In models with heterogeneous beliefs, we cannot analyze policy interventions using standard methods of welfare economics. We develop a novel way of assessing welfare in such models, building on risk sharing rather than the Pareto property as the concept of efficiency. Differences of opinion...

We find evidence for the beta anomaly in mutual fund performance. This anomaly is not accounted for in the standard four-factor framework, nor by the addition of a BAB factor to the benchmark model. We identify the active component of alpha (i.e., active alpha) not attributable to the passive...

Belief disagreement generates a fundamental tension between two desirable features of a resource allocation: Pareto optimality and risk sharing. While Pareto optimality generally opposes restrictions to trade, a growing literature rejects it in the presence of heterogeneous beliefs and proposes...

We empirically investigate the role of credit supply in fertility decisions. Using the U.S. banking deregulation in the 1980s and the 2007–2009 Great Recession as two independent laboratories for the study of credit supply shocks, we find that an increase in credit supply consistently implies...

We analyze the risk and return characteristics across firms sorted by their environmental and social (ES) ratings. We document that ES ratings have no significant relationship with average returns nor unconditional market risk. Firms with higher ES ratings do have significantly lower systematic...

We consider a worker's job search problem in which firms arrive sequentially, observe the worker's unemployment duration, and conduct an interview to learn about her unobservable productivity. Firms engage in fully flexible information acquisition subject to a uniformly posterior-separable cost...

We exploit heterogeneity in decreasing returns to scale parameters across funds to analyze their effects on capital allocation decisions in the mutual fund market. We find strong evidence that steeper decreasing returns to scale attenuate flow sensitivity to performance, which has a large effect...

We study the consequences of reported social misconduct for YouTube streamers. Using a staggered difference-in-differences approach, we find that YouTube channels of streamers who are found to have misconducted themselves experience significant drops in both subscription and viewership. Such...

We estimate a model in which Bayesian investors learn about parameters governing mutual fund performance in real time and competitively allocate capital to funds, conditional on their current beliefs. The model-implied aggregate allocation of capital in response to the history of observed...

We analyze the risk and return characteristics across firms sorted by their environmental and social (ES) ratings. We document that ES ratings have no significant relationship with average stock returns or unconditional market risk. Stocks of firms with higher ES ratings do have significantly...