The authors show that discrimination can occur even when it is common knowledge that underlying group characteristics do not differ and employers do not prefer same-group candidates. When employers can judge job applicants' unknown qualities better when candidates belong to the same group and...

An informational cascade occurs when it is optimal for an individual, having observed the actions of those ahead of him, to follow the behavior of the preceding individual with regard to his own information. The authors argue that localized conformity of behavior and the fragility of mass...

U.S. corporations do not issue and repurchase debt and equity to counteract the mechanistic effects of stock returns on their debt-equity ratios. Thus over one- to five-year horizons, stock returns can explain about 40 percent of debt ratio dynamics. Although corporate net issuing activity is...