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Giulia Brancaccio awarded the Yuki Arai Faculty Research Prize in Finance
Giulia Brancaccio and Karam Kang have been awarded the Yuki Arai Faculty Research Prize in Finance for their paper "Search Frictions and Product Design in the Municipal Bond Market." Established by alumnus Yuki Arai (MBA ’10), the award aims to recognize and promote excellence in research by Stern faculty and is bestowed annually on the best faculty paper on the topic of Finance. The committee is particularly interested in papers with a focus on investments.
The winner of the Yuki Arai...
Ph.D. Job Market Candidates
Stern Economics Ph.D. students currently on the job market:
• Daniel Stackman
• Anna Airoldi
• Jake Kantor - Job Market Paper: "Adaptation to Natural Disaster Risk: Lessons from Twentieth-Century American Flood Control Dams"
Venky Venkateswaran awarded the Swiss Finance Institute 2022 Outstanding Paper Award
Venky Venkateswaran and his co-authors, Maryam Farboodi, Dhruv Singal, and Laura Veldkamp have been awarded the Swiss Finance Institute 2022 Outstanding Paper Award for their paper, "Valuing Financial Data." The Swiss Finance Institute Outstanding Paper Award is awarded annually to an unpublished research paper that makes an outstanding contribution to the field of finance. The jury selecting the winning paper is composed of all Swiss Finance Institute Chaired professors and is headed by the...
Adam Brandenburger, Patricia Contreras-Tejada, Pierfrancesco La Mura, Giannicola Scarpa, and Kai Steverson's "Agreement and Disagreement in a Non-Classical World," published in Philosophical Transactions of the Royal Society A
The Agreement Theorem (Aumann, 1976) states that if two Bayesian agents start with a common prior, then they cannot have common knowledge that they hold different posterior probabilities of some underlying event of interest. In short, the two agents cannot "agree to disagree." This result applies in the classical domain where classical probability theory applies. But in non-classical domains, such as the quantum world, classical probability theory does not apply. Inspired principally by their...
Adam Brandenburger, Amanda Friedenberg, and H. Jerome Keisler's "The Relationship Between Strong Belief and Assumption," published in Synthese
We define two maps, one map from the set of conditional probability systems (CPS's) onto the set of lexicographic probability systems (LPS’s), and another map from the set of LPS's with full support onto the set of CPS's. We use these maps to establish a relationship between strong belief (defined on CPS's) and assumption (defined on LPS's). This establishes a relationship at the abstract level between these two widely used notions of belief in an extended probability-theoretic setting.
Chris Conlon, Nathan Miller, Tsolmon Otgon, and Yi Yao's "Rising Markups, Rising Prices?" published in the American Economic Association Papers and Proceedings
The rise in markups and market power documented by De Loecker, Eeckhout, and Unger (2020) has recently generated much discussion in economics. We measure the correlation between the change in firm level markups and the change in industry level prices as measured by the Producer Price Index and find little to no relationship both for 1980–2018 and 2018–present. While a "false negative" result due to mismeasurement is possible, it also raises the possibility that firms have not passed along...
Paul Scott, Adrian Torchiana, Ted Rosenbaum, and Eduardo Souza-Rodrigues' "Improving Estimates of Transitions from Satellite Data: A Hidden Markov Model Approach" published in The Review of Economics and Statistics
Satellite-based image classification facilitates low-cost measurement of the Earth's surface composition. However, misclassified imagery can lead to misleading conclusions about transition processes. We propose a correction for transition rate estimates based on the econometric measurement error literature to extract the signal (truth) from its noisy measurement (satellite-based classifications). No ground-truth data is required in the implementation. Our proposed correction produces...
Adam Brandenburger, Ye Jin, and Zhen Zhou's "Coordination via delay: Theory and experiment," published in Games and Economic Behavior
This paper studies the effect of introducing an option of delay in coordination games—that is, of allowing players to wait and then choose between the risk-dominant and payoff-dominant actions. The delay option enables forward-induction reasoning to operate, whereby a player's waiting and not choosing the risk-dominant action right away signals an intention to choose the payoff-dominant action later. If players have ϵ-social preferences—they help others if they can do so at no cost to...
Adam Brandenburger and Stefan Bucher's "Divisive Normalization is an Efficient Code for Multivariate Pareto-Distributed Environments," published in PNAS
Divisive normalization is a canonical computation in the brain, observed across neural systems, that is often considered to be an implementation of the efficient coding principle. We provide a theoretical result that makes the conditions under which divisive normalization is an efficient code analytically precise: We show that, in a low-noise regime, encoding an n-dimensional stimulus via divisive normalization is efficient if and only if its prevalence in the environment is described by...
Adam Brandenburger, Pierfrancesco La Mura, and Stuart Zoble's "Rényi Entropy, Signed Probabilities, and the Qubit," published in Entropy
The states of the qubit, the basic unit of quantum information, are 2×2 positive semi-definite Hermitian matrices with trace 1. We contribute to the program to axiomatize quantum mechanics by characterizing these states in terms of an entropic uncertainty principle formulated on an eight-point phase space. We do this by employing Rényi entropy (a generalization of Shannon entropy) suitably defined for the signed phase-space probability distributions that arise in representing quantum states.
Luis Cabral and Gabriel Natividad's "Bundling Sequentially Released Durable Goods," published in the Journal of Industrial Economics
Suppose two durables are sequentially released and suppose that consumer valuations of these goods are positively correlated. By the time the second good is released, high-valuation buyers are out of the market for the first good. Therefore, a bundle can be targeted at the low-valuation consumers without violating the high-valuation consumers' incentive compatibility constraint. We test the model's predictions on data from retail DVD sales in the 2000's. Consistent with theory, our estimates...
Larry White's "The Dead Hand of Cellophane and the Federal Google and Facebook Antitrust Cases: Market Delineation Will Be Crucial" published in The Antitrust Bulletin
The U.S. Department of Justice (DOJ) and Federal Trade Commission (FTC) monopolization cases against Google and Facebook, respectively, represent the most important federal nonmerger antitrust initiatives since (at least) the 1990s. As in any monopolization case, market delineation will be a central feature of both cases—as it was in the du Pont Cellophane case of sixty-five years ago. Without a delineated market, how can one determine whether a company has engaged in monopolization?
Larry White's guest article, "A Riff and a Half on the Delineation of Relevant Markets in Antitrust Cases" in the Network Law Review
Excerpt from the Network Law Review -- "In this note, I wish to make two points. First – and most important: A satisfactory paradigm for delineating relevant markets in unilateral monopolization cases – which involve allegations of restrictive, exclusionary, and/or predatory actions, or abuse of dominance – has not yet appeared in the litigation of monopolization cases. Unfortunately, the market delineation paradigm that has been successfully used for delineating relevant markets for..."