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We construct a new index of media slant that measures whether a news outlet's language is more similar to a congressional Republican or Democrat. We apply the measure to study the market forces that determine political content in the news. We estimate a model of newspaper demand that incorporates slant explicitly, estimate the slant that would be chosen if(More)
Multidivisional organizations exist primarily to coordinate the activities of their divisions. To do so efficiently, they must resolve a trade-off between coordination and adaptation: the more closely activities are synchronized across divisions, the less they can be adapted to the local conditions of each division. To the extent that division managers are(More)
Any opinions expressed here are those of the author(s) and not those of the institute. Research disseminated by IZA may include views on policy, but the institute itself takes no institutional policy positions. The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between(More)
We introduce a game of complete information with multiple principals and multiple agents. Each agent makes a decision that can affect the payoffs of all principals. Each principal offers monetary transfers to each agent conditional on the action taken by the agent. We characterize pure-strategy equilibria and we provide conditions — in terms of game(More)
It is widely recognized that active media can play a role in enhancing political competition by informing voters. However, collusion between government and media can undermine this role. We extend the political accountability model to include the presence of media outlets and the possibility that the incumbent exerts influence over them. In equilibrium, the(More)
A group of n " quacks " plays a price-competition game, facing a continuum of " patients " who recover with probability , whether or not they acquire a quack's " treatment ". If patients chose rationally, the market would be inactive. I assume, however, that patients choose according to a boundedly rational procedure, which re ‡ects " anecdo-tal "(More)
This paper builds a theory of trust based on informal contract enforcement in social networks. In our model, network connections between individuals can be used as social collateral to secure informal borrowing. We de…ne network-based trust as the highest amount one agent can borrow from another agent, and derive a reduced-form expression for this quantity(More)
Recent empirical work suggests a strong connection between the incentives money managers are o®ered and their risk-taking behavior. We develop a general model of delegated portfolio management, with the feature that the agent can control the riskiness of the portfolio. This represents a departure from the existing literature on agency theory in that moral(More)
Recent studies show that single-quarter institutional herding positively predicts short-term returns. Motivated by the theoretical herding literature, which emphasizes endogenous persistence in decisions over time, we estimate the e¤ect of multi-quarter institutional buying and selling on stock returns. Using both regression and portfolio tests, we …nd that(More)
An organization will often use a specialized technical language that is understood by its members but not by others. We develop a theory of optimal organizational languages and identify a key trade-o¤ between facilitating internal communication and encouraging communication with other organizations. " Dialects " are suboptimal: two organizations will either(More)