Peer Effects among Swimmers

We develop a novel identification strategy and examine various aspects of peer effects using swimming data. We find that the performance of adjacent competitors positively influences swimmers' performances. In particular, swimmers are influenced by slower‐lane peers, suggesting that being chased improves one's performance. We use absenteeism data to directly compare the performances of swimmers with and without peers. We have found that swimmers swim faster with peers swimming behind them than when swimming alone, but that they swim slower with peers swimming ahead. Finally, we find that observability is a key determinant of peer effects, by comparing freestyle and backstroke competitions.     

TARP’s deadbeat banks

This paper tests whether poorly capitalized banks with troubled loan books are more likely to miss their bailout dividends. Privately held banks with weaker core capital ratios, more charged off loans, more allowances for loan losses, and more non-performing loans are more likely to miss their Troubled Asset Relief Program (TARP) dividends. Banks that issue non-cumulative preferred stock are also more likely to be TARP deadbeats. In addition, banks that missed a bailout dividend in the prior quarter are significantly more likely to miss the next bailout dividend.     

Native-Born Filipina/o Americans and Labor Market Discrimination

Filipina/o Americans face significant discrimination in the US labor market. Although Filipina/o Americans face both wage discrimination and occupational discrimination, the amount varies according to combinations of factors like gender, region of residence, and level of education.     

Common (stock) sense about risk-shifting and bank bailouts

If a bank is facing insolvency, it will be tempted to reject good loans and accept bad loans so as to shift risk onto its creditors. We analyze the effectiveness of buying up toxic mortgages in troubled banks, buying preferred stock, and buying common stock. If bailing out banks deemed “too big to fail” involves buying assets at above fair market values, then these banks are encouraged ex ante to gamble on bad assets. Buying up common (preferred) stock is always the most (least) ex ante- and ex post-efficient type of capital infusion, regardless of whether the bank volunteers for the recapitalization.     

Estimating JP Morgan Chase's Profits From the Madoff Deposits

JP Morgan Chase had deposits from Bernard L. Madoff's investors totaling $5.5 billion at one point in 2008. The Chase account was supposedly where most of the funds in his Ponzi scheme were deposited. Any large deposit can be a considerable source of profit to a bank. Assuming that the deposits returned the bank's net interest margin and grew at a random geometric rate, this article estimates that JP Morgan Chase generated $435 million in after‐tax profits from this very large account over the course of 16 years. With JP Morgan Chase the target of pending lawsuits relating to the Madoff fraud, this article's methodology and results may be of interest to litigants, prosecutors, journalists, and academics.     

Appraising Unhappiness in the Wake of the Great East Japan Earthquake

Considering the case of the Great East Japan Earthquake, we use the experienced‐utility approach to appraise the psychological distress from disaster‐related news. We take advantage of the serendipitous timing of our original nationwide weekly panel survey that became a fitting resource for the investigation of subjective well‐being in the immediate aftermath of the earthquake. Although all of Japanese society was affected, we found geographical heterogeneity between the affected areas (Sendai and Tokyo) and the unaffected areas in terms of mental costs. Our finding reminds us of the focusing effect (Kahneman et al., 2006 ; Dolan and Kahneman, 2008 ) as captured by Schkade and Kahneman ( 1998 ) in the maxim “Nothing in life is quite as important as you think it is while you are thinking about it”.     

One foot in,one foot out: how does individuals' external search breadth affect innovation outcomes?

The “variance hypothesis” predicts that external search breadth leads to innovation outcomes, but people have limited attention for search and cultivating breadth consumes attention. How does individuals' search breadth affect innovation outcomes? How does individuals' allocation of attention affect the efficacy of search breadth? We matched survey data with complete patent records, to examine the search behaviors of elite boundary spanners at IBM. Surprisingly, individuals who allocated attention to people inside the firm were more innovative. Individuals with high external search breadth were more innovative only when they allocated more attention to those sources. Our research identifies limits to the “variance hypothesis” and reveals two successful approaches to innovation search: “cosmopolitans” who cultivate and attend to external people and “locals” who draw upon internal people. © 2014 The Authors. Strategic Management Journal published by John Wiley & Sons Ltd.     

The occurrence and spatial distribution of collaboration: biotech firms in Gothenburg,Sweden

This paper deals with the occurrence and spatial distribution of collaborations within biotechnology. By starting from a total population of 45 firms involved in biotech R&D, we shed light on how many collaborate with (1) other firms, (2) venture capitalists, and (3) actors in science and technology and whether these partners can be found in the region, nation or in the rest of the world. Possible explanations for the different patterns are drawn out.     

The wage effects of subsidized career breaks

This article studies how subsidized career breaks affect future labor market performance. The analysis uses a Swedish career break program where applications were accepted until local funds were exhausted. The rejected applicants serve as counterfactuals to derive estimates that are unaffected by selection or omitted variables. The estimated wage effect of a 10-month-long break is negative and in the order of 3 % 1–2 years after the interruption. The average applicant is estimated to have substantially lower returns to experience than the average worker. The results thus show that career breaks are costly, even for groups with low expected returns to experience, and in an environment with very compressed wages. The career breaks also induced an increase in job and task mobility whereas post-leave labor supply remained unaffected except for workers close to retirement.