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UNDER CONSTRUCTION
Intangible Capital, Theory & Structural Estimation
The goal is to increase your ability to ground your research in powerful economic storytelling that frames convincing explanations of important phenomenon, and that increases both the probability of publication and the impact of your empirical paper
The PhD program provides you with an incredible opportunity to consume knowledge before the demands of production fully fall on you. The knowledge foundation that you build here is the fuel that will power you through the publishing demands of an uncompromising tenure clock. It is your life, so I will leave it up to you to decide how aggressively to pursue foundational knowledge. The final exam for this course is your thesis paper, your long run research impact and your academic career.
I expect you to come to class prepared to participate in class discussions having carefully read and thought about the assigned papers. All students will be expected to present one or two papers. Papers marked in green are available for student presentations. A typical presentation will run 30-40 minutes in total. Assume the audience has read the paper. You should consider the following questions in preparing your presentation (and non-presenters in preparing for class discussions):
What is the research question and why is it important?
What is the theoretical framework, if any, that is used to motivate the research question and hypotheses?
What are the main concerns, limitations, and weaknesses? How does the paper’s empirical methods attempt to mitigate these?
How well is the research design tied to the research question? How accurately do the empirical proxies capture the underlying economic constructs of interest? To what extent is the research design capable of distinguishing between alternative hypotheses?
What are the main results? How do the authors interpret them? How do you interpret them?
While I don't want you to overinvest in preparing slides, the ability to powerfully organize a set of ideas in PowerPoint form will be crucial to your long run success. You should also use these presentations to develop your presentation skills and to begin discovering your natural presentation style.
Session Details
Optional Background Reading
Hayek, F. 1945. The use of knowledge in society. American Economic Review 35, 519-530. (A classic article every student of markets should read).
Making Sense of Chaos: A Better Economics for a Better World, 2024, J. Doyne Farmer. Doyne is a pioneer in the field of complexity science and chaos theory. In this book he argues that agent-based models are a powerful alternative to classical financial economics. For those who want an excellent and unique overview of modern financial economics and its limitations check out chapters 5-11. These chapters are not highly technical, but are very insightful and interesting. I have been listening to them in audio book form and referring to the book as needed. For background on agent-based modeling see:
Agent-Based Modeling in Economics and Finance: Past, Present, and Future. Robert L. Axtell and J. Doyne Farmer. Forthcoming in the Journal of Economic Literature.
Introduction to Agent-Based Modeling. Hosted by Complexity Explorer, The Santa Fe Institute.
Isaac Newton vs. Las Vegas: How Physicists Used Science To Beat The Odds At Roulette, 2017 Forbes. Farmer builds a builds a computer that fits in his shoe to beat the Roulette Wheel in Las Vegas.
The Beginning of Infinity: Explanations That Transform the World, by David Deutsch. Are humans just a chemical scum on the surface of a typical planet in orbit round a typical star on the outskirts of a typical galaxy...? Not according to David Deutsch! This is a brilliant and inspiring book about the nature of knowledge, how we acquire it, and the central role of explanation in creating new knowledge. David argues that all progress, both theoretical and practical, has resulted from a single human activity: the quest for good explanations. Chris Armstrong at Stanford recommended this book to me and I in turn recommend it to you (also see The Fabric of Reality).
Session 1 Wednesday 10/29/25 12pm to 3pm
Architecture of Corporate Transparency; Shareholder vs. Stakeholder Primacy; Corporate Governance
Papers for Class Discussion (PowerPoint Slides)
I will refer to this paper but not discuss it in detail
Related Literature
Session 2 Wednesday 11/05/24 12pm to 3pm
Incentive Design and Incentive Dynamics
Papers for Class Discussion (PowerPoint Slides)
I will refer to these papers but not discuss them in detail
Related Literature
Session 3 Wednesday 11/12/25 12pm to 3pm
Executive Compensation: Cash-based bonus plans and relative performance evaluation
Papers for Class Discussion (PowerPoint Slides)
Related Literature
Session 4 Wednesday 11/19/25 12pm to 3pm
Relative Performance Evaluation, Signal Jamming
Papers for class discussion (PowerPoint slides for Stein 1989)
Related Literature
Session 5 Wednesday 11/26/25 12pm to 3pm
Disclosure and Governance; Using Theory to Motivate Empirical Research
Papers for Class Discussion
Session 6 Wednesday 12/03/25 12pm to 3pm
Information, Incomplete Contracts, Debt Contracting, Adverse Selection and the Winner's Curse
Background Reading (I will weave both of these papers into my introduction to debt contracting)
Papers for Class Discussion
Valuable Reviews of Debt Contracting Literature
Financial Contracting: A Survey of Empirical Research and Future Directions. Roberts, Michael R. and Sufi, Amir, Annual Review of Financial Economics, Vol. 1, pp. 207-226, 2009.
The Role of Information and Financial Reporting in Corporate Governance and Debt Contracting. Armstrong, Guay and Weber. Journal of Accounting and Economics, 50 (2010) 179-234. Section 5 discusses the role of financial reporting in the design of debt contracts.
Related Literature
Session 7 Wednesday 12/10/25 12pm to 3pm
Eclectic
Papers for Class Discussion.
Students choose any 3 of these 4 papers.
Other Literature
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