Faculty and Staff

This article develops a welfare theoretic framework for interpreting evidence on the impacts of public programs on housing markets. We extend Rosen's hedonic model to explain how housing prices capitalize exogenous shocks to public goods and externalities. The model predicts that trading between heterogeneous buyers and sellers will drive a wedge between these “capitalization effects” and welfare changes. We test this hypothesis in the context of changes in measures of school quality in five metropolitan areas. Results from boundary discontinuity designs suggest that capitalization effects understate parents’ willingness to pay for public school improvements by as much as 75%.

Increasing levels of financial inequality prompt questions about the relationship between income and well-being. Using a twins sample from the Survey of Midlife Development in the U. S. and controlling for personality as core self-evaluations (CSE), we found that men, but not women, had higher subjective financial well-being (SFWB) when they had higher incomes. This relationship was due to ‘unshared environmental’ factors rather than genes, suggesting that the effect of income on SFWB is driven by unique experiences among men. Further, for women and men, we found that CSE influenced income and SFWB, and that both genetic and environmental factors explained this relationship. Given the relatively small and male-specific relationship between income and SFWB, and the determination of both income and SFWB by personality, we propose that policy makers focus on malleable factors beyond merely income in order to increase SFWB, including financial education and building self-regulatory capacity.

The debate about representation in the brain and the nature of the cognitive system has been going on for decades now. This paper examines the neurophysiological evidence, primarily from single cell recordings, to get a better perspective on both the issues. After an initial review of some basic concepts, the paper reviews the data from single cell recordings – in cortical columns and of category-selective and multisensory neurons. In neuroscience, columns in the neocortex (cortical columns) are understood to be a basic functional/computational unit. The paper reviews the fundamental discoveries about the columnar organization and finds that it reveals a massively parallel search mechanism. This columnar organization could be the most extensive neurophysiological evidence for the widespread use of localist representation in the brain. The paper also reviews studies of category-selective cells. The evidence for category-selective cells reveals that localist representation is also used to encode complex abstract concepts at the highest levels of processing in the brain. A third major issue is the nature of the cognitive system in the brain and whether there is a form that is purely abstract and encoded by single cells. To provide evidence for a single-cell based purely abstract cognitive system, the paper reviews some of the findings related to multisensory cells. It appears that there is widespread usage of multisensory cells in the brain in the same areas where sensory processing takes place. Plus there is evidence for abstract modality invariant cells at higher levels of cortical processing. Overall, that reveals the existence of a purely abstract cognitive system in the brain. The paper also argues that since there is no evidence for dense distributed representation and since sparse representation is actually used to encode memories, there is actually no evidence for distributed representation in the brain. Overall, it appears that, at an abstract level, the brain is a massively parallel, distributed computing system that is symbolic. The paper also explains how grounded cognition and other theories of the brain are fully compatible with localist representation and a purely abstract cognitive system.

This paper studies an infinite-horizon repeated moral hazard problem where a single principal employs several agents. We assume that the principal cannot observe the agents' effort choices; however, agents can observe each other and can be contractually required to make observation reports to the principal. Observation reports, if truthful, can serve as a monitoring instrument to discipline the agents. However, reports are cheap talk so that it is also possible for agents to collude, i.e., where they shirk, earn rents, and report otherwise to the principal. The main result of the paper constructs a class of collusion-proof contracts with two properties. First, equilibrium payoffs to both the principal and the agents approach their first-best benchmarks as the discount factor tends to unity. These payoff bounds apply to all subgame perfect equilibria in the game induced by the contract. Second, while equilibria themselves depend on the discount factor, the contract that induces these equilibria is independent of the discount factor.

This paper traces the history of mortgage law in the United States. I explore the history of foreclosure procedures, redemption periods, restrictions on deficiency judgments, and foreclosure moratoria. The historical record shows that the most enduring aspects of mortgage law stem from case law rather than statute. In particular, the ability of creditors to foreclose nonjudicially is determined very early in states’ histories, usually before the Civil War, and usually in case law. In contrast, the aspects of mortgage law developed through statute change more frequently. This finding calls into question whether common law is inherently more flexible than the civil-law system used in some other countries. However, case law tends to be less responsive to populist pressures than statutes. My findings suggest that the reason common law favors financial development is unlikely to be its greater flexibility relative to law made by statute.

Persistent economic pressures in today's business landscape require organizations to be constantly vigilant about managing costs. Reducing headcount is one common but often controversial form of cost cutting. Recently Hewlett-Packard announced that it would be cutting an additional 11,000-16,000 jobs on top of an original plan to let as many as 34,000 workers go as part of a business restructuring and turnaround strategy. Chief Executive Officer (CEO) Meg Whitman said major shifts that are transforming how technology is paid for and consumed pose major challenges for HP, along with its competitors. To be successful in this new reality, she emphasized that HP needs to be lower-cost and more nimble. This is just one of a long list of examples of significant corporate workforce reductions in the face of mounting financial and competitive challenges faced by businesses across many industries.

As our discipline has matured, we have begun to develop theories of supply chain management. However, we submit that a major omission of theory development in the supply chain management discipline is that we have failed to develop a theory of what we are managing - a theory of the supply chain. Using a conceptual theory building approach, we introduce foundational premises about the structure and boundary of the supply chain, which can serve as the basis for much needed, additional development of the theory of the supply chain.

Land surface energy balance in a built environment is widely modelled using urban canopy models with representation of building arrays as big street canyons. Modification of this simplified geometric representation, however, leads to challenging numerical difficulties in improving physical parameterization schemes that are deterministic in nature. In this paper, we develop a stochastic algorithm to estimate view factors between canyon facets in the presence of shade trees based on Monte Carlo simulation, where an analytical formulation is inhibited by the complex geometry. The model is validated against analytical solutions of benchmark radiative problems as well as field measurements in real street canyons. In conjunction with the matrix method resolving infinite number of reflections, the proposed model is capable of predicting the radiative exchange inside the street canyon with good accuracy. Modeling of transient evolution of thermal filed inside the street canyon using the proposed method demonstrate the potential of shade trees in mitigating canyon surface temperatures as well as saving of building energy use. This new numerical framework also deepens our insight into the fundamental physics of radiative heat transfer and surface energy balance for urban climate modeling.

Studies on urban heat island (UHI) have been more than a century after the phenomenon was first discovered in the early 1800s. UHI emerges as the source of many urban environmental problems and exacerbates the living environment in cities. Under the challenges of increasing urbanization and future climate changes, there is a pressing need for sustainable adaptation/mitigation strategies for UHI effects, one popular option being the use of reflective materials. While it is introduced as an effective method to reduce temperature and energy consumption in cities, its impacts on environmental sustainability and large-scale non-local effect are inadequately explored. This paper provides a synthetic overview of potential environmental impacts of reflective materials at a variety of scales, ranging from energy load on a single building to regional hydroclimate. The review shows that mitigation potential of reflective materials depends on a set of factors, including building characteristics, urban environment, meteorological and geographical conditions, to name a few. Precaution needs to be exercised by city planners and policy makers for large-scale deployment of reflective materials before their environmental impacts, especially on regional hydroclimates, are better understood. In general, it is recommended that optimal strategy for UHI needs to be determined on a city-by-city basis, rather than adopting a “one-solution-fits-all” strategy.

Information systems research is replete with examples of the importance of business processes defining IT adoption. Business processes are influenced by both organizational and operational concerns. We evaluate the comparative importance of operational and organizational influences for complementary IT systems. In the context of acute-care hospitals the analysis shows that an organizational approach to automating a process is related to different financial outcomes than an operational approach. Six complementary systems supporting a three-stage medication management process are studied: prescribing, dispensing, and administration. The analysis uses firm-level, panel data extracted from the HIMSS Analytics database spanning ten years of IT adoption for 140 hospitals. We have augmented the HIMSS dataset with matching demographic and financial details from the American Hospital Association and the Centers for Medicare and Medicaid Services. Using event sequence analysis we explore whether organizations are more likely to adopt organization boundary spanning systems and if the sequence of adoption follows the temporal ordering of the business process steps. The research also investigates if there is a relationship between the paths to IT adoption and financial performance. Comparison of the two measures suggests that the organizational model of adoption is observed more often in the data. Following the organizational model of adoption is associated with approximately $155 dollar increase in net income per patient day; whereas the operational model of adoption is associated with approximately $225 dollars decrease in net income per patient day. However, this effect diminishes with the adoption of each additional system thus demonstrating that the adoption path effects may only be relevant in the short-term.