This paper provides a unified framework for interpreting a wide range of interactions models which have appeared in the economics literature. A formalization taken from the statistical mechanics literature is shown to encompass a number of socioeconomic phenomena ranging from out of wedlock...

In this paper, we ask how bankruptcy law affects the financial decisions of corporations and its implications for firm dynamics. According to current U.S. law, firms have two bankruptcy options: Chapter 7 liquidation and Chapter 11 reorganization. Using Compustat data, we first document capital...

We find that institutional ownership in publicly traded companies is associated with more innovation (measured by cite-weighted patents). To explore the mechanism through which this link arises, we build a model that nests the lazy-manager hypothesis with career-concerns, where institutional...

The purpose of this essay is to discuss two approaches to inference, and how "human capital" can provide a way to combine them. The first approach, ubiquitous in economics, is based upon the Rubin/Holland potential outcomes model and relies upon randomized treatment to measure the causal effect...

We examine how machine learning can be used to improve and understand human decision-making. In particular, we focus on a decision that has important policy consequences. Millions of times each year, judges must decide where defendants will await trial—at home or in jail. By law, this decision...

Recent work suggests that women are more responsive to negative feedback than men in certain environments. We examine whether negative feedback in the form of relatively low grades in major-related classes explains gender differences in the final majors undergraduates choose. We use unique...

We document that prior portfolio choices influence investors' expectations about asset values, and their future choices. We find that people update more from information consistent with their prior choices, leading to sticky portfolios over time. These effects are related to how the brain's...

We survey a representative sample of U.S. individuals about how well leading academic theories describe their financial beliefs and decisions. We find substantial support for many factors hypothesized to affect portfolio equity share, particularly background risk, investment horizon, rare...

Treatment for depression is complex, requiring decisions that may involve tradeoffs between exploiting treatments with the highest expected value or experimenting with treatments with higher possible payoffs. Using patient claims data, we show that among skilled doctors, using a broader...