Publications

A strategic tension between consumers in a monopolistic market arises when many high-value consumers want to pool with a few lower-value consumers in order to obtain low prices from the seller. We study the interaction between consumers and the resulting market segmentation into consumer groups as the outcome of a cooperative game between the consumers. We introduce two new solution concepts, the weakened core and stability, which coincide with the core whenever it is nonempty. We show that these concepts are in fact equivalent and non-empty, and are characterized by efficiency and saturation. A segmentation is saturated if shifting consumers from a segment with a higher price to a segment with a lower price leads the seller to optimally increase the lower price. We show that stable segmentations that maximizes average consumer surplus (across all segmentations) always exist

We examine whether and how granular, real-time predictive models should be in- tegrated into central banks’ macroprudential toolkit. First, we develop a tractable framework that formalizes the tradeoff regulators face when choosing between imple- menting models that forecast systemic risk accurately but have uncertain causal content and models with the opposite profile. We derive the regulator’s optimal policy in a set- ting in which private portfolios react endogenously to the regulator’s model choice and policy rule. We show that even purely predictive models can generate welfare gains for a regulator, and that predictive precision and knowledge of causal impacts of policy interventions are complementary. Second, we introduce a deep learning architecture tailored to financial holdings data—a graph transformer—and we discuss why it is op- timally suited to this problem. The model learns vector embedding representations for both assets and investors by explicitly modeling the relational structure of holdings, and it attains state-of-the-art predictive accuracy in out-of-sample forecasting tasks including trade prediction.

We examine whether and how granular, real-time predictive models should be in- tegrated into central banks’ macroprudential toolkit. First, we develop a tractable framework that formalizes the tradeoff regulators face when choosing between imple- menting models that forecast systemic risk accurately but have uncertain causal content and models with the opposite profile. We derive the regulator’s optimal policy in a set- ting in which private portfolios react endogenously to the regulator’s model choice and policy rule. We show that even purely predictive models can generate welfare gains for a regulator, and that predictive precision and knowledge of causal impacts of policy interventions are complementary. Second, we introduce a deep learning architecture tailored to financial holdings data—a graph transformer—and we discuss why it is op- timally suited to this problem. The model learns vector embedding representations for both assets and investors by explicitly modeling the relational structure of holdings, and it attains state-of-the-art predictive accuracy in out-of-sample forecasting tasks including trade prediction.

We ask when additional data collection by a monopolist to engage in price discrimi- nation monotonically increases or decreases weighted surplus. To answer this question, we develop a model to study endogenous market segmentation subject to residual un- certainty. We give a complete characterization of when data collection is good or bad for surplus, which consists of a reduction of the problem to one with only two demand curves, and a condition for the two-demand-curves case that highlights three distinct ef- fects of information on welfare. These results provide insights into when data collection and usage for price discrimination should be allowed.

How does market power in the corporate banking sector influence the effects of interest rate cap policies on credit allocation? We study this question using administrative credit registry data in Bangladesh, where the Central Bank capped the interest rate on corporate loans at 13% in 2009, relative to a pre-reform average interest rate of 14.5%. We apply a difference-in-differences design with variation in pre-regulation, branch-level interest rates as an exposure measure and find that a one percentage point cap-induced drop in rates increased lending amounts by 30% over the two years of the cap regime. This increase in lending is not driven by banks’ costs to supplying credit, as proxied by the riskiness of the borrower pool or deposit funding costs. Our results point to substantial credit under-provision due to banks’ market power in an emerging markets context, even in the presence of relationship lending.

Over the past two decades, the European Commission's enforcement activities against abusive practices often came too late. Investigations only started when companies had already acquired a strong dominant position. It proved difficult to restore competition. In this paper, we advocate an earlier intervention, namely when undertakings start to monopolize markets. This is possible under Art. 102 TFEU with a return to the original definition of dominance and less emphasis on market shares. In line with cases like Hoffman-LaRoche, dominance must be defined as the ability to steer the market into a direction that is detrimental to competition and trading partners. This will allow to investigate the behaviour of firms at an earlier point of time, particularly in markets prone to tipping.

Disruptions to government contracts traditionally arise during federal shutdowns when Congress fails to appropriate necessary funding. However, recent shifts in federal real estate policy, marked by lease cancellations and non-renewals, challenge the long-standing perception of federal leases as a secure and stable investment. We investigate how federal lease cancellations impact the pricing of government contract risk premia. Using unanticipated Department of Government Efficiency (DOGE) cancellations as a shock to commercial mortgage default risk, we find that first-loss CMBS bond tranches directly linked to DOGE-notified leases experience a persistent 4% drop in price, with large, negative spillover effects to bond prices, delinquency rates, and rental cash flows tied to nearby public and private-tenant leases. These results reflect that early termination options were previously perceived by investors as a dormant clause. Applying arbitrage pricing models of commercial lease contingencies confirms the underpricing of risk associated with government tenants.

We characterize profit-maximizing menus in screening settings in which the agent has one of two privately-known types. We assume that utilities are quasi- linear but impose no other restrictions (such as increasing differences) on the agent’s utility or the set of alternatives. Our characterization clarifies the role of increasing differences in the standard setting and shows when random menus are beneficial. We describe applications to vertical and horizontal differentiation and multi-product bundling.

Firms' diversity, equity, and inclusion (DEI) policies have received significant scrutiny in recent years, including their efficacy and role in long-term value creation. We provide new evidence on these issues by studying what is arguably the most important group of firms-those with identified problems. We find that in the wake of DEI controversies, firms shift their hiring practices toward recruiting diverse employees to presumably improve public perception of their DEI profiles. However, these effects are economically small and largely superficial. Despite these limited firm responses, we find these controversies have important negative stock price implications, which are largely offset when firms make more meaningful DEI investments. Our findings suggest firms currently often do little to address public concerns regarding their DEI activities, despite their significant value implications.

The transparency and control of earnings are major concerns for gig economy workers across platforms such as ride-hailing and food delivery. While workers advocate for greater transparency, platforms selectively disclose information, shaping workers' decision-making and earnings. Recently, the Federal Trade Commission (FTC) has highlighted lack of transparency as a key issue, and platforms have responded by introducing upfront pay quotes that provide pertrip compensation details for workers. Using a game-theoretic model, we analyze the strategic interactions between the platform and workers, incorporating tools from information design to examine how different transparency policies-specifically, a fixed commission rate versus upfront pay quotes-shape equilibrium outcomes. We find that greater transparency can paradoxically increase platform control, as it allows platforms to fine-tune pay structures in ways that ultimately reduce worker autonomy. Moreover, while full information benefits the platform when it has flexibility in commission setting, it can backfire under commitment constraints, leading to lower profits than a no-information policy. Our findings highlight that transparency is not inherently beneficial for workers. Instead, its effects depend on how it interacts with pay policies. In particular, simple mechanisms, such as a fixed commission rate, can provide workers with more stability and bargaining power than per-trip transparency. These insights offer important guidance for policymakers and platform designers navigating the trade-offs of transparency in the gig economy. Keywords: Platforms, transparency, queueing, gig eco

Consideration set models generalize discrete-choice models by relaxing the assumption that consumers consider all available options. Determining which options were considered has previously required either survey data or restrictions on how attributes affect consideration or utility. We provide an alternative route. In full-consideration models, choice probabilities satisfy a symmetry property analogous to Slutsky symmetry in continuous-choice models. This symmetry breaks down in consideration set models when changes in characteristics perturb consideration. We show that consideration probabilities are constructively identified from the resulting asymmetries. We validate our approach in a lab experiment where consideration sets are known and then apply our framework to study a “smart default” policy in Medicare Part D, wherein consumers are automatically reassigned to lower-cost prescription drug plans with the option of opting out. Full-consideration models imply that such a policy will be ineffective because consumers will opt out to avoid switching costs. Allowing for inattention, we find that defaulting all consumers to lower-cost options produces negligible welfare benefits on average, but defaulting only consumers who would save at least $300 produces large benefits.

Global powers, like the United States and China, exert influence on other countries by threatening the suspension or alteration of financial and trade relationships. We show that the mechanisms that generate gains from integration and specialization, such as external economies of scale, also increase these countries’ power to exert economic influence because in equilibrium they make other relationships poor substitutes for those with a global hegemon. We study how smaller countries can insulate themselves from geoeconomic pressure from the great powers by pursuing anti-coercion policy. We show that while an individual country can make itself better off, uncoordinated attempts by multiple countries to limit their dependency on the hegemon lead to unwinding the global gains from integration and fragmenting the global financial and trade system. Countries resort to inefficient home alternatives the more so hegemons are expected to want to exert their influence in disruptive ways. An integrated liberal world order emerges as an equilibrium when the hegemon’s incentives are well aligned with the world economy, politically and economically. Generically, the world economy fragments along political and economic alignments. We study a leading application focusing on financial services and payment systems as both a tool of coercion by the hegemon and an industry with strong strategic complementarities at the global level.

Economics Job Market Rumors (EJMR) is an online forum and clearing house for infor-
mation about the academic job market for economists. It also includes content that is
abusive, defamatory, racist, misogynistic, or otherwise “toxic.” Almost all of this content
is created anonymously by contributors who receive a four-character username when post-
ing on EJMR. Using only publicly available data we show that the statistical properties of
the scheme by which these usernames were generated allows the IP addresses from which
most posts were made to be determined with high probability.1 We recover 47,630 distinct
IP addresses of EJMR posters and attribute them to 66.1% of the roughly 7 million posts
made over the past 12 years. We geolocate posts and describe aggregated cross-sectional
variation—particularly regarding toxic, misogynistic, and hate speech—across sub-forums,
geographies, institutions, and IP addresses. Our analysis suggests that content on EJMR
comes from all echelons of the economics profession, including, but not limited to, its elite
institutions.

We present a new database of banking-crisis interventions from the Roman Empire
to the present, covering 1,946 interventions in 20 categories across 143 countries.
We demonstrate that crisis-intervention patterns are significantly related to income
and fiscal variables and to measures of the political system and currency regime.
GDP losses following crises are economically significant and are larger for
wealthier countries, with some evidence that these losses are mitigated by
democratic political systems and liberal currency regimes. Finally, intervention
frequencies reached an apex during the post-Bretton Woods era, continuing a
secular increase since at least the late 17th century.

This paper proposes a theory of large-scale government bond purchases by central banks in an environment with endogenous information acquisition. Information acquisition by private investors lowers sovereign bond yields by reducing uncertainty, and makes prices more responsive to new information. I show that asset purchases by the central bank discourage information acqui- sition. Using the case of Italian bonds and the start of ECB purchases in 2015, I document through various measures that price informativeness indeed sig- nificantly declined with purchases. When the sovereign can be subject to self- fulfilling debt crises, however, this reduction in information acquisition can be beneficial. I show that by impairing price informativeness, asset purchases can avoid the occurrence of roll-over crises, generating large welfare gains. A key property of the model is that substantial purchases may be required, while small interventions have ambiguous welfare consequences. When the sovereign expects the central bank to carry such programs, it leads to exces- sive indebtedness, forcing the central bank to run an inflated balance sheet to avoid roll-over crises.

When consumers encounter unfamiliar products, they often face difficulty in understanding
which attributes are crucial, leading to challenges in product comparison and potential di-
minished interest in the category. This study examines how firms strategically communicate
the importance of product attributes in a competitive environment. Despite consumer aware-
ness of attributes and their levels, ambiguity regarding their relative importance remains.
We analyze a situation where two firms each receive a noisy signal about the true attribute
importance and convey this information to consumers through cheap-talk messages. Follow-
ing these communications, consumers decide whether to incur a cost to further explore the
category by visiting stores. Our findings reveal a truthful equilibrium where firms honestly
report their received signals. In this equilibrium, when both firms’ messages align, their
collective messages can credibly convey information about the more important attribute,
thereby encouraging store visits and purchase. Interestingly, firms may still find it advan-
tageous to truthfully highlight an attribute, even if it doesn’t align with their competitive
advantage. Moreover, we show that without competition (i.e., a single firm communicating),
this truthful equilibrium does not exist. Thus, the presence of the competition enables the
credible communication of information about attribute importance, benefiting both firms
by enhancing consumer engagement with the product category

This paper provides a framework in which a multiproduct ecosystem competes with small single-product firms in both price and innovation. The ecosystem is able to use data collected on one product to improve the quality of its other products. We study the impact of regulation which either restricts the use of data across the ecosystem’s business units, or which requires the ecosystem to share data with small firms. This regulation induces small firms to innovate more and set higher prices; it also dampens data spillovers within the ecosystem, reduces the ecosystem’s incentive to innovate, and potentially increases its prices. As a result, the impact of data regulation on consumers is ambiguous. Small firms do not necessarily benefit from sharing data with each other via a data cooperative, because doing so triggers more aggressive pricing by the ecosystem. A data cooperative can also harm consumers by inducing the ecosystem to innovate less.

This paper proposes a tractable model of the Global Financial Cycle and study its welfare implications for emerging market economies (EMEs). When local firms issue debt denominated in dollars, central banks must increase their policy rate as the U.S. tightens in order to offset balance sheet effects stemming from the depreciation of their currency. When global financial mar- kets are imperfect, this synchronized policy response has negative spillovers: all individual countries seek to attract capital inflows at the expense of one another, exacerbating the Global Financial Cycle. This congestion externality requires further tightening and results in inefficiently low levels of output and employment in EMEs, and generates gains from coordination. On the con- trary, discouraging debt issuance in dollars through macroprudential policy has positive spillovers, and does not necessarily require coordination between EMEs. Its optimal use dampens the Global Financial Cycle and its inefficien- cies.