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.

David M. Kreps, Walter Schachermayer
June 2019

We prove a fundamental result concerning the connection between discrete-time models of financial markets and the celebrated Black–Scholes–Merton continuous-time model in which “markets are complete.” Specifically, we prove that if (a) the probability law of a...

Katherine Casey, Rachel Glennerster, Edward Miguel, Maarten Voors
May 29, 2019

Where the state is weak, traditional authorities often control the local provision of land, justice, and public goods. These authorities are criticized for ruling in an undemocratic and unaccountable fashion, and are typically quite...

Szu-chi Huang, Jennifer Aaker
May 16, 2019

Forthcoming at Journal of Personality and Social Psychology

People pursue goals throughout their lives, and many of these attempts end happily—a goal is achieved. However, what facilitates the continuation of behaviors that are aligned with the...

Robb Willer, Jan Gerrit Voelkel
May 8, 2019

While polls show progressive economic policies are popular, progressive candidates typically lose elections in the U.S. One explanation for this progressive paradox is that the opponents of progressive candidates often win through “symbolic politics,” successfully...

Lawrence M. Wein, Abbas Kazerouni
May 2019

Submitted to Operations Research

Motivated by drug design, we consider the best-arm identification problem in generalized linear bandits. More specifically, we assume each arm has a vector of covariates, there is an unknown vector of...

Anat R. Admati, Martin F. Hellwig
April 30, 2019

We take issue with claims that the funding mix of banks, which makes them fragile and crisis-prone, is efficient because it reflects special liquidity benefits of bank debt. Even aside from neglecting the systemic damage...

Harikesh S. Nair
April 30, 2019

This chapter presents a selective review of a literature in marketing that analyzes diffusion and pricing over the product life-cycle. I primarily focus on empirical work, and on papers that deal with the dynamics of...

Takuo Sugaya, Yuichi Yamamoto
April 26, 2019

We study repeated games in which players learn the unknown state of the world by observing a sequence of noisy private signals. We find that for generic signal distributions, the folk theorem obtains using ex-post...

Juliane Begenau, Saki Bigio, Jeremy Majerovitz
April 2019

This paper presents five facts on the behavior of U.S. banks between 2007 and 2015 that impose useful restrictions on the formulation of a bank problem. (1) Market to book leverage ratio diverged significantly during...

Susan Athey, Guido W. Imbens
March 24, 2019

We discuss the relevance of the recent Machine Learning (ML) literature for economics and econometrics. First we discuss the differences in goals, methods and settings between the ML literature and the traditional econometrics and statistics...

Zhengyang Jiang, Arvind Krishnamurthy, Hanno Lustig
March 19, 2019

We develop a theory that links the U.S. dollar’s valuation in FX markets to foreign investors’ demand for U.S. safe assets. When the convenience yield that foreign investors derive from holding U.S. safe assets increases,...

Julian Runge, Harikesh S. Nair, Jonathan Levav
March 18, 2019

The “freemium” model for digital goods involves selling a base version of the product for free, and making premium product features available to users only on payment. The success of the model is predicated on...

Katherine Casey, Rachel Glennerster, Kelly Bidwell
March 15, 2019

Candidate debates have a rich history and remain integral to contemporary campaign strategy. There is, however, little evidence that they affect the behavior of voters or politicians. The scarcity of political information in the developing...

Wenxin Du, Benjamin Hébert, Amy Wang
March 14, 2019

Violations of no-arbitrage conditions measure the shadow cost of constraints on intermediaries, and the risk that these constraints tighten is priced. We demonstrate in an intermediary-based asset pricing model that violations of no-arbitrage such as...

Philip G. Berger, Jung Ho Choi, Sorabh Tomar
March 14, 2019

Does decomposing cost of goods sold entail significant competitive costs? We examine this question using a relaxation of disaggregated manufacturing cost disclosure requirements in Korea. Our survey evidence indicates managers perceive these disclosures to provide...

Stephan Seiler, Anna Tuchman, Song Yao
March 12, 2019

We analyze the impact of a tax on sweetened beverages, often referred to as a “soda tax,” using a unique data set of prices, quantities sold, and nutritional information across several thousand taxed and untaxed...

Richard Lu, Jennifer A. Chatman, Amir Goldberg, Sameer B. Srivastava
March 3, 2019

Why are some people more successful than others at fitting in culturally over time? Prior research has offered divergent and seemingly inconsistent answers to this question. One perspective has highlighted the importance of shared values...

Katharina Lix, Amir Goldberg, Sameer B. Srivastava, Melissa A. Valentine
March 2019

How does diversity among members of a team affect their performance? Prior research has found diversity to be a double-edged sword that sometimes boosts and in other

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Jung Ho Choi, Brandon Gipper
March 2019

We examine employment effects, such as wages and employee turnover, before, during, and after periods of fraudulent financial reporting. To analyze these effects, we combine U.S. Census data with SEC enforcement actions against firms with...

Pedro M. Gardete, Megan H. Antill
March 2019

Previously titled “Avoiding Lemons in Search of Peaches: Designing Information Provision”

The increasing amount of data available to consumers has most likely aided in decision-making. However, it has also created an opportunity for sellers to...