Can incumbent sellers and buyers use contracts with stipulated damages to extract surplus from entrants? We experimentally study the strategic environments of Aghion and Bolton (1987)and Spier and Whinston (1995). As predicted, contract renegotiation weakens the commitment power of stipulated...

The U.S. Supreme Court has ruled that restrictions on independent political expenditures by corporations and labor unions are unconstitutional on First Amendment grounds (Citizens United v. FEC, 2010). In this paper, we test the hypothesis that the decision gave an electoral boost to...

This paper investigates the Chinese tariff pass-through mechanism. We estimate how market structure, specifically the size of the private sector, affects the transmission of prices from the border to consumers by using household survey data from urban China. Our results suggest that changes in...

This paper analyzes the impact of college enrollment expansion on student academic achievements and labor market outcomes. When public policies promote “access” to college education, colleges adjust their curricula: Non-elite public colleges adopt a less demanding curriculum to accommodate...

Using administrative tax data that contain information on firm credit take-up and employee residence, we examine the impact of the Empowerment Zone and Renewal Community employment tax credits on local labor. We find modest evidence that zone designation improves labor market outcomes among...

We estimate the effects of real exchange rate movements on employment in US cities between 2003 and 2010. We explore the differences in the composition of local industries to construct city-specific changes in exchange rates and estimate their effects on local employment in manufacturing...

This paper provides evidence that the recent housing bust in the United States precipitated a “credit crunch” for small businesses. Using detailed records of individual bank’s lending history, we develop a measure of their exposure to the housing bust. This measure is then used to estimate...

Matching provisions in state clean elections acts have been ruled unconstitutional by the U.S. Supreme Court on First Amendment grounds (Arizona Free Enterprise Club’s Freedom Club PAC v. Bennett, 2011). By modeling political speech as a costly advertising activity in an electoral contest, we...

We analyze the role of transaction costs in risk transfer markets. For example, when these markets are in their infancy, they are characterized by few contracts and high transaction costs. In this case, we show that only highly risk-averse buyers (e.g., hedgers) exist in the market alongside...

We examine the incentives of access-regulated firms to invest in infrastructure facilities they must share with competitors. The non-strategic incentives imply that investment depends positively on the market size. The strategic incentives imply that investment also depends on market...