Publications

While the Emergency Department (ED) at Elm City Hospital had always been a hectic place, the COVID-19 pandemic had strained the resources of the department as never before. However, even as the pandemic waned, the ED remained overburdened as patients who had avoided treatment for other ailments during COVID had begun to arrive in an unbroken flow. Dr. Rohit Sangal, an emergency medicine physician at the hospital since 2014, knew that something had to be done to reduce waiting times and provide high quality care.

Sangal had heard that some hospital departments had adopted a split-flow model to ease congestion, dividing arriving patients by those that could be treated while sitting from those needed to lay flat. But would such an arrangement improve patient flow at Elm City with current staffing levels? Sangal, who beside his medical training had gained an MBA from the Yale School of Management, considered the operational implications of the revised procedure. The hospital administration would want to know if the new approach would help before investing in retooling the facilities.

Enel, Italy’s largest utility company, embarked on a significant transformation in the early 21st century. CEO Francesco Starace, appointed in 2014, required the company to build no new electricity power plants and renewable energy projects and dams that were opposed by the local population of the area where they were to be constructed or that did not begin to produce revenue within three years. These directives had a transformative impact on the company, reducing the company’s dependence on traditional fossil fuels and igniting the company’s innovative capacity.

Despite these efforts, Enel faced substantial challenges in 2017. One of the significant hurdles was managing the transition to green energy while ensuring profitability and stability. Enel had to navigate the complexities associated with shutting down old, polluting power plants and integrating new renewable energy sources into the grid. Moreover, the push towards decarbonization stressed Enel’s resources. How could the company stay on the path that Starace’s directives had laid out?

Proper allocation of public servants across local employers is often hampered by a major institutional friction: wage rigidity. Through the lens of the market for public-school teachers, we study the equilibrium equity-eciency implication of this friction. In our model, teachers di↵er in their comparative advantages in teaching low- or high-achieving students. School districts, which serve di↵erent student bodies, use both wage and hiring strategies to compete for their preferred teachers. We estimate the model using data from Wisconsin, where districts gained control over teacher pay in 2011. We find that, all else equal, giving districts control over teacher pay would lead to more ecient teacher- district sorting but larger educational inequality. Teacher bonus programs that incentivize comparative advantage-based sorting, combined with bonus rates favoring districts with more low-achieving students, could improve both eciency and equity.

Equinor, originally founded as Statoil in 1972 upon the discovery of substantial oil deposits on Norway's continental shelf, transitioned into a publicly traded company in 2001 with the Norwegian government retaining majority ownership. The company developed its expertise in the extraction of fossil fuels from challenging deepwater locations and emerged as a significant player in the global oil market. Recognizing the finite nature of the Norwegian oil fields and increasing concerns regarding climate change, Statoil initiated a strategic shift to transition to what they believed to be a low-carbon future. This involved a rebranding to Equinor in 2018 to reflect its broader energy focus. Equinor's strategy embraced both maintaining its oil business with reduced carbon emissions during extraction and sequestration and expanding its renewable energy portfolio. 

Despite these efforts, Equinor faced substantial challenges. Many stakeholders viewed the hybrid model skeptically, contrasting the reliable and high-margin oil sector with the innovative but lower-margin renewables sector. Environmentalists and ESG investors doubted Equinor's commitment, and others highlighted the dissimilar business nature and the complexity of reconciling these within a single corporate structure. After the 2022 Russian invasion of Ukraine, Equinor’s hybrid strategy was scrutinized as the company increased natural gas production to support Europe’s energy security, earning record profits and raising questions about how the company would invest its windfall.

There is evidence that Republican-leaning counties have had higher COVID-19 death rates than Democratic-leaning counties and similar evidence of an association between political party affiliation and attitudes regarding COVID-19 vaccination; further data on these rates may be useful.

Factor investing has been around for several decades, backed by an enormous body of literature, and yet it is still surrounded by much confusion and debate. Some of the rhetoric and myths have existed for a long time, while others have arisen in response to the difficult performance from 2018 to 2020 and the subsequent turnaround. This short piece distills the central concepts and practical takeaways of our Fact, Fiction, and Factor Investing article, which examined many claims about factor investing, referencing an extensive academic literature and performing simple, yet powerful, analysis to address those claims.

We study the allocative challenges that governmental and nonprofit organizations face when tasked with equitable and efficient rationing of a social good among agents whose needs (demands) realize sequentially and are possibly correlated. As one example, early in the COVID-19 pandemic, the Federal Emergency Management Agency faced overwhelming, temporally scattered, a priori uncertain, and correlated demands for medical supplies from different states. In such contexts, social planners aim to maximize the minimum fill rate across sequentially arriving agents, where each agent’s fill rate (i.e., its fraction of satisfied demand) is determined by an irrevocable, one-time allocation. For an arbitrarily correlated sequence of demands, we establish upper bounds on the expected minimum fill rate (ex post fairness) and the minimum expected fill rate (ex ante fairness) achievable by any policy. Our upper bounds are parameterized by the number of agents and the expected demand-to-supply ratio, yet we design a simple adaptive policy called projected proportional allocation (PPA) that simultaneously achieves matching lower bounds for both objectives (ex post and ex ante fairness) for any set of parameters. Our PPA policy is transparent and easy to implement, as it does not rely on distributional information beyond the first conditional moments. Despite its simplicity, we demonstrate that the PPA policy provides significant improvement over the canonical class of nonadaptive target-fill-rate policies. We complement our theoretical developments with a numerical study motivated by the rationing of COVID-19 medical supplies based on a standard compartmental modeling approach that is commonly used to forecast pandemic trajectories. In such a setting, our PPA policy significantly outperforms its theoretical guarantee and the optimal target-fill-rate policy.

Although hedonic principles of emotion regulation suggest that people wish to feel good, the current research demonstrates that sometimes feeling good just seems wrong. Specifically, the authors argue that, immediately after viewing moralized content such as human suffering, consumers believe that it is morally appropriate to sustain negative emotions (Study 1). Thus, after exposure to content related to human suffering (vs. other negative content), consumers view subsequent mood-sustaining consumption as morally appropriate and hedonic consumption as morally inappropriate (Study 2). Consequently, they avoid repairing their emotions through hedonic consumption because of their preference to engage in morally appropriate behavior (Studies 3 through 4b); this is particularly true for individuals who view themselves as more moral (Study 4b). These effects are mitigated when the hedonic consumption is morally relevant (Study 4a), rather than prototypically frivolous. This research offers clear prescriptions to marketers about when and when not to offer hedonic consumption as mood repair. By allowing people to pay respect to suffering victims, marketers can give consumers needed space to feel their compassionate emotions

We survey the nascent literature on machine learning in the study of financial markets. We highlight the best examples of what this line of research has to offer and recommend promising directions for future research. This survey is designed for both financial economists interested in grasping machine learning tools, as well as for statisticians and machine learners seeking interesting financial contexts where advanced methods may be deployed.

Despite widespread knowledge and acceptance of the importance of climate-friendly behavior, consumers often fail to take the necessary actions to engage in more sustainable consumption. We propose a framework for structuring reminder messages to drive desired climate-friendly actions in a way that helps consumers build better long-term habits. Specifically, we formally test where to place the reminder in the consumption decision process (refilling of reusable water bottles) and find that simple action-oriented reminders, if placed early in the decision process, where they can benefit from contextual triggers, can motivate habits that endure even after the reminder period has ended. Furthermore, we find that specific sustainability-focused reminders (bringing a reusable bottle or bag) can motivate climate-friendly behaviors without negatively affecting overall consumption of the underlying good.

Despite global commitments and efforts, a gender-based division of paid and unpaid work persists. To
identify how psychological factors, national policies, and the broader sociocultural context contribute
to this inequality, we assessed parental-leave intentions in young adults (18–30 years old) planning to
have children (N = 13,942; 8,880 identified as women; 5,062 identified as men) across 37 countries that
varied in parental-leave policies and societal gender equality. In all countries, women intended to take
longer leave than men. National parental-leave policies and women’s political representation partially
explained cross- national variations in the gender gap. Gender gaps in leave intentions were paradoxically
larger in countries with more gender-egalitarian parental-leave policies (i.e., longer leave available to
both fathers and mothers). Interestingly, this cross-national variation in the gender gap was driven by
cross- national variations in women’s (rather than men’s) leave intentions. Financially generous leave
and gender-egalitarian policies (linked to men’s higher uptake in prior research) were not associated with
leave intentions in men. Rather, men’s leave intentions were related to their individual gender attitudes.
Leave intentions were inversely related to career ambitions. The potential for existing policies to foster
gender equality in paid and unpaid work is discussed

To provide a fuller picture of compliance with ASC 350-20, we hand-collect data to track 893 large acquisitions across time. Our model, which links impairments to post-acquisition accounting and market performance declines as well as acquisition-year attributes, identifies 349 acquisitions as likely to impair. We provide evidence that 65 percent of these at-risk acquisitions impair in the next two years. Our study should be useful to future research as it clarifies the role of hand-collection, market to book ratios, segment-level data, and volatility. We also offer descriptive evidence on impairment patterns. Overall, we find high levels of compliance and little opportunism.

When do people make optimistic forecasts about goal adherence? Nine preregistered studies find that a recent streak of goal-consistent behavior increases the predicted likelihood that the individual will persist, compared to various other patterns holding the rate of goal adherence constant. This effect is due to perceiving a higher level of commitment following a streak. Accordingly, the effect is larger when the behavior requires commitment to stick with it, compared to when the same behavior is enjoyable in its own right. Furthermore, the effect is weaker in the presence of another diagnostic cue of commitment: when the individual has a high historic rate of goal adherence. People also behave strategically in ways consistent with these inferences (e.g., are less likely to adopt costly goal support tools following a streak, choose partners with recent streaks for joint goal pursuit). Together, these results demonstrate the significance of streaky behavior for forecasting goal adherence.

The conduct described in the US complaints against Amazon harms competition between online stores and among the merchants who sell via them.

We study the effectiveness of information design in reducing congestion in social services catering to users with varied levels of need. In the absence of price discrimination and centralized admission, the provider relies on sharing information about wait times to improve welfare. We consider a stylized model with heterogeneous users who differ in their private outside options: low-need users have an acceptable outside option to the social service, whereas high-need users have no viable outside option. Upon arrival, a user decides to wait for the service by joining an unobservable first-come-first-serve queue, or leave and seek her outside option. To reduce congestion and improve social outcomes, the service provider seeks to persuade more low-need users to avail their outside option, and thus better serve high-need users. We characterize the Pareto-efficient signaling mechanisms and compare their welfare outcomes against several benchmarks. We show that if either type is the overwhelming majority of the population, then information design does not provide improvement over sharing full information or no information. On the other hand, when the population is sufficiently heterogeneous, information design not only Pareto-dominates full-information and no-information mechanisms, in some regimes it also achieves the same welfare as the “first-best,” that is, the Pareto-efficient centralized admission policy with knowledge of users’ types.

Several papers argue that financial economics faces a replication crisis because the majority of studies cannot be replicated or are the result of multiple testing of too many factors. We develop and estimate a Bayesian model of factor replication that leads to different conclusions. The majority of asset pricing factors (i) can be replicated; (ii) can be clustered into 13 themes, the majority of which are significant parts of the tangency portfolio; (iii) work out-of-sample in a new large data set covering 93 countries; and (iv) have evidence that is strengthened (not weakened) by the large number of observed factors.

European countries experienced a large increase in labor supply due to the influx of Ukrainian refugees after the 2022 Russia invasion. We study its dynamic effects in a spatial model with forward-looking households of different skills, trade, and endogenous capital accumulation. We find that real GDP increases in Europe in the long term, with large distributional effects across countries and skill groups. In the short run, an increase in the supply of labor strains the use of capital structures that takes time to build. Over time, countries that build capital structures increase output, resulting in potential long run benefits.

Leveraging an established exercise in negotiation education, we build a novel dataset for studying how the use of language shapes bilateral bargaining. Our dataset extends existing work in two ways: 1) we recruit participants via behavioral labs instead of crowdsourcing platforms and allow participants to negotiate through audio, enabling more naturalistic interactions; 2) we add a control setting where participants negotiate only through alternating, written numeric offers. Despite the two contrasting forms of communication, we find that the average agreed prices of the two treatments are identical. But when subjects can talk, fewer offers are exchanged, negotiations finish faster, the likelihood of reaching agreement rises, and the variance of prices at which subjects agree drops substantially. We further propose a taxonomy of speech acts in negotiation and enrich the dataset with annotated speech acts. We set up prediction tasks to predict negotiation success and find that being reactive to the arguments of the other party is advantageous over driving the negotiation.