"Separately Measuring Home-field Advantage for Offenses & Defenses: A Panel-data Study of Constituent Channels within Collegiate American Football"
(with Sarah Marx Quintanar)
Forthcoming, Southern Economic Journal
We improve constituent-channel estimates of home-field and neutral-site advantage for collegiate American football’s top division by utilizing a richer, twelve-season dataset and by exploiting the COVID-19 pandemic as a random shock. Novel to the literature, we separately examine points scored by each team, allowing us to identify impacts on each team’s offense and defense individually. The information set provided by our model is a strict superset of that provided by the previous standard in the literature, making ours a strictly dominant modeling choice. We demonstrate this improvement theoretically and empirically. Physiologically, away-team travel distance does not impact their own score, but it increases home-team scores, consistent with the notion that defenses tire faster than offenses. There is also similar but limited evidence of this effect for neutral-site teams. Time zones may play a minor role, too. Psychologically, crowd size and density hurt away-team scores but do not impact home or neutral-site teams. The away-team effect disappears in 2020, however, indicating that the pre-2020 effect is caused by the crowd’s noise, not their mere presence. We also find that increasing stadium capacity while holding crowd size constant hurts home-team scores, highlighting the importance of considering ticket demand when considering stadium expansion. Tactically, stadium familiarity helps offenses, not defenses, while team-opponent familiarity has the opposite effect. Weather also plays a role. At median values for key variables, we find an overall home-field advantage of 4.1 points.
(Appendix A - Appendix B - Appendix C)
"Being Watched in an Investment Game Setting: Behavioral Changes when Making Risky Decisions" (Appx 1, Appx 2)
(with Z. Tingting Jia)
2020, Journal of Behavioral & Experimental Economics
We design a laboratory experiment to test for behavioral differences due to observation within a novel arena: investment games. We find that fund managers are more risk-averse when investors can observe their investment allocations. This effect is more pronounced when investors, in addition to observing the allocations, can also observe the investment outcomes. Interestingly, allowing investors to observe how their investment is allocated does not impact how much they invest. Last, when the outcome of the risky investment is public knowledge, disclosing managers' allocations leads them to return more tokens to investors and to expropriate fewer tokens for themselves at the end of the game, ceteris paribus. We discuss potential causes of these effects.
"Dividend Payments and Excess Cash: An Experimental Analysis"
(with Z. Tingting Jia)
2019, Journal of Behavioral & Experimental Economics
There is an observed positive correlation between the size of firms’ dividends and the amount of cash they keep on hand. We specify a new channel of precautionary cash holdings as related to dividend-smoothing, which predicts that increased dividends should cause firms to keep more cash on hand. In the reverse direction, theory’s predictions depend on the source of the increased cash on hand. General dividend-smoothing theory predicts that temporary increases in cash due to natural market fluctuations should not affect dividends. If the increased cash is due to a permanent increase in profitability, both the marginal benefit and the marginal cost of paying dividends also increase, and the net effect is unclear. Theory’s predictions of causality cannot be tested empirically using observed firm data, however, due to an underlying endogeneity issue. We instead turn to a laboratory experiment to determine causality. In the lab, we separately and exogenously vary each relevant variable to test each theoretical hypothesis. Increased dividends lead to increased cash on hand. One-time increases in firms’ cash on hand, representing natural market fluctuations, do not affect firms’ dividends. Increases in cash on hand due to a permanent increase in firm profitability, however, cause dividends to decrease.
"Second-Best Prioritization of Environmental Cleanups"
(with Jacob LaRiviere and Justin Roush)
2019, Environmental and Resource Economics
Yearly allocations to EPA Superfund cleanups are relatively fixed, but the EPA has significant leeway over which sites to clean within a given year. However, the EPA currently does not consider any economic criteria when ordering sites for remediation. Given the local economic benefits to cleaning, the EPA may be able to increase overall social welfare by considering certain economic criteria. We build a theoretical model that incorporates both the short-run and long-run cleanup benefits and identifies the site and location characteristics that impact welfare. We then use calibrated Monte Carlo simulations to compare 6 feasible cleanup policies and 1 infeasible best-case policy to the status quo policy. We find that the best of the feasible policies can on average improve welfare by 1.88% of the status quo policy, though the administrative costs are likely non-trivial. A similarly beneficial alternative may be to use a set of heuristics regarding site characteristics to order cleanups. In order of importance, the ranking criteria are: site cleanup cost (cheapest first), long-term economic damages from waste, areas currently in a recession, and local discount rates. Ex ante local economic stability has no significant effect. This set of heuristics sees a slightly smaller mean welfare increase (1.85%). Notably, since 3 of the 4 criteria are easily observable, this increase is nearly costless.
"Shareholder Protection and Dividend Policy: An Experimental Analysis of Agency Costs"
(with Jacob LaRiviere and William Neilson)
2018, Management Science
Two competing principal-agent models explain why firms pay dividends. The substitute model proposes that corporate insiders pay dividends to signal and build trust with outside shareholders who lack legal protection. The outcome model, in contrast, surmises that when shareholders have legal protection, they demand dividends from insiders to prevent them from expropriating corporate funds. Either way, dividends represent an agency cost paid to align the interests of shareholders and insiders. Expropriations by insiders and reduced investment by shareholders are also agency costs, but are difficult to identify with archival data. Using a laboratory experiment, we identify the impact of strengthened shareholder protection on all three types of agency costs. Dividend payout ratios are five times larger with stronger investor protection, insider expropriation ratios are twice as high, and outsider investment falls by 45%. Thus, we find evidence that strengthening shareholder protection introduces previously unidentified agency costs into the insider-investor relationship.
"Biofuel Feedstock Assessment for Selected Countries"
(with Keith L. Kline, Gbadebo A. Oladosu, Amy K. Wolfe, Robert D. Perlack, and Virginia H. Dale)
2008, ORNL/TM-2007/224.
The primary purpose of this study was to replace point estimates of potential future biomass feedstock supplies with more analytically useful ‘supply curves’ for selected countries and feedstocks. Such supply curves permit more detailed analysis of feedstock variables when modeling future global biofuel markets. The study scope was focused to meet time and resource requirements. A screening process identified Argentina, Brazil, Canada, China, Colombia, India, Mexico, and the Caribbean Basin Initiative (CBI) region as likely to be important players in future feedstock supply based on a number of criteria including proximity to the United States, current feedstock production and participation in global markets. Future feedstocks are divided into two groups: traditional crops that can be converted to biofuel and cellulosic materials such as crop and forest residues. Crop feedstocks selected for study were sugarcane, corn, wheat, soybeans, and palm oil. The total production of these crops in the countries studied as a percentage of global non-U.S. production in 2006 is presented in Table ES-1. Selected countries represent the majority of non-U.S. supplies of sugarcane, soybeans and corn, 27% of wheat, and just a small fraction (3%) of global palm oil production.