Working Papers 2025
Working paper 1-2025
Kfir Eliaz and Ran Spiegler
Monopolistic Data Dumping
Abstract
A monopolist curates a database of current and historical observations for users who want to learn some parameter. Nowcasters ("forecasters") wish to learn its current (long-run) value. The monopolist chooses the size of each data type, facing constant marginal storage cost, and a menu of contracts, consisting of a fee and access level to each data type. The optimal menu offers full access to historical data, but discriminates access to current data: either full to all consumers or full to nowcasters and none to forecasters. Relative to social optimum, there is too much (little) historical (current) data, and sometimes too much total data.
Working paper 2-2025
Industry Firm Dynamics and Financing Conditions
Nittai K. Bergman, Rajkamal Iyer, Paymon Khorrani, William Mullins
Abstract
This paper analyzes how changes in financing conditions affect industry dynamics. We show that
industry leaders, defined as firms with the largest market share in a given industry, perform better than industry followers during periods of tight financing conditions. When financing conditions are tight, industry leaders outperform industry followers and experience higher abnormal returns, gain market share, invest more, raise more long-term debt, and have higher profitability rates. These effects are primarily concentrated in industries in which the disparity between leaders and followers, as measured by market capitalization, is large. Given these heterogeneous intra-industry effects, our results indicate that tight financing conditions widen inequality between industry leaders and followers, particularly when pre-existing industry inequality is large.
Working paper 3-2025
Central Bank Digital Currency: When Price and Bank Stability (Don't) Collide
Daniel Bird and David Weiss
Abstract
In a recent influential paper, Schilling, Fernández-Villaverde and Uhlig (2024) caution that the introduction of a central bank digital currency gives rise to a central bank trilemma in a nominal version of the quintessential Diamond and Dybvig (1983) model of bank-runs. We show that there is a natural policy tool that can be introduced into their environment to solve this trilemma.
Working paper 4-2025
Entrepreneurship and the Racial Wealth Gap
Daniel Albuquerque, Tomer Ifergane
Abstract
Entrepreneurship promotes wealth accumulation. However, Black households face significant barriers to entrepreneurship, operating fewer and smaller businesses. We formalize a general equilibrium model of entrepreneurship choice and wealth accumulation in which Black households experience adverse distortions as entrepreneurs and as workers. Disciplined by microdata, our model matches well the observed racial wealth gap and the correlation between wealth and entrepreneurship. We find that distortions faced by Black entrepreneurs are the key factor for understanding the racial wealth gap across the wealth distribution. Our analysis also indicates that addressing racial disparities in the U.S. can substantially increase output.
Working paper 5-2025
Bureaucracy in quest of feasibility
Herve Cres a, Itzhak Gilboa, Nicolas Vieille
Abstract
A bureaucracy has to determine the values of many decision variables while satisfying a set of constraints. The bureaucracy is not assumed to have any objective function beyond achieving a feasible solution, which can be viewed as ‘‘satisficing’’ à la Simon (1955). We assume that the variables are integer-valued and the constraints are linear. We show that simple and (arguably) natural versions of the problem are already NPHard. We therefore look at decentralized decisions, where each office controls but one decision variable and can determine its value as a function of its past values. However, an attempt to consult more than a single past case can lead to Condorcet-style consistency problems. We prove an Arrovian result, showing that, under certain conditions, feasibility is guaranteed only if all offices mimic their decisions in the same past case. This result can be viewed as explaining a status quo bias.
Published in Journal of Mathematical Economics 114 (2024) 1031046