"Citizens’ political behaviour and attitudes in changing contexts" Aula lignea Abstract Research has often underlined the importance of studying political behaviour and attitudes to capture the extent to which democracies are responsive to citizens’ preferences and needs, and thus the legitimacy of democratic regimes. Within this field, scholars have pointed at the role of contexts to explain cross-national and individual-level heterogeneities in political participation and public opinion. While the literature on the role of contexts in politics provides us with…

"Public opinion and the macro-polity: Italy in a comparative perspective" Aula lignea Abstract The politics and economics of public opinion are a major and expanding field of research and teaching in the social sciences. Yet, while public opinion and collective political behaviour have become an established research area in the USA, systematic work on other democracies, most notably across Europe, has lagged behind. Although research on Europe has produced a number of seminal studies, the potential benefits of comparing the…

"Choosing the risky option: information and risk propensity in referendum campaigns" Aula lignea Abstract Direct democracy has enjoyed increased popularity worldwide. Despite the complexity of most of the issues subject to a direct-democratic vote, in referendum campaigns voters generally face a simple choice between an uncertain Yes for a change and a safer No for maintaining the status quo. Given this asymmetrical structure in terms of uncertainty, in this presentation I argue that individual dispositions towards taking risks play a…

"Ethnic and Religious Discrimination in the Wedding Venue Business: Evidence from Two Field Experiments in Germany and Austria"  Aula lignea Abstract Various studies have investigated the discrimination of ethnic minorities on the labour and rental market, in the education system as well as in public administrations. While many of these studies found support for discrimination, we know little about the following question: To what extent is discrimination based on religious or ethnic grounds, or do the two maybe even reinforce…

"Cooperation and conflict in social systems" Aula lignea Abstract Cooperation and conflict are classical topics in the social sciences. Key questions include how cooperation arises and how conflict is avoided. Drawing on theoretical and methodological developments, I will present research that explores three mechanisms underlying cooperation and conflict. Using experiments and agent-based simulations, I test the role of group reputation and credible signalling in shaping conflict and the emergence of social norms to support cooperation. Additionally, I will discuss my planned research on these lines. Aron Szekely is applying for…

"The Missing Risk Premium in Exchange Rates" Job Market Seminar Abstract It is well known that the interest rate differential (the forward premium) predicts currency returns. However, we find that the real exchange rate, not the interest rate differential, is the main predictor of currency returns at longer horizons. We relate this finding to other puzzling features of currency markets, namely that the real exchange rate contemporaneously appreciates with the interest rate differential and that the positive relationship between currency…

"Achieving Efficiency in Repeated Partnerships via Information Design"

"Macro Uncertainty and the Term Structure of Risk Premium" abstract Abstract:Leading frictionless consumption-based asset pricing models (Long run risks and Habit formation) predict that the expected return on assets whose cash flows appear in the distant future are higher than or equal to the expected returns on assets which pay-off in the near future. Contrary to that prediction, some recent empirical studies have found that short-term assets earn a higher expected return than long-term assets. Here, I show that allowing…

"The Persistent Effects of Brief Interactions: Evidence from Immigrant Ships" Job Market Seminar Abstract This paper shows that brief social interactions can have a large impact on economic outcomes when they occur in high-stakes decision contexts. I study this question using a high frequency and detailed geolocalized dataset of matched immigrants-ships from the age of mass migration. Individuals exogenously travelling with (previously unrelated) higher quality shipmates end up being employed in higher quality jobs at destination. Several findings suggest that…

"Approximating Equilibria with Ex-Post Heterogeneity and Aggregate Risk" Job Market paper abstract Dynamic stochastic general equilibrium models with ex-post heterogeneity due to idiosyncratic risk have to be solved numerically. This is a nontrivial task as the cross-sectional distribution of endogenous variables becomes an element of the state space due to aggregate risk. Existing global solution methods have assumed bounded rationality in terms of a parametric law of motion of aggregate variables in order to reduce dimensionality. In this paper, we…

"Optimal Discovery and Influence through Selective Sampling" abstract Most decisions – from a job seeker appraising a job offer to a policymaker assessinga novel social program – involve the consideration of numerous attributes of an objectof interest. This paper studies the optimal evaluation of a complex project of uncertainquality by sampling a limited number of its attributes. The project is described by a unitmass of correlated attributes, of which only one is observed initially. Optimal samplingand adoption is characterized under…

"Incarcerate one to calm the others?Spillover effects of incarceration among criminal groups" Job Market paper abstract Abstract: What is the effect of incarcerating one member of a group on her criminalpartners? I answer this question using administrative data on all convictions in France between2003 and 2012. I exploit past joint convictions to identify 34,000 groups. Using a 48-monthindividual panel that records later criminal activity and sentencing, I find that the incarcerationof a peer is associated with a 5% decrease in…

"Monetary Policy, Expectations and Business Cycles in the U.S. Post-War Period" Job Market Paper Abstract This paper examines the interactions between monetary policy and the formation of expectations to explain U.S. business cycle fluctuations in the post-war period. I estimate a conventional medium-scale New-Keynesian model, in which I relax the assumption that the central pursued an 'active' monetary policy -- i.e. that stabilizes inflation and output growth -- over this entire period. I find that between 1955 and 1979 monetary…

"Globalisation and conflicts: the good, the bad, and the ugly of corporations in Africa" Job Market Seminar abstract Using georeferenced data on the affiliates and headquarters of multinational enterprises together with georeferenced conflict data, this work is the first to establish a causal link between the activities of multinational enterprises and violence. The results indicate that activities which increase local human capital decrease the probability of civil conflict, while the activity of exploitative sectors, in particular agriculture and forestry, increases…

"Legislating During War: Conflict and Politics in Colombia" Download the paper abstract For many countries, the escape from weak governance and cycles of violence is today the most challenging step in their path to prosperity. This paper studies an important aspect of this challenge: the relationship between civil conflict and congressional decision-making. I study this relationship in the context of Colombia, an electoral democracy currently undergoing a peace process to resolve what is the longest enduring conflict in the Americas.…

"Present Bias" Download the paper abstract Present bias is the inclination to prefer a smaller present reward to a larger later reward, but reversing this preference when both rewards are equally delayed. This paper investigates and characterizes the most general class of present-biased temporal preferences. We show that any present-biased preference has a max-min representation, which can be cognitively interpreted as if, the decision maker considers the most conservative present equivalents in the face of uncertainty about future tastes. We…

"Unions, Salaries, and The Market for Teachers: Evidence from Wisconsin" Download the paper abstract A careful study of teachers’ labor demand and supply, while extremely relevant for policy, is challenging due to a lack of variation in pay, as teacher salaries are usually set using steps-and-lanes schedules based entirely on seniority and academic credentials. This paper exploits the passage of Act 10 in Wisconsin in 2011, which changed the scope of collective bargaining on teacher salaries, to study the effects…

"Disentangling Credit Spreads and Equity Volatility" download the paper abstract In this paper, I provide a structural approach to quantify the forces thatgovern the joint dynamics of corporate bond credit spreads and equityvolatility. I build a dynamic model and estimate a wide array of fundamentalshocks using a large firm-level database on credit spreads, equityprices, accounting statements, and bond recovery ratios in the U.S. from1973 to 2014. A structural decomposition reveals that the joint dynamicsof credit spreads and equity volatility is…

"Occupational Switching and Wage Risk" download the paper abstract The literature on labor income risk treats the wage process as exogenous to workers, with few exceptions. However, observed wage dynamics are the result of both exogenous factors, such as productivity shocks, and workers' choices. Using data from administrative German social security records, I document that the extent of occupational switching upon changing establishments is high, and that the decision to change occupations is of major relevance for realized wage changes.…

"House of Funds" Download the paper abstract I document that political connections are an important driver of investment strategies of US mutual funds. I collect data on mutual fund holdings of US Congress members and equity holdings of mutual funds from 2004 to 2013. I show that funds whose shares belong to politicians place larger bets and trade more actively in stocks of politically sensitive firms, and in stocks of firms that operate in industries under the scope of politicians' congressional committees. Connected mutual funds perform…

"The Financial Intermediation Premium in the Cross Section of Stock Returns" Download the paper abstract This paper documents a significant risk premium for financial intermediation risk in the cross section of equity returns. Firms that borrow from highly levered financial intermediaries have on average 4% higher expected returns relative to firms with low-leverage lenders. This difference cannot be attributed to differences in firm characteristics and is driven by firms’ exposure to the financial sector. The dispersion in the leverage of…

"Coordination of Hours within the Firm" Download the paper Abstract Teamwork has become increasingly important in many firms, yet little is known about how coordination of hours among heterogeneous coworkers affects pay, productivity and labor supply. In this paper we propose a framework where differently productive firms choose whether or not to coordinate hours in exchange for productivity gains. In this framework, we show that more productive firms select into coordinating hours and pay compensating wage differentials, leading to attenuated…

"Devotion and Development: Religiosity, Education, and Economic Progress in 19th-Century France" Download the paper abstract This paper uses a historical setting to study when religion can be a barrier for diffusion of knowledge and economic development, and through which mechanism. I focus on 19th-century Catholicism and analyze a crucial phase of modern economic growth, the Second Industrial Revolution (1870-1914) in France. In this period, technology became skill-intensive, leading to the introduction of technical education in primary schools. At the same…

"Dynamic (In)Consistency and the Value of Information" Download the paper abstract This paper develops a revealed-preference model of information disclosure. One decision maker, DM1, ranks information sources (Blackwell experiments) knowing that a second decision maker, DM2, uses the information to select an act from a menu. Both decision makers are subjective expected utility maximizers but may differ in their preferences and/or beliefs. I assume the analyst observes, for each menu of acts, (i) a preference ordering over all Blackwell experiments…

"Entrepreneurs’ Wealth and Firm Dynamics" Download the paper abstract Owners of privately-held firms typically invest a large amount of their personal wealth into their firm. In principle, the wealth not invested in the firm may be used as a buffer to smooth shocks to the firm. Is such buffer stock behavior observed among privately-held firm owners? Does such buffer stock behavior affect the firm’s performance? To address these questions, we use matched employer-employee data, together with information on the assets…

"The Impact of Early Grading on Academic Choices: Mechanisms and Social Implications"

"The Long-Term Effects of Management and Technology Transfer: Evidence from the US Productivity Program” abstract This paper uses a unique historical episode to assess the long-run effects of man-agement and technology transfer on firm performance. During the 1950s, as part of the Marshall Plan, the US administration sponsored management-training trips for European managers to US firms and granted state-of-the-art machines to Euro-pean firms. I use newly-assembled data on the population of Italian firms eligible to participate in this program, tracked…

"Firms and Farms: The Impact of Agricultural Productivity on the Local Indian Economy"

"Political Connections and Market Structure"

"Pricing Algorithms and Tacit Collusion" Abstract There is an increasing tendency for firms to use pricing algorithms that speedily react to market conditions, such as the ones used by major airlines and online retailers like Amazon. I consider a dynamic model in which firms commit to pricing algorithms in the short run. Over time, their algorithms can be revealed to their competitors and firms can revise them, if they so wish. I show how pricing algorithms not only facilitate collusion but inevitably lead to it. To…

"Merger Activity in Industry Equilibrium" ABSTRACT We study a dynamic industry-equilibrium model that features mergers, entry, and exit by heterogeneous firms. We show how different sources of synergies affect merger cyclicality. Improvements in marginal productivity between merging firms generate a procyclical motive for mergers, while reductions in fixed costs of production generate a countercyclical one. The presence of a merger market makes poorly performing firms less likely to exit the industry in recessions, and it increases the mean and variance…

"Oaxaca-Blinder type Decomposition Methods for Duration Outcomes"

"Crime and Vigilance"

"The Geography of Unconventional Innovation"

"Asset Pricing with Dynamically Inconsistent Agents"

"Delisting of Pharmaceuticals from Insurance Coverage: Effects on Consumption, Pricing and Expenditures in France"

"Nonparametric Tests for Conditional Treatment Effects in Duration Outcomes"

"Quality Provision in the Presence of a BiasedIntermediary"

"Who Pays for the Minimum Wage?"

"Genetic and Economic Interaction in the Formationof Human Capital: The Case of Obesity"

"How Monetary Policy Changes Bank Liability Structure and Funding Cost"

"The allocation of talent: finance versus entrepreneurship"

"Comparing methods to evaluate the effects of job search assistance"

"The Costs of Adapting to a New Cultural Environment: Examining Immigrants' Outcomes"

"Work Incentives of Medicaid Beneficiaries and the Role of Asset Testing." Download the paper http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2323775

"Entry into Electoral Races and the Quality of Representation" Abstract U.S. Congressmen are very likely to be reelected and survey evidence suggests that voters are satisfied with their representatives. On the other hand, a large political science literature interprets the high incumbent reelection rate as evidence of lacking entry by strong challengers, analyzing its sources, consequences, and potential cures. This paper analyzes the extent to which there is a pool of potential candidates voters prefer to actual candidates, and what policies are effective at encouraging entry by preferable…

"Noisy signalling over time" Download the paper http://sanderheinsalu.com/papers/Noisy%20signalling%20over%20time.pdf

"Identity, Working Moms, and Childlessness: Evidence from Switzerland" Download the paper https://sites.google.com/site/andreassteinhauer/AndreasSteinhauerJMP.pdf  

"Will China Escape the Middle-income Trap? A Politico-economic Theory of Growth and State Capitalism" abstract Is China's rapid growth sustainable if the labor and capital market distortions persist? Will democratization occur given that Chinese middle-class are supportive of the regime? To answer the above questions, this paper proposes a politico-economic theory, as follows. In oligarchy, a political elite extracts surplus from the state sector and taxes the private sector, but it also needs political support from sufficiently many citizens to…

"Immigration and Wage Dynamics: Evidence from the Mexican Peso Crisis"

"The Rise of the Universal Bank: Financial Architecture and FirmVolatility in the United States"

"Realized Expectations and the Equilibrium Risk-Return Trade Off"

"Market Turmoil and Destabilizing Speculation"

"An Empirical Studyof Stock and American Option Prices"

"Towards a Theory of Trade Finance"

"Efficient Sovereign Default"

"The Effect of Intermediaries' Market Power in Decentralized Asset Markets"

"Building (and Milking) Trust: Reputation as a Moral Hazard Phenomenon"

"The Price of Development"

"Are Workers Better Matched in Large Labor Markets?"

"Time Inconsistency and Alcohol Sales Restrictions" Download the paper here

"Asset Prices with Heterogeneous Loss Averse Investors"

"The Great Escape? A Quantitative Evaluationof the Fed’s Liquidity Facilities"

"Sophisticated Intermediation and Aggregate Volatility"

"Optimal Hiring and Retention Policies for Heterogeneous Workers who Learn"

"Reference Dependence, Risky Projects and Credible Information Transmission" abstract We consider the interaction between an informed agent (A) who can make announcements concerning the information she has and an uninformed agent (B) who has to decide whether to start a project or not. We study the role that reference dependence and loss aversion may play in determining the credibility of A's announcement and we show that they may give rise to credible information transmission. This happens because in our model…

“The Recent Growth of International Reserves in Developing Economies: A Monetary Perspective”

"Racial Fragmentation, Income Inequality and Social Capital Formation: New Evidence from the US" abstract Existing studies of social capital formation in US metropolitan areas have found that social capital is lower when there is more income inequality and greater racial fragmentation. I add to this literature by examining the role of income inequality between racial groups (racial income inequality). I find that greater racial income inequality reduces social capital. Also, racial fragmentation is no longer a signicant determinant of social…

"Calendar Mechanisms" abstract I study a repeated mechanism design problem where a revenue-maximizing monopolist sells a fixed number of service slots to randomly arriving buyers with private values and increasing exit rates. In addition to characterizing the fully optimal mechanism, I study the optimal mechanisms in two restricted classes. First, the pure calendar mechanism, where the seller allocates future service dates instead of general promises. The unique optimal pure calendar mechanism is characterized in terms of the opportunity costs of…

"The Macroeconomic Effects of Goods and Labor Markets Deregulation" abstract We develop a dynamic stochastic general equilibrium model with endogenous producer entry and labor market frictions to study the macroeconomic effects of deregulating product and labor markets in Europe. Three results emerge. First, deregulation has positive welfare effects, but it can involve short-run costs, including higher unemployment and lower consumption. Second, the effects of deregulating one market depend on the level of regulation in the other. Policymakers can exploit this…

"Mechanism Design With Budget Constraints and a Continuum of Agents" abstract This paper studies mechanisms for assigning a divisible good to a population of budget-constrained agents where agents' private valuations and budgetsare independently distributed. In this setting, I nd the welfare- and revenue-maximizing mechanisms for assigning the good. Both of these optimal mecha-nisms feature a linear price for the good. The welfare-maximizing mechanismadditionally has a uniform lump sum transfer to all agents and a higher linearprice than the revenue-maximizing mechanism.…