Organizations & Markets

The present research is motivated by an interest in why organizational decision makers so often respond to accidents with remedy plans that focus narrowly on correcting human error rather than more environment-focused plans or more encompassing plans. We investigated the role of counterfactual thinking in the decision-making tendency toward human-focused plans. Our experiments indicated that even in a domain where human-focused remedies were not otherwise appealing, many participants decided on human-focused remedies after they had generated an “if only” conjecture about the accident.

This paper introduces a class of state dependent jump (SDJ) models in which the arrival intensity and jump sizes depend on a given set of state variables, including lagged jumps. With this model, we investigate the structure of jumps to U.S. equity indices, concentrating on the predictability of jumps times if found for all of the indices considered: Standard and Poor's 500 and Mid-Cap, the Russell 1000, 2000, and 3000 indices, the Wilshire 5000 and the Nasdaq 100 (NDX).

Several experiments provided evidence that negotiators make systematic errors in personality-trait attributions for the bargaining behaviors of their counterparts. Although basic negotiation behavior is highly determined by bargaining positions, negotiators primarily interpret their counterpart's behavior in terms of the counterpart's personality, such as his or her level of cooperativeness or agreeableness.

We examine the ability of a dynamic asset-pricing model to explain the returns on G7-country stock market indices. We extend Campbell's (1996) asset-pricing model to investigate international equity returns. We also utilize and evaluate recent evidence on the predictability of stock returns. We find some evidence for the role of hedging demands in explaining stock returns and compare the predictions of the dynamic model to those from the static CAPM. Both models fail in their predictions of average returns on portfolios of high book-to-market stocks across countries.

One possible explanation for bidding firms earning positive abnormal returns in diversifying acquisitions in the 1960s is that internal capital markets were expected to overcome the information deficiencies of the less-developed capital markets. Examining 392 bidder firms during the 1960s, we find the highest bidder returns when financially "unconstrained" buyers acquire "constrained" targets. This result holds while controlling for merger terms and for different proxies used to classify firms facing costly external financing.

Previous research has shown that wages in industries characterized by higher rates of technological change are higher. In addition, there is evidence that skill-biased technological change is responsible for the dramatic increase in the earnings of more educated workers relative to less educated workers that took place during the 1980s.

This paper extends the classic two-armed bandit problem to a many-agent setting in which N players each face the same experimentation problem. The main change from the single-agent problem is that an agent can now learn from the current experimentation of other agents. Information is therefore a public good, and a free-rider problem in experimentation naturally arises.

"Money's Worth" plays a prominent role in the U.S. Social Security debate. We cover all that good stuff in this chapter.

This paper considers whether stock price elasticity affects corporate financial decisions. Basic economic principles and the existing theoretical literature predict that firms choosing the Dutch auction instead of the fixed price tender offer should be those firms expecting to face greater stock price elasticity.