Publications

We argue that deviations from the law of one price between futures and spot prices, known as futures-cash bases, capture important information about liquidity demand for equity market exposure in global markets. We show that bases (1) co-move with dealer and investor futures positions, (2) are contemporaneously positively correlated with spot and futures returns with the same sign, and (3) negatively predict futures and spot market returns with the same sign. These findings are consistent with a model where the futures-cash basis reflects liquidity de- mand that is common to futures and cash equity markets. We show persistent supply-demand imbalances for equity index exposure reflected in bases, where compensation for meeting that liquidity demand is large (5-6% annual premium).

The lack of diversity across gender and race of corporate boards has been one of the most significant issues in corporate board governance in recent years. Given the critical role that shareholders have in approving director appointments, we analyze voting patterns in director elections to investigate whether and how shareholders value board diversity. Using a broad sample of director elections from 2008 through 2018, we find evidence that shareholders provide greater voting support for diversity on boards, particularly gender diversity. Our findings also indicate greater additional support for diverse boards rather than for individual candidates. However, the magnitude of incremental voting support for diversity is small, and we find little evidence that the additional support is sufficient to affect voting outcomes. These findings persist over time and across key institutional shareholders who have been some of the most outspoken proponents of board diversity (i.e., SRI funds), questioning shareholders’ commitment to promoting board diversity.

While a positive view of calling has been ubiquitous since its introduction into the literature over two decades ago, research remains unsettled about the extent to which it contributes to various aspects of the good life: an optimal way of living well via worthwhile endeavors. Further, scholars have identified two conceptual types of calling, marked by internal versus external foci; yet their differential impact on outcomes indicative of the good life, such as eudaimonic and hedonic well-being (characterized by the experience of purpose and meaning versus pleasure and happiness, respectively), is unknown. Through a meta-analysis of 201 studies, we provide the first systematic review focused on these two fundamental theoretical issues in the calling literature: how strongly related callings are to outcomes in the domains of work and life and which type of calling (internally or externally focused) more strongly predicts these outcomes, if either. We find that callings more strongly relate to outcomes indicative of the good life than recently argued. We further find that callings are more strongly linked to work than to life outcomes and to eudaimonic than to hedonic outcomes. The two types of calling converge in being associated with many similar outcomes, but they show some divergence: internally focused callings are more positively related to hedonic outcomes and less positively related to eudaimonic outcomes, relative to externally focused callings. This finding supports a view of callings as hierarchically structured, with a higher-order calling factor composed of two correlated yet distinct lower-order calling types. Integrating our meta-analytic findings with relevant literatures, we propose a theoretical model that addresses psychological and social need fulfillment through which different types of callings contribute to the good life.

We document the rise of China in offshore capital markets. Chinese firms use global tax havens to access foreign capital both in equity and bond markets. In the last twenty years, China’s presence went from raising a negligible amount of capital in these markets to accounting for more than half of equity issuance and around a fifth of global corporate bonds outstanding in tax havens. Using rich micro data, we show that a range of Chinese firms, including both tech giants and SOEs, use these offshore centers. We conclude by discussing the macroeconomic and financial stability implications of these patterns.

When a romantic relationship becomes serious, partners often confront a foundational decision about how to organize their personal finances: pool money together or keep things separate? In a six-wave longitudinal experiment, we investigated whether randomly assigning engaged or newlywed couples to merge their money in a joint bank account increases relationship quality over time. Whereas couples assigned to keep their money in separate accounts or to a no-intervention condition exhibited the normative decline in relationship quality across the first 2 years of marriage, couples assigned to merge money in a joint account sustained strong relationship quality throughout. The effect of bank account structure on relationship quality is multiply determined. We examine—and find support for—three potential mechanisms using both experimental and correlational methods: merging finances (1) improves how partners feel about how they handle money, (2) promotes financial goal alignment, and (3) sustains communal norm adherence (e.g., responding to each other’s needs without expectations of reciprocity). While prior research has documented a correlation between financial interdependence and relationship quality, our research offers the first experimental evidence that increasing financial interdependence helps newlyweds preserve stronger relationship quality throughout the newlywed period and potentially beyond.

We study the design of a decentralized two-sided matching market in which agents’ search is guided by the platform. There are finitely many agent types, each with (potentially random) preferences drawn from known type-specific distributions. Equipped with knowledge of these distributions, the platform guides the search process by determining the meeting rate between each pair of types from the two sides. Focusing on symmetric pairwise preferences in a continuum model, we first characterize the unique stationary equilibrium that arises given a feasible set of meeting rates. We then introduce the platform’s optimal directed search problem, which involves optimizing meeting rates to maximize equilibrium social welfare. We first show that incentive issues arising from congestion and cannibalization make the design problem fairly intricate. Nonetheless, we develop an efficiently computable search design whose corresponding equilibrium achieves at least 1/4 the social welfare of the optimal design. In fact, our construction always recovers at least 1/4 the first-best social welfare, where agents’ incentives are disregarded. Our search design is simple and easy to implement, as its corresponding bipartite graph consists of disjoint stars. Furthermore, our design implies the platform can substantially limit choice and yet induce an equilibrium with approximately optimal welfare. We offer alternative search designs with improved approximation factors for markets with certain special structures. Finally, we show that approximation is likely the best one can hope for by establishing that the problem of designing optimal directed search is 𝖭𝖯-hard to even approximate beyond a certain constant factor.

The European Commission has taken an intelligent first step in enabling competition to Google Android and Google Play Services

This paper considers whether age or gender matter in the market for managerial positions by following the career paths of film directors. Film directors manage multi-million projects and are hired on a project-by-project basis. Unlike other industries, researchers have access to most of the data decision makers use in the hiring process. We gather data on directors’ film projects from the time they enter the profession. We also study the directors’ background prior to the first movie they direct. As expected, the economic success of previous film projects is the main determinant of hiring for a new film, thus our null hypothesis is that controlling for career paths, age and gender should not matter in landing a new project. However, we find that age matters and although directors direct their first project on average around age 40, age negatively affects hiring even for directors under 50. This result holds when we adjust for expected productivity. We follow every director who drops out of the sample to verify our conclusions. We also document that on average, only 12% of an entering cohort of new directors are women and they follow a different path than men in the entertainment industry. We conclude that if there is evidence of bias in an industry where career related information is public knowledge, it may be worse in more opaque industries.

Five preregistered studies (N = 1934) demonstrate that the prevalent U.S. ideology to “follow your
passions” perpetuates academic and occupational gender disparities compared to some other cultural
ideologies. Study 1 shows that the follow-your-passions ideology is commonly used by U.S. students in
making academic choices. Studies 2–5 find that making the follow-your-passions ideology salient causes
greater academic and occupational gender disparities compared to the resources ideology (i.e., the idea that
one should pursue a field that leads to high income and job security). In Study 4, the follow-your-passions
ideology causes greater gender disparities even when compared to a cultural ideology that aligns more with
the female gender role (i.e., communal ideology). In Study 5, a moderated mediation analysis supports the
hypothesis that gender disparities are explained by women’s versus men’s greater tendency to draw upon
female role-congruent selves when the follow-your-passions ideology is salient compared to when the
resources ideology is salient. Drawing upon female role-congruent selves remains a significant mediator
even when accounting for alternative mediators (e.g., appropriateness of ideology for one’s gender). The
follow-your-passions ideology may not seem explicitly gendered, but it causes greater academic and
occupational gender disparities compared to some other cultural ideologies.

We introduce a model of dynamic pricing in perishable goods markets with competition and provide conditions for equilibrium uniqueness. Pricing dynamics are rich because both own and competitor scarcity affect future profits. We identify new competitive forces that can lead to misallocation due to selling units too quickly: the Bertrand scarcity trap. We empirically estimate our model using daily prices and bookings for competing U.S. airlines. We compare competitive equilibrium outcomes to those where firms use pricing heuristics based on observed internal pricing rules at a large airline. We find that pricing heuristics increase revenues (4-5%) and consumer surplus (3%).

High-quality presHigh-quality preschool is one of the most cost-effective educational interventions, yet the United States invests little in early childhood education. Recent policy discussions call for increasing preschool enrollment and raising the quality provided, especially for disadvantaged children, but equilibrium responses of private providers which make up most of the market gen- erate trade-offs between these objectives. Supply expansion may lower incentives to invest in quality, and price responses to demand subsidies can increase the costs faced by non-subsidized parents. This paper develops a dynamic model of the preschool market to evaluate the effec- tiveness of policies at achieving these objectives. The model nests a static equilibrium model of spatial competition and preschool choice within a dynamic model of providers’ entry, exit and quality investments. I estimate this model using data on the universe of child-care centers in Pennsylvania. I use the model to simulate the aggregate and distributional consequences of proposed approaches to early education expansion. I find that policies focused on expand- ing supply raise access but decrease the quality children are enrolled in due to parents’ value for proximity. Demand subsidies generate market expansion, but on their own do not create sufficient incentives for providers to invest in quality. Among the simulated policies, the most cost-effective at expanding high-quality enrollment combine demand subsidies targeted to low- income families with financial support to high-quality providers serving disadvantaged children. These policies increase access by reducing exit of providers, and expand high-quality enrollment for low-income children through subsidies. In addition, these targeted policies generate spillovers to the educational quality of non-targeted families by creating incentives for centers to invest in quality.

EforAll (Entrepreneurship for All) is a non-profit accelerator founded by tech entrepreneur and philanthropist Gujuraj “Desh” Deshpande and his wife Jaishree. It provides poor immigrants and racial minorities with free comprehensive training, mentorship, and resources to launch their own businesses. From its 11 locations primarily in the U.S. northeast, it graduated 350 new business owners in 2022, when its program moved to mostly virtual training during the pandemic. 

Currently, EforAll faces a significant dilemma: the board has set an ambitious target to grow the organization 150-fold over the next eight years. This includes launching 6,000 new businesses per year in 50 U.S. cities for a total of 50,000 startups by 2030, and increasing capital five-fold to $50 million. New CEO Meralis Hood must determine the feasibility of these expectations and strategize the scaling process while considering potential impacts on the accelerator's foundational model. She confronts questions regarding the scalability of the virtual training model, effective operational practices for national expansion, fundraising, mentor recruitment, staff roles, and overall sustainability of such rapid growth.

We explore the determinants of demand curvature and pass-through in aggregate, unit-demand, discrete choice mixed logit models. Accurate pass-through estimates are at the heart of analyses of mergers, taxation, tariffs, cost shocks, and exchange rates when firms have market power. To overcome the inherent curvature restrictions in multinomial logit models, we highlight the need to incorporate heterogeneity in both price responsiveness and preferences for product characteristics. A flexible and parsimonious specification of preference heterogeneity expands the feasible range of elasticity-curvature pairs up to those of the constant elasticity of substitution (CES) demand. We demonstrate empirically significant differences in estimated elasticity and curvature compared to simpler models and highlight their economic relevance in the context of price discrimination. mirv