Working Papers

Geoeconomic pressure — the use of existing economic relationships by governments to achieve geopolitical or economic ends — has become a prominent feature of global power dynamics. This paper introduces a methodology using large language models (…

Allocating capital to investment projects is one of a manager’s most critical responsibilities. However, such decisions are shaped by managers’ own beliefs and risk preferences, which can differ from those of diversified shareholders. To study…

We develop a model of disclosure timing in which the firm can commit to disclose its revenues at a fixed date (a time-based disclosure policy) or after a certain number of transactions have occurred (a news arrival-based disclosure policy). We…

Hegemonic powers, like the United States and China, exert influence on other countries by threatening the suspension or alteration of financial and trade relationships. Mechanisms that generate gains from integration, such as external economies…

Motivated by the disconnect between regulatory discussions and industry reports on voluntary sustainability investments, we examine the market equilibrium for sustainable products in the absence of regulation, focusing on firms’ strategic…

Modern recommender systems use machine learning (ML) models to predict consumer preferences based on consumption history. Although these “black-box” models achieve impressive predictive performance, they often suffer from a lack of transparency…

We examine whether access to specialized business courts that are more proficient in resolving contractual disputes influences the design of firms’ supply contracts. We use the staggered creation of these courts in different states at different…

Using data from TransUnion, a large U.S. credit bureau, we analyze whether and how cuts in bank income taxation are passed through to the interest rates and size of consumer loans. Exploiting the change in bank corporate income taxation from the…

We document the growth of retail options trading and provide evidence that retail investors are drawn to options by anticipated spikes in volatility. Retail investors purchase options in a concentrated fashion before earnings announcements,…

We examine the spillover effects of public firm disclosures on patent licensing, a key mechanism for technology diffusion. An interquartile increase in public firm presence, our proxy for peer disclosures, is linked to a 20.7% higher likelihood…

Effective information sharing is critical for the success of organizations and governments. Because information that is easy to access is more likely to be adopted, leaders often minimize friction in information delivery. However, one type of…

We examine whether and how granular, real-time predictive models should be integrated into central banks’ macroprudential toolkit. First, we develop a tractable framework that formalizes the tradeoff regulators face when choosing between…

We study the impact of Generative Artificial Intelligence (GenAI) in Chile, focusing on opportunities for task acceleration-specifically, the reduction of execution time for tasks within the hundred most common jobs in the country, corresponding…

In this paper, we examine biases arising in A/B tests where firms modify a continuous parameter, such as price, to estimate the global treatment effect of a given performance metric, such as profit. These biases emerge in canonical experimental…

We consider a retailer running a switchback experiment for the price of a single product, with infinite supply. In each period, the seller chooses a price from a set of predefined prices that consist of a reference price and a few discounted…

We use administrative corporate tax data from the IRS to study a particular form of tax avoidance for US multinational corporations (MNCs). This strategy relies on cost sharing agreements (CSAs), which govern joint R&D efforts conducted with…

This paper investigates decision-making in A/B experiments for online platforms and marketplaces. In such settings, due to constraints on inventory, A/B experiments typically lead to biased estimators because of interference; this phenomenon has…

We study how enhanced internal communication technology influences firms’ internal information production. By developing a model with a headquarters manager and several divisional managers, we formalize two competing economic forces—information…

The representativeness heuristic constitutes a striking departure from Bayesian updating. According to a strong form of the heuristic, agents reverse a conditioning argument: for example inferring that a patient is more likely than not to have a…

AI model alignment is crucial due to inadvertent biases in training data and the underspecified machine learning pipeline, where models with excellent test metrics may not meet end-user requirements. While post-training alignment via human…