Working Papers

Standard Pigouvian theory predicts that externalities should be corrected at the margin. However, demand distortions such as credit constraints or behavioral biases create a wedge between marginal benefit and marginal cost. While these distortions can lower aggregate abatement, they can increase the efficiency of green subsidy spending. In theory, this happens through two channels: by ...Read More

Spousal cofounding teams are common, yet we know little about how they affect startups’ ability to attract new hires. While prior work highlights internal advantages of spousal teams, such as trust, cohesion, and resilience, we propose that they may trigger concerns among external audiences by blurring professional and personal roles. Focusing on prospective employees, we ...Read More

The pharmaceutical market has experienced a massive wave of vertical integration between pharmacy benefit managers (PBMs) and health insurers in recent years. Using a unique dataset on insurer-PBM contracts, we document increasing vertical integration in Medicare Part D–vertically integrated insurers’ market share increased from about 30% to 80% between 2010 and 2018. Read More

Listening to the other side is essential for communication and conflict resolution. However, even when a listener listens well, the speaker may still exclaim, “You are not listening to me!” We reason this occurs because speakers think someone who disagrees with them simply has not listened. Read More

The marginal cost of electricity fluctuates hour-by-hour, yet retail customers typically face flat prices. Using data from all seven US wholesale markets and a new method to evaluate alternative rates set in advance that accounts for equilibrium price effects, we estimate efficiency gains from time-varying price schedules that better align price with cost. We have ...Read More

We show that financial reporting spurs consumer behavior. Using granular GPS data, we show that foot-traffic to firms’ commerce locations significantly increases in the days following their earnings announcements. Read More

Healthcare organizations have increasingly adopted video visits as an alternative care channel that offers higher convenience and holds promise for improving patients’ access to care. Despite the growing use, the impact of a new digital channel on care demand within existing physical channels has not been thoroughly investigated, especially in the primary care context of ...Read More

Mack Institute Research Assistant Lennart Meincke and Wharton Associate Professor of Management Andrew Carton have released a new working paper in our series of working papers on ChatGPT spearheaded by Mack Faculty Director Christian Terwiesch. The new paper, entitled “Beyond Multiple Choice: The Role of Large Language Models in Educational Simulations,” compares feedback on student ...Read More

Mack Institute Research Assistant Lennart Meincke, Wharton Professor Ethan Mollick and Mack Institute Co-Director and Wharton Professor Christian Terwiesch have published the next in Terwiesch’s series of working papers on ChatGPT. The new paper evaluates how LLMs can be used for idea generation and explores methods to increase the novelty, quality and dispersion of AI-generated ...Read More

I study investors’ trade-off between ETFs and open-ended mutual funds in the presence of idiosyncratic liquidity risk and aggregate uncertainty. Based on a portfolio choice model, I show that ETFs and mutual funds provide liquidity at different maturities. Mutual funds (ETFs) are preferred by investors facing high (low) idiosyncratic liquidity risk and shorter (longer) investment ...Read More