We examine five summer Olympics and identify stocks that media outlets hype as benefiting from the Olympics (Olympic stocks). There is a seven-year period from the time that a country first learns it has won the Olympic bid to the start of the games (...

We develop a continuous time framework for sequential goals-based wealth management. A stochastic factor process drives asset price dynamics and the client’s goal amount and income. We prove the weak dynamic programming principle for the value function of ...

This paper studies the impact of betrayal aversion on employees’ effort provision in exchange for a bonus payment that is at the employers’ expense and discretion. In our first study, using a laboratory experiment, we find that the performance of an ...

Consumers increasingly use digital advice when making purchasing decisions. How do such tools change consumer behavior and what types of consumers are likely to use them? We examine these questions with a randomized controlled trial of digital expert ...

We study a social dilemma in a single-queue system in which human servers have discretion over the effort with which to process orders that arrive stochastically. We show theoretically that the efficient outcome in the form of high effort can be sustained ...

Recent years have seen a growth in customized products and services. As a prerequisite for customization, private information on individual customers’ quality preferences needs to be uncovered. Sellers can listen to customers about their stated or self-...

We introduce a measure of regret for stock market investors and investigate its cross-sectional asset pricing implications. According to our regret-based framework, investors experience regret due to not achieving the highest possible return from a ...

As digitization sweeps across industries and markets, analytics and data-driven decision making (DDD) are becoming increasingly important. The adoption of analytics and DDD has been slower in small-to-medium enterprises (SMEs) compared with large firms, ...

We develop a dynamic equilibrium model to derive the endogenous relations among firms’ ownership structures, managerial incentives, and asset returns. Ownership concentration is positively related to managerial incentives (PPS) but is negatively related ...

Financial covenants influence firm behavior by state-contingently allocating decision rights. I develop a quantitative model with long-term debt where shareholders cannot commit to not dilute existing lenders with new debt issuances. Lenders intervene on ...

This paper studies how a tick size change affects market quality, price discovery, and the competition for liquidity provision by dealers and high-frequency trading firms (HFTs) in the U.S. Treasury market. Using difference-in-differences regressions ...

This paper studies the cost of capital effect of a major regulatory technology, or RegTech, event: the staggered implementation of the Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system of the Securities and Exchange Commission in the ...

This study quantifies the number of estimates involved in firms’ accruals and examines whether it is informative about the relation between accruals and future earnings. We measure the number of estimates using the frequency of the use of the word ...

Despite a large minimum wage literature that analyzes employee outcomes, there is less evidence on firm performance, prices, and quality. Exploiting staggered changes in U.S. minimum wages during 2000–2008 and census data on more than 29,000 hotel ...

We study the interaction of flexible capital utilization and depreciation for expected returns and investment of firms. Empirically, an investment strategy that buys (sells) equities with low (high) utilization rates earns 5% per annum. Utilization ...

The convention when calculating corporate bond trading costs is to estimate bid–ask spreads that customers pay, implicitly assuming that dealers always provide liquidity to customers. We show that, contrary to this assumption, customers increasingly ...

Using current performance to set future targets can discourage effort and reduce performance. Our study examines whether this ratchet effect also undermines incentives of high-level managers and executives. We use a dynamic model to show that empirical ...

The investment capital asset pricing model, in which expected returns vary cross-sectionally with investment, profitability, and expected growth, provides an equilibrium foundation for Graham and Dodd’s security analysis. The q⁵ model is a good start to ...

We find evidence for the beta anomaly in mutual fund performance. This anomaly is not accounted for in the standard four-factor framework, nor by the addition of a betting-against-beta factor to the benchmark model. We identify the active component of ...

This paper examines the causal relationship between proximity and knowledge diffusion by estimating the elasticity of core-based statistical area (CBSA) pair-level citations to variations in travel time induced by the introduction of new flight routes. ...