Organizations & Markets

We consider the optimal design of mortgage-backed securities (MBS) in a dynamic setting in which a mortgage underwriter with limited liability can engage in costly hidden effort to screen borrowers and can sell loans to investors. We show that (i) the timing of payments to the underwriter is the key incentive mechanism, (ii) the maturity of the optimal contract can be short, and that (iii) bundling mortgages is efficient as it allows investors to learn about underwriter effort more quickly, an information enhancement effect.

Ichino and Moretti (2009) find that menstruation may contribute to gender gaps in absenteeism and earnings, based on evidence that absences of young female Italian bank employees follow a 28-day cycle. We find this evidence is not robust to the correction of coding errors or small changes in specification, and we find no evidence of increased female absenteeism on 28-day cycles in data on school teachers.

I investigate the contribution of pharmaceutical innovation to recent longevity growth in Germany and France. First, I examine the effect of the vintage of prescription drugs (and other variables) on the life expectancy and age-adjusted mortality rates of residents of Germany, using longitudinal, annual, state-level data during the period 2001–2007. The estimates imply that about one-third of the 1.4-year increase in German life expectancy during the period 2001–2007 was due to the replacement of older drugs by newer drugs.

This article characterizes optimal policy when a government uses indirect control toexert its authority. Wedevelopadynamicprincipal-agent model inwhich a principal (a government) delegates thepreventionof a disturbance–suchas riots, protests, terrorism, crime, or tax evasion–to an agent who has an advantage in accomplishing this task. Our setting is a standard repeated moral hazard model with two additional features. First, the principal is allowed to exert direct control by intervening with an endogenously determined intensity of force which is costly to both players.

International Financial Management seamlessly blends theory with the analysis of data, examples, and practical case situations. Overall, Bekaert and Hodrick equips future business leaders with the analytical tools they need to understand the issues, make sound international financial decisions, and manage the risks that businesses may face in today"s competitive global environment.

All data in this edition has been updated to reflect the most recent information, including coverage on the latest research, global financial crisis, and emerging markets.

Using informant reports on working professionals, we explored the role of listening in interpersonal influence and how listening may account for at least some of the relationship between personality and influence. The results extended prior work which has suggested that listening is positively related to influence for informational and relational reasons.

We provide evidence from the field that levels of discrimination are heterogeneous across contexts in which we might expect to observe bias. We explore how discrimination varies in its extent and source through an audit study including over 6,500 professors at top U.S. universities drawn from 89 disciplines and 258 institutions. Faculty in our field experiment received meeting requests from fictional prospective doctoral students who were randomly assigned identity-signaling names (Caucasian, Black, Hispanic, Indian, Chinese; male, female).