<heading id="h1" level="1" implicit="yes" format="display">ABSTRACT</heading>This paper investigates the effects of preferences on judgments in an investing context, where investors should be motivated to interpret information objectively, yet have clear preferences with respect to what the information they are evaluating conveys (i.e., a gain or a loss on their...

<heading id="h1" level="1" implicit="yes" format="display">ABSTRACT</heading>Implicit employment contracts are a common way to motivate firm productivity but also require that employees trust management to be fair when allocating postproduction firm resources between employees and owners. We use an experiment to study the problem of motivating firm productivity,...

We investigate analysts' use of stock returns and other analysts' forecast revisions in revising their own forecasts after an earnings announcement. We find that analysts respond more strongly to these signals when the signals are more informative about future earnings changes. Although analysts...

Using a series of laboratory markets, this paper provides evidence that a willingness to engage in speculative trade is largely driven by a failure of traders to account for information about value implicit in other traders' actions and that this behavior arises because traders construct myopic...

Loan commitments represent more than 82 percent of all commercial and industrial loans by domestic banks. This paper develops a valuation model for loan commitments incorporating early exercise, multiple fees, partial exercise and credit risk. The model is analytically tractable and easy to...

How does the banking sector’s financial health affect bank-dependent borrowers’ performance? We use the exogenous shock to U.S. banking system during the Russian crisis of Fall 1998 as a natural experiment to separate the effect of borrower’s demand of credit from the bank’s ability to...

We document empirical support for a key micro-level channel—innovation by young, private firms—through which financial sector deregulation affects economic growth. We find that intrastate banking deregulation, which increased the local market power of banks, decreased the level and risk of...

How does the banking sector’s financial health affect bank-dependent borrowers’ performance? We use the exogenous shock to U.S. banking system during the Russian crisis of Fall 1998 as a natural experiment to separate the effect of borrower’s demand of credit from the bank’s ability to...