Working Papers

These papers are working drafts of research which often appear in final form in academic journals. The published versions may differ from the working versions provided here.

Anqi Li, Davin Raiha, Ken Shotts
March 2020

We develop a model of electoral accountability with mainstream and alternative media. In addition to regular high- and low-competence types, the incumbent may be an aspiring autocrat who controls the mainstream media and will...

Daniel Chen, Darrell Duffie
February 19, 2020

We model a simple market setting in which fragmentation of trade of the same asset across multiple exchanges improves allocative efficiency. Fragmentation reduces the inhibiting effect of price-impact avoidance on order submission. Although fragmentation reduces...

Dirk Bergemann, Francisco Castro, Gabriel Weintraub
February 17, 2020

We compare the revenue of the optimal third-degree price discrimination policy against a uniform pricing policy. A uniform pricing policy offers the same price to all segments of the market. Our main result establishes that...

Ramesh Johari, Hannah Li, Gabriel Weintraub
February 13, 2020

We develop an analytical framework to study experimental design in two-sided platforms. In the settings we consider, customers rent listings; rented listings are occupied for some amount of time, then become available. Platforms typically use...

Benjamin Hébert, Jennifer La'O...
February 7, 2020

This paper analyzes non-fundamental volatility and efficiency in a class of large games (including e.g. linear-quadratic beauty contests) that feature strategic interaction and endogenous information acquisition. We adopt the rational inattention approach to information acquisition...

Susan Athey, Kevin Bryan, Joshua S. Gans
January 10, 2020

The allocation of decision authority by a principal to either a human agent or an artificial intelligence (AI) is examined. The principal trades off an AI’s more aligned choice with the need to motivate the...

Morris A. Cohen, Shiliang Cui, Ricardo Ernst, Hau L. Lee, Arnd Huchzermeier, Panos Kouvelis, Hau L. Lee, Hirofumi Matsuo, Marc Steuber
January 8, 2020

This paper reports on the results of a global field study conducted in 2014 and 2015 among leading manufacturers from a wide range of industries. It provides insights on managerial practices that concern production sourcing...

Anat R. Admati
January 5, 2020

A healthy and stable financial system enables efficient resource allocation and risk sharing. A reckless and distorted system, however, causes enormous harm. The cycles of boom, bust, and crisis that repeatedly plague banking and finance...

Kevin Smith, Eric C. So
January 2020

We develop a measure of how information events impact investors’ perceptions of firms’ riskiness. We derive this measure from an option-pricing model where investors anticipate an announcement containing information on the mean and variance of...

Charles M. C. Lee, Eric C. So, Charles C. Y. Wang
December 30, 2019

We introduce a parsimonious framework for choosing among alternative expected-return proxies (ERPs) when estimating treatment effects. By comparing ERPs’ measurement-error variances in the cross-section and time series, we provide new evidence on the relative performance...

Paulo Somaini
December 12, 2019

This paper provides a positive identification result for first-price procurement models with asymmetric bidders, statistically dependent private signals,
and interdependent costs. When bidders are risk neutral, the model’s payoff-relevant primitives are: (i) the joint...

Nikhil Agarwal, Itai Ashlagi, Michael Rees, Paulo Somaini, Daniel Waldinger
December 10, 2019

A transplant can improve a patient’s life while saving several hundreds of thousands of dollars in healthcare expenditures. Organs from deceased donors, like many other scarce public resources (e.g. public housing, child-care, publicly funded long-term...

Ramesh Johari, Bar Light, Gabriel Weintraub
December 4, 2019

Online platforms collect rich information about participants, and then share this information back with participants to improve market outcomes. In this paper we study the following information disclosure problem of a two-sided market: how much...

Ilya A. Strebulaev, Will Gornall
December 2, 2019

We develop a valuation model for venture capital–backed companies and apply it to 135 US unicorns, that is, private companies with reported valuations above $1 billion. We value unicorns using financial terms from legal filings...

Darrell Duffie
December 1, 2019

For globally systemically important banks (G-SIBs) with U.S. headquarters, we find large postLehman reductions in market-implied probabilities of government bailout, along with big increases in debt financing costs for these banks after controlling for insolvency...

Jung Ho Choi, Brandon Gipper, Shawn X. Shi
December 2019

Pay for non-performance is among the most prominent arguments of executive rent extraction, especially Bertrand and Mullainathan’s (2001) pay for luck. We revisit their finding over the last two decades, 1997 through 2016. Pay for...

Rebecca Lester, Lisa De Simone, Aneesh Raghunandan
November 6, 2019

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We examine the association between thousands of state and local firm-specific tax subsidies and business activity in the surrounding county, measured as the number of employees, aggregate wages, per capita employment,...

Jung Ho Choi, Brandon Gipper, Sara Malik
November 2019

We examine whether financial reporting quality influences employee turnover and wages using employer-employee matched data in the U.S. We find that low financial reporting quality is associated with high employee turnover risk, so workers demand...