Economics Insights @ CBS

Although women pursue managerial credentials at nearly the same rate as men, gender disparities in wages exist because of the shortfall in wages women sustain relative to men at the onset of their careers. This article develops a tryout approach to test for the presence of demand-side contributions to initial wage inequality while also developing and testing theory on why it may be lessened through internships.

The authors examine how consumers respond to pseudo-free offers--offers that are presented to consumers as free but that require consumers to make a nonmonetary payment (such as completing a survey or providing personal information) in order to receive the "free" good or service. Across six studies, the authors find that consumers are generally just as likely to accept pseudo-free offers (with nonmonetary costs) as comparable truly free offers (with no costs), as long as the costs of the pseudo-free offers are below some threshold.

We provide a framework for identifying accounting numbers that indicate risk and expected return. Under specified accounting conditions for measuring earnings and book value, book-to-price (B/P) indicates expected returns, providing justification for B/P in asset pricing models. However, the framework also points to earnings-to-price (E/P) as a risk characteristic. Indeed, E/P, rather than B/P, is the relevant characteristic when there is no expected earnings growth, but the weight shifts to B/P with growth.

We extend latent Dirichlet allocation by introducing a topic model, hierarchically dual latent Dirichlet allocation (HDLDA), for contexts in which one type of document (e.g., search queries) are semantically related to another type of document (e.g., search results). In the context of online search engines, HDLDA identifies not only topics in short search queries and web pages, but also how the topics in search queries relate to the topics in the corresponding top search results.