NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

NBER Working Papers by Jennifer Brown

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Working Papers

December 2012Misconduct in Credence Good Markets
with Dylan B. Minor: w18608
We examine misconduct in credence good markets with price taking experts. We propose a market-level model in which price-taking experts extract surplus based on the value of their firm's brand and their own skill. We test the predictions of the model using sales complaint data for exclusive and independent insurance agents. We find that exclusive insurance agents working for large branded firms are more likely to be the subject of a justified sales complaint, relative to independent experts, despite doing substantially less business. In addition, more experienced experts attract more complaints per year.
July 2012Boarding a Sinking Ship? An Investigation of Job Applications to Distressed Firms
with David A. Matsa: w18208
We use novel data from a leading online job search platform to examine the impact of corporate distress on firms’ ability to attract job applicants. Survey responses suggest that job seekers accurately perceive firms’ financial health, as measured by the companies’ credit default swap prices. Analyzing responses to job postings by major financial firms during the recent financial crisis, we find that an increase in an employer’s distress results in fewer and lower quality applicants. These effects are particularly evident when the social safety net provides workers with weak protection against unemployment and for positions requiring advanced training.
December 2011Selecting the Best? Spillover and Shadows in Elimination Tournaments
with Dylan B. Minor: w17639
We consider how past, current, and future competition within an elimination tournament affect the probability that the stronger player wins. We present a two-stage model that yields the following main results: (1) a shadow effect—the stronger the expected future competitor, the lower the probability that the stronger player wins in the current stage and (2) an effort spillover effect—previous effort reduces the probability that the stronger player wins in the current stage. We test our theory predictions using data from high-stakes tournaments. Empirical results suggest that shadow and spillover effects influence match outcomes and have been already been priced into betting markets.

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