Andrea Prat (joint with Amil Dasgupta) ''Information aggregation in financial markets with career concerns'', forthcoming in JET

A paper by Andrea Prat (joint with Amil Dasgupta) Information aggregation in financial markets with career concerns, is forthcoming in the Journal of Economic Theory.

Abstract: What are the equilibrium features of a dynamic financial market in which traders care about their reputation for ability? The authors modify a standard sequential trading model to include traders with career concerns. They show that this market cannot be informationally efficient: there is no equilibrium in which prices converge to the true value, even after an infinite sequence of trades. They characterize the most revealing equilibrium of this game and show that an increase in the strength of the traders’ reputational concerns has a negative effect on the extent of information that can be revealed in equilibrium but a positive effect on market liquidity.

Oriana Bandiera (joint with Iwan Barankay and Imran Rasul) ''Social Capital in the Workplace: Evidence on its Formation and Consequences''

A paper by Oriana Bandiera (joint with Iwan Barankay and Imran Rasul) "Social Capital in the Workplace: Evidence on its Formation and Consequences" is forthcoming in Labour Economics.

Abstract: The existence of social ties between co-workers affect many aspects of firm and worker behavior, such as how workers respond to a given set of incentives, the optimal compensation structures for workers at different tiers of the firm hierarchy, and the optimal organizational design for the firm. This paper presents evidence on the social capital in one particular firm, as embodied in the friendship ties among its workers. The authors describe the structure of the friendship network as a whole and present evidence on the determinants of social ties. Finally, they review evidence from a field experiment they conducted in the firm to highlight one particular mechanism through which social capital significantly affects worker performance.