Research

Management Studies Offers Antitrust a More Sophisticated Picture of Firm Behavior

Neoclassical economics, which places the rational and well-informed actor maximizing utility at its foundation, underpins the dominant schools of thought on firm behavior in antitrust. Although neoclassical economics assumes that firms maximize profit, it has little to say on the actual decision-making processes within firms that drive firm conduct. In part, this is because neoclassical economists view the firm as a “black box,” whose decision-making behavior is too idiosyncratic or obscure to link to output and performance. At the same time, neoclassical assumptions about firm rationality and profit maximization mean that whatever these idiosyncratic behaviors of the individual firm may be, they are designed to maximize profit and returns to owners. Thus, firm decisions can be presumed to be rational.

Tax Audits Deter Tax Avoidance But Not Without Costs to Firm Performance and Local Economies

In new research, Ga-Young Choi and Alex Kim show that tax audits work to deter firm tax avoidance, but with unintended costs for investment and employment for the firm and the broader economy.

Do Corporate Mergers and Acquisitions Hurt Workers?

Competition authorities and analysts are increasingly focused on the impact of mergers and acquisitions on worker welfare. Using a novel dataset on Canadian firms and workers, David Arnold, Kevin Milligan, Terry S. Moon and Amirhossein Tavakoli test the empirical validity of several theories on how M&A may help or harm workers.

How Post-WWII Inflation Benefited Republican Presidential Candidates

American households accumulated a large stock of savings during World War II, much of which was held in the form of war bonds. After the war, inflationary episodes eroded the purchasing power of these bonds, contributing to a backlash against the incumbent Democrats. In new research, Gillian Brunet, Eric Hilt, and Matthew S. Jaremski study the impact of post-WWII inflation on voting outcomes using data on the sales of savings bonds during the war.

Consumer Protection Laws Need an Update To Combat Behavioral Manipulation and Safeguard Privacy in the Digital Era

In new research, Monika Leszczyńska explores how consumers’ ideas of morality should inform government agencies and courts as they seek to update and enforce consumer protection laws. The focus is on adapting these laws to address modern business practices in the digital age. These practices involve behavioral manipulation of consumers, resulting in non-monetary damages, such as the invasion of privacy.

State-Level Private Enforcement Is Much More Complicated Than Previously Thought

Most of the scholarship on private enforcement, in which individual citizens sue to enforce legal statutes, has focused on federal-level laws. In new research, Diego A. Zambrano, Neel Guha, Austin Peters, and Jeffrey Xia show how expansive and messy state-level private enforcement statutes are, and explain why previous theories on private enforcement do not explain the dynamic among the states. They conclude that research on state-level private enforcement demands much more attention than previously provided.

How the Democratic Party Lost Less-Educated Voters

In a new paper, Ilyana Kuziemko, Nicolas Longuet-Marx, and Suresh Naidu point to a shift in the Democratic Party’s economic policy, from predistribution to redistribution, as one of the reasons why it has lost less-educated voters.

Investors Should Engage With Firms They Want To Go Green, Not Divest

How can investors use capital markets to encourage emissions reductions? In new research, Matthew E. Kahn, John G. Matsusaka, and Chong Shu examine whether public pension funds are more effective in mitigating pollution when they divest from fossil fuel companies or actively engage their management.

How Trump’s Quota Policy Transformed Immigration Judging

In new research, Elise Blasingame, Christina Boyd, Roberto Carlos, and Joseph Ornstein explore how the Trump administration used a quota policy for immigration judges working under the Department of Justice's purview to influence how they adjudicated cases. The authors find the policy successfully nudged more judges to rule against immigrant plaintiffs.

Setting the Record Straight on Historical Industrial Policy

While governments have forged ahead with various industrial policies in areas such as clean energy and semiconductors, we still have much to learn about the historical efficacy of such interventions. Réka Juhász and Claudia Steinwender evaluate the growing literature on nineteenth century industrial policy and possible paths for future research.

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