The British government's Nudge Unit, which uses insights from behavioural psychology and economics (see Nudge website for further details) to improve public policy, has been partially privatised (story here). Employees now own one third, the government owns one third, and Nesta, a charity set up to stimulate innovation, owns the other third. It seems that demand for the Nudge Unit's services from foreign governments and non-government institutions has been one of the reasons for this move. Another reason could be that this new ownership structure is applying some of the insights of behavioural economics in terms of incentivising employees of the unit. The Nudge Unit has been nudged!
Daron Acemoglu, Simon Johnson, Amir Kermani, James Kwak and Todd Mitton have written a paper on whether firms connected to Timothy Geithner benefited from these connections. They do so by looking at how stocks of these firms reacted to the announcement that he was a nominee for Treasury Secretary in November 2008. They find that there were large abnormal returns for connected firms. Below is the paper's abstract and the full paper is available here . The announcement of Timothy Geithner as nominee for Treasury Secretary in November 2008 produced a cumulative abnormal return for financial firms with which he had a connection. This return was about 6% after the first full day of trading and about 12% after ten trading days. There were subsequently abnormal negative returns for connected firms when news broke that Geithner's confirmation might be derailed by tax issues. Excess returns for connected firms may reflect the perceived impact of relying on the advice of a small ne...