Publications

Educators

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2021
Working Paper

Housing Consumption and the Cost of Remote Work

By: Christopher Stanton and Pratyush Tiwari

This paper estimates housing choice differences between households with and without remote workers. Prior to the pandemic, the expenditure share on housing was more than seven percent higher for remote households compared to similar non-remote households in the same... View Details

Keywords: Remote Work; Geographic Mobility; Housing; Cost; Geographic Location; Income

2003
Case

What's the True Cost of Your Capital?

By: Timothy A. Luehrman

Keywords: Cost of Capital

February 1984
Article

A Monetary Equilibrium Model with Transaction Costs

By: J. J. Rotemberg

Keywords: Cost

03 Dec 2020
Research & Ideas

Cut Payroll Costs with Transparency, Fairness, and Compassion

workweeks, unpaid leave, pay freezes, elimination of bonuses, a freeze on 401(k) matching, and reduced vacation allowance. Some CEOs believe salary cuts are a way to spread the pain of reducing salary costs across a broad number of... View Details

Keywords: by Boris Groysberg and Sarah Abbott

Article

Research: The Cost of a Single U.S. Immigration Restriction

By: Dany Bahar, Prithwiraj Choudhury and Britta Glennon

On June 22, 2020, President Trump passed an Executive Order drastically cutting the number of highly skilled international workers eligible for non-immigrant visas to the U.S. To quantify the impact of this policy, the authors examined the immediate change in stock... View Details

Keywords: Work Visas; H1-B; Restriction; Impact; Immigration; Governing Rules, Regulations, and Reforms; Cost; Economy

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Article

The Cost of Capital for Alternative Investments

By: Jakub W. Jurek and Erik Stafford

Traditional risk factor models indicate that hedge funds capture pre-fee alphas of 6% to 10% per annum over the period from 1996 to 2012. At the same time, the hedge fund return series is not reliably distinguishable from the returns of mechanical S&P 500 put-writing... View Details

Keywords: Hedge Funds; Required Returns; Downside Risk; Index Options; Investment Funds; Cost of Capital; Investment Return; Risk and Uncertainty; Financial Services Industry

1999
Chapter

The Cyclical Behavior of Prices and Costs

By: Julio J. Rotemberg and Michael Woodford

Keywords: Price; Cost; Business Cycles

1986
Working Paper

Price Competition with a Distribution of Switch Costs and Reservation Prices

By: Jerry R. Green and Suzanne Scotchmer

When there is a distribution of switch costs and of reservation prices for a good, and marginal cost of producing the good is zero, equilibrium in pure price strategies may (and sometimes must) exhibit price dispersion. Equilibrium may or may not exist, and there may... View Details

Article

Sovereign Debt Buybacks Can Lower Bargaining Costs

By: J. J. Rotemberg

Keywords: Sovereign Finance; Negotiation; Cost; Borrowing and Debt

22 Jan 2014
Research & Ideas

High-Tech Immigrant Workers Don’t Cost US Jobs

are legal fees and recruiting costs for hiring immigrants, and that kind of stuff will quickly wipe out any underpayment that a firm would get off a $50,000 salary. So I don't have the belief that firms are using this to reduce the wage... View Details

Keywords: by Dina Gerdeman; Computer; Financial Services

October 1975 (Revised October 1991)
Background Note

Some Comments on Computing Prime Cost Variances

December 2015
Case

Nextel Peru: Emerging Market Cost of Capital

By: Luis M. Viceira and Joel L. Heilprin

Educators

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2016
Article

Vicarious Contagion Decreases Differentiation—and Comes with Costs

By: Ovul Sezer and Michael I. Norton

Baumeister et al. propose that individual differentiation is a crucial determinant of group success. We apply their model to processes lying in between the individual and the group—vicarious processes. We review literature in four domains—attitudes, emotions, moral... View Details

Keywords: Moral Sensibility; Behavior; Groups and Teams; Attitudes; Emotions

March 1997
Article

Transactions Costs and Capital Structure Choice: Evidence from Financially Distressed Firms

By: S. C. Gilson

This study provides evidence that transactions costs discourage debt reductions by financially distressed firms when they restructure their debt out of court. As a result, these firms remain highly leveraged and one-in-three subsequently experience financial distress.... View Details

Keywords: Cost; Capital Structure; Decision Choices and Conditions; Information; Finance; Business Ventures

May 2022
Article

Investment as the Opportunity Cost of Dividend Signaling

By: Zach Kaplan and Gerardo Pérez Cavazos

We provide evidence that firms with weak investment opportunities (those whose current earnings justify a greater valuation than firms with strong investment opportunities) signal their permanent earnings level through their dividends. In the cross-section, we show... View Details

Keywords: Dividends; Earnings; Investment Opportunities; Payout Policy; Signaling; Capital Structure; Business Earnings; Investment; Opportunities