Permissionless blockchains were constructed with a view to being sustainably secure. At the heart of blockchain consensus mechanisms was an explicit cost (whether it be work or stake) for participation in the network and the opportunity to propose blocks that would be added to the blockchain. A...

This paper examines how the introduction of artificial intelligence (AI), particularly generative and large language models capable of interpolating precisely between known data points, reshapes scientists' incentives for pursuing novel versus incremental research. Extending the theoretical...

Liquidity management is key in industries with variable cash flows. We study how businesses in the highway construction industry manage cash flow by strategically bidding more on work with an earlier payout--a practice known as front-end loading. We find that small contractors, infrequent...

Personalizing policies can theoretically increase their effectiveness. However, personalization is difficult when individual types are unobservable and the preferences of policymakers and individuals are not aligned, which could cause individuals to misreport their type. Mechanism design offers...

This paper analyzes the design of tests to distinguish human from artificial intelligence through the lens of information design. We identify a fundamental asymmetry: while AI systems can strategically underperform to mimic human limitations, they cannot overperform beyond their capabilities....

Using data on prescriptions for cholesterol-lowering drugs (statins), we study differences in the treatments chosen by Danish physicians for themselves versus for their patients. We estimate that physicians discount patient health benefit relative to their own, valuing the additional potency of...

Credit scores are a primary screening device for the allocation of credit, housing, and sometimes even employment. In the data, credit scores grow and fan out with age; at the same time, income and consumption inequality also increase with a cohort's age. We postulate a simple model with hidden...

This paper examines a new moral hazard in delegated decision-making: authors can embed hidden instructions--known as prompt injections--to bias AI referees in academic peer review, thereby hijacking machine recommendations. Because AI reviews are relatively inexpensive compared to manual...

Evasion is a key obstacle to raising customs revenue. We study how improved administrative capacity enables governments to combat evasion by redesigning tariff codes. Using newly compiled historical records from the Early American Republic, we show that as Customs administration matured, the...

When the value of a pledgeable asset (or project) is uncertain, investors are tempted to examine it. The asset owner ultimately bears the information cost, reducing her financing capacity. A pecking order emerges. Debt generates a greater financing capacity than equity: unlike equity investors...