We model dynamic financing of innovative projects where relational financiers observe entrepreneurs' experimentation and thus information they endogenously produce, before deciding on continued financing. We show that enterpreneurs' optimal information productions follow threshold strategies. Insider financiers extract little or no intermin rent even with full information monopoly, hindering efficient financing ex ante. Independent experimentation by insiders mitigate the problem, but can be either a complement or substitute to entrepreneurs' information production.
Financial markets are an environment of immense complexity and uncertainty. People make investment and business decisions based on their best guesses of future economic conditions, which compounds uncertainty.
In the US and abroad, firms operating in the same industries and same narrow markets, managing the same number of workers and the same amount of capital, can vary wildly in their output.
The main purpose of this paper is to estimate an equilibrium model of private and public school competition that can generate realistic pricing patterns for private universities in the U.S. We show that the parameters of the model are identified and can be estimated using a semi-parametric estimator given data from the NPSAS. We find substantial price discrimination within colleges. We estimate that a $10,000 increase in family income increases tuition at private schools by on average $210 to $510.
We use insurance claims data for 27.6 percent of individuals with private employer-sponsored insurance in the US between 2007 and 2011 to examine the variation in health spending and in hospitals’ transaction prices. We document the variation in hospital prices within and across geographic areas, examine how hospital prices influence the variation in health spending on the privately insured, and analyze the factors associated with hospital price variation. Four key findings emerge.
We experimentally investigate the difference in competitiveness of 3-5 year-old boys and girls in the U.S. 124 children from a preschool are randomly matched into girl-girl, boyboy, and boy-girl pairs of similar age and participate in a gender-neutral, competitive classroom activity using candy as an incentive. Children participate in a piece rate incentive scheme and a tournament incentive scheme in rounds 1 and 2, and select their preferred incentive scheme for round 3. We find that girls and boys choose to compete at equal rates – with 80% of children choosing to compete overall.