Finance
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- 04 Sep 2018
- Working Paper Summaries
Investing Outside the Box: Evidence from Alternative Vehicles in Private Capital
Private equity vehicles that differ from the traditional structure have become a major portion of investors’ portfolios, especially over the past decade. This study identifies differences in performance across limited and general partners participating in such vehicles, as well as across the two broad classes of alternative vehicles.
- 29 Aug 2018
- Working Paper Summaries
How Much Does Your Boss Make? The Effects of Salary Comparisons
This study of more than 2,000 employees at a multibillion dollar firm explores how perceptions about peers’ and managers’ salaries affect employee behaviors and preferences for equity. Employees exhibit a high tolerance for inequality when job titles differ, which may explain why incentives are granted through promotions, and gender pay differences are most pronounced across positions.
- 20 Aug 2018
- Research & Ideas
Bargain Hunters Beware: A Store's 'Original Price' Might Not Be After All
Retailers often compare a "sale" price to the original price. Donald Ngwe says consumers should be skeptical of those original prices — and so should regulators. Open for comment; Comment(s) posted.
- 08 Aug 2018
- Sharpening Your Skills
Parmigiano-Reggiano, Jane Austen, and Other Things You Didn't Know About Finance
Why did Italian bank Credito Emiliano accept young Parmigiano-Reggiano as loan collateral? What can Jane Austen and Mel Brooks teach us about finance fundamentals? What's up with millennials and their Chase Sapphire Reserve cards? Our recent stories explain all. Open for comment; Comment(s) posted.
- 16 Jul 2018
- Working Paper Summaries
The Impact of Increasing Search Frictions on Online Shopping Behavior: Evidence from a Field Experiment
With even minor changes to the design of an online store, sellers may get more full-priced sales from price-insensitive shoppers. As shoppers spend more time on the website given higher search frictions, they may also be considering a larger set of products.
- 26 Jun 2018
- Working Paper Summaries
The Impact of Pensions and Insurance on Global Yield Curves
The global financial crisis and its aftermath had a dramatic impact on the solvency of pension funds and insurance companies. Drawing on a large cross-section of countries, this paper shows the importance of pension and insurance companies in determining the yields on long maturity bonds around the world.
- 18 Jun 2018
- Working Paper Summaries
A Measure of Risk Appetite for the Macroeconomy
This paper sheds new light on connections between financial markets and the macroeconomy. It shows that investors’ appetite for risk—revealed by common movements in the pricing of volatile securities—helps determine economic outcomes and real interest rates.
- 14 Jun 2018
- Cold Call Podcast
How Chase Sapphire Made Credit Cool for Millennials
The Chase Sapphire Reserve card was one of the hottest product launches in 2016. But what would be its next act, now that the introductory offer of 100,000 points was reduced? Shelle Santana discusses JP Morgan's strategy. Open for comment; Comment(s) posted.
- 13 Jun 2018
- Sharpening Your Skills
That Costs HOW Much?
Beyond the attributes of the product itself, price is probably the leading determinant of success in the marketplace. What does it takes to get the price right? Open for comment; Comment(s) posted.
- 30 May 2018
- Research & Ideas
Should Retailers Match Their Own Prices Online and in Stores?
For multichannel retailers, pricing strategy can be difficult to execute and confusing to shoppers. Research by Elie Ofek and colleagues offers alternative approaches to getting the price right. Open for comment; Comment(s) posted.
- 21 May 2018
- HBS Case
How Would You Price One of the World's Great Watches?
For companies with lots of innovation stuffed in their products, getting the price right is a crucial decision. Stefan Thomke discusses how watchmaker A. Lange & Söhne puts a price on its 173-year-old craftsmanship. Open for comment; Comment(s) posted.
- 07 May 2018
- Research & Ideas
Why Online Retailers Should Hide Their Best Discounts
Online retailers should take a tip from brick-and-mortar shops: Shove your best deals to the back of the store. Research by Thales Teixeira and Donald Ngwe. Open for comment; Comment(s) posted.
- 02 Apr 2018
- Research & Ideas
Is 'Gut Feel' a Good Reason to Invest in a Startup?
Most investments in startups should never be made, at least when using by-the-numbers reasoning. But funded they are. Laura Huang believes investors use gut instinct to manage that risk. Open for comment; Comment(s) posted.
- 31 Mar 2018
- Working Paper Summaries
Expected Stock Returns Worldwide: A Log-Linear Present-Value Approach
Over the last 20 years, shortcomings of classical asset-pricing models have motivated research in developing alternative methods for measuring ex ante expected stock returns. This study evaluates the main paradigms for deriving firm-level expected return proxies (ERPs) and proposes a new framework for estimating them.
- 29 Mar 2018
- Working Paper Summaries
Government Incentives and Financial Intermediaries: The Case of Chinese Sell-Side Analysts
This study is the first to examine analysts’ incentives vis-à-vis the government in a context where government has the ability and motives to influence capital market institutions. The paper highlights the role of government incentives in analysts’ behavior and output.
- 28 Mar 2018
- Research & Ideas
Sophisticated Investors May Be Harming Fintech Lending Platforms
A study by Boris Vallee and Yao Zeng says savvy investors on peer-to-peer lending platforms are upsetting a delicate balance that makes those systems work for borrowers. Open for comment; Comment(s) posted.
- 15 Mar 2018
- Working Paper Summaries
Targeted Price Controls on Supermarket Products
Governments sometimes consider targeted price controls when popular goods become less affordable. Looking at price controls in Argentina between 2007 and 2015, this study’s findings suggest that new technologies like mobile phones are allowing governments to better enforce targeted price control programs, but the impact of these policies on aggregate inflation is small and short-lived.
- 12 Mar 2018
- Op-Ed
Op-Ed: Why BlackRock CEO Larry Fink Is Not a Socialist
BlackRock CEO Larry Fink’s open letter to CEOs has reignited the “shareholders versus stakeholders” debate. Bill George says it's actually not much of a debate: mission-driven, values-centered companies perform better. Open for comment; Comment(s) posted.
- 12 Mar 2018
- Working Paper Summaries
Using Online Prices for Measuring Real Consumption Across Countries
The increasing availability of big data can improve measurement of real consumption in closer to real time. This study shows that online prices may enhance data of the International Comparisons Program, dramatically improving the frequency and transparency of purchasing power parities compared with traditional data collection methods.
IQ from IP: Simplifying Search in Portfolio Choice
Mutual fund managers solve their complex “search problem” for superior investable returns by tracking—and trading—on very particular sets of firms and insiders. These sets are chosen strategically and remain very persistent over time, as does the outperformance these insiders’ trades afford to the given fund managers.