A Solomonic Solution to Blockchain Front-Running

By Joshua S. Gans and Richard Holden

AEA Papers and Proceedings, May 2023

Blockchain front-running involves multiple agents, other than the legitimate agent, claiming a payment from performing a contract. It arises because of the public nature of blockchain transactions and potential network congestion. This paper notes that di...

Blockchain Private Pools and Price Discovery

By Agostino Capponi, Ruizhe Jia, and Ye Wang

AEA Papers and Proceedings, May 2023

In this paper, we examine the balance between allocative efficiency and price discovery in blockchain-based finance. Our analysis reveals that the use of private pools, while improving blockspace allocation efficiency, negatively impacts price discovery. ...

Technologies That Replace a "Central Planner"

By Robert M. Townsend and Nicolas X. Zhang

AEA Papers and Proceedings, May 2023

Contracting possibilities are endogenous to the technologies on which the negotiation and the trading environments are built. Here we review how different technologies allow different implementations of the "central planner" and gradually abstract this ce...

Financial Bubbles in Infinitely Repeated Auctions with Tokens

By Andrea Canidio

AEA Papers and Proceedings, May 2023

An auctioneer holds an infinite sequence of private value auctions. He can accept payments in a blockchain-based token that he creates and initially owns. I show that relative to a standard auction with dollars, the present-discounted value of the expecte...

Innovation for Innovators: The Financing of Intangibles

By Ana Babus, Matias Marzani, and Sara Moreira

AEA Papers and Proceedings, May 2023

This paper examines the characteristics of firms that adopt new financial products and their association with measures of performance. We build a novel firm-level panel dataset and document a positive association between intangible capital and the adoptio...

The Great Start-up Sellout and the Rise of Oligopoly

By Florian Ederer and Bruno Pellegrino

AEA Papers and Proceedings, May 2023

We document a secular shift from initial public offerings to acquisitions of venture capital-backed start-ups and show that this trend is accompanied by an increase in the opportunity cost of going public over the last quarter-century. Dominant companies ...

Rising Markups, Rising Prices?

By Christopher Conlon, Nathan H. Miller, Tsolmon Otgon, and Yi Yao

AEA Papers and Proceedings, May 2023

The rise in markups and market power documented by De Loecker, Eeckhout, and Unger (2020) has recently generated much discussion in economics. We measure the correlation between the change in firm level markups and the change in industry level prices as m...

Corporate Governance, Economic Entrenchment, and Growth

By Randall Morck, Daniel Wolfenzon, and Bernard Yeung

Journal of Economic Literature, September 2005

Outside the United States and the United Kingdom, large corporations usually have controlling owners, who are usually very wealthy families. Pyramidal control structures, cross shareholding, and super-voting rights let such families control corporations w...

Terms of the Deal Were Not Announced: Accounting for Mergers with Unpublicized Values

By Thomas G. Wollmann

AEA Papers and Proceedings, May 2023

Most economy-wide studies of merger activity ignore deals whose terms are not announced. Using US data, I find that restricting attention to mergers with publicized values eliminates 60 percent or more of transactions. Exploiting a change in antitrust law...

M&A and Innovation: A New Classification of Patents

By Zhaoqi Cheng, Ginger Zhe Jin, Mario Leccese, Dokyun Lee, and Liad Wagman

AEA Papers and Proceedings, May 2023

Policymakers are increasingly concerned that incumbent acquisitions of small or young firms may slow down rather than speed up innovation, but it is difficult to identify which firms are related in the fast-changing space of technological innovation. This...

Mergers and Acquisitions under Common Ownership

By Miguel Antón, Florian Ederer, Mireia Giné, and Bruno Pellegrino

AEA Papers and Proceedings, May 2023

We provide new facts about the cross section and evolution of mergers and acquisitions for US public firms. Using a general equilibrium model with a hedonic demand system and data on institutional ownership, we document that mergers are increasingly conce...

Risk Rating without Information Provision

By Philip Mulder and Carolyn Kousky

AEA Papers and Proceedings, May 2023

We describe the initial impact of risk-based flood insurance pricing in the United States. More than two-thirds of National Flood Insurance Program policyholders are paying higher premiums under "Risk Rating 2.0" (RR2.0), and increases will continue in th...

Efficient Adaptation to Flood Risk

By Winston P. Hovekamp and Katherine R. H. Wagner

AEA Papers and Proceedings, May 2023

This paper studies whether private adaptation to flood risk is economically efficient. We estimate the return to elevating houses, one of the most significant private defensive investments against flooding, using two decades of microdata on the universe o...

Wildfire Insurance, Information, and Self-Protection

By Judson Boomhower, Meredith Fowlie, and Andrew J. Plantinga

AEA Papers and Proceedings, May 2023

Like other climate-related disasters, wildfires are intensifying. Property owners can reduce their vulnerability to wildfire losses but are not well informed about the costs and benefits of available self-protection investments. Technological advances mea...

Policies for Electrifying the Light-Duty Vehicle Fleet in the United States

By Cassandra Cole, Michael Droste, Christopher Knittel, Shanjun Li, and James H. Stock

AEA Papers and Proceedings, May 2023

Decarbonization of light-duty vehicles (LDVs) in the United States is an important policy priority. We investigate the roles of the Infrastructure Investment and Jobs Act and the Inflation Reduction Act in accelerating the transition of LDVs to electric v...

Pass-through of Electric Vehicle Subsidies: A Global Analysis

By Panle Jia Barwick, Hyuk-soo Kwon, Binglin Wang, and Nahim Bin Zahur

AEA Papers and Proceedings, May 2023

We investigate the pass-through of electric vehicle (EV) subsidies in 13 countries that account for 95 percent of global EV sales from 2013 to 2020. Our results indicate high pass-through rates of 70-80 percent on average. Pass-through is highest for glob...

Has Consumer Acceptance of Electric Vehicles Been Increasing? Evidence from Microdata on Every New Vehicle Sale in the United States

By Kenneth T. Gillingham, Arthur A. van Benthem, Stephanie Weber, Mohamed Ali Saafi, and Xin He

AEA Papers and Proceedings, May 2023

Electric vehicle (EV) sales have been rapidly growing around the world, spurred by technology advances and policy actions. This study leverages rich data on all individual new light-duty vehicles sold in the United States from 2014 to 2020. We examine how...

The Mental Health of Caregivers and Young Children in Conflict-Affected Settings

By Juliana Sánchez-Ariza, Jorge Cuartas, and Andrés Moya

AEA Papers and Proceedings, May 2023

We analyze the effects of conflict-related violence on the mental health of caregivers and young children, as well as the role of caregivers' mental health in explaining the toll of conflict on early childhood mental health. Although an upcoming body of w...

Allocation under Dictatorship: Research in Stalin's Archives

By Paul Gregory and Mark Harrison

Journal of Economic Literature, September 2005

We survey recent research on the Soviet economy in the state, party, and military archives of the Stalin era. The archives have provided rich new evidence on the economic arrangements of a command system under a powerful dictator including Stalin's role i...

Reparations for Victims: Lessons from Colombia

By Arlen Guarin, Juliana Londoño-Vélez, and Christian Posso

AEA Papers and Proceedings, May 2023

Reparations recognize and address the harm that victims suffered during war, conflict, or authoritarianism, and some experts argue that the compensation can also help victims to rebuild life projects. Using linked administrative microdata, we study the wo...