學術論文

We document that firms prefer counties with higher ethnic diversity in locating their interstate investments, especially for those pursuing innovation, seeking to establish service centers, or capable of managing a diverse workforce. We also find some evidence that interstate investment in high ethnic diversity locations results in increased patent applications, sales growth, positive media coverage, and overall operating performance. Taken together, we show that firms prefer to invest in ethnically diverse locations as they recognize the potential benefits of leveraging a diverse labor supply such as enhancing problem-solving, innovation, and performance.

Do real assets protect against inflation? Stocks’ core inflation betas are negative, while their energy betas are positive. Currencies, commodities, and real estate mostly hedge against energy inflation, but not core inflation. These hedging properties are reflected in the prices of inflation risks: only core inflation carries a negative risk premium, and its magnitude is consistent within and across asset classes, uniquely among macroeconomic risk factors. Energy inflation has become more procyclical and volatile since the 1990s, which helps explain the time-varying correlation between stock and bond returns. A two-sector New Keynesian asset pricing model accounts for these facts quantitatively.

This paper introduces a novel nonparametric high-frequency jump test for discretely observed Itô semimartingales. Based on observations sampled recursively at first exit times from a symmetric double barrier, our method distinguishes between threshold exceedances caused by the Brownian component and jumps, which enables the construction of a feasible, noise-robust statistical test. Simulation results demonstrate superior finite-sample performance of our test compared to existing methods. An empirical analysis of NYSE-traded stocks provides clear statistical evidence for jumps, with the results highly robust to spurious detections.

This work examines the behaviors of the online projected gradient ascent (OPGA) algorithm and its variant in a repeated oligopoly price competition under reference effects. In particular, we consider that multiple firms engage in a multiperiod price competition, where consecutive periods are linked by the reference price update and each firm has access only to its own first-order feedback. Consumers assess their willingness to pay by comparing the current price against the memory-based reference price, and their choices follow the multinomial logit (MNL) model. We use the notion of stationary Nash equilibrium (SNE), defined as the fixed point of the equilibrium pricing policy, to simultaneously capture the long-run equilibrium and stability. We first study the loss-neutral reference effects and show that if the firms employ the OPGA algorithm—adjusting the price using the first-order derivatives of their log-revenues—the price and reference price paths attain last-iterate convergence to the unique SNE, thereby guaranteeing the no-regret learning and market stability. Moreover, with appropriate step-sizes, we prove that this algorithm exhibits a convergence rate of ̃ 𝒪 ⁢(1/𝑡2) in terms of the squared distance and achieves a constant dynamic regret. Despite the simplicity of the algorithm, its convergence analysis is challenging due to the model lacking typical properties such as strong monotonicity and variational stability that are ordinarily used for the convergence analysis of online games. The inherent asymmetry nature of reference effects motivates the exploration beyond loss-neutrality. When loss-averse reference effects are introduced, we propose a variant of the original algorithm named the conservative-OPGA (C-OPGA) to handle the nonsmooth revenue functions and show that the price and reference price achieve last-iterate convergence to the set of SNEs with the rate of 𝒪⁢(1/√𝑡) . Finally, we demonstrate the practicality and robustness of OPGA and C-OPGA by theoretically showing that these algorithms can also adapt to firm-differentiated step-sizes and inexact gradients.

This paper explores whether investors’ personal experience with climate change affects their voting behavior on climate change–related proposals. We find that fund managers exposed to abnormally hot temperatures are significantly more likely to support climate proposals. We further show that the effect is persistent. We observe significant heterogeneity in the effect of hot temperatures, depending on firm-level climate risk, the quality of the proposals, fund investment strategy, and prior awareness of climate change. Fund managers’ personal experience with climate change matters for the outcome of climate proposals as it affects the aggregate support they receive. Fund managers exposed to abnormally hot temperatures are also more likely to divest from stocks with greater exposure to climate change.

Manufacturers often preannounce reference prices for products that have not yet been produced or even developed. These prices are rarely binding, meaning that the manufacturers can make price adjustments in the future, possibly at a cost. In this paper, we argue that price preannouncements can serve as a weak price commitment that, we find, helps the manufacturers secure better deals from their suppliers, thereby lowering their procurement costs and improving their profit. Surprisingly, even an extremely weak price commitment can substantially improve a manufacturer’s profit. On the other hand, when the price commitment is credible enough, the manufacturer forgoes the price preannouncement. Collectively, these results underscore the strategic effects that price preannouncements can have on firms’ marketing decisions.

How does the balance between text and pictorial content in marketer-generated social media posts affect user engagement? The authors address this question by using computer vision and natural language processing tools to extract the visual and textual features of 34,610 organic brand posts from Facebook and Instagram. Using a Confounding-and-Cluster-Robust Causal Forests model, they test how the balance of text and picture affects social media engagement across content and visual contexts. Results show that posts with greater emphasis on overlay text over pictorial content tend to have fewer likes and comments. However, the performance of text-oriented posts improves if text is more centered, informative, emotionally positive, and congruent with the pictorial content, and if the picture contains fewer prominent objects or less information such as social cues. They quantify how incremental changes in such content composition affect social media engagement. These findings set forth evidence-based principles for optimizing text and picture balance in marketer-generated content (MGC) and provide actionable guidelines on whether, where, when, and how to present text on an image. This research highlights the potential for transforming content and media creation from an imprecise art form into an empirical science nested within a data-driven visual optimization framework.

What influences consumers to make product decisions alone versus with household partners? This research examines how consumers’ preference for solo or joint decision-making with household partners varies between product acquisition and disposal stages. Ten pre-registered studies demonstrate that for many household products, consumers are more likely to choose joint (vs. solo) decision-making with household partners for disposal than for acquisition. This asymmetry occurs because disposal (vs. acquisition) increases perceptions of the potential for infringement on a household partner’s rights, which increases the desire for clarity about a partner’s product valuation and thus the choice of joint (vs. solo) decision-making with one’s partner. The authors identify three process-consistent boundary conditions, wherein this acquisition-disposal asymmetry is mitigated: (1) when the product cannot be used by one’s partner, (2) when considering decisions with non-household members (e.g., non-cohabitating close friends) instead of one’s household partner, and (3) when the product’s price exceeds the household’s typical budget. Moreover, the authors discuss implications of this acquisition-disposal asymmetry for consumer well-being and marketing strategies, including its potential to cause delays in disposal decisions relative to acquisition decisions. This research contributes to understanding household decision dynamics and identifies a novel contributor to overaccumulation of household products.

This paper identifies a new channel through which employment protection laws can harm workers: they enable employers to exploit naïve present-biased employees. The theoretical mechanism through which firing costs enable exploitation is built upon a widespread career structure. Employers frequently offer career trajectories with an unattractive entry phase (e.g., with low pay or high effort), an even less attractive mid-career stage, and high rewards promised in a final career phase. Naïve employees accept such contracts, expecting to complete the high-reward track. They, however, eventually drop out or sort into alternative paths mid-career when costs loom large and rewards remain distant. As a result, employers avoid paying the promised rewards while capturing surplus from early-career phases. Firing costs give employers more leeway to exploit workers with such contracts: they reduce the employees’ expected risk of dismissal and make long-term rewards appear more credible. Employers can then exploit employees even more—for example, by lowering early-career wages—knowing that employees will still accept such steeper contracts despite not following through. Our model aligns with career patterns in fields such as healthcare, academia, or accounting. It also yields testable predictions on wage structures, attrition, and how firing costs and labor market conditions shape contract design.