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• Article | Journal of Finance | June 2020

  Lazy Prices

  Lauren Cohen, Christopher J. Malloy and Quoc Nguyen

  We explore the implications of a subtle "default" choice that firms make in their regular reporting practices, namely that firms typically repeat what they most recently reported. Using the complete history of regular quarterly and annual filings by U.S. corporations from 1995 to 2014, we show that when firms make an active change in their reporting practices, this conveys an important signal about the firm. Changes to the language and construction of financial reports have strong implications for firms' future returns: a portfolio that shorts "changers" and buys "non-changers" earns up to 188 basis points per month (over 22% per year) in abnormal returns in the future. These reporting changes are concentrated in the management discussion (MD&A) section. Changes in language referring to the executive (CEO and CFO) team, or regarding litigation, are especially informative for future returns.

  Keywords: information; default behavior; inertia; firms; annual reports; disclosure; Information; Business or Company Management; Behavior; Corporate Disclosure; Financial Reporting; United States;

  Citation:

  Cohen, Lauren, Christopher J. Malloy, and Quoc Nguyen. "Lazy Prices." Journal of Finance 75, no. 3 (June 2020): 1371–1415. (Winner of the First Prize, Chicago Quantitative Alliance Academic Paper Competition, 2016. Winner of the Jack Treynor Prize for superior work in the field of investment management and financial markets, sponsored by the Q-Group,The Institute for Quantitative Research in Finance, 2016. Winner of the Hillcrest Behavioral Finance Prize, 2016.)  View Details

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• Article | Bloomberg Opinion

  How to End the Plasma Shortage for Coronavirus Patients

  Scott Duke Kominers

  Those who have recovered from the virus will donate more blood if given the right incentives.

  Citation:

  Kominers, Scott Duke. "How to End the Plasma Shortage for Coronavirus Patients." Bloomberg Opinion (May 11, 2020).  View Details

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• Working Paper | HBS Working Paper Series | 2020

  Paying It Backward and Forward: Expanding Access to Convalescent Plasma Therapy Through Market Design

  Scott Duke Kominers, Parag A. Pathak, Tayfun Sönmez and M. Utku Ünver

  COVID-19 convalescent plasma (CCP) therapy is currently a leading treatment for COVID-19. At present, there is a shortage of CCP relative to demand. We develop and analyze a model of centralized CCP allocation that incorporates both donation and distribution. In order to increase CCP supply, we introduce a mechanism that utilizes two incentive schemes, respectively based on principles of “paying it backward" and “paying it forward." Under the first scheme, CCP donors obtain treatment vouchers that can be transferred to patients of their choosing. Under the latter scheme, patients obtain priority for CCP therapy in exchange for a future pledge to donate CCP if possible. We show that in steady-state, both principles generally increase overall treatment rates for all patients—not just those who are voucher-prioritized or pledged to donate. Our results also hold under certain conditions if a fraction of CCP is reserved for patients who participate in clinical trials. Finally, we examine the implications of pooling blood types on the efficiency and equity of CCP distribution.

  Keywords: COVID-19; convalescent plasma; vouchers; Health Pandemics; Health Care and Treatment; Resource Allocation; Market Design;

  Citation:

  Kominers, Scott Duke, Parag A. Pathak, Tayfun Sönmez, and M. Utku Ünver. "Paying It Backward and Forward: Expanding Access to Convalescent Plasma Therapy Through Market Design." Harvard Business School Working Paper, No. 20-116, May 2020.  View Details

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