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Columbia Business School Research

At the Forefront of Their Fields

At Columbia Business School, our faculty members are at the forefront of research in their respective fields, offering innovative ideas that directly impact the practice of business today. A quick glance at our publication on faculty research, CBS Insights, will give you a sense of the breadth and immediacy of the insight our professors provide.

As a student at the School, this will greatly enrich your education. In Columbia classrooms, you are at the cutting-edge of industry, studying the practices that others will later adopt and teach. As any business leader will tell you, in a competitive environment, being first puts you at a distinct advantage over your peers. Learn economic development from Ray Fisman, the Lambert Family Professor of Social Enterprise and a rising star in the field, or real estate from Chris Mayer, the Paul Milstein Professor of Real Estate, a renowned expert and frequent commentator on complex housing issues. This way, when you complete your degree, you'll be set up to succeed.

The Columbia Advantage

Columbia Business School in conjunction with the Office of the Dean provides its faculty, PhD students, and other research staff with resources and cutting edge tools and technology to help push the boundaries of business research.

Specifically, our goal is to seamlessly help faculty set up and execute their research programs. This includes, but is not limited to:

  • Highly skilled staff of full-time predoctoral fellows, summer research interns, and part-time research assistants
  • Access to centralized funding from the Dean's office and external grants to support research activities
  • Providing a state-of-the-art high-performance grid computing environment
  • Acquisition of proprietary data sets and access to various databases
  • Leading library which provides faculty with latest tools and techniques to enable digital scholarship

All these activities help to facilitate and streamline faculty research, and that of the doctoral students working with them.

Featured Research

Be a better manager: Live abroad

Authors
W. Maddux, Adam Galinsky, and C. Tadmor
Date
January 1, 2010
Format
Journal Article
Journal
Harvard Business Review

The article offers the authors' views on expatriate management programs and the benefits from executives interacting with the people and institutions of the host country. The idea that international experience or interaction between foreign managers and local people will help managers become more creative, entrepreneurial, and successful is discussed. The concept of integrative complexity in bi-cultural managers which enhances job performance is mentioned.

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The Kidney Case

Authors
D. Austen-Smith, T. Feddersen, Adam Galinsky, and K. Liljenquist
Date
January 1, 2010
Format
Case Study
Publisher
Kellogg School of Management, Dispute Resolution Research Center

The Kidney Case is multi-person exercise that involves the allocation of a single kidney. Students read profiles of eight candidates for the kidney and make a first allocation decision. Each candidate was designed to be high on some allocation principles but low or unknown on others (e.g., best, match, time in cue, age, personal responsibility for disease, future benefits to society, etc.). Then, students are put into groups and assigned to advocate for one of the candidates. Each group will prepare and give a 3-minute presentation on why their candidate should receive the kidney.

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Mitigating Disaster Risks in The Age Of Climate Change

Authors
Harrison Hong, Jinqiang Yang, and Neng Wang
Date
Forthcoming
Format
Journal Article

Emissions abatement alone cannot address the consequences of global warming for weather disasters. We model how society adapts to manage disaster risks to capital stock. Optimal adaptation — a mix of firm-level efforts and public spending — varies as society learns about the adverse consequences of global warming for disaster arrivals. Taxes on capital are needed alongside those on carbon to achieve the first best.

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Returns to Education through Access to Higher-Paying Firms: Evidence from US Matched Employer-Employee Data

Authors
Niklas Engbom and Christian Moser
Date
May 1, 2017
Format
Journal Article
Journal
American Economic Review: Papers and Proceedings

What are the sources of the returns to education? We study the allocation of higher education graduates from public institutions in Ohio across firms. We present three results. First, we confirm findings in the earlier literature of large pay differences across degrees. Second, we show that up to one quarter of pay premiums for higher degrees are explained by between-firm pay differences. Third, higher education degrees are associated with greater representation at the best-paying firms.

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Putting on the pressure: How to make threats in negotiations

Authors
Adam Galinsky and K. Liljenquist
Date
January 1, 2004
Format
Journal Article
Journal
Negotiation

This article focuses on the role of threats in negotiations. Broadly speaking, a threat is a proposition that issues demands and warns of the costs of noncompliance. Even if neither party resorts to them, potential threats shadow most negotiations. Researchers have found that people actually evaluate their counterparts more favorably when they combine promises with threats rather than extend promises alone. Whereas promises encourage exploitation, the threat of punishment motivates cooperation.

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Type
Working Paper
Date
2021

Purchase History and Product Personalization

Author
Doval, Laura and Vasiliki Skreta

Product personalization opens the door to price discrimination. A rich product line allows for higher consumer satisfaction, but the mere choice of a product carries valuable information about the consumer that the firm can leverage for price discrimination. Controlling the degree of product personalization provides the firm with an additional tool to curb ratcheting forces arising from consumers' awareness of being price discriminated.

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Type
Working Paper
Date
2021

News and Markets in the Time of COVID-19

Author
Mamaysky, Harry

The initial phase of the COVID-19 pandemic was characterized by voluminous, highly negative news coverage. Markets overreacted to uninformative news, and reacted more to news during high volatility periods. News coverage responded to lagged market activity, and causally impacted contemporaneous returns. The early part of the pandemic was characterized by pronounced feedback between news and markets. I propose a structural break test to identify the presence and end of such feedback episodes. This one ended in March 2020, which was knowable by the end of April.

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Type
Working Paper
Date
2021

Constrained Information Design

Author
Doval, Laura and Vasiliki Skreta

We provide tools to analyze information design problems subject to constraints. We do so by showing that the techniques in Le Treust and Tomala (2019) extend to the case of multiple inequality and equality constraints. This showcases the power of the results in that paper to analyze problems of information design subject to constraints. We illustrate our results with applications to mechanism design with limited commitment (Doval and Skreta, 2020) and persuasion of a privately informed receiver (Kolotilin et al., 2017).

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Type
Newspaper/Magazine Article
Date
2021
Publication
Financial Times

Lessons from Peanuts’ Linus for high-yield investors

Author
Carr, Ellen

Current market pricing of risk is evidence of late-cycle behaviour.

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Type
Working Paper
Date
2021

Token-based Platform Finance

Author
Cong, Lin, Ye Li, and Neng Wang

We develop a dynamic model of platform economy where tokens serve as a means of payments among platform users and are issued to finance investment in platform productivity. Tokens are optimally issued to reward platform owners when the productivity-normalized token supply is low and burnt to boost the franchise value when the productivity-normalized normalized supply is high.

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Type
Working Paper
Date
2021

Facebook Ads vs. Malaria: A Cluster-Randomized Trial in India

Author
Rao, Nandan, Dante Donati, and Victor Orozco-Olvera
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Type
Working Paper
Date
2021

Pricing with Samples

Author
Allouah, Amine, Achraf Bahamou, and Omar Besbes

Pricing is central to many industries and academic disciplines ranging from Operations Research to Computer Science and Economics. In the present paper, we study data-driven optimal pricing in low informational environments. We analyze the following fundamental problem: how should a decision-maker optimally price based on a single sample of the willingness-to-pay (WTP) of customers. The decision-maker's objective is to select a general pricing policy with maximum competitive ratio when the WTP distribution is only known to belong to some broad set.

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Type
Working Paper
Date
2021

Public Company Auditing Around the Securities Exchange Act

Author
Bourveau, Thomas, Matthias Breuer, Jeroen Koenraadt, and Robert Stoumbos

We explore the landscape of public company auditing around the introduction of the Securities and Exchange Commission (SEC) in 1934. Using a broad sample of historical annual reports spanning several decades, we document that most public companies obtained audits even before the SEC’s audit mandate, which limited the mandate’s impact on audit rates. We further document that these companies selected their auditors based on characteristics reflecting independence and competence, even before the SEC’s mandate.

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Type
Working Paper
Date
2021

Sovereign Risk, Currency Risk, and Corporate Balance Sheets

Author
Du, Wenxin and Jesse Schreger
We provide a comprehensive account of the evolution of the currency composition of sovereign and corporate external borrowing by emerging markets over the past fifteen years. We show that a higher reliance on foreign currency debt by the corporate sector is associated with higher sovereign default risk. We introduce local currency sovereign debt and private sector currency mismatch into a standard sovereign debt model to examine how the currency composition of corporate borrowing affects the sovereign's incentive to inflate or default.
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Type
Working Paper
Date
2021

When You Talk, I Remain Silent: Spillover Effects of Peers' Mandatory Disclosures on Firms' Voluntary Disclosures

Author
Breuer, Matthias, Katharina Hombach, and Maximillian Mueller

We predict and find that regulated firms' mandatory disclosures crowd out unregulated firms' voluntary disclosures. Consistent with information spillovers from regulated to unregulated firms, we document that unregulated firms reduce their own disclosures in the presence of regulated firms' disclosures. We further find that unregulated firms reduce their disclosures more the greater the strength of the regulatory information spillovers.

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Type
Working Paper
Date
2021

Optimal Mechanism for the Sale of a Durable Good

Author
Doval, Laura and Vasiliki Skreta

A buyer wishes to purchase a durable good from a seller who in each period chooses a mechanism under limited commitment. The buyer's valuation is binary and fully persistent. We show that posted prices implement all equilibrium outcomes of an infinite-horizon, mechanism selection game. Despite being able to choose mechanisms, the seller can do no better and no worse than if he chose prices in each period, so that he is subject to Coase's conjecture. Our analysis marries insights from information and mechanism design with those from the literature on durable goods.

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Type
Journal Article
Date
2021
Journal
Journal of Finance

Rare Disasters, Financial Development, and Sovereign Debt

Author
Rebelo, Sergio, Neng Wang, and Jinqiang Yang

We propose a model of sovereign debt in which countries vary in their level of financial development, defined as the extent to which they can issue debt denominated in domestic currency in international capital markets. We show that low levels of financial development generate the "debt intolerance" phenomenon that plagues emerging markets: it reduces overall debt capacity, increases credit spreads, and limits the country's ability to smooth consumption.

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Type
Journal Article
Date
2021
Journal
Proceedings of the National Academy of Sciences

A mega-study of text-based nudges encouraging patients to get vaccinated at an upcoming doctor’s appointment

Author
Milkman, Katherine, Mitesh Patel, Linnea Gandhi, Heather Graci, Dena Gromet, Hung Ho, Joseph Kay, Timothy Lee, and Modupe Akinola
Many Americans fail to get life-saving vaccines each year, and the availability of a vaccine for COVID-19 makes the challenge of encouraging vaccination more urgent than ever. We present a large field experiment (N = 47,306) testing 19 nudges delivered to patients via text message and designed to boost adoption of the influenza vaccine. Our findings suggest that text messages sent prior to a primary care visit can boost vaccination rates by an average of 5%.
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Type
Working Paper
Date
2021

Earnings Inequality and the Minimum Wage: Evidence from Brazil

Author
Engbom, Niklas and Christian Moser

We show that a rise in the minimum wage accounts for a large decline in earnings inequality in Brazil since 1994. To this end, we combine rich administrative and survey data with an equilibrium model of the Brazilian labor market. Our results imply that the minimum wage has far-reaching spillover effects on wages higher up in the distribution, accounting for one-third of the 25.9 log point fall in the variance of log earnings in Brazil since 1994. At the same time, the minimum wage's effects on employment and output are muted by reallocation of workers toward more productive firms.

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Type
Newspaper/Magazine Article
Date
2021
Publication
Journal of Financial Economics

Intermediation in the Interbank Lending Market

Author
Craig, Ben and Yiming Ma

This paper studies systemic risk in the interbank market. We first establish that in the German interbank lending market, a few large banks intermediate funding flows between many smaller periphery banks. We then develop a network model in which banks trade off the costs and benefits of link formation to explain these patterns. The model is structurally estimated using banks' preferences as revealed by the observed network structure before the 2008 financial crisis.

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Type
Working Paper
Date
2021

The Importance of Investor Heterogeneity: An Examination of the Corporate Bond Market

Author
Li, Jane (Jian) and Haiyue Yu

Corporate bond market participants are increasingly worried about liquidity. However, bid-ask spreads and other standard measures indicate liquidity has not deteriorated significantly. This paper proposes a potential reconciliation. We show the sensitivity of credit yields to bid-ask spreads increased fourfold from 2005 to 2019. We then provide a model that connects this change to the rapid growth of mutual funds in the corporate bond market. The model features heterogeneous investors with different trading needs who choose between a risk-free asset and illiquid bonds.

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Type
Working Paper
Date
2021

Lightning Network Economics: Channels

Author
Guasoni, Paolo, Gur Huberman, and Clara Shikhelman

Compared with existing payment systems, Bitcoin’s throughput is low. Designed to address Bitcoin’s scalability challenge, the Lightning Network (LN) is a protocol allowing two parties to secure bitcoin payments and escrow holdings between them. In a lightning channel, each party commits collateral towards future payments to the counterparty and payments are cryptographically secured updates of collaterals. The network of channels increases transaction speed and reduces blockchain congestion.

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Type
Newspaper/Magazine Article
Date
2021
Publication
Organization Science

Mitigating Gig Worker Misconduct: Evidence from a Real Effort Experiment

Author
Burbano, Vanessa and Bennett Chiles
Employee misconduct is costly to organizations and has the potential to be even more common in gig and remote work contexts, where workers are physically distant from their employers. There is thus a need for scholars to better understand what employers can do to mitigate misconduct in these non-traditional work environments, particularly as the prevalence of such work environments is increasing.
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Type
Newspaper/Magazine Article
Date
2021
Publication
Project Syndicate

The Climate Tipping Point We Want

Author
Wagner, Gernot

The green transition comes with costs; but they are well worth it, and they pale in comparison to the costs of inaction. The ever-falling costs of renewables have not eliminated the politics of climate change. But they certainly have made our choices much easier.

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Type
Journal Article
Date
2021
Journal
Econometrica

A Macroeconomic Model with Financially Constrained Producers and Intermediaries

Author
Elenev, Vadim, Tim Landvoigt, and Stijn Van Nieuwerburgh

How much capital should financial intermediaries hold? We propose a general equilibrium model with a financial sector that makes risky long-term loans to firms, funded by deposits from savers. Government guarantees create a role for bank capital regulation. The model captures the sharp and persistent drop in macro-economic aggregates and credit provision as well as the sharp change in credit spreads observed during the Great Recession.

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Type
Working Paper
Date
2021

CIP Deviations, the Dollar, and Frictions in International Capital Markets

Author
Du, Wenxin and Jesse Schreger

The covered interest rate parity (CIP) condition is a fundamental arbitrage relationship in international finance. In this chapter, we review its breakdown during the Global Financial Crisis and its continued failure in the subsequent decade. We review how to measure CIP deviations, discuss the drivers of CIP deviations, and the implications of CIP deviations for global financial markets.

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Type
Journal Article
Date
2021
Journal
Organization & Environment

Getting Gig Workers to Do More by Doing Good: Field Experimental Evidence from Online Platform Labor Marketplaces

Author
Burbano, Vanessa

This article describes randomized field experiments implemented on two online labor market platforms examining the effect of employer charitable giving on a source of human capital that is becoming increasingly important to firms: the gig worker. It provides support that a message about charitable giving increases gig workers' willingness to complete extra work, and that pro-socially oriented gig workers are most responsive.

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Type
Journal Article
Date
2021
Journal
American Journal on Intellectual and Developmental Disabilities

Information Avoidance and Information Seeking Among Parents of Children with ASD

Author
Law, Kiely, Paul Lipkin, George Loewenstein, Alison Marvin, and Nachum Sicherman

We estimated the effects of information avoidance and information seeking among parents of children diagnosed with ASD on age of diagnosis. An online survey was completed by 1,815 parents of children with ASD. Children of parents who self-reported that they had preferred "not to know," reported diagnoses around 3 months later than other children.

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Type
Journal Article
Date
2021

Learning about competitors: Evidence from SME lending

Author
Darmouni, Olivier and Andrew Sutherland

We study how small and medium enterprise (SME) lenders react to information about their competitors’ contracting decisions. To isolate this learning from lenders’ common reactions to unobserved shocks to fundamentals, we exploit the staggered entry of lenders into an information-sharing platform. Upon entering, lenders adjust their contract terms toward what others offer. This reaction is mediated by the distribution of market shares: lenders with higher shares or that operate in concentrated markets react less.

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Type
Journal Article
Date
2021
Journal
The Quarterly Journal of Economics

Redrawing the Map of Global Capital Flows: The Role of Cross-Border Financing and Tax Havens

Author
Coppola, Antonop, Matteo Maggiori, Brent Neiman, and Jesse Schreger

Global firms finance themselves through foreign subsidiaries, often shell companies in tax havens, which obscures their true economic location in official statistics. We associate the universe of traded securities issued by firms in tax havens with their issuer’s ultimate parent and restate bilateral investment positions to better reflect the financial linkages connecting countries around the world. Bilateral portfolio investment from developed countries to firms in large emerging markets is dramatically larger than previously thought.

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Type
Journal Article
Date
2021
Journal
Journal of International Financial Markets, Institutions and Money

Risk and Return in International Corporate Bond Markets

Author
Bekaert, Geert and Roberto De Santis

We investigate risk and return in the major corporate bond markets of the developed world. We find that average returns increase with maturity and ratings class (where ratings go from high to low) and that this pattern is fit well by a global CAPM model, where the market consists of equity, sovereign and corporate bonds. Nonetheless, we strongly reject "asset class integration," finding a model which separates the market portfolio into its three components to fit much more of the corporate bond return variation.

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Type
Newspaper/Magazine Article
Date
2021
Publication
Journal of Financial Economics

The Benchmark Inclusion Subsidy

Author
Kashyap, Anil, Natalia Kovrijnykh, Jane (Jian) Li, and Anna Pavlova

We study the effects of evaluating asset managers against a benchmark on corporate decisions, e.g., investments, M&A, and IPOs. We introduce asset managers into an otherwise standard model and show that firms inside the benchmark are effectively subsidized by the asset managers. This “benchmark inclusion subsidy” arises because asset managers have incentives to hold some of the equity of firms in the benchmark regardless of their risk characteristics. Due to the benchmark inclusion subsidy, a firm inside the benchmark values an investment project more than the one outside.

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Type
Working Paper
Date
2021

Dynamic Information Regimes in Financial Markets

Author
Glasserman, Paul, Harry Mamaysky, and Yiwen Shen

We develop a model of investor information choices and asset prices where the availability of information about fundamentals is time-varying. A competitive research sector produces more information when more investors are willing to pay for that research. This feedback, from investor willingness to pay for information to more information production, generates two regimes in equilibrium, one having high prices and low volatility, the other the opposite. The low-price, high-volatility regime is associated with greater information asymmetry between informed and uninformed investors.

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Type
Working Paper
Date
2021

Credit Supply, Firms, and Earnings Inequality

Author
Moser, Christian, Farzad Saidi, Benjamin Wirth, and Stefanie Wolter

We study the distributional consequences of monetary policy-induced credit supply in the labor market. To this end, we construct a novel dataset that links worker employment histories to firm financials and banking relationships in Germany. Firms in relationships with banks that are more exposed to the introduction of negative interest rates in 2014 experience a relative contraction in credit supply, associated with lower average wages and employment. These effects are heterogeneous within and between firms.

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Type
Journal Article
Date
2021
Journal
Journal of Marketing

Buy Less, Buy Luxury: Understanding and Overcoming Product Durability Neglect for Sustainable Consumption

Author
Sun, Jennifer, Silvia Bellezza, and Neeru Paharia

The authors propose that purchasing luxury can be a unique means to engage in sustainable consumption because high-end products are particularly durable. Six studies examine the sustainability of high-end products, investigate consumer decision making when considering high-end versus ordinary goods, and identify effective marketing strategies to emphasize product durability, an important and valued dimension of sustainable consumption.

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Type
Journal Article
Date
2021
Journal
Journal of Finance

Financial Fragility with SAMs?

Author
Greenwald, Daniel, Tim Landvoigt, and Stijn Van Nieuwerburgh

Shared Appreciation Mortgages (SAMs) feature mortgage payments that adjust with house prices. These mortgage contracts are designed to stave off home owner default by providing payment relief in the wake of a large house price shock. SAMs have been hailed as an innovative solution that could prevent the next foreclosure crisis, act as a work-out tool during a crisis, and alleviate fiscal pressure during a downturn. They have inspired Fintech companies to offer home equity contracts. However, the home owner's gains are the mortgage lender's losses.

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Type
Working Paper
Date
2021

Income Statement Mismatching Conveys Information and Has Not Reduced the Informativeness of Earnings Over Time

Author
Penman, Stephen, Hyung Il Oh, and Hyung Il Oh
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Type
Newspaper/Magazine Article
Date
2021
Publication
The Review of Financial Studies

Mutual Fund Liquidity Transformation and Reverse Flight to Liquidity

Author
Ma, Yiming, Kairong Xiao, and Yao Zeng
We identify fixed-income mutual funds as an important contributor to the unusually high selling pressure in liquid asset markets during the Covid-19 crisis. We show that mutual fund liquidity transformation led to pronounced investor outflows. In meeting redemptions, funds followed a pecking order by first selling their liquid assets, including Treasuries and high-quality corporate bonds, which generated the most concentrated selling pressure in these markets.
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Type
Working Paper
Date
2021

The Impact of Paid Family Leave on Employers: Evidence from New York

Author
Bartel, Ann, Maya Rossin-Slater, Christopher Ruhm, Meredith Slopen, and Jane Waldfogel

We designed and fielded a survey of New York and Pennsylvania firms to study the impacts of New York's 2018 Paid Family Leave policy on employer outcomes. We match each NY firm to a comparable PA firm and use difference-in-difference models to analyze within-match-pair changes in outcomes. We find that PFL leads to an improvement in employers' rating of their ease of handling long employee absences, concentrated in the first policy year and among firms with 50-99 employees. We also find an increase in employee leave-taking in the second policy year, driven by smaller firms.

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Type
Journal Article
Date
2021
Journal
Management Science

Underwriting Government Debt Auctions: Auction Choice and Information Production

Author
Gupta, Sudip, Rangarajan Sundaram, and M. Suresh Sundaresan

In this paper, we examine a novel two-stage mechanism for selling government securities, wherein the dealers underwrite in the first stage the sale of securities, which are auctioned in stage 2 via either a discriminatory auction (DA) or a uniform price auction (UPA).

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Type
Working Paper
Date
2021

Corporate Websites: A New Measure of Voluntary Disclosure

Author
Boulland, Romain, Thomas Bourveau, and Matthias Breuer

We construct a new measure of voluntary disclosure based on firms’ websites. Using the Wayback Machine, we create a standardized measure of disclosure capturing the quantity of information on firms’ websites. We validate our measure by documenting that it is positively associated with established measures of firms’ voluntary disclosure and liquidity. Importantly, we document that our measure, while correlated with established disclosure measures, is not subsumed by those measures. It complements existing measures in three important ways.

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Type
Newspaper/Magazine Article
Date
2021
Publication
Nature Climate Change

Recalculate the social cost of carbon

Author
Wagner, Gernot

Mere mention of the term ‘social cost of carbon’ (SCC) invites both superlatives as to its importance as the ‘holy grail’ of climate economics and strong counteractions, including calls to have it scrapped altogether. In some sense, the SCC is simply an attempt to answer the question of how bad climate change truly is, typically in US dollars. To some, meanwhile, the SCC is a lagging indicator of the severity of climate change, perennially behind the latest science.

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Type
Working Paper
Date
2021

The Aggregate and Distributional Effects of Spatial Frictions

Author
Heise, Sebastian and Tommaso Porzio

We develop a general equilibrium model of frictional labor reallocation across firms and regions, and use it to quantify the aggregate and distributional effects of spatial frictions that hinder worker mobility across regions in Germany. The model leverages matched employer-employee data to unpack spatial frictions into different types while isolating them from labor market frictions that operate also within region.

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Type
Journal Article
Date
2021
Journal
Journal of Political Economy

Optimal Fiscal Policy without Commitment: Revisiting Lucas-Stokey

Author
Debortoli, Davide, Ricardo Nunes, and Pierre Yared

According to the Lucas-Stokey result, a government can structure its debt maturity to guarantee commitment to optimal fiscal policy by future governments. In this paper, we overturn this conclusion, showing that it does not generally hold in the same model and under the same definition of time-consistency as in Lucas-Stokey. Our argument rests on the existence of an overlooked commitment problem that cannot be remedied with debt maturity: a government in the future will not necessarily tax above the peak of the Laffer curve, even if it is ex-ante optimal to do so.

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Type
Working Paper
Date
2021

Mechanism Design with Limited Commitment

Author
Doval, Laura and Vasiliki Skreta

We develop a tool akin to the revelation principle for mechanism design with limited commitment. We identify a canonical class of mechanisms rich enough to replicate the payoffs of any equilibrium in a mechanism-selection game between an uninformed designer and a privately informed agent. A cornerstone of our methodology is the idea that a mechanism should encode not only the rules that determine the allocation, but also the information the designer obtains from the interaction with the agent.

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Type
Journal Article
Date
2021

What is the U.S. Comparative Advantage in Entrepreneurship? Evidence from Israeli Migrations to the United States

Author
Conti, Annamaria and Jorge Guzman

We investigate underlying sources of the US entrepreneurial ecosystem's advantage compared to other innovative economies by assessing the benefits Israeli startups derive from migrating to the US. Addressing positive sorting into migration, we show that migrants raise larger funding amounts and are more likely to have a US trademark and be acquired than non-migrants. Migrants also achieve a higher acquisition value. However, their patent output is not larger.

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Type
Newspaper/Magazine Article
Date
2021
Publication
Organization Science

Congruence between Leadership Gender and Organizational Claims Affects the Gender Composition of the Applicant Pool: Field Experimental Evidence

Author
Abraham, Mabel and Vanessa Burbano

The extent to which men and women sort into different jobs and organizations—namely, gender differences in supply-side labor market processes—is a key determinant of workplace gender composition. This study draws on theories of congruence to uncover a unique organization-level driver of gender differences in job seekers’ behavior. We first argue and show that congruence between leadership gender and organizational claims is a key mechanism that drives job seekers’ interest.

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Type
Working Paper
Date
2021

How Big Should Your Data Really Be? Data-Driven Newsvendor and the Transient of Learning

Author
Besbes, Omar and Omar Mouchtaki

We study the classical newsvendor problem in which the decision-maker must trade-off underage and overage costs. In contrast to the typical setting, we assume that the decision-maker does not know the underlying distribution driving uncertainty but has only access to historical data. In turn, the key questions are how to map existing data to a decision and what type of performance to expect as a function of the data size.

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Type
Working Paper
Date
2021

Migrants, Information, and Working Conditions in Bangladeshi Garment Factories

Author
Boudreau, Laura, Rachel Heath, and Tyler McCormick

Many workers in large factories in developing countries are internal migrants from rural areas. We develop a model in which migrants are poorly informed about working conditions upon beginning work but learn more as they gain experience in the industry. We then examine the relationship between workers' migration status and the working conditions they face in a household survey of garment workers in Bangladesh.

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Type
Working Paper
Date
2021

Country Risk

Author
Hassan, Tarek, Jesse Schreger, Markus Schwedeler, and Ahmed Tahoun

We construct new measures of country risk and sentiment as perceived by global investors and executives using textual analysis of the quarterly earnings calls of publicly listed firms around the world. Our quarterly measures cover 45 countries from 2002-2020. We use our measures to provide a novel characterization of country risk and to provide a harmonized definition of crises. We demonstrate that elevated perceptions of a country's riskiness are associated with significant falls in local asset prices and capital outflows, even after global financial conditions are controlled for.

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Type
Journal Article
Date
2021
Journal
Journal of Accounting Research

How Does Financial-Reporting Regulation Affect Industry-Wide Resource Allocation?

Author
Breuer, Matthias

This paper examines the impact of mandatory reporting and auditing of firms' financial statements on industry-wide resource allocation. Using threshold-induced variation in the share of mandated firms in a given industry, I document that reporting mandates facilitate ownership dispersion in capital markets and spur competition in product markets. I, however, do not find that reporting mandates unambiguously improve the efficiency of industry-wide resource allocation. With respect to auditing mandates, I find only that they impose a fixed cost on firms, deterring smaller entrants.

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Type
Journal Article
Date
2021
Journal
Management Science

Surge Pricing and Its Spatial Supply Response

Author
Besbes, Omar, Francisco Castro, and Ilan Lobel

We consider the pricing problem faced by a revenue maximizing platform matching price-sensitive customers to flexible supply units within a geographic area. This can be interpreted as the problem faced in the short-term by a ride-hailing platform. We propose a two-dimensional framework in which a platform selects prices for different locations, and drivers respond by choosing where to relocate in equilibrium based on prices, travel costs and driver congestion levels.

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Type
Journal Article
Date
2021

Eight priorities for calculating the social cost of carbon

Author
Wagner, Gernot, David Anthoff, Maureen Cropper, Simon Dietz, Kenneth T. Gillingham, Ben Groom, J. Paul Kelleher, Frances C. Moore, and James H. Stock

Advice to the Biden administration as it seeks to account for mounting losses from storms, wildfires and other climate impacts.

One of the first executive orders US President Joe Biden signed in January began a process to revise the social cost of carbon (SCC). This metric is used in cost–benefit analyses to inform climate policy. It puts a monetary value on the harms of climate change, by tallying all future damages incurred globally from the emission of one tonne of carbon dioxide now.

[…]

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Type
Working Paper
Date
2021

Earnings Inequality and Dynamics in the Presence of Informality: The Case of Brazil

Author
Engbom, Niklas, Gustavo Gonzaga, Christian Moser, and Roberta Olivieri

Using rich administrative and household survey data, we document a series of new facts on earnings inequality and dynamics in a developing country with a large informal sector: Brazil. Since the mid-1990s, both inequality and volatility of earnings have declined significantly in Brazil's formal sector. Higher-order moments of the distribution of earnings innovations show cyclical movements in Brazil that are similar to those in developed countries like the US. Earnings mobility is comparatively high, especially at the bottom of the distribution.

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Type
Journal Article
Date
2021

Effects of Sequential Sensory Cues on Food Taste Perception: Cross-Modal Interplay Between Visual and Olfactory Stimuli

Author
Biswas, , Dipayan, Donald Lehmann, and Lauren Labrecque
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