We study the interplay between a "one person-one vote" political system and a "one share-one vote" corporate governance regime. The political system sets Pigouvian subsidies, while corporate governance determines firm-specific public good investments. Our analysis highlights a two-way feedback...

I theoretically investigate how the informational content of stock prices is affected by the structure of firms' capital investment decisions. The efficiency of stock prices is determined by the weight firms attach to private information and by the extent to which investment is predictable. Both...

This paper develops a dynamic general equilibrium model with stochastic social preferences and endogenous corporate investment decisions. We find that firms’ investment decisions largely undo the effects of shifts in preferences on stock prices and risk premia. Only when most firms have...

Forward-looking investments determine the resilience of firms' supply chains. Such investments confer externalities on other firms in the production network. We compare the equilibrium and optimal allocations in a general equilibrium model with an arbitrary number of vertical production tiers....

To the extent that firms don't internalise the negative externalities oftheir CO2 emissions, government intervention is needed to curb globalwarming. We study the equilibrium interaction between firms, which caninvest in green technologies, and government, which can impose\ emissioncaps but has...

We experimentally examine how group identity affects trust behaviorin an investment game. In one treatment, group identity isinduced purely by minimal groups. In other treatments, group membersare additionally related by outcome interdependence establishedin a prior public goods game. Moving...