What explains short term fluctuations of stock prices? This paper exploits a natural experiment from the 18th century in which information flows were regularly interrupted for exogenous reasons. English shares were traded on the Amsterdam exchange and news came in on sailing boats that were...

This paper investigates the in-flight marketplace. It uses detailed data of inflight purchases to understand social effects in purchase behavior, and determine their potential for designing marketing promotions. We find that on average a passenger is approximately 30% more likely to buy after...

Debates between candidates for public office have a rich historical tradition and remain an integral part of contemporary campaign strategy. There is, however, no definitive evidence of whether debates affect actual voting behavior. Limited media penetration implies that the effects of...

This paper discusses the phenomenon of "built to become:" an open-ended ongoing process for which there is no grand ex ante plan possible and which unfolds through a series of transformations in the course of the strategic evolution of long-lived companies. It develops a "strategic leadership"...

We answer the following question: At t = 1, an expert has (probabilistic) information about a random outcome X. In addition, the expert will obtain further information about X as time passes, up to some time t = T + 1 at which X will be publicly revealed. (How) Can a protocol be devised that...

Research across disciplines presumes that market categories will have strong boundaries. Categories without well-defined boundaries typically are not useful so are expected to fade away. We suggest many contexts contain lenient market categories, or less-constraining market categories, that...

A central counterparty (CCP) is a financial market utility that lowers counterparty default risk on specified financial contracts by acting as a buyer to every seller, and as a seller to every buyer. When at risk of failure, a CCP could be forced into a normal insolvency process such as...

We develop a model of the joint capital structure decisions of banks and their borrowers. Strikingly high bank leverage emerges naturally from the interplay between two sets of forces. First, seniority and diversification reduce bank asset volatility by an order of magnitude relative to that of...

We construct a dynamic model of financial intermediation in which changes in the information held by financial intermediaries generate asymmetric credit cycles as the ones documented by Reinhart and Reinhart (2010). We model financial intermediaries as "expert" agents who have a unique ability...

This study investigates the cost sharing arrangement (CSA), which is a mechanism used by multinational corporations (MNCs) to shift valuable intellectual property (IP) offshore to low-tax jurisdictions. We find that a CSA enables the MNC to shift income to low-tax foreign jurisdictions when the...