Banks must manage their trading books, not just value them. Pricing includes valuation adjustments collectively known as XVA (at least credit, funding, capital and tax), so management must also include XVA. In trading book management we focus on pricing, hedging, and allocation of prices or...

We present comprehensive evidence in support of giving liquidity equal standing to size, value/growth, and momentum as investment styles, as defined by Sharpe (1992). First, we show that financial market liquidity, as identified by stock turnover, is an economically significant indicator of...

This paper studies a periodic-review pricing and inventory control problem for a retailer, which faces stochastic price-sensitive demand, under quite general modeling assumptions. Any unsatisfied demand is lost, and any leftover inventory at the end of the finite selling horizon has a salvage...

This study examines the implications of using national-level (i.e., audit firm-wide) data aggregated across individual practice offices when testing for quality differentiation in auditing. I present a statistical framework that identifies the nature and sources of bias in aggregation when...

Financial accounting affords considerable discretion to firms in aggregating internal information for external dissemination, yet little evidence exists about the consequences of such aggregation. We examine a central operational effect by studying whether withholding disaggregated cost...

Although neoclassical economic theory predicts that fixed cost magnitude and fixed cost reporting format will not influence short-term pricing decisions, these factors systematically affected pricing decisions in a duopoly experiment. Increasing fixed cost magnitude (a pure sunk cost in this...

Although neoclassical economic theory predicts that fixed cost magnitude and fixed cost reporting format will not influence short-term pricing decisions, these factors systematically affected pricing decisions in a duopoly experiment. Increasing fixed cost magnitude (a pure sunk cost in this...

We examine how tax cuts that benefit some firms are related to the economic performance of their direct competitors. Consistent with tax cuts decreasing the cost of initiating competitive strategies, we find that a decrease in the tax burden for only a specific group of firms in the U.S. economy...

We investigate cost-based access pricing in regulated network industries. Building on recent progress in the accounting literature, we show that a regulator must choose a particular depreciation schedule, namely, relative replacement cost depreciation in order to prevent the network provider...

Abstract EU power market design has been focused on facilitating trading between countries and for this has defined interfaces for market participants and TSOs between countries. The operation of power systems and markets within countries was not the focus of these developments. This may have...