Using an agent-based simulation, we illustrate how goal-seeking behavior affects network formation, learning, and performance. Our organization has one manager, who decides where to invest financial capital; individual workers, who decide where to work and prefer projects with larger budgets;...

We propose and test a view of corporate diversification as a strategy that exploits internal information markets, by bringing together information that is scattered across the economy. First, we construct an inter-industry network using input-output data, to proxy for the economy's information...

We document a strong decline in corporate-diversification activity since the late 1970's, and we develop a dynamic model that explains this pattern, both qualitatively and quantitatively. The key feature of the model is that synergies endogenously decline with technological specialization,...

We model a commodity producing firm that has private information about future volume and requires outside financing to fund a growth opportunity. Due to costly financial distress, a firm's first-best strategy is to sell forward its future production, avoiding any price risk. Low-volume...

Existing literature emphasizes skills-based explanations for executive-firm matching, namely in the context of financial expertise. In contrast, our paper argues that informational concerns may also be relevant. We model a public firm with a project opportunity of uncertain quality, where...

We develop a parsimonious general equilibrium model where agents allocate time across three activities: production, trade, and leisure. Leisure includes time spent socializing, which economizes transaction costs. Our framework yields multiple equilibria in terms of the number of social ties and...

We model an economy where it is beneficial for high-type organizations to collaborate with other high types, and where this assortative-matching pattern allows informed financiers to provide inexpensive funds to partner companies of their high-type ventures. The expected funding benefit...

Using an agent-based simulation, we illustrate how goal-seeking behavior affects network formation, learning, and performance. Our organization has one manager, who decides where to invest financial capital; individual workers, who decide where to work and prefer projects with larger budgets;...

Empirically-documented associations between network position and organizational performance could be driven by unobserved resources. I study this issue theoretically, by developing an equilibrium model of inter-firm network formation. Specifically, I investigate how an organization's resource...

A growing class of investors specializes in funding distressed firms. Specialization allows these investors to develop valuable expertise, which in principle can contribute to overall economic efficiency. Notwithstanding this argument, we show that specialized distress investors (SDIs) can...