This paper examines the equilibrium consequences of strategic behavior of mutual fund managers who withhold information about their funds and their managerial ability. We show that under this information asymmetry, low skills in the industry can result in a growth of passive management. A separating equilibrium in which skilled managers actively manage funds arises only if their compensation de...

Recent research has explored the relationship between social hierarchy and empathic accuracy—the ability to accurately infer other people’s mental states. In the current research, we tested the hypothesis that, regardless of one’s personal level of status and power, simply believing that social inequality is natural and morally acceptable (e.g., endorsing social dominance orientation, or SDO) w...

We develop a stock return-predictive measure based on an efficient aggregation of the portfolio holdings of all actively managed U.S. domestic equity mutual funds, and use this model to study the source of fund managers’ stock-selection abilities. This “generalized-inverse alpha” (GIA) approach reveals differences in the ability of managers to predict firms’ future earnings from fundamental res...

Pharmacy benefit managers (PBMs) have a unique opportunity to promote health and generate value in the healthcare system. Today, PBMs are largely evaluated on their ability to control costs rather than improve health. Pharmacy benefit managers should be evaluated along 3 dimensions in which they can increase value: (1) use of cost-effective medications, (2) timely initiation of appropriate medi...

We adopt dynamic matching theory to model team formation in organizations. Workers and managers are heterogenous in quality and select each other in order to form teams. Searching for a teammate is costly. Our primary theoretical innovation is to allow agents to search while matched and separate if they find a better teammate. If one side of the market has the ability to separate, we achieve po...

There has been an explosion in the availability of data and computing ability in retail management that has led to a new desire on the part of managers to implement demand based management. Demand based management uses statistical models to predict consumer price response using historical information. These models can be used to construct pricing decision support systems for retail managers. Cu...

This is an exploratory study examining the predictors of geographic information systems (GIS) adoption among nonprofit organizations. A variety of organization, system, and environment characteristics are measured via a survey administered to 72 managers of nonprofit organizations. Comparisons are made between GIS and website adoption by these organizations. Results indicate that nonprofit mana...

This paper develops a theory of efficient short-termism—the shareholders prefer shorttermism in project choice. Unlike previous theories, managers themselves prefer long-horizon projects, whereas short-termism maximizes firm value in the second-best case with optimal output-contingent wage contracts. Short-termism benefits the firm because it limits the managerial rent extraction that occurs wi...