Doctor of Philosophy, The Ohio State University, 2017, Business Administration

In this dissertation, I explore various aspects of household decision making in financial markets. In the first essay, I examine the effect of restricting payday credit to payday users. Using administrative banking data from over fifteen thousand online payday borrowers, I exploit a natural experiment surrounding a 2013 U.S. Department of Justice initiative known as Operation Choke Point (OCP) that unexpectedly shut down dozens of unlicensed online payday lenders. Using a difference in differences framework, I find a persistent reduction in payday borrowing of treated households, those with a pre-existing relationship with a lender that is shut down. Relative to control households, treated households reduce borrowing by $136 per month, reduce the number of bounced checks by 17%, and increase consumption by 3%. These effects are persistent and observable six quarters after treatment. A cross-sectional analysis reveals that the positive outcomes following restricted payday loan access are concentrated among the heaviest pre-treatment borrowers. I conclude by analyzing what types of purchases payday loans are financing and find that about half of abnormal spending occurs in predictable categories such as mortgages, car loans, and insurance. Surprisingly, I find evidence of abnormal gambling activity the week following payday borrowing. In the second essay, coauthored with Hoonsuk Park and Zahi Ben-David, we explore how sales tax influences the shopping behavior of individuals. For years, online retailers have maintained a price advantage over brick-and-mortar retailers by not collecting sales tax at the time of sale. Recently, several states have required that the online retailer Amazon collect sales tax during checkout. Using transaction-level data, we document that households living in these states reduce Amazon purchases by 9.4% after sales tax laws were implemented, implying elasticities ranging from –1.2 to –1.4. The effect is more pronounced for large purchase (open full item for complete abstract)

Committee: Stulz René (Advisor); Ben-David Itzhak (Committee Member); Sensoy Berk (Committee Member); Parker Jonathan (Committee Member) Subjects: Economics; Finance

Doctor of Philosophy, The Ohio State University, 2004, Business Administration

This dissertation studies how psychological and reputational considerations affect the behavior of individual investors and security analysts. The first essay examines investors' preference for framing their gains and losses using trading records of individual investors at a large discount brokerage firm. I find that investors tend to bundle sales of losers on the same day and separate sales of winners over different days. The result is consistent with the principles of mental accounting (Thaler (1985)), according to which individuals attain higher utility by integrating losses and segregating gains. Alternative explanations based on tax-loss selling strategies, margin calls, the number of winners and losers in a portfolio, the difference in the potential proceeds from selling winners and losers, and correlations among winners and losers in a portfolio do not fully account for the observed behavior. Logistic analyses show that investors are more likely to sell multiple stocks when they realize losses, after controlling for various factors including market and portfolio returns, overall sales activity during the day, and investor characteristics. The second essay provides a theoretical and empirical analysis of analysts' incentives to incorporate public information in their earnings forecasts. The model show that analysts may underreact to public news due to their reputational concerns, and that an analyst's incentive to underreact to public information 1) decreases with the size of unexpected news; 2) decreases with the uncertainty of earnings; 3) increases with the analyst's initial reputation; and 4) increases with how much the analyst values his/her current reputation relative to forecast accuracy. I test the implications of the model and find that analysts underreact to earnings news less when the size of unexpected earnings is large, when there is more uncertainty about the earnings, and when they have long track records. The model also implies that the strateg (open full item for complete abstract)

Committee: David Hirshleifer (Advisor) Subjects: Business Administration, General

PHD, Kent State University, 2011, College of Business and Entrepreneurship, Ambassador Crawford / Department of Management and Information Systems

Recent years have brought about tremendous growth in easily accessible investment information sources. The rapid expansion of cable news networks such as CNBC as well as the Internet blogosphere allows investors to receive around-the-clock advice, analysis, and commentary. This research suggests that investment information relayed from these sources may not always be objective analysis for the sole purpose of educating investors, but often investors are urged to act in a particular manner regarding their investment decisions, defined in this study as information activism. Information activism is intentional action stemming from formal and informal sources which provide supplemental communication intended to form and/or sway investor behavior for one or more firms or industries. Anecdotal cases as well as empirical research provide evidence that information activism affects capital markets. This study builds upon and expands empirical evidence, while examining the differential effects of two primary sources of information activism; cable news and financial blogs. In order to understand how information activism affects capital markets, key investor behavior responses, price reaction and trading volume, are examined on the days surrounding the information activism events. The theories of risk aversion (Friedman and Savage 1948) and loss aversion (Kahneman and Tversky 1979) suggest that investors may particularly rely on sources of investment information during unstable economic conditions. The financial crisis of 2008 provides a unique economic environment to examine the effects of information activism on investor behavior during divergent market conditions. Important moderating effects suggested by further relevant theories are also examined regarding investor sophistication, information asymmetry, and earnings quality. In addition to the analysis of immediate short-window responses of information activism on capital markets, a long-window reaction is also examined ov (open full item for complete abstract)

Committee: Pratim Datta PhD (Committee Chair); Alan Brandyberry PhD (Committee Member); Indrarini Laksmana PhD (Committee Member); Linda Zucca PhD (Committee Member) Subjects: Accounting