I test theories of the recent financial crisis by studying how banks’ pre-crisis investments connect to their CEOs’ beliefs. Using different proxies for beliefs, I find banks with larger housing investments and worse crisis performance had CEOs who were more optimistic ex ante. Banks with the most optimistic CEOs experienced 20 percentage points higher real estate loan growth, and 15 percentage...

Biases exist in many perceptual and cognitive functions. Since visual attention plays an important role in a wide range of perceptual and cognitive processes, any bias in the spatial distribution of attention is likely to be a significant source of perceptual and cognitive asymmetries. An attentional visual field task (AVF) requiring localization of a target among distractors was used to assess...

Humans show a rare tendency to punish norm-violators who have not harmed them directly-a behavior known as third-party punishment. Research has found that third-party punishment is subject to intergroup bias, whereby people punish members of the out-group more severely than the in-group. Although the prevalence of this behavior is well-documented, the psychological processes underlying it remai...

Allowing CEOs to hedge the risk in the compensation contracts their …rms give them has been controversial because such hedging permits the executives to undo some of the incentive e¤ects of those contracts; it also results in a divergence between the compensation …rms pay their senior executives and the compensation those executives e¤ectively receive. We analyze the personal hedging activities...

I classify CEOs as overoptimistic based on their option exercise behavior, and find that overoptimistic CEOs are more likely to pay with cash when market-wide valuations are (moderately) above their long-term trend, but not when market valuations are low. In contrast to rational CEOs, overoptimistic CEOs view their stock as overly costly and prefer cash payment, even during times of high market...

We observe many CEOs of big companies as easily as movie stars or sports players on Twitter. Why do they appear on social media and what would be the effect of their Twitter network on the corporate performance and shareholder benefit? This study explores big company CEOs on Twitter. We identify Twitterusing CEOs and examine the impact of their social media activity on the corporate performance...

Previous studies have shown that one's prior beliefs have a strong effect on perceptual decision-making and attentional processing. The present study extends these findings by investigating how individual differences in paranormal and conspiracy beliefs are related to perceptual and attentional biases. Two field studies were conducted in which visitors of a paranormal conducted a perceptual dec...