Publications

We evaluate the performance of private equity (PE) funds, using a variance decomposition model to separate skill from luck. We find a large amount of long-term persistence, and skilled PE firms outperform by 7% to 8% annually. But this…

Debt maturity influences debt overhang, the reduced incentive for highly levered borrowers to make real investments because some value accrues to debt. Reducing maturity can increase or decrease overhang even when shorter term debt’s value…

Previous research suggests that people draw inferences about their attitudes and preferences based on their own thoughtfulness. The current research explores how observing other individuals make decisions more or less thoughtfully can shape…

Folk wisdom suggests playing hard to get is an effective strategy in romantic attraction. However, prior research has yielded little support for this belief. This article seeks to reconcile these contrasting views by investigating how 2…

This article discusses the role of GAAP accounting from an investor’s perspective.  For all its flaws, a historical-based system of accounting is vital to the investment community, and I believe moves toward fair value accounting should…

We examine the financial health and performance of reverse mergers (RMs) that became active on U.S. stock markets between 2001 and 2010, particularly those from China (around 85% of all foreign RMs). As a group, RMs are small, early-stage…

Over the last few decades, researchers have taken a thorough and critical look at corporate governance from various perspectives. For the most part, they have found that structural features of corporate governance have little or no relation to…

We find that regulators can implement identical rules inconsistently due to differences in their institutional design and incentives, and this behavior may adversely impact the effectiveness with which regulation is implemented. We study…

A study by Stanford, the Institute of Executive Development, and The Conference Board reveals a critical stumbling block in the…

Berkshire Hathaway Vice Chairman Charlie Munger is well known as the partner of CEO Warren Buffett and also for his advocacy of “multi-disciplinary thinking” — the application of fundamental concepts from across various academic disciplines to…

We describe a novel currency investment strategy, the ‘dollar carry trade,’ which delivers large excess returns, uncorrelated with the returns on well-known carry trade strategies. Using a no-arbitrage model of exchange rates we show that these…

We empirically investigate the effect of uncertainty on corporate hiring. Using novel data from the labor market for MBA graduates, we show that uncertainty regarding how well job candidates fit with a firm’s industry hinders hiring, and that…

The widespread existence of cooperation is difficult to explain because individuals face strong incentives to exploit the cooperative tendencies of others. In the research reported here, we examined how the spread of reputational…

Decision makers often simplify decision problems by ignoring readily available information. The current multimethod research investigated which types of information about interdependence situations are psychologically prominent to decision makers…

Many believe that the selection of the CEO is the most important decision that a board can make. Why aren’t more companies prepared for a change at the top?

Over the last few years, a growing number of companies have put increased attention on issues related to social and environmental responsibility. As part of this trend, they have been gradually moving away from sole reliance on audits, and…

This paper undertakes an assessment of a rapidly growing body of economic research on financial literacy. We start with an overview of theoretical research, which casts financial knowledge as a form of investment in human capital. Endogenizing…

We argue and demonstrate that resource allocation within firms’ internal capital markets provides an important force countervailing financial market dislocation. We estimate a structural model of internal capital markets to separately identify…

We answer the following question: At t = 1, an expert has (probabilistic) information about a random outcome X. In addition, the expert will obtain further information about X as time passes, up to some time t = T + 1 at which X will be publicly…