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All HBS Web
(323)
- Faculty Publications (115)
- 2014
- Article
The Growth and Limits of Arbitrage: Evidence from Short Interest
By: Samuel G. Hanson and Adi Sunderam
We develop a novel methodology to infer the amount of capital allocated to quantitative equity arbitrage strategies. Using this methodology, which exploits time-variation in the cross section of short interest, we document that the amount of capital devoted to value...
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Hanson, Samuel G., and Adi Sunderam. "The Growth and Limits of Arbitrage: Evidence from Short Interest." Review of Financial Studies 27, no. 4 (April 2014): 1238–1286. (Winner of the RFS Rising Scholar Prize 2014. Internet Appendix Here.)
- 2015
- Working Paper
Measurement Errors of Expected-Return Proxies and the Implied Cost of Capital
Despite their popularity as proxies of expected returns, the implied cost of capital's (ICC) measurement error properties are relatively unknown. Through an in-depth analysis of a popular implementation of ICCs by Gebhardt, Lee, and Swaminathan (2001) (GLS), I show...
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Wang, Charles C.Y. "Measurement Errors of Expected-Return Proxies and the Implied Cost of Capital." Harvard Business School Working Paper, No. 13-098, May 2013. (Revised February 2015.)
- 2013
- Chapter
Capturing History: The Case of the Federal Radio Commission in 1927
By: David Moss and Jonathan Lackow
In the study of regulation (and political economy more generally), there is a danger that historical inferences from theory may infect historical tests of theory. It is imperative, therefore, that historical tests always involve a vigorous search not only for...
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Keywords:
Capture;
History By Inference;
Economic Theory Of Regulation;
Federal Radio Commission;
Theory;
Economics;
Media and Broadcasting Industry;
United States
Moss, David, and Jonathan Lackow. "Capturing History: The Case of the Federal Radio Commission in 1927." Chap. 8 in Preventing Regulatory Capture: Special Interest Influence and How to Limit It, edited by Daniel Carpenter and David Moss. Cambridge: Cambridge University Press, 2013.
- November 2012
- Article
An Age Penalty in Racial Preferences
By: Deborah A. Small, Devin G. Pope and Michael I. Norton
We document an age penalty in racial discrimination: charitable behavior toward African American children decreases-and negative stereotypical inferences increase-with the age of those children. Using data from an online charity that solicits donations for school...
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Keywords:
Stereotyping;
Charitable Giving;
Prejudice;
Prosocial Behavior;
Philanthropy and Charitable Giving;
Age;
Race;
Prejudice and Bias
Small, Deborah A., Devin G. Pope, and Michael I. Norton. "An Age Penalty in Racial Preferences." Social Psychological & Personality Science 3, no. 6 (November 2012): 730–737.
- June 2012
- Article
Consequence-Cause Matching: Looking to the Consequences of Events to Infer Their Causes
By: Robyn A. LeBoeuf and Michael I. Norton
We show that people non-normatively infer event causes from event consequences. For example, people inferred that a product failure (computer crash) had a large cause (widespread computer virus) if it had a large consequence (job loss), but that the identical failure...
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LeBoeuf, Robyn A., and Michael I. Norton. "Consequence-Cause Matching: Looking to the Consequences of Events to Infer Their Causes." Journal of Consumer Research 39, no. 1 (June 2012): 128–141.
- March 2011 (Revised December 2012)
- Case
Demand Media
By: John Deighton and Leora Kornfeld
Google search had helped Demand Media grow to be a $1.9 billion online publisher. Then, social media and smartphone apps began to change the way people navigated the Internet. How should Demand Media respond? The business ran on a radically new model in which a stable...
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Keywords:
Business Model;
Information Publishing;
Consumer Behavior;
Customization and Personalization;
Internet and the Web;
Publishing Industry
Deighton, John, and Leora Kornfeld. "Demand Media." Harvard Business School Case 511-043, March 2011. (Revised December 2012.) (request a courtesy copy.)
- Article
Temporal View of the Costs and Benefits of Self-Deception
By: Zoe Chance, Michael I. Norton, Francesca Gino and Dan Ariely
Researchers have documented many cases in which individuals rationalize their regrettable actions. Four experiments examine situations in which people go beyond merely explaining away their misconduct to actively deceiving themselves. We find that those who exploit...
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Keywords:
Hindsight Bias;
Lying;
Motivated Reasoning;
Self-enhancement;
Social Psychology;
Perception;
Performance Expectations
Chance, Zoe, Michael I. Norton, Francesca Gino, and Dan Ariely. "Temporal View of the Costs and Benefits of Self-Deception." Proceedings of the National Academy of Sciences 108, no. S3 (September 13, 2011): 15655–15659.
- Article
The Social Utility of Feature Creep
By: Debora V. Thompson and Michael I. Norton
Previous research shows that consumers frequently choose products with too many features that they later find difficult to use. Our research shows that this seemingly suboptimal behavior may in fact confer benefits when factoring in the social context of consumption....
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Keywords:
Impression Management;
Social Influence;
Conspicuous Consumption;
Signaling;
Product Features;
Consumer Behavior;
Information Technology;
Experience and Expertise;
Status and Position
Thompson, Debora V., and Michael I. Norton. "The Social Utility of Feature Creep." Journal of Marketing Research (JMR) 48, no. 3 (June 2011): 555–565.
- October 2009
- Article
Negotiation Analysis: From Games to Inferences to Decisions to Deals
Exemplified by the pioneering work of Howard Raiffa and often expressed in the pages of the Negotiation Journal, the emergent prescriptive field of "negotiation analysis" progressively developed from Raiffa's early contributions to game theory and to his later...
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Keywords:
Decision Choices and Conditions;
Negotiation Participants;
Negotiation Preparation;
Negotiation Process;
Negotiation Tactics;
Game Theory
Sebenius, James K. "Negotiation Analysis: From Games to Inferences to Decisions to Deals." Negotiation Journal 25, no. 4 (October 2009): 449–465.
- 2009
- Other Unpublished Work
When Does Industrial Policy Work? Evidence from the Brazilian Ethanol Fuel Industry
By: Santiago Mingo and Tarun Khanna
What is the impact of a state-led industrial policy program on entrepreneurial activity, industry evolution, and firm competitiveness? How and when is industrial policy an effective tool to spur the development of an emerging industry? To address these questions, we...
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- 2008
- Working Paper
Resolving Information Asymmetries in Markets: The Role of Certified Management Programs
Firms and regulators are increasingly relying on voluntary mechanisms to signal and infer quality of difficult-to-observe management practices. Prior evaluations of voluntary management programs have focused on those that lack verification mechanisms and have found...
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Keywords:
Management Practices and Processes;
Information;
Standards;
Performance Improvement;
Programs;
Environmental Sustainability;
Manufacturing Industry;
United States
Toffel, Michael W. "Resolving Information Asymmetries in Markets: The Role of Certified Management Programs." Harvard Business School Working Paper, No. 07-023, December 2008. (October 2006.)
- 2008
- Working Paper
Rethinking the Role of History in Law & Economics: The Case of the Federal Radio Commission in 1927
By: David A. Moss and Jonathan B. Lackow
In the study of law and economics, there is a danger that historical inferences from theory may infect historical tests of theory. It is imperative, therefore, that historical tests always involve a vigorous search not only for confirming evidence, but for...
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Keywords:
Economic History;
Decision Choices and Conditions;
Government Legislation;
Law;
Media and Broadcasting Industry
Moss, David A., and Jonathan B. Lackow. "Rethinking the Role of History in Law & Economics: The Case of the Federal Radio Commission in 1927." Harvard Business School Working Paper, No. 09-008, August 2008.
- Article
Coarse Thinking and Persuasion
By: Sendhil Mullainathan, Joshua Schwartzstein and Andrei Shleifer
We present a model of uninformative persuasion in which individuals "think coarsely": they group situations into categories and apply the same model of inference to all situations within a category. Coarse thinking exhibits two features that persuaders take advantage...
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Mullainathan, Sendhil, Joshua Schwartzstein, and Andrei Shleifer. "Coarse Thinking and Persuasion." Quarterly Journal of Economics 123, no. 2 (May 2008): 577–619.
- June 2008
- Article
How Are Preferences Revealed?
By: John Beshears, James J. Choi, David Laibson and Brigitte C. Madrian
Revealed preferences are tastes that rationalize an economic agent's observed actions. Normative preferences represent the agent's actual interests. It sometimes makes sense to assume that revealed preferences are identical to normative preferences. But there are many...
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Beshears, John, James J. Choi, David Laibson, and Brigitte C. Madrian. "How Are Preferences Revealed?" Journal of Public Economics 92, nos. 8-9 (June 2008): 1787–1794.
- December 2007 (Revised January 2008)
- Background Note
Evaluating M&A Deals-Announcement Effects, Risk Arbitrage and Event Risk
The announcement of merger or acquisition conveys new information to the capital markets. This note describes how the stock prices of a Buyer and Target behave after the announcement of a deal. First, for an all-stock deal that is certain to go through, the note...
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Keywords:
Mergers and Acquisitions;
Announcements;
Capital Markets;
Stocks;
Price;
Risk and Uncertainty
Baldwin, Carliss Y. "Evaluating M&A Deals-Announcement Effects, Risk Arbitrage and Event Risk." Harvard Business School Background Note 208-103, December 2007. (Revised January 2008.)
- November 2007
- Background Note
Bayesian Estimation & Black-Litterman
By: Joshua D. Coval and Erik Stafford
Describes a practical method for asset allocation that is more robust to estimation errors than the traditional implementation of mean-variance optimization with sample means and covariances. The Bayesian inspired Black-Litterman model is described after introducing...
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Coval, Joshua D., and Erik Stafford. "Bayesian Estimation & Black-Litterman." Harvard Business School Background Note 208-085, November 2007.
- 2007
- Working Paper
Choice, Rationality and Welfare Measurement
By: Jerry R. Green and Daniel A. Hojman
We present a method for evaluating the welfare of a decision maker, based on observed choice data. Unlike the standard economic theory of revealed preference, our method can be used whether or not the observed choices are rational. Paralleling the standard theory we...
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Green, Jerry R., and Daniel A. Hojman. "Choice, Rationality and Welfare Measurement." HKS Faculty Research Working Paper Series, No. 2144, November 2007.
- 2007
- Working Paper
The 'Fees → Savings' Link, or Purchasing Fifty Pounds of Pasta
By: Michael I. Norton and Leonard Lee
Many consumers have had the experience of entering discount membership clubs to make a few purchases, only to leave with enough pasta to outlast a nuclear winter. We suggest that the presence of membership fees can lead consumers to infer a "fees → savings" link,...
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Norton, Michael I., and Leonard Lee. "The 'Fees → Savings' Link, or Purchasing Fifty Pounds of Pasta." Harvard Business School Working Paper, No. 08-029, November 2007.
- Article
Aid in the Aftermath of Hurricane Katrina: Inferences of Secondary Emotions and Intergroup Helping
By: A.J.C. Cuddy, M. Rock and M. I. Norton
Cuddy, A.J.C., M. Rock, and M. I. Norton. "Aid in the Aftermath of Hurricane Katrina: Inferences of Secondary Emotions and Intergroup Helping." Group Processes & Intergroup Relations 10, no. 1 (January 2007): 107–118.
- November 2006
- Article
Patent Citations as a Measure of Knowledge Flows: The Influence of Examiner Citations
By: Juan Alcacer and Michelle Gittelman
Analysis of patent citations is a core methodology in the study of knowledge diffusion. However, citations made by patent examiners have not been separately reported, adding unknown noise to the data. We leverage a recent change in the reporting of patent data showing...
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Keywords:
Patents;
Knowledge Sharing;
Management Analysis, Tools, and Techniques;
Information Technology;
Prejudice and Bias;
Change
Alcacer, Juan, and Michelle Gittelman. "Patent Citations as a Measure of Knowledge Flows: The Influence of Examiner Citations." Review of Economics and Statistics 88, no. 4 (November 2006): 774–779.