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.

Salman Arif, Azi Ben-Rephael, Charles M. C. Lee
February 24, 2017

Daily directional trading by mutual funds (MFs) is highly-persistent and price-destabilizing, leading to return reversals lasting months.  This effect is distinct from the “flow-induced trading” phenomenon in prior studies.  At the same time, short-sale volume...

Evan J. Soltas, David Broockman
February 23, 2017

We exploit a natural experiment to study voter taste-based discrimination against nonwhite political candidates. In Illinois Republican presidential primary elections, voters do not vote for presidential candidates directly. Instead, they vote delegate-by-delegate for delegate candidates...

Charles M. C. Lee, Ken Li
February 14, 2017

Predicted stock issuers (PSIs) are firms with expected “high-investment and low-profit” (HILP) profiles that earn unusually low returns.  Over a 36-year period (1978-2013), average returns to top-decile PSIs are indistinguishable from Treasury yields.  We show...

Susan Athey, Christian Catalini, Catherine E. Tucker
February 13, 2017

This paper uses data from the MIT digital currency experiment to shed light on consumer behavior regarding commercial, public and government surveillance. The setting allows us to explore the apparent contradiction that many cryptocurrencies offer...

Katherine Casey
January 31, 2017

Voting is fundamentally a forecasting problem: voters try to predict the future performance in office based on incomplete information about candidates. Forecast inputs combine observable resume criteria with more subjective assessments of confidence and trustworthiness....

Ilan Guttman, Iván Marinovic
January 20, 2017

Empirical and survey evidence suggest that firms often manipulate reported numbers to avoid debt covenant violations. The theoretical literature, by and large, has ignored the consequences of this phenomenon on debt contracting. Departing from a...

Susan Athey, Mark Mobius
January 11, 2017

A policy debate centers around the question whether news aggregators such as
Google News decrease or increase traffic to online news sites. One side of the debate, typically espoused by publishers, views aggregators as...

Peter C. Psarras, Praveen Bains, Panuya Charoensawadpong, Mark Carrington, Stephen Comello, Stefan J. Reichelstein, Jennifer Wilcox
January 2017

It is well documented that a concerted effort is required to reduce the threat of climate change. One vital component in this portfolio of solutions — carbon capture and utilization — has been stalled by...

Jess Benhabib, Jesse Perla, Christopher Tonetti
January 2017

We study how innovation and technology diffusion interact to endogenously determine the productivity distribution and generate aggregate growth. We model firms that choose to innovate, adopt technology, or produce with their existing technology. Costly adoption...

Susan Athey, Julie Tibshirani, Stefan Wager
January 2017

We propose a method for non-parametric statistical estimation, based on random forests (Breiman, 2001), that can be used to fit any heterogeneous parameter of interest identified as the solution to a set of local estimating...

Jonathan B. Berk, Jules H. van Binsbergen
2017
Santiago Balseiro, Yonatan Gur
2017

In display advertising markets, advertisers often purchase ad placements through bidding in repeated auctions based on realized viewer information. We study how budget-constrained advertisers may compete in such sequential auctions in the presence of uncertainty...

Lisa De Simone, Jordan Nickerson, Jeri K. Seidman, Bridget Stomberg
December 16, 2016

Can common empirical tests reliably identify tax avoidance? This is an important question because our understanding of the determinants of tax avoidance largely depends on results generated using such tests. We seed Compustat data...

Dana Foarta, Takuo Sugaya
December 15, 2016

Why might a country choose a decentralized rather than a centralized regulatory structure? And what might reverse this choice? We consider a core institutional relationship in regulation. A regulator exerts effort towards a final outcome,...

Lisa De Simone, Lillian F. Mills, Bridget Stomberg
December 15, 2016

We use confidential Internal Revenue Service data on the magnitude of U.S.-foreign intercompany transactions to develop a measure of the likelihood that U.S. multinational entities (MNEs) shift income out of the U.S. Results show...

Elizabeth Pontikes, William P. Barnett
December 8, 2016

A coevolutionary perspective on knowledge strategy is developed, where variant positions in knowledge space are predicted to result in differential advantages in product space.  In particular, advantages to being both consistent and specialized in knowledge...

Yuliy Sannikov, Andrzej Skrzypacz
December 7, 2016

We build a linear-quadratic model to analyze trading in a market with private information and heterogeneous agents. Agents receive private taste/inventory shocks and trade continuously. Agents differ in their need for trade as well as...

Martin Gaynor, Carol Propper, Stephan Seiler
December 2016

The impacts of choice in public services are controversial.  We exploit a reform in the English National Health Service to assess the impact of relaxing constraints on patient choice. We estimate a demand model that...

Stefan J. Reichelstein, Ansu Sahoo
December 2016

A basic tenet of microeconomics is that for a competitive industry in equilibrium the market price of a product will be equal to its marginal cost. This paper develops a model framework and a corresponding...