Decision Making & Negotiations

In this paper, I estimate the magnitude of an informational friction limiting credit reallocation to firms during the 2007 to 2009 financial crisis. Because lenders rely on private information when deciding which relationship to end, borrowers looking for a new lender are adversely selected. I show how to separately identify private information from information common to all lenders but unobservable to the econometrician by using bank shocks within a discrete choice model of relationships.

One common explanation for the gender wage gap is that women and men have different negotiation behaviors in labor markets. Yet, scholars also suggest that the gender wage gap reflects differences in initial salary offers provided to women and men that vary apart from negotiations. A challenge in parsing these explanations has been that salaries, not salary offers, have been studied previously by researchers. In this study we use proprietary data on nearly 300,000 initial salary offers from thousands of employers to job candidates in the U.S. from 2017 to 2020.

We propose a view of conglomerates that is at odds with what was seen in the implementation of highly unrelated diversification strategies pursued in the 1960s. Many of their differences emanated from development of the Internet’s enhanced computing power which facilitated greater controls as well as significant scalability.

An idea is a collection of existing concepts or words. What makes an idea original or appealing is how these concepts or words are combined in the context in which they appear. Similarly, a food recipe is a combination of ingredients, and it is often evaluated based on how these ingredients fit together to form the whole. In this research, we leverage representation learning methods, specifically word embeddings, to measure the fit among ingredients in the recipe and capture the possibly complex interactions between these ingredients.

While setting explicit goals often boosts performance, we identify a novel way in which setting a goal can backfire. In 13 studies and four supplemental studies, using both incentive-compatible and hypothetical designs across a range of consumer domains, we demonstrate that setting an explicit goal and making progress towards it decreases the likelihood that people subsequently switch to alternative means of pursuit. This occurs because means are perceived to be more effective relative to alternatives if they have been used to progress towards a clear reference point.