Publications

A study of how companies disclose their digital initiatives on earnings calls and written communications finds that more firms are using these technologies, that financial markets reward companies that disclose such initiatives, but that financial performance... View Details

2010
Chapter

The Euro as a Reserve Currency for Global Investors

By: Luis M. Viceira and Ricardo Gimeno

This article explores the demand for the euro for risk management purposes and the evidence of stock market integration in the euro area. We define a reserve currency as one that investors demand either because it helps them hedge real interest risk and inflation risk,... View Details

Keywords: Volatility; Inflation and Deflation; Capital Markets; Currency; Stocks; Financial Markets; Financing and Loans; Investment Return; Investment Portfolio; Risk Management

2007
Working Paper

Dynamics of Platform Competition: Exploring the Role of Installed Base, Platform Quality and Consumer Expectations

By: Feng Zhu and Marco Iansiti

This paper seeks to answer three questions. First, which drives the success of a platform, installed base, platform quality or consumer expectations? Second, when does a monopoly emerge in a platform-based market? Finally, when is a platform-based market socially... View Details

Keywords: Price; Network Effects; Digital Platforms; Monopoly; Quality; Competitive Advantage; Digital Platforms

17 Aug 2016
Working Paper Summaries

The Empirical Economics of Online Attention

Keywords: by Andre Boik, Shane Greenstein, and Jeffrey Prince; Media & Broadcasting

15 Oct 2012
News

Pay-as-You-Drive Insurance: Big Brother Needs a Makeover

18 Nov 2016
News

2016’s Best Things to Buy on Black Friday

November 2020
Supplement

Valuing Celgene's CVR

By: Benjamin C. Esty and Daniel Fisher

When Bristol-Myers Squibb (BMS) acquired Celgene Corporation in November 2019, Celgene shareholders received cash, BMS stock, and a contingent value right (CVRs) that would pay $9 if the U.S. Food and Drug Administration (FDA) approved three of Celgene’s late stage... View Details

Keywords: Mergers and Acquisitions; Value; Valuation; Judgments; Decision Making; Cash Flow; Financial Instruments; Cognition and Thinking; Pharmaceutical Industry; Biotechnology Industry; United States

Research Summary

Corporate Bond Pricing and Different Sources of Asset Return Volatility (with George Chacko and Jens Hilscher)

This paper presents a pricing model for defaultable bonds. Default is defined by a cash flow, not value, covenant. The cash flow (total distributions) yield is stochastic. We find that different sources of volatility, cash flow versus discount rate news, affect... View Details

April 1980
Case

Peter Green's First Day

Peter Green, a new salesperson for Scott Carpets, learns firsthand that his largest account has always been given a discount based on falsified information and expects the same preferred treatment to continue. Peter's boss condones the discount. Peter must decide... View Details

Keywords: Ethics; Rank and Position; Conflict and Resolution

2023
Working Paper

Cognitive Uncertainty in Intertemporal Choice

By: Benjamin Enke and Thomas Graeber

This paper studies the relevance of cognitive uncertainty – subjective uncertainty over one's utility-maximizing action – for understanding and predicting intertemporal choice. The main idea is that when people are cognitively noisy, such as when a decision is complex,... View Details

Keywords: Cognitive Uncertainty; Intertemporal Choice; Cognition and Thinking; Complexity; Decision Choices and Conditions

2014
Working Paper

Principals and Their Car Dealers: What Do Targets Tell About Their Relation?

By: Jan Bouwens, Eddy Cardinaels and Jingwen Zhang

In this study we describe target setting and target achievements for a car dealership. Car dealers are eligible for a discount on the purchase price conditional on their achieving the sales targets set by the franchisor. We show that car dealers (franchisees) who... View Details

Keywords: Goals and Objectives; Motivation and Incentives; Franchise Ownership; Auto Industry; Retail Industry

July 1, 2024
Article

Research: Speed Matters When Companies Respond to Social Issues

By: Alison Wood Brooks, Jimin Nam, Maya Balakrishnan and Julian De Freitas

Companies and their leaders face new pressures to make public statements about controversial and sometimes divisive social and political issues. New research shows that timing matters: consumers perceive a relationship between speed and authenticity, and discount... View Details

Keywords: Perception; Social Issues; Public Opinion; Communication Strategy

Register to Read

November 2020
Teaching Note

Valuing Celgene's CVR

By: Benjamin C. Esty and Daniel Fisher

Teaching Note for HBS Case No. 221-031. When Bristol-Myers Squibb (BMS) acquired Celgene Corporation in November 2019, Celgene shareholders received cash, BMS stock, and a contingent value right (CVRs) that would pay $9 if the U.S. Food and Drug Administration (FDA)... View Details

Keywords: Mergers and Acquisitions; Valuation; Value; Judgments; Decision Making; Cash Flow; Financial Instruments; Cognition and Thinking; Pharmaceutical Industry; Biotechnology Industry; United States

May 2006
Article

Tying Odysseus to the Mast: Evidence from a Commitment Savings Product in the Philippines

By: Nava Ashraf, Dean Karlan and Wesley Yin

We designed a commitment savings product for a Philippine bank and implemented it using a randomized control methodology. The savings product was intended for individuals who want to commit now to restrict access to their savings, and who were sophisticated enough to... View Details

Keywords: Information; Product; Philippines

January 1995 (Revised August 1997)
Background Note

Cross-Border Valuation

By: Kenneth A. Froot and W. Carl Kester

Provides a review of valuation techniques used to assess cross-border investments. Discusses the discounting of free cash flows with a weighted average cost of capital and the use of adjusted present value. Special concerns such as foreign-exchange risk, country risks,... View Details

Keywords: Valuation; Cross-Cultural and Cross-Border Issues

March 1994 (Revised June 1999)
Background Note

Real Options: Valuing Managerial Flexibility

Provides a basic understanding of real options in corporate finance. Traditional discounted cash flow techniques (NPV) do not deal well with managerial flexibility or future response to uncertainty. The value of this flexibility can be significant and is handled well... View Details

Keywords: Strategy; Capital Budgeting; Corporate Finance

June 18, 2019
Article

Research: Investors Reward Companies That Talk Up Their Digital Initiatives

By: Suraj Srinivasan and Wilbur Chen

A study of how companies disclose their digital initiatives on earnings calls and written communications finds that more firms are using these technologies, that financial markets reward companies that disclose such initiatives, but that financial performance... View Details

Keywords: Digital Technologies; Disclosure; Investment; Performance Improvement

Register to Read

June 2001 (Revised September 2010)
Exercise

Deal-crafting Toolkit

By: Michael A. Wheeler

Illustrates the potential sources of value creation as well as practical barriers to its achievement. Students analyze five brief scenarios that would yield efficient trades over valuation, discount rates, expectations, and risk tolerance, but that might be thwarted by... View Details

Keywords: Negotiation Deal; Negotiation Process; Behavior; Valuation; Value Creation