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...

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 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 The Swiss Finance Institute Outstanding Paper Award is awarded annually to an unpublished research paper that makes an outstanding contribution to the field of finance.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...

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...

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...

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.

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...

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?

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..."

In the United States, households obtain health insurance through distinct market segments. We explore the economics of this segmentation by comparing coverage provided through small employers versus the individual marketplace. Using data from Oregon, we find households with group coverage spend 26% less on covered health care than households with individual coverage yet face higher markups. We develop a model of plan choice and health spending to estimate preferences in both markets and...

From mid-January to March 2020, 3M masks sold on Amazon by third party sellers were priced 2.4 times higher than Amazon's 2019 price. However, this price increase was not uniform across sellers. We estimate that when Amazon is stocked out (one of our measures of scarcity) new (entrant) sellers increase price by 178%, whereas the continuing sellers' increase is limited to 56.7%. This is consistent with the idea that seller reputation limits the extent of profitable price gouging. Similar...

Recent micro evidence of how workers search for jobs is shown to have critical implications for the macroeconomic propagation of labor market shocks. Unemployed workers send over 10 times as many job applications in a month as their employed peers, but are less than half as likely per application to make a move. I interpret these patterns as the unemployed applying for more jobs that they are less likely to be a good fit for. During periods of high unemployment, it consequently becomes harder...

Paul Scott and coauthors develop a model of competition in prices and infrastructural investment among mobile network providers. Market shares and service quality (download speed) are simultaneously determined, for demand affects the network load just as delivered quality affects consumer demand. While consolidation typically has adverse impacts on consumer surplus, economies of scale push in the other direction. Consumer surplus is maximized at a moderate number of firms, and that the...