This paper investigates the market reaction to short sales on an intraday basis in a market setting where short sales are transparent immediately following execution. We find a mean reassessment of stock value following short sales of up to −0.20 percent with adverse information impounded within fifteen minutes or twenty trades. Short sales executed near the end of the financial year and those related to arbitrage and hedging activities are associated with a smaller price reaction; trades near information events precipitate larger price reactions. The evidence is generally weaker for short sales executed using limit orders relative to market orders.

Would people choose what they think would maximize their subjective well-being (SWB)? We present survey respondents with hypothetical scenarios and elicit both choice and predicted SWB rankings of two alternatives. While choice and predicted SWB rankings usually coincide in our data, we find systematic reversals. We identify factors-such as predicted sense of purpose, control over one's life, family happiness, and social status-that help explain hypothetical choice controlling for predicted SWB. We explore how our findings vary by SWB measure and by scenario. Our results have implications regarding the use of SWB survey questions as a proxy for utility.

ABSTRACT This study examines whether politicians exhibit hometown favoritism in assigning preferential corporate income tax rates. We find that firms with hometown connections to incumbent provincial leaders experience favorable tax treatment. This effect is more pronounced when those leaders have strong hometown preferences and weaker when they have a strong incentive to seek promotion, suggesting that social incentives are the primary drivers of the effects on corporate tax benefits of hometown favoritism by politicians. Moreover, this effect is intensified when members of senior management have personal connections with the provincial leader. The mechanism test reveals that the provincial governments tend to qualify connected firms for preferential tax policies under their jurisdictions. Overall, our results suggest that hometown favoritism by politicians promotes tax benefits for business entities. Data Availability: Data are available from the public sources cited in the text. JEL Classification: H26; H71; M48.

ABSTRACT This paper investigates the performance of option investments across different stocks by computing monthly returns on at‐the‐money straddles on individual equities. We find that options with high historical returns continue to significantly outperform options with low historical returns over horizons ranging from 6 to 36 months. This phenomenon is robust to including out‐of‐the‐money options or delta‐hedging the returns. Unlike stock momentum, option return continuation is not followed by long‐run reversal. Significant returns remain after factor risk adjustment and after controlling for implied volatility and other characteristics. Across stocks, trading costs are unrelated to the magnitude of momentum profits.

We study the link between market forces, cross-sectional inequality, and intergenerational mobility. Emphasizing complementarities in the production of human capital, we show that wealthy parents invest, on average, more in their offspring than poorer ones. As a result, economic status persists across generations even in a world with perfect capital markets and without differences in innate ability. In fact, under certain conditions, successive generations of the same family may cease to regress toward the mean. We also consider how short- and long-run mobility are affected by changes in the returns to human capital.

Abstract Focuses on a project by the American Accounting Association's Committees on Professional Examinations which evaluated the professional examinations for accountants. Objectives of the project; Methodology of the projects; Comparison of examinations and accounting curricula; Recommendations.

We build a bridge between relationship lending and transactions lending—investigating relationship effects on contract terms for credit cards, a relatively pure transactions-lending technology. Using more than 1 million accounts, we find that during normal times, consumers with relationships obtain better terms but small businesses with relationships do not. Both groups obtain improved terms during COVID-19, consistent with intertemporal smoothing—relationship borrowers obtain more favorable terms during crises, paid for by worse terms in normal times. Among other findings, CARES Act impediments to reporting consumer delinquencies to credit bureaus, designed to protect customers, reduced informational value of credit scores, penalizing safer consumers.

ABSTRACT We show that market‐maker balance sheet and income statement variables explain time variation in liquidity, suggesting liquidity‐supplier financing constraints matter. Using 11 years of NYSE specialist inventory positions and trading revenues, we find that aggregate market‐level and specialist firm‐level spreads widen when specialists have large positions or lose money. The effects are nonlinear and most prominent when inventories are big or trading results have been particularly poor. These sensitivities are smaller after specialist firm mergers, consistent with deep pockets easing financing constraints. Finally, compared to low volatility stocks, the liquidity of high volatility stocks is more sensitive to inventories and losses.

This paper combines panel data on monthly mortality rates of US states and daily temperature variables for over a century (1900-2004) to explore the regional evolution of the temperature-mortality relationship and documents two key findings. First, the impact of extreme heat on mortality is notably smaller in states that more frequently experience extreme heat. Second, the difference in the heat-mortality relationship between hot and cold states declined over 1900-2004, though it persisted through 2004. Continuing differences in the mortality consequences of hot days suggests that health motivated adaptation to climate change may be slow and costly around the world.