OPPORTUNISTIC MATCHING IN THE HOUSING MARKET*

We construct a model of the housing market in which agents differ in their flow values while searching. Agents enter the market relaxed (with high flow values) but move to a desperate state (low flow values) at a Poisson rate if they have not already transacted. We characterize the equilibrium steady‐state matching pattern and the joint distribution of price and time to sale (for sellers). The expected price conditional on time to sale falls with time spent on the market, whereas the conditional variance of price first rises and then falls with time on the market.     

Can Oxford heal itself?

The fast-growing HMO was hammered on Wall Street after revealing its massive computer problems. Those foul-ups are being fixed, but now comes the hard part--reclaiming the trust of stunned shareholders and outraged doctors.     

Demographic change and income inequality in the United States, 1976-1989

"The U.S. economy experienced significant increases in the degree of income inequality over the past two decades.... In this paper we consider the effects of race, age, female headship, and college education on the distribution of family income by developing a multivariate methodology that allows us to gauge the influence of one factor while holding other determinants of family incomes constant. Over the period studied we find that race had only a minor effect on the overall size distribution of income. Age had a somewhat greater effect than race. In contrast, the impact of female heads and college education were quite substantial. The multivariate estimates reveal that the effects of female heads and college education both increase the Gini to a much greater extent than the progressivity of federal income taxes decreases it. The effects of college education and female headed families on inequality have grown larger across time, while the influence of age has declined. We find that the effects of race on inequality have changed little over the 1976 to 1989 period."     

In search of a residual dividend policy

We survey 309 sample firms exhibiting behavior consistent with a residual dividend policy and their matched counterparts to learn how they set their dividend policies. The findings reveal that the sample firms are more likely than their counterparts to maintain a long-term dividend payout ratio, use long-run earnings forecasts in setting the dividend, and be unconcerned about the cost of raising external funds. Yet, firms behaving as though they follow a residual dividend policy generally do not profess to follow the policy. At best, the sample firms follow a “modified” residual policy in which they carefully manage their payout ratio and dividend trend. Although it may not be an explicit goal of such a dividend policy, consistently low free cash flow typically results.     

Feedback loops, fair value accounting and correlated investments

This paper presents and tests a model of the price dynamics that arise when investors fail to recognize the redundancy of unrealized gains and losses (“UGLs”) that are correlated with the firm’s past returns. Consistent with the predictions of our model, our experiment shows that a firm’s prices and earnings become highly volatile when correlated investment is large and correlated UGLs are made salient by comprehensive income reporting. The results suggest that including correlated UGLs in performance numbers could induce violations of weak-form efficiency that exacerbate volatility in share prices and earnings.     

Bank CEO materialism: Risk controls,culture and tail risk

We investigate how the prevalence of materialistic bank CEOs has evolved over time, and how risk management policies, non-CEO executives’ behavior and tail risk vary with CEO materialism. We document that the proportion of banks run by materialistic CEOs increased significantly from 1994 to 2004, that the strength of risk management functions is significantly lower for banks with materialistic CEOs, and that non-CEO executives in banks with materialistic CEOs insider trade more aggressively around government intervention during the financial crisis. Finally, we find that banks with materialistic CEOs have significantly more downside tail risk relative to banks with non-materialistic CEOs.     

Rookes v. Barnard and the trade union question in British politics

In the 1950s, given the scope of the Trade Disputes Act 1906 that had granted immunity against specific torts (civil wrongs) to organisers of industrial action, the courts had little role in industrial relations. Hence, the importance of the House of Lords decision in 1964 that, in threatening to strike to secure Douglas Rookes's removal from the Heathrow design office of the British Overseas Aircraft Corporation after his resignation from the union, Alfred Barnard and others had used unlawful means because a threat to break a contract of employment came within the tort of intimidation that was unprotected by the Trade Disputes Act's statutory immunities, and thus, they were liable to pay damages to Rookes. The legal arguments deployed are analysed within growing unease in the Conservative Party and among employers at the emergence of workplace union organisation and national strikes. Despite being partially neutralised by the Trade Disputes Act 1965, Rookes was a harbinger of a new judicial activism that outflanked trade unions' tort immunities by creating novel common law liabilities. This in turn laid the political basis for subsequent Conservative legislation to restrict and regulate trade unions and industrial action, a project that is ongoing.     

The Gordian Knot of Practicing Digital Transformation: Coping with Emergent Paradoxes in Ambidextrous Organizing Structures*

Despite increasing scholarly attention on digital transformation, there are only limited micro‐level insights into how incumbent firms organize and manage their digital transformation efforts on a daily basis. Through a longitudinal, exploratory qualitative case study of a large firm, this article investigates how organizational members respond to an ambidextrous organizing model designed to accelerate digital innovations. The firm relied on a hybrid model of separation and integration to organize and manage its digital transformation efforts. This study unfolds the implications and consequences of such a model at the micro‐level. By applying a paradox lens, it shows how the coping actions of organizational members affected the digital transformation. The article illustrates how the hybrid organizing model led to the emergence of three paradoxes at the organizational level (paradoxes of organizing, attention, and knowledge sharing) that organizational members had to cope with. It shows how organizational members, through their coping with these paradoxes, indirectly affected the organizing model by altering its original design; and how the management, influenced by these learnings, subsequently adapted the model to enable a better sustainability over time. Overall, the findings show and explain why organizing for digital transformation is a particularly complex and paradoxical endeavor. They also provide important insights to managers and organizational developers, helping them to become aware of possible tensions in their organizing efforts as well as of coping strategies and practices to tackle these tensions. Finally, the article suggests different paths for further research in digital transformation and digital innovation from a micro‐level perspective.