Publications

This paper studies the impact of career concerns on technological change by analyzing the adoption of digital cinematography in the US motion picture industry. This setting allows us to collect rich data on the adoption of this new technology at the project-level (i.e., movie) as well as on the career of the main decision maker (i.e., director). We find that early career directors played a leading role in the adoption of digital technology and that this effect appears to be explained by career concerns, rather than alternative motives we consider and analyze. Technological savviness also plays a role.

Evaluations play a critical role in the allocation of resources and opportunities.
Although evaluation systems are a cornerstone of organizational and market
processes, they often reinforce social and economic inequalities. The body of
organizational research on inequality and evaluations is extensive, but it is also
fragmented, siloed within specific contexts and types of evaluations (e.g., hiring,
performance). As a result, we currently lack a systemic understanding of the
conditions under which inequalities emerge. This paper provides a unifying
framework to identify how gender and racial inequality is produced and reproduced in
evaluations across professional contexts (e.g., digital platforms, entrepreneurship,
traditional employment). Our framework categorizes the drivers of inequality into
three main areas: prevailing beliefs in evaluative contexts, the design and structure of
evaluation processes, and the characteristics of evaluators. Our approach not only
sheds light on the common processes that exacerbate inequality but also underscores
why an integrative framework is critical for both theoretical advancement and
enacting effective reforms.

Large Language Models (LLMs) are reshaping consumer decision-making, particularly in communication
with firms, yet our understanding of their impact remains limited. This research explores the effect of
LLMs on consumer complaints submitted to the Consumer Financial Protection Bureau from 2015
to 2024, documenting the adoption of LLMs for drafting complaints and evaluating the likelihood of
obtaining relief from financial firms. Utilizing a leading AI detection tool, we analyzed over 1 million
complaints and identified a significant increase in LLM usage following the release of ChatGPT. We
establish a causal relationship between LLM usage and an increased likelihood of obtaining relief
by employing instrumental variables to address endogeneity in LLM adoption. Experimental data
further support this link, demonstrating that LLMs enhance the clarity and persuasiveness of consumer
narratives. Our findings suggest that facilitating access to LLMs can help firms better understand
consumer concerns and level the playing field among consumers. This underscores the importance of
policies promoting technological accessibility, enabling all consumers to effectively voice their concerns.

The same belief can be alternatively thought of as rational, careful, unfortunate, or an act of faith. These beliefs about one’s
beliefs are called “metacognitive positions.” I review evidence that people hold at least four different metacognitive positions.
For each position, I discuss what kinds of cognitive processes generated belief and what role people’s values and preferences
played in belief formation. We can learn a lot about someone’s belief based on how they relate to that belief. Learning how
someone relates to their belief is useful for identifying the best ways to try to change their mind.

Business users are needed to help create useful interfaces, while useful interfaces are needed to justify investment and entry by business users.

Consensus analyst target prices are widely available online at no cost to investors. In this paper we examine how the amount of dispersion in the individual target prices comprising the consensus affects the predictive association between the consensus target price and future returns. We find that returns implied by consensus target prices and realized future returns are positively correlated when dispersion is low, but they become highly negatively correlated when dispersion is high. Further analyses suggest that the differing effect of dispersion stems from incentive-driven staleness in price targets by some analysts after bad news. As a stock performs poorly and some analysts are slow to update their target prices, dispersion increases, and the consensus target price becomes too high. This has important implications for how consensus analyst target prices should inform investment decisions. We show that a hedge strategy taking a long (short) position in stocks with the highest predicted returns among stocks with the lowest (highest) dispersion earns more than 11% annually. Finally, we show that the negative correlation between consensus-based predicted returns and future realized returns for high-dispersion stocks exists mainly for stocks with high retail interest, suggesting that unsophisticated investors are misled by inflated target prices that are available freely online.

I evaluate the effect of financial statement audits on the governance practices of nonprofit organizations. Using a regression discontinuity design that exploits revenue-based exemption thresholds, I find that financial audits cause organizations to implement governance mechanisms, such as conflict of interest policies, whistleblower policies, and formal approval of the CEO’s compensation by a committee. Consistent with these governance practices curtailing managers’ private benefits, I document reductions in nepotism and CEO-to-employee pay ratio. The results are more pronounced for organizations (1) whose audit is overseen by an audit committee, (2) that already have an independent board, and (3) that face high charity-level demand for oversight. Collectively, these findings shed light on how financial audits shape the governance practices of small, less sophisticated organizations like nonprofits in ways that go beyond financial statements’ direct use in decision-making and contracting.

How to handle the ethical challenges raised by entrepreneurship education amid its explosive growth in colleges—from the perspective of an educator, administrator, investor, inventor, and former student entrepreneur.

Entrepreneurship is now everywhere on college campuses: from classes and contests to accelerators and incubators spread across diverse departments and programs. These activities cultivate tomorrow's Facebooks and Googles but can also put profit in conflict with pedagogy. Should faculty keep information about student start-ups confidential? Should universities, or educators personally, invest in student start-ups? Should educators adjudicate disputes between student founders? In The Ethics of Entrepreneurship Education, Kyle Jensen addresses these questions and many others.

This book fills a significant hole in the literature and helps readers think through the everyday ethical problems that arise in campus entrepreneurship. Jensen draws on economics literature, normative ethics, the wisdom of antiquity, and stories from his own wide-ranging experience to guide the discussion, while mixing in a good deal of wit and levity. It is an invaluable resource for all those involved in campus entrepreneurship, from university educators and administrators to students, mentors, investors, donors, and alumni.

Asset owners will play a foundational role in how the financial system will respond to the immediate and long-term physical, transition, legal, and other risks and opportunities emerging from global climate change. We investigated how asset owners incorporated climate change in their investments using a process framework of organizational change. We conducted more than 50 interviews with asset owners with over $750B assets under management, and their stakeholders, including beneficiaries, lawyers, consultants, and asset managers. These asset owners included retail investors, high-net-worth family offices, pensions, foundations, endowments, trusts, and corporations. Interviewees discussed their investment strategies related to climate change, including mitigation, adaptation, profit, philanthropic finance, risks, and opportunities. We found that legal stakeholders sometimes drove conversations, that trustees gradually matured in their fiduciary identities, and that staff struggled to operationalize investment mandates. We summarize proposed interventions that will help asset owners better serve their commitments.

Researchers and economic research were essential to the success of the Financial Crisis Inquiry Commission. For example, researchers submitted testimony, briefed commissioners, and spoke with our staff in recorded interviews. They also provided access to key data sources and helped us use them. Although we started our investigation barely one year after the height of the crisis, there was already a strong core of early, empirical research grappling with many of our key questions, such as why investors ran certain markets, why incentive problems pervaded securitization markets, and why risk management failed at so many large companies. We also benefited from the wealth of research exploring developments in financial markets leading up to the crisis. The process to build the research staff on a tight deadline was chaotic, and we needed people willing to work long hours, work on a team, and follow the evidence wherever it took us.

The Occupational Safety and Health Administration (OSHA) is decentralized, wherein field offices coordinated at the state level undertake inspections. We study whether this structure can lead to interstate frictions in sharing information and how this impacts firms’ compliance with workplace safety laws. We find that firms caught violating in one state subsequently violate less in that state but violate more in other states. Despite this pattern, and in keeping with information frictions, violations in one state do not trigger proactive OSHA inspections in other states. Moreover, firms face lower monetary penalties when subsequent violations occur across state lines, likely due to the lack of documentation necessary to assess severe penalties. Finally, firms are more likely to shift violating behavior into states with greater information frictions. Our findings suggest that internal information within regulators impacts the likelihood and location of corporate misconduct.

The usefulness of financial disclosures is a source of considerable debate in the municipal setting, given their lack of timeliness. This paper empirically examines the extent to which municipal financial disclosures have information content. Using the entire universe of annual financial disclosures from 2009 to 2020, we show that trading activity in the secondary market for municipal bonds increases after the disclosures are filed. Both institutional and retail trades increase around disclosure filings, but the effect is pronounced for retail traders, for whom the reports are more likely to provide new information. Moreover, the heightened trading is pronounced for timelier disclosures, consistent with regulators' views that untimely disclosures are less likely to provide new information. We also find a pronounced response when investors' risk is high and when the disclosures contain risk-related discussions. Our results contrast with earlier research and provide the first large-scale evidence that participants in the U.S. market for municipal bonds perceive financial disclosures to have informational value.

Research in psychology and medicine has linked mental health disorders, and particularly bipolar disorder (BD), to employment in creative professions. Little is known, however, about the mechanisms for this link, which could be due to biology (primarily through a person’s genes) or environmental (through socioeconomic status). Using administrative data on mental health diagnoses and occupations for the population of Denmark, we find that people with BD are more likely to be musicians than the population, but less likely to hold other creative jobs. Yet, we also show that healthy siblings of people with BD are significantly more likely to work in creative professions. Notably, people from wealthy families are consistently more likely to work in creative professions, and access to family wealth amplifies the likelihood that siblings of people with BD pursue creative occupations. Nevertheless, family wealth explains only a small share of the correlation between BD and creative employment.

We propose a model of advertising content that focuses on messenger selection, where advertising can generate product-match signals for consumers. We consider advertis- ing as a problem of Bayesian persuasion with costly information processing, where the type of communication messenger is costless to observe and determines the information structure consumers will face, thereby affecting their attention decisions. Messengers are classified as high type or low type based on their likelihood of generating positive signals about product match. Our findings highlight that the optimal choice of messengers depends on their signal elasticities and the firm’s decision on whether to induce consumer attention. In particular, we find that when it is crucial to raise prices and high-type messengers overshadow the product match value by providing generally positive signals, a low-type messenger can effectively capture consumer attention and persuade them to pay a higher premium. This holds true even if high-type messengers can better grab consumers’ attention by providing additional entertainment value or when some consumers are naive in belief updating.

Over the last two decades, the sociology of entrepreneurship has exploded as an area of academic inquiry. Most of this research has been focused on understanding the environmental conditions that promote entrepreneurship and processes related to the initial formation of an organization. Despite this surge in activity, many important questions remain open. Only more recently have scholars begun to turn their attention to what happens to organizations, and the people connected to them, as they mature and move through the life cycle of entrepreneurship. These open questions, moreover, connect to many classic themes in the literature on careers, organizational sociology, stratification, and work and occupations. Using a framework that focuses on three phases of the entrepreneurial life cycle—pre-entry, entry, and post-entry—we summarize sociological research on entrepreneurship and highlight opportunities for future research.

Online reviews serve as a guide for consumer choice. With advancements in large language models (LLMs) and generative AI, the fast and inexpensive creation of human-like text may threaten the feedback function of online reviews if neither readers nor platforms can differentiate between human-written and AI-generated content. In two experiments, we found that humans cannot recognize AI-written reviews. Even with monetary incentives for accuracy, both Type I and Type II errors were common: human reviews were often mistaken for AI-generated reviews, and even more frequently, AI-generated reviews were mistaken for human reviews. This held true across various ratings, emotional tones, review lengths, and participants’ genders, education levels, and AI expertise. Younger participants were somewhat better at distinguishing between human and AI reviews. An additional study revealed that current AI detectors were also fooled by AI-generated reviews. We discuss the implications of our findings on trust erosion, manipulation, regulation, consumer behavior, AI detection, market structure, innovation, and review platforms.

This paper identifies which investments in school facilities help students and are valued by homeowners. Using novel data on school district bonds, test scores, and house prices for 29 U.S. states and a research design that exploits close elections with staggered timing, we show that increased school capital spending raises test scores and house prices on average. However, impacts differ vastly across types of funded projects. Spending on basic infrastructure (such as HVAC) or on the removal of pollutants raises test scores but not house prices; conversely, spending on athletic facilities raises house prices but not test scores. Socio-economically disadvantaged districts benefit more from capital outlays, even conditioning on project type and the existing capital stock. Our estimates suggest that closing the spending gap between high- and low-SES districts and targeting spending towards high-impact projects may close as much as 25% of the observed achievement gap between these districts.

US state governments frequently provide firms with targeted subsidies. In exchange, recipients promise to create or retain a certain number of jobs in the subsidizing state. Using novel hand-collected data, we address three questions: (i) the extent to which firms meet job creation targets promised in their applications, (ii) the factors that determine which firms meet the targets, and (iii) the benefits to firms from meeting those targets. We find that 63% of subsidies awarded to publicly traded U.S. firms between 2004 and 2015 meet their promised job creation targets. Firms with poorer labor practices are less likely to meet their targets, as are politically connected firms that receive subsidies in election years. Conversely, promised job targets are also more likely to be met for subsidies accompanied by government press releases but less likely to be met for subsidies accompanied by firm press releases; the latter likely reflects the fact that firms put out press releases for larger subsidies with more ambitious job targets. In terms of consequences, firms that meet job targets are more successful at obtaining subsequent subsidies both in and out of subsidizing states. However, while firms’ success in meeting job targets is associated with an uptick in positive media coverage, this does not flow through to ESG ratings, even on scores specific to community impact. Our results should be of interest to both academics and policymakers interested in the design of state-level economic incentives.