Working Papers

For many machine learning algorithms, two main assumptions are required to guarantee performance. One is that the test data are drawn from the same distribution as the training data, and the other is that the model is correctly specified. In real…

Platforms can obtain sizable returns by operationally managing their market thickness, i.e., the availability of supply-side inventory. Using data from a natural experiment on a major B2B auction platform specializing in the $424 billion…

We introduce a parsimonious framework for choosing among alternative expected-return proxies (ERPs) when estimating treatment effects. By comparing ERPs’ measurement-error variances in the cross-section and time series, we provide new evidence on…

This paper provides a positive identification result for first-price procurement models with asymmetric bidders, statistically dependent private signals,

and interdependent costs. When bidders are risk neutral, the model’s payoff-relevant…

A transplant can improve a patient’s life while saving several hundreds of thousands of dollars in healthcare expenditures. Organs from deceased donors, like many other scarce public resources (e.g. public housing, child-care, publicly funded…

We develop a valuation model for venture capital-backed companies and apply it to 135 US unicorns, that is, private companies with reported valuations above $1 billion. We value unicorns using financial terms from legal filings and find that…

For globally systemically important banks (G-SIBs) with U.S. headquarters, we find large post-Lehman reductions in market-implied probabilities of government bailout, along with big increases in debt financing costs for these banks after…

Pay for non-performance is among the most prominent arguments of executive rent extraction, especially Bertrand and Mullainathan’s (2001) pay for luck. We revisit their finding over the last two decades, 1997 through 2016. Pay for luck presents…

Eliminating firms’ access to tax havens can have unintended consequences for their domestic economic activity. We study a policy that limited profit shifting by U.S. multinationals and show it raised the tax cost of domestic investment. Firms…

This paper studies families’ preferences for peers in the school and the implications of those preferences for the distribution of academic outcomes. I develop an equilibrium model of school competition and student sorting under social…

We examine the association between thousands of state and local firm-specific tax subsidies and business activity in the surrounding county, measured as the number of employees, aggregate wages, per capita employment, per capita wages, and number…

It is widely understood that scarcity focuses people on “here and now” problems, causing myopic, impulsive decisions. Our work challenges this basic premise and asks whether scarcity can ever lead to increased patience. We suggest that existing…

This paper develops a new approach to isolate and quantify the extent to which deposit withdrawals are due to liquidity, exposure to policy risk, or expectations about how other depositors will behave. We use high frequency micro-data on insured…

We examine whether financial reporting quality influences employee turnover and wages using employer-employee matched data in the U.S. We find that low financial reporting quality is associated with high employee turnover risk, so workers demand…

Forty-five years ago, power as a topic was mostly absent from management textbooks and courses, including executive education teaching, in the fields of business and public administration. This was the case notwithstanding the…

A common challenge in estimating the long-term impacts of treatments (e.g., job training programs) is that the outcomes of interest (e.g., lifetime earnings) are observed with a long delay. We address this problem by combining several short-term…

We investigate the effect of patent disclosures on corporate innovation. Using the American Inventor’s Protection Act (AIPA) as a shock that increased patent disclosures, we find an increase in innovation for firms whose rivals reveal more…

We show that household consumption displays excess sensitivity to salient macro-economic news. When the announced local unemployment rate reaches a 12-month maximum, local consumers in that area reduce discretionary spending by 2% relative to…