We study the role of public risk-sharing in markets where firms face substantial cost uncertainty, focusing on public reinsurance in health insurance. We develop a model where insurers internalize cost uncertainty through risk charges that raise effective marginal costs and create a role for reinsurance. Public reinsurance lowers both expected costs and cost volatility, particularly for smaller insurers, reducing prices and enhancing competition. Using an event study of staggered state-level reinsurance programs, we show that public reinsurance leads insurers to lower prices and private reinsurance purchases, benefiting financially constrained insurers the most. Structural estimates indicate that risk charges account for a substantial share of the premium-cost wedge and highlight public reinsurance’s comparative advantage over premium subsidies by providing risk protection and enhancing competition. Our results underscore the importance of accounting for firms’ risk exposure in policy design and provide a general framework for understanding public risk-sharing policies.

In the Australian real estate market, about a third of properties are sold at auction. Properties that fail auctions sell later for a 1.3 percent discount. Consistent with a causal channel, the effect holds with property-level fixed effects and when auction failure is instrumented by adverse weather or seller overvaluation. Prices cluster below round numbers, and the discount fades over time, inconsistent with our effects reflecting unobserved property characteristics. The evidence suggests that there are behavioral factors affecting the valuations of buyers and sellers.

We find widespread evidence that firms avoid overtime payments by strategically assigning “managerial” titles. Exploiting the exemption threshold under the Fair Labor Standards Act (FLSA), we find managerial titles increase almost fivefold just above the overtime pay cutoff, including suspect listings, such as “Director of First Impressions” for a role equivalent to “Front-Desk Clerk.” Avoidance is higher when firms have more bargaining power and are financially constrained. It is also more common in occupations with volatile demand and unpredictable worker scheduling. Patterns align with litigation and Department of Labor enforcement. Firms avoid roughly 13.5% in compensation costs, hiring strategic “managers.”

Corporate tax avoidance is a recurring focus of policy‐makers, the media, activist groups, and researchers. This focus often centers on multinational enterprises' (MNEs) use of tax havens, with a wide body of research utilizing MNEs' tax haven use as evidence of corporate tax avoidance activities. However, the common assumption that MNEs operate in tax havens only for tax avoidance purposes overlooks the role tax havens play as homes for captive insurance entities, which allow firms to secure “self” insurance coverage but do not provide obvious differential federal tax benefits. When we remove the effect of captives on tax haven–based measures, we observe a roughly threefold increase in the magnitude of tax savings specifically associated with haven noncaptive activity. We document that nonfinancial firms' use of captive insurance occurs in approximately 11% of firm‐years and spans nearly all Fama–French 49 industries. We construct a haven captive use determinants model, with strong discriminatory power and compelling out‐of‐sample corroboration tests, that future research can employ to account for firms' use of haven captives. Our findings underscore the importance of separating captive and noncaptive‐related haven activities.

Difference-in-differences (DiD) is arguably the most popular quasi-experimental research design. Its canonical form, with two groups and two periods, is well understood. However, empirical practices can be ad hoc when researchers go beyond that simple case. This article provides an organizing framework for discussing different types of DiD designs and their associated DiD estimators. It discusses covariates, weights, handling multiple periods, and staggered treatments. The organizational framework, however, applies to other extensions of DiD methods as well.

The engagement quality review is a key component of an audit firm's quality control system. This study leverages unique data on individual engagement quality reviewers (EQRs) to examine how previous shared working experience between EQRs and engagement partners affects audit quality. While prior research suggests that within‐firm network ties between predecessor and successor partners facilitate knowledge transfer, we find that prior shared working experience between EQRs and engagement partners is associated with lower audit quality. Mechanism tests indicate that such experience is associated with a higher likelihood of regulatory enforcement actions related to deficiencies in audit procedures, insufficient evidence, and a lack of professional skepticism. We also find that such experience corresponds with higher materiality thresholds, suggesting reduced scrutiny during audit planning and execution. Additional analyses reveal that these adverse effects primarily arise when previous shared working relationships did not produce adverse outcomes, when EQRs are not audit industry leaders, and when they face lower reputational risk. These findings are especially salient given that EQRs’ previous shared working experience with engagement partners appears to weigh heavily in EQR assignments. Overall, our study provides important insights into the implications of EQR independence and the determinants of engagement quality review effectiveness.

This study examines whether mutual fund managers generate alpha through thematic investment strategies that select stocks poised to benefit from specific themes. Using textual analysis of 10-K filings, we identify stocks’ thematic exposures and construct each fund’s thematic concentration index (TCI) from its holdings. High-TCI funds significantly outperform, with a top-minus-bottom decile spread of 4.26% in annualized four-factor alpha. Managers’ thematic expertise is related to their undergraduate field of study. Outperformance arises from superior stock selection rather than theme-related timing, with an informational advantage on firm earnings, particularly in stocks exposed to themes related to managers’ undergraduate training.

We identify the distributional and quantile marginal treatment effect functions when the outcome is right-censored. Our method requires a conditionally exogenous instrument and random censoring. We propose asymptotically consistent semi-parametric estimators and valid inferential procedures for the target functions . To illustrate, we evaluate the effect of alternative sentences (fines and community service vs. no punishment) on recidivism in Brazil. Our results highlight substantial treatment effect heterogeneity: we find that people whom most judges would punish take longer to recidivate, while people who would be punished only by strict judges recidivate at an earlier date than if they were not punished.