We study the performance of investments made at different points of an investment cycle. We use a large data set covering hotels in the U.S., with rich details on their location, characteristics and performance. We find that hotels built during hotel construction booms underperform their peers....

We study the performance of investments made at different points of an investment cycle. We use a large data set covering hotels in the U.S., with rich details on their location, characteristics and performance. We find that hotels built during hotel construction booms underperform their peers....

The relational contracts literature suggests that a principal can improve contract self-enforceability by specifying initial requirements that increase the agent's ex-post rents. Initial requirements specified in hotel franchise agreements — size and quality-tier of hotel — offer a unique...