"Rediscovery"

We model search in settings where decision makers know what can be found but not where to find it. A searcher faces a set of choices arranged by an observable attribute. Each period, she either selects a choice and pays a cost to learn about its quality, or she concludes search to take her best discovery to date. She knows that similar choices have similar qualities and uses this to guide her search. We identify robustly optimal search policies with a simple structure. Search is directional, recall is never invoked, there is a threshold stopping rule, and the policy at each history depends only on a simple index.

“Data Governance with Vulnerable Individuals”

We assess the efficacy of privacy regulation when consumers are privacy conscious. We develop a model of data linkages where a consumer interacts sequentially with two firms: one firm collects data on consumer behavior, and the other firm leverages the data to set a quality level and a price. A data linkage benefits the consumer in equilibrium when the recipient firm is sufficiently similar to the collecting firm. We endogenize linkage formation under several existing privacy regulations. Voluntary consent requirements are beneficial to consumers in equilibrium but blanket bans on discriminatory price and quality offers are harmful.

"Congestion Pricing, Carpooling, and Commuter Welfare"

Building on the canonical “bottleneck” model of Vickrey (1969), we show that carpooling and road pricing are highly complementary in addressing traffic congestion: they can be much more effective jointly than each one separately, and can improve commuter welfare without having to rely on the redistribution of government revenue. By contrast, technological advances that make time in traffic more comfortable or productive (e.g., self-driving cars), implemented without additional economic incentives, may result in zero improvement in social welfare.

“What is the Purpose of Board Overlap?”

We investigate if the primary motivation of board overlap is to mitigate competitive spillovers or to manage technology spillovers. We focus on the staggered introduction of Corporate Opportunity Waivers (COWs) in nine U.S. states since 2000, which reduced legal risk to directors serving on multiple boards and increased intra-industry board overlap. Only firm pairs with strong competitive spillovers experience new board overlap, whereas strong technology spillovers do not trigger new board overlap. New intra-industry board overlap results in higher firm profitability and increased operating margins and is achieved through reduced investments and greater differentiation in product development.

“The Heterogeneous Effects of Household Debt Relief”

The marginal propensity to consume (MPC) out of liquidity provided by a largescale debt forbearance program serves as a sufficient statistic for both changes in borrower creditworthiness and the stimulative effect of the policy. Using transaction-level data from a Portuguese bank during COVID-19, we show thatthe average MPC is about 15 cents per euro, with significant heterogeneity across households. Borrowers with lower liquid wealth and income exhibit substantially higher MPCs, indicating a deterioration in their creditworthiness. This heterogeneity underscores the trade-off between the short-term economic stimulus provided by debt forbearance and the potential credit risks that emerge once the program ends.

"Reduced Forms: Feasibility, Extremality, Optimality"

We study independent private value auction environments in which bidders' utilities depend non-linearly on their expected probabilities of winning. Our framework accommodates heterogeneity in bidders’ valuation distributions, imposes no specific functional form on their utility functions, and places no ad hoc restrictions on the auction mechanisms available to the seller. Within this general setting, we significantly refine the (Border-type) characterization of feasible reduced forms—that is, the set of expected allocation probabilities implementable by some auction. For any given reduced form, we construct a one-dimensional curve such that the reduced form is feasible if and only if the corresponding constraints along this curve are satisfied. Leveraging this curve of tight feasibility constraints, we explicitly characterize extreme points of the set of feasible reduced forms and solve for the seller’s optimal auction.

"Efficiency and Collusion-Proofness in Dynamic Mechanism Design"

Abstract: We study dynamic mechanisms with Markovian private information both in transferable utility (TU) and non-transferable utility (NTU) settings. Our Guaranteed Utility Mechanism is efficient and collusion-proof in the TU setting, while it is approximately so in the NTU setting. Moreover, our GUM does not suffer from key shortcomings of existing efficient mechanisms that we identify: (i) in the TU setting, we show that in canonical efficient mechanisms, such as the Balanced Team Mechanism and the Dynamic Pivot Mechanism, none of the efficient equilibria might survive iterative elimination of weakly dominated strategies; (ii) in the NTU setting, approaches from statistical testing mechanisms cannot be used for infinite type spaces. In both settings, our mechanism satisfies participation constraints, permits observability of past types, and accommodates private actions.

"Subjective Beliefs and Portfolio Choice: Evidence from Financial Advisors"

We survey financial advisors to elicit their subjective beliefs about asset returns and the macroeconomy. Our bespoke survey design captures both short-term and
long-term return expectations for multiple asset classes, as well as the minimum acceptable rate of return. This allows us to decompose return expectations into two subjective components: required returns and excess returns (alpha). These two components play distinct roles in explaining belief heterogeneity: required returns drive variation in long-term expectations, while excess returns dominate short-term expectations. By linking survey responses to the portfolios managed by the same advisors, we further demonstrate that portfolio decisions are more sensitive to excess returns than to required returns.

"Incentive Design with Spillovers"

A principal uses payments conditioned on stochastic outcomes of a team project to elicit costly effort from the team members. We develop a multi-agent generalization of a classic first-order approach to contract optimization by leveraging methods from network games. The main results characterize the optimal allocation of incentive pay across agents and outcomes. Incentive optimality requires equalizing, across agents, a product of (i) individual productivity (ii) organizational centrality and (iii) responsiveness to monetary incentives.

"Dual Reductions and the First-Order Approach for Informationally Robust Mechanism Design"

The guarantee of a mechanism is the lowest objective value for the designer, across all information structures and equilibria. Brooks and Du (2024) proposed a “first-order” approach to characterizing guarantee-maximizing mechanisms by maximizing a particular lower bound on the guarantee: the expected lowest strategic virtual objective. In this paper, we show that for any mechanism M, there is an associated “dual reduction” mechanism M' for which the expected lowest strategic virtual objective of M' (and hence the guarantee of M') is greater than the guarantee of M. This provides a rigorous foundation for the use of the strategic virtual objective in designing informationally robust mechanisms. A parallel result, based on dual reductions of information structures, justifies Brooks and Du’s (2024) first-order approach to characterizing information structures with the lowest potential, in terms of those that minimize the expected highest informational virtual objective.

 "A Theory of Labor Markets with Inefficient Turnover"

We develop a theory of labor markets with four features: search frictions, worker productivity shocks, wage rigidity, and two-sided lack of commitment. Inefficient job separations occur in the form of endogenous quits and layoffs that are unilaterally initiated whenever a worker’s wage-to-productivity ration moves outside an inaction region. We derive sufficient statistics for the labor market response to aggregates shocks based on the distribution of workers’ wage-to-productivity ratios. These statistics depend on the incidence of inefficient job separations and are linked to readily available microdata on wage changes and worker flows between jobs.

"Deposit Insurance and Portfolio Allocation"

This paper examines the effects of deposit insurance (DI) on the household portfolio allocation between bank deposits and risky assets. Our theoretical framework shows that limited DI creates a kink in the capital allocation line, prompting depositors to bunch at the DI threshold and increase equity investments. Using a natural experiment in India and monthly individual-level data, we first confirm depositor bunching at the DI threshold. Employing a bunching-in-difference approach, we then show that DI expansion shifts portfolios from equity and mutual funds to deposits, producing temporary asset pricing effects. We document that this shift from equity to deposits is driven by an unmet demand for safe assets, indicating the crucial role of DI in limiting the supply of safe assets. Bunchers invest more in safer equity of state-owned firms and liquidate them after DI expansion with transient asset pricing implications for these stocks. Finally, by integrating our model with the data, we estimate the depositor-implied probability of bank failure and evaluate the welfare implications of DI-induced portfolio reallocation. Our welfare analysis suggests that although DI expansion can increase welfare, this improvement is limited by the increase in moral hazard after DI expansion.

"Spreading Information via Networks: An Irrelevance Result"

An informed planner wishes to spread information among a group of agents in order to induce efficient coordination---say the adoption of a new technology with positive externalities. The agents are connected via a social network. The planner informs a seed and then the information spreads via the network. While the structure of the network affects the rate of diffusion, we show that the rate of adoption is the same for all acyclic networks.

"Allocation Mechanisms with Mixture-Averse Preferences"

Consider an economy with equal amounts of N types of goods, to be allocated to agents with strict quasi-convex preferences over lotteries. We show that ex-ante, all Pareto efficient allocations give almost all agents lotteries over at most two outcomes. Therefore, even if all preferences are the same, some identical agents necessarily receive different lotteries. Our results  provide a simple criterion to show that many popular allocation mechanisms are ex-ante inefficient. Assuming the reduction axiom, social welfare  deteriorates by first randomizing over these binary lotteries. Efficient full ex-ante equality is achieved if agents satisfy the compound independence axiom.

"Calibrated Mechanism Design"

We study optimal mechanism design in settings where a designer has private information and interacts repeatedly with strategic agents. Motivated by applications like ad auctions, we introduce calibrated mechanism design, in which mechanisms must be robust to the information agents learn over time through participation. We formalize this via calibrated information structures, capturing what players infer from repeated interaction. We characterize implementable outcomes under this constraint, provide a decomposition result in single-agent environments, and show that learning endogenous to the mechanism's operation can fundamentally limit the designer’s ability to exploit private information.

“The Impact of Social Insurance on Household Debt”

This paper investigates how the expansion of social insurance affects households’ accumulation of debt. Insurance can reduce reliance on debt by lessening the financial impact of adverse events such as illness and job loss. But it can also weaken the motive to self-insure through savings, and households’ improved financial resilience can increase access to credit. Using data on 10 million people and a quasi-experimental research design, we estimate the causal effect of expanded insurance on household debt, exploiting ZIP-code level heterogeneity in exposure to the staggered expansions of one of the largest US social insurance programs: Medicaid. We find that a 1 percentage point increase in a ZIP code’s Medicaid-eligible population increases credit card borrowing by 0.46%. Decomposing this effect in a model of household borrowing, we show that increased credit supply in response to households’ improved financial resilience drives the rise in borrowing and contributed 32% of the net welfare gains of expanding Medicaid.

"Collusion with Optimal Information Disclosure" 

Motivated by recent concerns surrounding the use of third-party pricing algorithms
by competing …rms, we study repeated Bertrand competition where market demand
or the cost of serving the market is observed by an intermediary (or “algorithm”) that
optimally discloses demand or cost information to maximize …rms’collusive pro…t. We
assume that pro…t is a¢ ne in the unknown state, so expected pro…t is determined
by the expected state. We show that an upper censorship disclosure policy is opti-
mal, which leads to price rigidity and supra-monopoly prices at some states. Under
a concavity condition, improving the algorithm’s accuracy reduces expected consumer
surplus. When the state is positively correlated over time, the algorithm discloses
more information when recent demand was lower or costs were higher. The analysis
extends to a generalized model that accommodates product di¤erentiation and capacity constraints.

“Improving market-based measures of Systemic Risk”

We identify a bias in existing systemic risk measures based on the market value of equity (e.g., SRISK). The bias is a function of expected creditor losses and increases in the variance of the realised value of bank assets. This implies that such systemic risk measures decrease when the volatility of a bank's assets increases. We propose an approach that addresses the bias and, based on the novel concept of a systemic-risk neutral probability measure, allows to capture the interaction of changes in volatility at the bank and the sectoral level. Then, we estimate and simulate a combined model for equity and CDS prices for a set of global banks. The bias-correcting term is quantitatively important, and, as theory predicts, increases in times of stress. Based on our estimates, we introduce a systemic risk dashboard that allows to decompose systemic risk based on the assumed importance of different externalities.