Publications

Executive control of the judiciary: the appointment power in Russia
Journal of Law, Economics and Organisation, 2016, 32(3)

Judicial institutions and firms' external finance: evidence from Russia 
Lead article
Journal of Law, Economics and Organisation, 2013, 29(4) 
Honourable mention in Russia’s National Award in Applied Economics 2016

Distributive politics and electoral incentives: Evidence from Seven US State Legislatures
with Toke Aidt
Lead article
American Economic Journal: Economic Policy, 2012, 4(3) 

                   Reply to Per Pettersson-Lidbom

The new political economy of Russia
with Eric Berglöf, Andrei Kunov and Ksenia Yudaeva
Cambridge: MIT Press, 2003


Work in progress

I am currently working on a project where we analyse data on managers in a large chain of food and drink stores in order to shed light on some fundamental questions about human behaviour. Somewhat uniquely, we are able to combine observational data on managerial performance at the firm with the data on characteristics and behaviours of these managers we collected through laboratory experiments with them. This work is generously supported by the Keynes Fund.

 

Incentives and rank concerns in managerial tournaments, 2017

When firms use relative performance pay in which they rank employees, an employee’s behaviour may respond to the rank they get. What is the relative importance of rank effects compared to monetary incentives? What is the direction of rank effects? Arguably, a bad rank may generate desire to catch up, or it may discourage further effort.

In this paper we address these questions by analysing store managers in a large firm where the bonus is determined through a high powered tournament. We study managers’ response to feedback about their rank. In this tourna- ment, the bonus is a step function of rank, and so marginal incentives and rank have a non-monotonic relationship, allowing us to separate the impact of incentives from that of rank on behaviour of managers.

First, we find that managers ignore marginal incentives, but respond to rank. Second, their response suggests desire to catch up: when managers get a bad rank on either profit or service, they respond by improving performance. This response is monotonic in rank. Importantly, we show that managers achieve these improvements by making corresponding changes to labour and production, the key input variables directly under their control.

 

Persistent Overconfidence and Biased Memory: Evidence from Managers, 2017

with David Huffman, and Collin Raymond

We provide evidence of persistent overconfidence among managers in a firm, who face a high-powered tournament incentive scheme, and have very detailed feedback as well as substantial experience. This raises a question about the mechanisms by which the managers sustain overconfident believes and avoid drawing correct, if disappointing, conclusions from the substantial information they receive.  We show that memory plays a key role:  managers who are overconfident prop up their self-image by selectively forgetting unfavourable performance outcomes from the past.