We review research that measures time preferences-i.e., preferences over intertemporal tradeoffs. We distinguish between studies using financial flows, which we call "money earlier or later" (MEL) decisions and studies that use time-dated consumption/effort. Under different structural models, we show how to translate what MEL experiments directly measure (required rates of return for financial flows) into a discount function over utils. We summarize empirical regularities found in MEL studies and the predictive power of those studies. We explain why MEL choices are driven in part by some factors that are distinct from underlying time preferences.

One of the largest bodies of literature in the field of industrial organization is devoted to the interpretation and testing of several hypotheses advanced by Joseph Schumpeter (1950) concerning innovation and industrial market structure. One set of hypotheses focuses on the role of firm size as a determinant of R&D spending and the rate of technological advance. Another set focuses on the effect of market concentration on R&D and technological advance. In this paper, we reexamine the latter set of hypotheses at the industry level, using new data on R&D appropriability and technological opportunity collected by Levin et al. (1984) in a survey of R&D executives in 130 industries.

We demonstrate that legislation has a simple, yet previously undetected, impact on stock prices. Exploiting the voting record of legislators whose constituents are the affected industries, we show that the votes of these “interested” legislators capture important information seemingly ignored by the market. A long-short portfolio based on these legislators' views earns abnormal returns of over 90 basis points per month following the passage of legislation. Industries that we classify as beneficiaries of legislation experience significantly more positive earnings surprises and positive analyst revisions in the months following passage of the bill, as well as significantly higher future sales and profitability. We show that the more complex the legislation, the more difficulty the market has in assessing the impact of these bills. Further, the more concentrated the legislator's interest in the industry, the more informative are her votes for future returns.

AFA Meetings in Chicago for helpful comments and suggestions. We are grateful for funding from the We demonstrate that a firm’s ability to innovate is predictable, persistent, and relatively simple to compute, and yet the stock market ignores the implications of past successes when valuing future innovation. We show that two firms that invest the exact same in research and development (R&D) can have quite divergent, but predictably divergent, future paths. Our approach is based on the simple premise that while future outcomes associated with R&D investment are uncertain, the past track records of firms may give insight into their potential for future success. We show that a long-short portfolio strategy that takes advantage of the information in past track records earns abnormal returns of roughly 11 percent per year. Importantly, these past track records also predict divergent future real outcomes in patents, patent citations, and new product innovations. Firms engage in a variety of activities. Some of these activities are straightforward, and easy to assess how they will impact firm value (e.g., maintenance capital expenditures). However, some of these activities, while crucially important for the discounted value of a

How do consumer credit markets affect the allocation of workers to firms, output, and labour productivity? We address this question in two steps. First, we use new micro-data to estimate empirical elasticities of job search patterns to credit. Second, we estimate our novel theory of sorting under risk aversion to match these elasticities, and then we conduct aggregate counterfactuals. Empirically, we show that an increase in credit limits worth 10% of prior annual earnings allows individuals to take 0.33 weeks longer to find a job. Conditional on finding a job, they earn 1.85% more and work at higher paying firms. We also find that young and high-utilization individuals are more responsive to credit. Theoretically, we integrate risk aversion and borrowing into a model with worker and firm heterogeneity. We estimate the model to match our new empirical elasticities, and we then measure how the credit expansion from 1964 to 2004 affected sorting and output. Sorting improves as credit expands since constrained workers—in particular constrained, young, high human capital workers—find more capital-intensive jobs.

This research contributes to the scarce but growing literature on women angel investors. More specifically, leveraging stereotype threat theory, we investigate the role played by the social environment in shaping investing behavior across genders. This study offers a comparison between female angels from a stereotype-threat–free environment and (a) male angels, and (b) female angel investors investing in a strongly male-dominated environment. Using proprietary survey data of 96 business angels, our findings confirm that the social context plays an important role in explaining female investment behavior and involvement in BA-group activities. We find that women in a female-only group do not feature investment behavior that differs significantly from men. Whereas women who invest as a minority in a male-dominated environment tend to behave differently. Investment experience, however, moderates the influence of male-dominated environments on female investment behavior. The study confirms earlier exploratory findings related to the role of stereotype threat in female business angel activity at the individual level. Contributing to stereotype threat theory and gender studies in the business angel literature, our findings suggest that the historically marginal contribution of women is a result of the social construction of their role in the finance industry, in which stereotype threats may be particularly prevalent, rather than of supposedly innate features of gender.