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.

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Alberto Abadie, Susan Athey, Guido W. Imbens, Jeffrey M. Wooldridge
June 2017

Previously titled: Finite Population Causal Standard Errors

Consider a researcher estimating the parameters of a regression function based on data for all 50 states in the United States or on data for all visits to...

Susan Athey, Christian Catalini, Catherine E. Tucker
June 2017

‘Notice and Choice’ has been a mainstay of policies designed to safeguard consumer privacy. This paper investigates distortions in consumer behavior when faced with notice and choice which may limit the ability of consumers to...

Dmitry Orlov, Pavel Zryumov, Andrzej Skrzypacz
May 30, 2017

We study the design of macro-prudential stress tests and capital requirements. The tests provide information about correlation in banks portfolios. The regulator chooses contingent capital requirements that create a liquidity buffer in case of a...

Anat R. Admati, Peter M. DeMarzo, Martin F. Hellwig, Paul Pfleiderer
May 26, 2017

Forthcoming in Journal of Finance

Firms’ inability to commit to future funding choices has profound consequences for capital structure dynamics. With debt in place, shareholders pervasively resist leverage reductions no matter how much such reductions...

Gregory J. Martin, Ali Yurukoglu
April 5, 2017

Forthcoming in American Economic Review

We measure the persuasive effects of slanted news and tastes for like-minded news, exploiting cable channel positions as exogenous shifters of cable news viewership. Channel positions do not correlate with...

Kyle Bagwell, Robert W. Staiger, Ali Yurukoglu
March 2017

This paper empirically examines recently declassified data from the GATT/WTO on tariff bargaining. Focusing on the Torquay Round (1950-51), we document six stylized facts about these interconnected high-stakes international negotiations. Several of these stylized facts lend...

Dana Foarta, Takuo Sugaya
February 15, 2017

Why might a country choose to aggregate regulatory information into a single government agency? And what might reverse this choice? We consider an oversight setting in which the institutional structure affects access to information. A...

Ali Yurukoglu, Kyle Bagwell, Robert Staiger
February 2017

We provide an equilibrium analysis of the efficiency properties of bilateral tariff negotiations in a three-country, two-good general equilibrium model of international trade when transfers are not feasible. We consider “weak-rules” settings characterized by two cases: 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...

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...

Sebastian Di Tella, Pablo Kurlat
January 2017

We propose a model of banks’ exposure to movements in interest rates and their role in the transmission of monetary shocks. Since bank deposits provide liquidity, higher interest rates allow banks to earn larger spreads...

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...

Yuliy Sannikov, Sebastian Di Tella
November 2016

Revise and Resubmit at Econometrica

We characterize optimal asset management contracts in a classic portfolio-investment setting. When the agent has access to hidden savings, his incentives to misbehave depend on his precautionary saving motive. The...

John Ameriks, Joseph Briggs, Andrew Caplin, Matthew D. Shapiro, Christopher Tonetti
September 2016

Individuals face significant late-in-life risks, including needing long-term care (LTC). Yet, they hold little long-term care insurance (LTCI). Using both “strategic survey questions,” which identify preferences, and stated demand questions, this paper investigates the degree...

Sebastian Di Tella
September 2016

Revise and Resubmit at American Economic Review

I characterize the optimal financial regulation policy in an economy where financial intermediaries trade capital assets on behalf of households, but must retain an equity stake for incentive...

Susan Athey, Emilio Calvano, Saumitra Jha
August 6, 2016

We analyze the classic problem of sustaining trust when cheating and leaving trading partners is easy, and outside enforcement is difficult. We construct equilibria where individuals are loyal to smaller groups– communities– that allow repeated...

Susan Athey, Iva Parashkevov, Vishnu Sarukkai, Jing Xia
August 2016

This paper develops a model of user adoption and use of virtual currency (such as Bitcoin), and focusing on the dynamics of adoption in the presence of frictions arising from exchange rate uncertainty. The theoretical model can...

Claire S.H. Lim, Ali Yurukoglu
May 24, 2016

Forthcoming in Journal of Political Economy 

This paper quantitatively assesses time inconsistency, moral hazard, and political ideology in monopoly regulation of electricity distribution. We specify and estimate a dynamic model of utility regulation featuring investment...

Yuliy Sannikov, Peter M. DeMarzo
May 2, 2016

We study a principal-agent setting in which both sides learn about future profitability from output, and the project can be abandoned/terminated if profitability is too low. With learning, shirking by the agent both reduces output...