirtation or Enduring Marriage? (Review)
Fund Manager Use of Public Information: New Evidence on Managerial Skills
We show theoretically that the responsiveness of a fund manager’s portfolio allocations to changes in public information decreases in the manager’s skill. We go on to estimate this sensitivity (RPI) as the R² of the regression…
Investment Under Uncertainty and Time-Inconsistent Preferences
While standard real options models assume that agents possess a constant rate of time preference, there is substantial evidence that agents are impatient about choices in the short term but are patient when choosing between long-term alternatives…
Limits of Arbitrage: Theory and Evidence from the Mortgage-Backed Securities Market
“Limits of Arbitrage” theories hypothesize that the marginal investor in a particular asset market is a specialized arbitrageur rather than a diversified representative investor. We examine the mortgage-backed securities (MBS) market in this…
Purchasing, Pricing, and Quick Response in the Presence of Strategic Consumers
We consider a retailer that sells a product with uncertain demand over a finite selling season. The retailer sets an initial stocking quantity and, at some predetermined point in the season, optimally marks down remaining inventory. We…
Return Persistence and Fund Flows in the Worst Performing Mutual Funds
We document that the observed persistence amongst the worst performing actively managed mutual funds is attributable to funds that have performed poorly both in the current and prior year. We demonstrate that this persistence results from an…
Supreme Court Appointments as a Move-the-Median Game
A three-stage model isolates conditions under which an executive appointment to a collective choice body, such as a court or a regulatory agency, has an immediate bearing on policy. The model strikes a balance between previous formal models that…
Trust and Distrust In Organizations: Dilemmas and Approaches
The effective functioning of a democratic society—including social, business, and political interactions—largely depends on trust. Yet trust remains a fragile and elusive resource in many of the organizations that make up society’s building…
Biases in Multi-Year Management Financial Forecasts: Evidence from Private Venture-Backed U.S. Companies
This paper studies the properties and determinants of managers’ multi-year financial forecasts. Using one- to five-year-ahead forecasts reported by private venture-backed firms, we ask whether, by how much, and why biases in managers’ forecasts…
Business Value of Global Trade Management Solutions
Global Trade Management (GTM) software solutions allow companies to automate import and export processes, provide higher visibility to goods at supplier sites and in-transit materials, address compliance issues, and improve their inventory…
Differential Development of High-Level Visual Cortex Correlates with Category-Specific Recognition Memory
High-level visual cortex in humans includes functionally defined regions that preferentially respond to objects, faces and places. It is unknown how these regions develop and whether their development relates to recognition memory. We used…
Dynamic Signaling and Market Breakdown
We consider the effects a public revelation of information (e.g. rating, grade) has on trading in a dynamic signaling model. Competing buyers offer prices to a privately informed seller who can reject them and delay trade. Delay is costly and the…
Resisting persuasion by illegitimate means: A metacognitive perspective on minority influence
The present research tests a new metacognitive perspective on resistance in minority influence situations. It is proposed that when people initially resist persuasive messages from sources in the numerical minority, they can lose attitude…
The Cross Section of Foreign Currency Risk Premia and Consumption Growth Risk
Aggregate consumption growth risk explains why low interest rate currencies do not appreciate as much as the interest rate differential and why high interest rate currencies do not depreciate as much as the interest rate differential. Domestic…
Common Failings: How Corporate Defaults Are Correlated
We test the doubly stochastic assumption under which firms’ default times are correlated only as implied by the correlation of factors determining their default intensities. Using data on U.S. corporations from 1979 to 2004, this assumption is…