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SSRN Research Paper Series
The Social Science Research Network’s Research Paper Series includes working papers produced by Stanford GSB the Rock Center.
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Selling Information
I consider the monopolistic pricing of informational good. A buyer’s willingness to pay for information is from inferring the unknown payoffs of actions in decision-making. A monopolistic seller and the buyer each observes a private signal about…
Persuading the Regulator to Wait
We study a Bayesian persuasion game in the context of real options. The Sender (firm) chooses signals to reveal to the Receiver (regulator) each period but has no long-term commitment power. The Receiver chooses when to exercise the option,…
What Makes U.S. Government Bonds Safe Assets?
U.S. government bonds are considered to be the world’s safe store of value, especially during periods of economic turmoil such as the events of 2008. But what makes U.S. government bonds “safe assets?” We highlight coordination among investors,…
The I-Theory of Money
A theory of money needs a proper place for financial intermediaries. Intermediaries create inside money and their ability to take risks determines the money multiplier. In downturns, intermediaries shrink their lending activity and fire-sell…
Overconfidence and Occupational Choice
A statistical theory of overconfidence is proposed and applied to the issue of occupational choice. Individuals who can choose whether to engage in an activity or not must estimate their performance. The estimates have error and that error has…
Reserve Prices in Internet Advertising Auctions: A Field Experiment
We present the results of a large field experiment on setting reserve prices in auctions for online advertisements, guided by the theory of optimal auction design suitably adapted to the sponsored search setting. Consistent with the theory,…
Strategic Trading in Informationally Complex Environments
We study trading behavior and the properties of prices in informationally complex markets. Our model is based on the single-period version of the linear-normal framework of Kyle (1985). We allow for essentially arbitrary correlations among the…
Collective Choice in Dynamic Public Good Provision
Two heterogeneous agents exert effort over time to complete a project and collectively decide its scope. A larger scope requires greater cumulative effort and delivers higher benefits upon completion. To study the scope under collective choice,…
Durable Coalitions and Communication: Public versus Private Negotiations
We present a laboratory experiment to study the formation of dynamic coalitions in a bargaining setting where the current status quo policy is determined by the policy implemented in the previous period. Our main experimental treatment is the…
Propensity Score Matching and Subclassification in Observational Studies with Multi-level Treatments
In this paper, we develop new methods for estimating average treatment effects in observational studies, focusing on settings with more than two treatment levels under unconfoundedness given pre-treatment variables. We emphasize subclassification…
The Missed Opportunity and Challenge of Capital Regulation
Capital regulation is critical to address distortions and externalities from intense conflicts of interest in banking and from the failure of markets to counter incentives for recklessness. The approaches to capital regulation in Basel III and…
The Determinants and Welfare Implications of U.S. Workers' Diverging Location Choices by Skill: 1980-2000
From 1980 to 2000, the rise in the U.S. college-high school graduate wage gap coincided with increased geographic sorting as college graduates concentrated in high wage, high rent cities. This paper estimates a structural spatial equilibrium…
Housing Supply Elasticity and Rent Extraction by State and Local Governments
Governments may extract rent from private citizens by inflating taxes and spending on projects which benefit special interests. Using a spatial equilibrium model, I show that less elastic housing supplies increase governments’ abilities to…
In Short Supply: Short-Sellers and Stock Returns
We examine the economic determinants of short-sale supply, and its consequences for future stock returns. Lendable supply increases with expected borrowing costs and decreases with financial statement constructs that indicate overvaluation…
Who Wants Affordable Housing in their Backyard? An Equilibrium Analysis of Low Income Property Development
We estimate the spillovers of properties financed by the Low Income Housing Tax Credit (LIHTC) onto surrounding neighborhood residents. We nonparametrically estimate the impact of LIHTC development on nearby house prices by developing a new…
Exact P-values for Network Interference
We study the calculation of exact p-values for a large class of non-sharp null hypotheses about treatment effects in a setting with data from experiments involving members of a single connected network. The class includes null hypotheses that…
Machine Learning for Estimating Heterogeneous Casual Effects
In this paper we study the problems of estimating heterogeneity in causal effects in experimental or observational studies and conducting inference about the magnitude of the differences in treatment effects across subsets of the population. In…
Efficiency of Flexible Budgetary Institutions
Which budgetary institutions result in efficient provision of public goods? We analyze a model with two parties bargaining over the allocation to a public good each period. Parties place different values on the public good, and these…
Long-Term Care Utility and Late-in-Life Saving
Older wealthholders spend down assets slowly. To study this pattern, the paper introduces health-dependent utility into a model in which different preferences for bequests, expenditures when in need of long-term care (LTC), and ordinary…
The Missing “One-Offs”: The Hidden Supply of High-Achieving, Low-Income Students
We show that the vast majority of low-income high achievers do not apply to any selective college. This is despite the fact that selective institutions typically cost them less, owing to generous financial aid, than the two-year and nonselective…