The Cost of Foreclosure Delay

We measure the cost of foreclosure delay by estimating time‐related foreclosure costs using a large national sample of residential mortgages before, during, and after the recent U.S. housing crisis. The large volume of foreclosures, coupled with an unprecedented series of government interventions in mortgage servicing practices, significantly extended foreclosure timelines during and after the crisis.  Costs were especially pronounced in judicial review states, which saw average foreclosure costs go up 15 percentage points, 24 percentage points in the highest cost state.  Cost increases of this magnitude are likely to have consequences for servicing practices and mortgage credit availability.     

The Economics of Software Development by Pair Programmers

Evidence suggests that pair programmers–two programmers working collaboratively on the same design, algorithm, code, or test–perform substantially better than the two would working alone. Improved quality, teamwork, communication, knowledge management, and morale have been among the reported benefits of pair programming. This paper presents a comparative economic evaluation that strengthens the case for pair programming. The evaluation builds on the quantitative results of an empirical study conducted at the University of Utah. The evaluation is performed by interpreting these findings in the context of two different, idealized models of value realization. In the first model, consistent with the traditional waterfall process of software development, code produced by a development team is deployed in a single increment; its value is not realized until the full project completion. In the second model, consistent with agile software development processes such as Extreme Programming, code is produced and delivered in small increments; thus its value is realized in an equally incremental fashion. Under both models, our analysis demonstrates a distinct economic advantage of pair programmers over solo programmers. Based on these preliminary results, we recommend that organizations engaged in software development consider adopting pair programming as a practice that could improve their bottom line. To be able to perform quantitative analyses, several simplifying assumptions had to be made regarding alternative models of software development, the costs and benefits associated with these models, and how these costs and benefits are recognized. The implications of these assumptions are addressed in the paper.     

Segmented financial risk tolerances within the standardised initial public offering regulatory environment of the Australian Securities Exchange

This study examines differentiated financial risk tolerance attitudes between three listing branches within the Australian Securities Exchange’s (ASX) standardised listing environment. Western Australia’s (WA) concentration of earlier-stage IPOs (51% of all ASX small, (predominately mining) initial public offerings (IPOs)) appears to reflect a localised ‘entrepreneurial’ risk attitude towards smaller, higher-risk transactions, comparative to New South Wales and Victoria . Our mixed method approach identifies that the concentration of small-cap, capital raising experiences that are (in)/formally shared through key ‘gatekeepers’, shape locally adopted funding capabilities, business processes, and risk attitudes. Underlying risk attitudes were influenced by the shared confidence in the recognition and management of risk, thereby increasing the propensity to participate in more speculative opportunities, and WA’s presumptive higher risk tolerance.     

The effect of Airbnb announcements on hotel stock prices

The sharing economy model that was developed in the last decade has a major effect on a different aspect of life. The purpose of this research is to test the effect of a sharing economy product on its competitors. Specifically, this study used the event study approach to examine how Airbnb announcements affected hotel stock prices. To accomplish this goal, we used 180 Airbnb announcements to investigate the general effect of Airbnb, and the effects according to the type of announcement and the type of audience. The findings indicate that general Airbnb announcements have a negative effect on the hotel stock prices. In addition, investors respond negatively to positive announcements but not to neutral ones. Finally, announcements targeting young people have no effect on the stock prices of hotel companies, while the effect of announcements targeting families lasts the longest. We also explored investment strategies for general investors and those with inside information. We suggest that general investors short sell the stock on the day of the news announcement. Investors with inside information should short sell the stock a few days before the day of the news announcement. In both cases, investors should close their positions a few days later depending on the type of announcement.