We present and test an explanation for lags in the adjustment of wholesale gasoline prices to changes in crude oil prices. Our simple model with costly adjustment of production and inventories implies that output prices will respond with a lag to cost shocks even in the absence of menu costs,...

This paper develops a model in which the effectiveness of the board's monitoring of the CEO depends on the board's independence. The independence of new directors is determined through negotiations (implicit or explicit) between the existing directors and the CEO. The CEO's bargaining position,...

This paper explores leadership within organizations. Leadership is distinct from authority because following a leader is a voluntarty rather than coerced activity of the followers. This paper considers how a leader induces rational followers to follow her in situations when the leader has...

In many recent antitrust cases, manufacturers of complex high- technology equipment have been accused of exercising market power in the sale of proprietary service or parts necessary to maintain the machines they produce. The manufacturer generally concedes that it has market power in selling...

It is a common view that private information in the foreign exchange market does not exist. We provide evidence against this view. The evidence comes from the introduction of trading in Tokyo over the lunch hour. Lunch-hour return variance doubles with the introduction of trading, which cannot...

This chapter uses implied volatilities to examine both the existence and form of the currency risk premium. First, I test for “simple efficiency”, under which there is no risk premium and expectations are rational. This involves testing whether implied volatilities predict subsequent excess...