ABSTRACT We provide theory and experimental evidence consistent with an unintended, causal relation between Corporate Social Responsibility (CSR) performance and investors' estimates of fundamental value that can be attenuated by investors' explicit assessment of CSR performance. Consistent with “affect-as-information” theory from psychology, we find that investors who are exposed to, but do not explicitly assess, CSR performance derive higher fundamental value estimates in response to positive CSR performance, and lower fundamental value estimates in response to negative CSR performance. Explicit assessment of CSR performance, however, significantly diminishes this effect, indicating that the effect among investors who do not explicitly assess CSR performance is unintended; i.e., they unintentionally use their affective reactions to CSR performance in estimating fundamental value. Supplemental findings shed light on consequences of these fundamental value estimates: investors who do not explicitly assess CSR performance rely on their unintentionally influenced estimates of fundamental value to increase the price they are willing to pay to invest in the stock of a firm with positive CSR performance. Overall, our theory and findings contribute to the CSR and affect literatures in accounting by revealing the contingent nature of how and to what extent CSR performance influences investors' beliefs about firm value and the bids these investors are likely to make in equity markets. Data Availability: Contact the authors.

We study the effectiveness of pay-and-chase lawsuits and upfront regulations for combating health care fraud. Between 2003 and 2017, Medicare spent $7.7 billion on 37.5 million regularly scheduled ambulance rides for patients traveling to and from dialysis facilities even though many did not satisfy Medicare's criteria for receiving reimbursements. Using an identification strategy based on the staggered timing of regulations and lawsuits across the US, we find that adding a prior authorization requirement for ambulance reimbursements reduced spending much more than pursuing criminal and civil litigation did on their own. We find no evidence that prior authorization affected patients' health.

Views on the role played by banks in the economy have evolved greatly over the last 125 years, as have arguments on the need, as well as the best way, to regulate them. Some of the key insights in the debate have been published in the Journal of Political Economy. In what follows, we will outline the main contributions to the debate in recent years, with an emphasis on work done at the University of Chicago or published in the JPE. We want to emphasize work that has relevance today, but despite this caveat, we will probably end up doing injustice to work published long ago. We begin with a framework for organizing the theories of intermediation. We then draw out the implications for what the theories say about regulation and note that in many respects the motivation for regulation has been only loosely tied to the theory of intermediation. We close with some open questions for regulators and economists interested in banking. We do not survey the research that has followed up on work published in the JPE, nor will we attempt to provide a detailed overview of the entire academic literature on banking. For that, we refer the reader to the excellent work by Gorton and Winton (2003) and Freixas and Rochet (2008).

ABSTRACT We study managerial incentive provision under moral hazard when growth opportunities arrive stochastically and pursuing them requires a change in management. A trade‐off arises between the benefit of always having the “right” manager and the cost of incentive provision. The prospect of growth‐induced turnover limits the firm's ability to rely on deferred pay, resulting in more front‐loaded compensation. The optimal contract may insulate managers from the risk of growth‐induced dismissal after periods of good performance. The evidence for the United States broadly supports the model's predictions: Firms with better growth prospects experience higher CEO turnover and use more front‐loaded compensation.

ABSTRACT This paper examines how cultural differences influence the returns of momentum strategies. Cross‐country cultural differences are measured with an individualism index developed by Hofstede (2001) , which is related to overconfidence and self‐attribution bias. We find that individualism is positively associated with trading volume and volatility, as well as to the magnitude of momentum profits. Momentum profits are also positively related to analyst forecast dispersion, transaction costs, and the familiarity of the market to foreigners, and negatively related to firm size and volatility. However, the addition of these and other variables does not dampen the relation between individualism and momentum profits.

Hypothetical referenda have been proposed as an incentive‐compatible mechanism that can be used to obtain social valuations of environmental resources. We employ experimental methods to test the hypothesis that such referenda are indeed incentive compatible. Our results lead us to reject that hypothesis.

The thesis of this symposium, organized by James Bicksler, was that while finance theory will surely inform practitioners, it seems appropriate to pay some attention to the opposite flow: practitioners can inform theory. Contributors include a distinguished group of practitioners with extensive backgrounds in economics, and economists with extensive public policy experience: Martin Feldstein, Robert Glauber, David Mullins, and Steven Wallman. Their topics range from privatizing social security, to managing market crashes, to the regulatory agency cost problem, to regulatory constraints in a technologically advanced world.

ABSTRACT The thesis of this symposium, organized by James Bicksler, was that while finance theory will surely inform practitioners, it seems appropriate to pay some attention to the opposite flow: practitioners can inform theory. Contributors include a distinguished group of practitioners with extensive backgrounds in economics, and economists with extensive public policy experience: Martin Feldstein, Robert Glauber, David Mullins, and Steven Wallman. Their topics range from privatizing social security, to managing market crashes, to the regulatory agency cost problem, to regulatory constraints in a technologically advanced world.

Economics is characterized by well-developed predictive theories of human behavior. A wide variety of empirical tests of models based on those theories have been developed, as well as extensive and reliable data bases to test the theories. Thus, one can experiment with and simulate economic behavior. For these reasons, the conventional lecture-discussion format may be the least effective way to teach economics. Rather, the most effective teaching method may be as a laboratory science. We report here on two efforts to adapt economic instruction to a laboratory format. The purpose of adapting the lecture-laboratory format to economics is to permit a more active learning environment in which students can be meaningfully engaged by the material, with other students, and with the instructor. We report on two recent efforts to convert economics to a true, experimental, laboratory social science. The first, beginning in 1988, is a demonstration project conducted at Denison University for majors in economics. The second, beginning in 1993, is a true experiment conducted at Washington State University for all students taking introductory microand macroeconomics. I. The Demonstration Project for Economics Majors at Denison University

In a series of studies employing a variety of approaches, we have found that the potential impact of climate change on US agriculture is likely negative. Deschênes and Greenstone (2007) report dramatically different results based on regressions of agricultural profits and yields on weather variables. The divergence is explained by (1) missing and incorrect weather and climate data in their study; (2) their use of older climate change projections rather than the more recent and less optimistic projections from the Fourth Assessment Report; and (3) difficulties in their profit measure due to the confounding effects of storage.