This paper presents a game theoretic analysis of the generalized second-price auction that the company Overture operated in 2004 to sell sponsored search listings on search engines. We construct a model that embodies few prior assumptions about parameters, and we present results that indicate...

Private equity funds pay particular attention to capital structure when executing leveraged buyouts, creating an interesting setting for examining capital structure theories. Using a large, detailed, international sample of buyouts from 1980-2008, we find that buyout leverage is unrelated to the...

This report presents new evidence relating to the effects of climate policy in Europe, particularly the European Union Emissions Trading Scheme (EU ETS). The evidence is based on new data from almost 800 phone interviews we conducted with managers in manufacturing plants in six European...

Sampling poses an interesting problem in markets with experience goods. Free samples reveal product quality and help consumers to make informed purchase decisions (promotional effect). However, sampling may also induce consumers to substitute purchases with free consumption (displacement...

In this paper we consider a two-stage duopoly game where firms first decide whether to invest in advertising and then compete in prices. Advertising has two effects: a market enlargement for both firms and a predatory gain for the investing firm only. Both symmetric and asymmetric equilibria may...

In a world where rational individuals may hold different prior beliefs, a sender can influence the behavior of a receiver by controlling the informativeness of a signal. We characterize the set of distributions of posterior beliefs that can be induced by a signal, and provide necessary and...

Dual system and dual process views of the human mind have contrasted automatic, fast, and non-conscious with controlled, slow, and conscious thinking. This paper integrates duality models from the perspective of consumer psychology by identifying three relevant theoretical strands: Persuasion...

Theory suggests that reputations, developed in repeated face-to-face interactions, allow nonanonymous, floor-based trading venues to attenuate adverse selection in the trading process. We identify instances when stocks listed on the New York Stock Exchange (NYSE) experience a non-trivial...

Given the opportunity to buy IPO shares of uncertain value at a fixed price, potentially informed investors have an incentive to refuse to participate in offerings the underwriter happens to overprice. We show that an underwriter can efficiently resolve this problem by entering into a repeat...

A bank can efficiently underwrite individually difficult to value IPOs by offering them as a package deal to a stable coalition of investors (block-booking). Block-booking banks set offer prices to equalize downside risk across their offerings, not expected returns. Examining US IPOs over the...