Publications

The concept of pluralistic ignorance was introduced a century ago by social psychologist, Floyd Allport. It has been broadly applied in the social sciences, including psychology, sociology, political science, and economics. Pluralistic ignorance…

Investors’ individual arbitrage models introduce idiosyncratic risk into complex asset strategies, driving up average returns and Sharpe ratios. However, despite the attractive risk-return trade-off, participation is limited. This is because…

We consider multi-agent multi-firm contracting when agents benchmark their wages to those of their peers, using weights that vary within and across firms. When a single principal commits to a public contract, optimal contracts hedge relative wage…

This paper studies whether tax policies in developed nations affect developing economies. We study firm investment responses to a major reform that reduced the corporate income tax rate for U.K.-based firms. Our identification strategy compares…

Importance Psychiatric hospitalization is the standard of care for patients presenting to an emergency department (ED) or urgent care (UC) with high suicide risk. However, the effect of hospitalization in reducing subsequent…

This paper examines financial literacy in the United States, using the 2021 National Financial Capability Study data. A large volume of papers have demonstrated the importance of financial knowledge and documented the low level of financial…

We design a battery of semantic illusions and cognitive reflection tests, aimed to elicit intuitive yet erroneous responses. We administer these tasks, traditionally used to study reasoning and decision-making in humans, to OpenAI’s generative…

We analyze non-fundamental volatility and efficiency in large games featuring strategic interaction and endogenous information acquisition. We adopt the rational inattention approach to information acquisition but generalize to a large class of…

In many settings, interventions may be more effective for some individuals than others, so that targeting interventions may be beneficial. We analyze the value of targeting in the context of a large-scale field experiment with over 53,000 college…

We show that websites’ vendor use falls after the European Union’s (EU’s) General Data Protection Regulation (GDPR), but that market concentration also increases among technology vendors that provide support services to websites. We collect panel…

We examine why some words are more memorable than others by using predictive machine learning models applied to word recognition and recall datasets. Our approach provides more accurate out-of-sample predictions for recognition and recall than…

We study an impatient, risk-neutral government that cannot commit to a particular debt path, financed by competitive lenders. In equilibrium, debt adjusts slowly toward a debt-to-income target, exacerbating booms and busts. Strikingly, gains from…

We examine whether and how firms structure their merger and acquisition (M&A) deals to avoid scrutiny from antitrust regulators. There are approximately 40% more M&As than expected bunching just below thresholds that trigger antitrust…

This seems an opportune time to reflect on our paper, The Iron Cage Revisited, some 40 years after its original publication. In this essay, we recall the influences on us at the time, speculate on factors that shaped its subsequent…

We study price and non-price provisions of debt contracts to gauge how creditors evaluate changes in senior executives’ personal income taxes (“managerial taxes”) of their borrowers. Because managers’ personal income taxes can exacerbate…

Purchase decisions typically involve tradeoffs between attributes associated with desirability (e.g., quality) and feasibility (e.g., price). In this paper we examine how the decision context impacts consumers’ preference between a high-…

We examine how firms’ contractual relationships with their employees affect the design of their debt contracts, and the use of financial covenants in particular. Viewing the firm as the nexus of both explicit and implicit contractual…

A higher U.S. government debt/output ratio does not forecast higher surpluses or lower returns on Treasurys in the future. Neither future cash flows nor discount rates account for the variation in the current debt/output ratio. The market…