Economics Insights @ CBS

Effective monitoring by equity blockholders is important for good corporate governance. A prominent theoretical literature argues that the threat of block sale ("exit") can be an effective governance mechanism. Many blockholders are money managers. We show that, when money managers compete for investor capital, the threat of exit loses credibility, weakening its governance role. Money managers with more skin in the game will govern more successfully using exit. Allowing funds to engage in activist measures ("voice") does not alter our qualitative results.

In the wake of recent revelations about US involvement in torture, and widespread and seemingly-growing support of torture in the US, we consider how people judge the value of information gained from informants under coercion. Drawing on past work on confirmation biases and moral judgments, we predicted, and found, that American torture supporters are more likely than opposers to see coerced information as relatively valuable and necessary in a scenario describing the foiling of an al-Qaeda terrorist attack.

The development of predictive models in healthcare settings has been growing; one such area is the prediction of patient arrivals to the Emergency Department (ED). The general premise behind these works is that such models may be used to help manage an ED which consistently faces high congestion. In this work, we propose a class of proactive policies which utilizes future information of potential patient arrivals to effectively manage admissions into an ED while reducing waiting times for patients who are eventually treated.