Publications

We hypothesized that incongruous misfortunes generate stronger affective reactions and perceptions of injustice than do equally severe and equally probable congruous misfortunes. Incongruous misfortunes are defined as ones that bring to mind…

This paper considers a two-period model of investment management. Investors decide how to reallocate their wealth between two mutual funds managed by different investment advisers after observing the performance of each adviser in the first…

We derive a role for inside investors, such as venture capitalists, in resolving various agency problems that arise in a multistage financial contracting problem. Absent an inside investor, the choice of securities is unlikely to reveal all…

This paper analyzes a model of financing for start-up companies, focusing on the investment decisions that are made in later stages of financing and on the interaction between entrepreneurs, venture capitalists and other capital providers. We…

This paper studies the shelf space allocation decision for a store brand. We argue that since the store brand can play a unique role in the overall strategy of the retailer, traditional arguments for shelf space allocation decisions may not be…

Stock market crashes, defined as precipitous declines in value for securities that represent a large proportion of wealth (Garber 1992), are rare, difficult to explain, and potentially catastrophic. During four trading days in the crash of…

This paper is motivated by an often-observed but under-studied phenomenon of the modern business enterprise, management by exception. The term describes the relative infrequency of management interference in the lower tiers of an organizational…

Firms often concentrate on a narrow range of activities and claim to forgo other, apparently profitable, opportunities. This pursuit of narrow strategies is applauded by some academics who study strategic management. The authors present two…

President Clinton’s Health Security Act relies on government regulation, not market forces, to control costs. The act creates an entitlement to comprehensive benefits and places the federal budget at risk for total health care costs in order to…

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It was proposed that individuals’ responses to information regarding their relative position in a performance distribution would depend on how they frame the information. To the degree that they focus selectively on the positive features of the…

In this paper we explore the relationship between brand advertising and wholesale and retail margins. We show that when the retail market is characterized by oligopolistic competition, higher level of brand advertising by a manufacturer can lead…

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What is the optimal structure of the banking industry? Is it one in which firms have close long-term relationships with a single bank or one in which firms have arms-length relationships with multiple creditors? And what is the effect of…

We discuss two contrasting styles of vertical organization of an industry with complementary activities or components: systems competition versus component competition. When firm’s competencies differ, systems competition is not a perfect…

Manufacturer supported trade deals remain one of the major competitive tools in today’s market place. This is true despite the fact that such trade deals are often claimed to be unprofitable for manufacturers. The unprofitability is attributed to…